Exhibit 99.1


PROSPECTUS OF			PROXY STATEMENT OF

RADA Electronic Industries LTD.

September 13, 2022

To the Shareholders of RADA Electronic Industries Ltd.:

We cordially invite you to the extraordinary general meeting of shareholders of RADA Electronic Industries Ltd. (“RADA” or “we”) to be held at 10:00 a.m. (Israel time) on October 19, 2022, at RADA’s offices at 7 Giborei Israel Street, Netanya, Israel.

As previously announced, on June 21, 2022, RADA entered into the Agreement and Plan of Merger, dated as of June 21, 2022 (the “merger agreement”), by and among Leonardo DRS, Inc., a Delaware corporation (“DRS”), RADA and Blackstart Ltd, a company organized under the laws of the State of Israel and a wholly owned subsidiary of DRS (“Merger Sub”). Upon the terms and subject to the conditions of the merger agreement, and in accordance with the Companies Law, 5759-1999, of the State of Israel (together with the rules and regulations promulgated thereunder, the “ICL”), at the effective time of the merger contemplated by the merger agreement (the “merger”), Merger Sub will be merged with and into RADA, with RADA as the surviving company of the merger and thereby becoming a wholly owned subsidiary of DRS. At the effective time of the merger (the “effective time”), each ordinary share of RADA, par value New Israeli Shekel 0.03 per share (“RADA shares”), issued and outstanding immediately prior to the effective time will be converted into and become exchangeable for one share of common stock of DRS, par value $0.01 per share (“DRS common stock”). Immediately prior to the effective time, the shares of DRS common stock held by Leonardo US Holding, Inc., a Delaware corporation (“US Holding”), the sole stockholder of DRS, will be split (rounded up to the nearest whole share), as necessary, such that, immediately following the effective time and the issuance of the shares of DRS common stock to holders of RADA shares and the treatment of options to purchase RADA shares as described in the section titled “The Merger Agreement—Treatment of Equity Awards”: (A) US Holding will hold 80.5% of the issued and outstanding shares of DRS common stock on a fully diluted basis (with US Holding’s ownership percentage including 50% of any awards or other equity interests that DRS may issue pursuant to entitlements under any grants of certain one-time special awards of restricted stock units (the “One-Time Awards”) and the foregoing percentage calculation excluding any awards or other equity interests that DRS may issue pursuant to entitlements under the DRS’s long term incentive plan and 50% of any awards or other equity interests that DRS may issue pursuant to entitlements in connection with any grants of One-Time Awards, and such foregoing percentage will assume a reference price for RADA options equal to the volume-weighted average price of the RADA shares on the NASDAQ for the ten trading days immediately prior to the closing date); and (B) the holders of RADA shares, RADA vested options and RADA unvested options (or DRS options issued pursuant to the provisions of the merger agreement) will hold or have entitlements to 19.5% of the issued and outstanding shares of DRS common stock on a fully diluted basis (the foregoing percentage calculation excluding any awards or other equity interests that DRS may issue pursuant to entitlements under the DRS long-term incentive plan or the issuance of any One-Time Awards). We encourage you to read the merger agreement, a copy of which is attached to this proxy statement/prospectus as Annex A, in its entirety.

At the RADA extraordinary general meeting, in addition to the approval of the merger agreement and the transactions contemplated by the merger agreement, including the merger (the “merger proposal”), shareholders of RADA will be asked to vote separately on a number of compensation matters, subject to separate resolutions, the approval of which is not a condition to the approval of the merger proposal and whose approval is not a condition to closing the merger and the consummation of the merger. Enclosed with this letter you will find a copy of the notice of the extraordinary general meeting and the proxy statement for the general meeting. The enclosed proxy statement/prospectus and the attachments thereto contain important information about the extraordinary general meeting, the merger agreement, the merger, the other transactions contemplated by the merger agreement and the other agenda items, and you are urged to read them carefully and in their entirety.

Currently, DRS common stock is not publicly traded. Following the effectiveness of the merger, DRS common stock is expected to be listed and traded on the NASDAQ and the Tel Aviv Stock Exchange, which is referred to as the “TASE”, under the symbol “DRS”.

We urge you to read the accompanying proxy statement/prospectus, including the Annexes and the documents incorporated by reference, carefully and in its entirety. In particular, we urge you to read carefully the section titled “Risk Factors” beginning on page 33 of this proxy statement/prospectus.

YOUR VOTE IS IMPORTANT. ACCORDINGLY, YOU ARE REQUESTED TO PROMPTLY COMPLETE, SIGN AND DATE THE ENCLOSED PROXY CARD AND RETURN IT IN THE ENVELOPE PROVIDED, WHETHER OR NOT YOU PLAN TO ATTEND THE MEETING. THIS WILL NOT PREVENT YOU FROM VOTING YOUR RADA SHARES IN PERSON IF YOU SUBSEQUENTLY CHOOSE TO ATTEND THE MEETING.


Very truly yours,

Yossi Ben Shalom, Executive Chairman of the Board of Directors

Neither the Securities and Exchange Commission nor any state securities commission, nor the Israel Securities Authority, has approved or disapproved of the securities to be issued under this proxy statement/ prospectus or determined if this proxy statement/prospectus is accurate or complete. Any representation to the contrary is a criminal offense.

This proxy statement/prospectus is dated September 13, 2022 and is first being made available to RADA shareholders on or about September 13, 2022.

NOTICE OF EXTRAORDINARY GENERAL MEETING OF SHAREHOLDERS

An extraordinary general meeting (the “extraordinary general meeting”) of RADA shareholders will be held at 10:00 a.m. (Israel time) on October 19, 2022, at RADA’s offices at 7 Giborei Israel Street, Netanya, Israel, to consider and vote on the following matters, including in connection with the acquisition of RADA by Leonardo DRS, Inc., a Delaware corporation (“DRS”):

1.The approval and adoption of: (i) the Agreement and Plan of Merger, dated as of June 21, 2022 (the “merger agreement”), by and among DRS, RADA and Blackstart Ltd, a company organized under the laws of the State of Israel and a wholly owned subsidiary of DRS (“Merger Sub”); (ii) the merger contemplated by the merger agreement (the “merger”), by which Merger Sub will be merged with and into RADA in accordance with the provisions of Sections 314-327 of the Companies Law 1999 of the State of Israel (together with the rules and regulations promulgated thereunder, the “ICL”), with RADA as the surviving company of the merger and thereby becoming a wholly owned subsidiary of DRS; and (iii) all other transactions contemplated by the merger agreement, all upon the terms and subject to the conditions set forth in the merger agreement (the “merger proposal”);

2.The approval to purchase a seven-year “tail” endorsement to RADA’s current directors’ and officers’ liability insurance policy;

3.The approval of payment of a transaction bonus to RADA’s Chief Executive Officer;

4.The approval of payment of a transaction bonus to the Executive Chairman of the RADA board of directors;

5.The approval of payment of a transaction bonus to RADA’s Chief Financial Officer; and

6.The approval of the grant of retention awards by DRS to certain office holders of RADA.

Shareholders of record at the close of business on September 14, 2022, are entitled to notice of, and to vote at, the meeting. Whether or not you plan to attend the meeting, you are urged to promptly complete, date and sign the enclosed proxy and to mail it in the enclosed envelope, which requires no postage if mailed in the United States.

If your shares are registered directly in your name with our transfer agent, American Stock Transfer & Trust Company, LLC (“AST”), you are considered to be, with respect to those shares, a shareholder of record, and these proxy materials are being sent directly to you by us. If your shares are held in a brokerage account or by a trustee or nominee, or through a member of the Tel Aviv Stock Exchange (“TASE”), you are considered to be the beneficial owner of shares held in “street name” and these proxy materials are being forwarded to you together with a voting instruction form by the broker, trustee nominee, or TASE member that holds your shares, or by an agent hired by them, explaining how to direct the broker, trustee or nominee to vote your shares. You are also invited to attend the meeting, but since a beneficial owner is not the shareholder of record, you may not vote these shares directly at the meeting unless you obtain a “legal proxy” from the broker, trustee or nominee that holds your shares, giving you the right to vote the shares at the extraordinary general meeting or, if your shares are held by a TASE member, provide a certificate from your bank or your broker as to the number of shares owned by you at the record date.

If your shares are held via RADA’s broker for trading on the TASE, you should deliver or mail (via registered mail) your completed proxy to the offices of our company together with a proof of ownership issued by your broker (ishur baalut), as of the record date. Alternatively, you may vote ordinary shares of our company electronically via the electronic voting system of the Israel Securities Authority, up to 10:00 a.m. (Israel time) on October 17, 2022. You should receive instructions about electronic voting from your broker.

Each RADA share is entitled to one vote upon each of the matters to be presented at the meeting. The approval of the merger proposal requires the affirmative vote of the holders of a majority of the voting power represented and voting on each of the proposals in person or by proxy (not taking into consideration abstentions), excluding any RADA shares that are held by DRS, Merger Sub or (a) a person holding, directly or indirectly, either (i) 25% or more of the voting rights of DRS or Merger Sub, or (ii) the right to appoint 25% or more of the directors of DRS or

Merger Sub, or (b) one of such person’s spouse, siblings, parents, grandparents, descendants, spouse’s descendants, siblings, or parents, or the spouse of any such person, or a corporation controlled by any one or more of such persons or by DRS or Merger Sub. The approval of proposals 2 through 6 also requires a special majority as described in the proxy statement/prospectus.

This notice is being sent to shareholders in accordance with the requirements of the Companies Regulations (Notice of Meeting of Shareholders and Meeting of Class of Shareholders of a Public Company), 5760-2000. The last date for submitting a request to include a proposal in accordance with Section 66(b) of the ICL, is September 20, 2022.

Joint holders of RADA shares should take note that, pursuant to Article 32(d) of the Amended and Restated Articles of Association of RADA, the vote of the senior holder of joint holders of any RADA share who tenders a vote, whether in person or by proxy, will be accepted to the exclusion of the vote(s) of the other joint holder(s) of such RADA share, and for this purpose seniority will be determined by the order in which the names stand in RADA’s share register.


By order of the RADA Board of Directors,


Yossi Ben Shalom

Executive Chairman of the Board of Directors

September 13, 2022

RADA ELECTRONIC INDUSTRIES LTD.

PROXY STATEMENT

EXTRAORDINARY GENERAL MEETING OF SHAREHOLDERS

This proxy statement/prospectus is being furnished in connection with the solicitation of proxies on behalf of the Board of Directors of RADA Electronic Industries Ltd. to be voted at the Extraordinary General Meeting of Shareholders (the “extraordinary general meeting”) and at any adjournments and postponements thereof, pursuant to the accompanying Notice of Extraordinary General Meeting of Shareholders. The meeting will be held at 10:00 a.m. (Israel time) on October 19, 2022, at RADA’s offices at 7 Giborei Israel Street, Netanya, Israel.

This proxy statement/prospectus, the attached notice of extraordinary general meeting and the enclosed proxy card are being mailed to RADA shareholders on or about September 16, 2022.

Purpose of the Extraordinary General Meeting. At the meeting, RADA shareholders will be asked to consider and vote upon the following matters:

(1)to approve and adopt: (i) the Agreement and Plan of Merger, dated as of June 21, 2022 (the “merger agreement”), by and among DRS, RADA and Blackstart Ltd, a company organized under the laws of the State of Israel and a wholly owned subsidiary of DRS (“Merger Sub”); (ii) the merger contemplated by the merger agreement (the “merger”), by which Merger Sub will be merged with and into RADA in accordance with the provisions of Sections 314-327 of the Companies Law 1999 of the State of Israel (together with the rules and regulations promulgated thereunder, the “ICL”), with RADA as the surviving company of the merger and thereby becoming a wholly owned subsidiary of DRS; and (iii) all other transactions contemplated by the merger agreement, all upon the terms and subject to the conditions set forth in the merger agreement (the “merger proposal”);

(2)to approve the purchase of a seven-year “tail” endorsement to RADA’s current directors’ and officers’ liability insurance policy;

(3)to approve the payment of a transaction bonus to RADA’s Chief Executive Officer;

(4)to approve the payment of a transaction bonus to the Executive Chairman of RADA’s board of directors;

(5)to approve the payment of a transaction bonus to RADA’s Chief Financial Officer; and

(6)to approve the grant of retention awards by DRS to certain office holders of RADA.

Record date. Proxies for use at the meeting are being solicited by RADA’s board of directors. Only RADA shareholders with RADA shares registered in their name or names as of the close of trading on September 14, 2022, the record date, will be entitled to vote at the extraordinary general meeting or at any adjournment or postponement thereof. As of the close of trading on September 7, 2022, RADA had 49,726,194 RADA shares outstanding. Each RADA share outstanding as of the record date is entitled to one vote upon the matters presented at the extraordinary general meeting.

Recommendation of the Board of Directors

RADA board of directors recommends a vote FOR the merger proposal and FOR all the other proposals set forth in this proxy statement/prospectus.

Proxy Procedure

Only holders of record of RADA shares, as of the close of business on September 14, 2022, are entitled to notice of, and to vote in person or by proxy, at the meeting. As of September 7, 2022, there were 49,726,194 outstanding RADA shares.

Voting in Person. If your shares are registered directly in your name with our transfer agent (i.e., you are a “registered shareholder”), you may attend and vote in person at the extraordinary general meeting. If you are a beneficial owner of shares registered in the name of your broker, bank, trustee or nominee (i.e., your shares are held in “street name”), you are also invited to attend the extraordinary general meeting; however, to vote in person at the extraordinary general meeting as a beneficial owner, you must first obtain a “legal proxy” from your broker, bank, trustee or nominee authorizing you to do so.

If you are a beneficial owner and your shares are held through the Tel Aviv Stock Exchange (the “TASE”) and you wish to participate in the extraordinary general meeting, you are also invited to attend the extraordinary general meeting; however, to vote in person at the extraordinary general meeting as a beneficial owner, you must present an ownership certificate that you may obtain from the TASE Clearing House Ltd (the “TASE Clearing House”) member through which your shares are registered indicating that you were the beneficial owner of such shares on September 14, 2022, the record date for the voting. If the TASE member holding your shares is not a TASE Clearing House member, please make sure to present an ownership certificate from the TASE Clearing House member in which name your shares are registered.

Voting by Mail. You may submit your proxy by mail by completing, signing and mailing the enclosed proxy card in the enclosed, postage-paid envelope, or, for shares held in street name, by following the voting instructions provided by your broker, bank trustee or nominee. The proxy must be received by our transfer agent or at RADA’s registered office in 7 Giborei Israel Street, Netanya, Israel at least forty-eight (48) hours prior to the appointed time of the meeting to be validly included in the tally of RADA shares voted at the extraordinary general meeting.

If you are a beneficial owner and your shares are held through the TASE, in order to vote you must complete, sign and date the proxy card (in the form filed on MAGNA, the distribution site of the Israel Securities Authority, at www.magna.isa.gov.il and MAYA, the reporting site of the TASE at www.maya.tase.co.il) and attach to it an ownership certificate from the TASE Clearing House member through which your shares are registered indicating that you were the beneficial owner of the shares on September 14, 2022, the record date for voting. The proxy card, together with the ownership certificate must be received at our registered office in Israel (in person, by mail or via fax to: +972-9885-5885, Attention: Dafna Sror, corporate controller), at least forty-eight (48) hours prior to the appointed time of the extraordinary general meeting, to be validly included in the tally of RADA shares voted at the meeting If the TASE member holding your shares is not a TASE Clearing House member, please make sure to include an ownership certificate from the TASE Clearing House member in which name your shares are registered.

Electronic Voting through MAGNA. If your shares are held via RADA’s broker for trading on the TASE, you may also vote your ordinary shares electronically via MAGNA, the electronic voting system of the Israel Securities Authority (the “ISA”), up to 10:00 a.m. (Israel time) on October 17, 2022. You should receive instructions about electronic voting from your broker.

Change or Revocation of Proxy

If you are a registered shareholder, you may change your vote at any time prior to the exercise of authority granted in the proxy by filing with us a written notice of revocation, or duly executed proxy bearing a later date, or by attending the extraordinary general meeting and voting in person. Attendance at the extraordinary general meeting will not cause your previously granted proxy to be revoked unless you specifically so request.

If your shares are held in street name, you may change your vote by submitting new voting instructions to your broker, bank, trustee or nominee or, if you have obtained a legal proxy from your broker, bank, trustee or nominee giving you the right to vote your shares, by attending the extraordinary general meeting and voting in person.

If you are a beneficial owner and your shares are held through the TASE, you may revoke or change your vote at any time before the extraordinary general meeting by communicating such change in writing or by executing and delivering a later-dated proxy provided such later dated proxy is received at our registered office in Israel (in person, by mail or via fax to: +972-9885-5885 Attention: Dafna Sror, corporate controller) or by attending the extraordinary general meeting and voting in person. Attendance at the extraordinary general meeting will not cause your previously granted proxy to be revoked unless you specifically so request.

Quorum. No less than two RADA shareholders present in person or by proxy, and holding or representing between them at least 25% of the voting power of RADA, shall constitute a quorum at the extraordinary general meeting. If within one-half hour from the time appointed for the holding of the extraordinary general meeting a quorum is not present, the extraordinary general meeting shall be adjourned to October 26, 2022, at the same time and place. At such adjourned meeting, any two shareholders present in person or by proxy, shall constitute a quorum.

Broker non-votes and abstentions will be counted as present at the extraordinary general meeting for the purpose of determining whether a quorum is present.

A broker non-vote occurs when a bank, broker or other nominee holding RADA shares for a beneficial owner does not vote on a particular proposal because the nominee does not have discretionary voting power with respect to that proposal and has not received instructions from the beneficial owner. While counted for quorum purposes, abstentions and broker non-votes will not be treated as voting shares and will not have any effect on whether the requisite vote is obtained for all matters placed before shareholders for their vote.

Required vote. The approval of the merger proposal requires the affirmative vote of holders of a majority of the RADA shares present, in person or by proxy, and voting on the merger proposal (not taking into consideration abstentions or broker-non-votes) excluding any RADA shares that are held by DRS, Merger Sub or (a) a person holding, directly or indirectly, either (i) 25% or more of the voting rights of DRS or Merger Sub, or (ii) the right to appoint 25% or more of the directors of DRS or Merger Sub, or (b) one of such person’s spouse, siblings, parents, grandparents, descendants, spouse’s descendants, siblings, or parents, or the spouse of any such person, or a corporation controlled by any one or more of such persons or by DRS or Merger Sub (any of (a) or (b), a “DRS Related Person”).

The approval of each of the other proposals requires the affirmative vote of a majority of the RADA shares present, in person or by proxy, and voting on such proposal (not taking into consideration abstentions). In addition, in order to approve each of (i) Proposal 2 (the purchase of the “tail” endorsement to the directors’ and officers’ liability insurance policy); (ii) Proposal 3 (the payment of a transaction bonus to the Chief Executive Officer of RADA); (iii) Proposal 4 (the payment of a transaction bonus to the Executive Chairman of the RADA board of directors) (iv) Proposal 5 (the payment of transaction bonus to the Chief Financial Officer of RADA); and (v) Proposal 6 (the grant of retention awards by DRS to certain office holders of RADA); the shareholders’ approval must either (i) include at least a majority of the RADA shares voted by shareholders who are not controlling shareholders (within the meaning of the ICL) and who are not shareholders who have a personal interest (within the meaning of the ICL) in the approval of such proposal, not taking into consideration abstentions or broker non-votes, or (ii) be obtained such that the total RADA shares of non-controlling shareholders and non-interested shareholders voted against such proposal do not represent more than two percent of the outstanding RADA shares.

Based on information provided by DRS and Merger Sub to RADA, as of the date of this proxy statement/prospectus, RADA is not aware of any holdings of RADA shares by DRS, Merger Sub or any DRS Related Person.

Abstentions and broker non-votes will not be treated as having been voted in respect of the merger proposal and the other proposals. Consequently, assuming a quorum is present at the extraordinary general meeting, broker non-votes and abstentions will have no effect on the voting with respect to the merger proposal as well as the other proposals.

RADA is unaware at this time of any other matters that will come before the extraordinary general meeting. If any other matters properly come before the extraordinary general meeting, it is the intention of the persons designated as proxies to vote in accordance with their judgment on such matters. RADA shares represented by executed and unrevoked proxies will be voted in accordance with such judgment.

Proposed Resolutions. It is proposed that the following resolutions be adopted at the extraordinary general meeting:

Proposal 1: “RESOLVED, to approve and adopt: (i) the Agreement and Plan of Merger, dated as of June 21, 2022 (the “merger agreement”), by and among DRS, RADA and Blackstart Ltd, a company organized under the

laws of the State of Israel and a wholly owned subsidiary of DRS (“Merger Sub”); (ii) the merger contemplated by the merger agreement (the “merger”), by which Merger Sub will be merged with and into RADA in accordance with the provisions of Sections 314-327 of the Companies Law 1999 of the State of Israel (together with the rules and regulations promulgated thereunder, the “ICL”), with RADA as the surviving company of the merger and thereby becoming a wholly owned subsidiary of DRS; and (iii) all other transactions contemplated by the merger agreement, all upon the terms and subject to the conditions set forth in the merger agreement (collectively, the “merger proposal”)”;

Proposal 2: “RESOLVED, to approve the purchase of a seven-year “tail” endorsement to RADA’s current directors’ and officers’ liability insurance policy, as described in Proposal 2 of the proxy statement/ prospectus”;

Proposal 3: “RESOLVED, to approve the payment of a transaction bonus to RADA’s Chief Executive Officer, as described in Proposal 3 of the proxy statement/prospectus”;

Proposal 4: “RESOLVED, to approve the payment of a transaction bonus to the Executive Chairman of RADA’s board of directors, as described in Proposal 4 of the proxy statement/prospectus”;

Proposal 5: “RESOLVED, to approve the payment of a transaction bonus to RADA’s Chief Financial Officer, as described in Proposal 5 of the proxy statement/prospectus”; and

Proposal 6: “RESOLVED, to approve the grant of retention awards by DRS to certain office holders of RADA, as described in Proposal 6 of the proxy statement/prospectus”.

Cost of Soliciting Votes for the Extraordinary General Meeting

RADA will bear the cost of soliciting proxies from RADA shareholders. Proxies will be solicited by mail and may also be solicited in person, by telephone or electronic communication, by our directors or officers. RADA will reimburse brokerage houses and other custodians, nominees and fiduciaries for their expenses in accordance with the regulations of the Securities and Exchange Commission, or the SEC, concerning the sending of proxies and proxy material to the beneficial owners of our shares.

Voting Results of the Extraordinary General Meeting

We will publish the final results of the matters voted on at the meeting in a Form 6-K filed with the SEC, the ISA and the TASE as soon as practicable following the meeting. You may obtain a copy of the Form 6-K through any of the following means:

•reviewing our corporate news and SEC filings at: https://www.rada.com/investors;

•reviewing our SEC filings through the SEC’s EDGAR filing system at www.sec.gov;

•reviewing our ISA filings through the ISA’s MAGNA distribution system at www.magna.isa.gov.il; or

•reviewing our TASE filings through the TASE’s MAYA filing system at www.maya.tase.co.il

ABOUT THIS PROXY STATEMENT/PROSPECTUS

This proxy statement/prospectus, which forms part of a registration statement on Form S-4 filed with the U.S. Securities and Exchange Commission (“SEC”) by DRS, constitutes a prospectus of DRS under the U.S. Securities Act of 1933, as amended, which is referred to as the “Securities Act”, with respect to the shares of DRS common stock to be issued to the holders of RADA shares as provided for in the merger agreement. This proxy statement/prospectus also constitutes a notification with respect to the extraordinary general meeting of RADA shareholders. RADA is a “foreign private issuer” (as defined by the SEC) and not subject to, and this proxy statement/prospectus does not constitute a solicitation under, the U.S. proxy rules contained in Sections 14(a), 14(b), 14(c), 14(f) and 16 of the Exchange Act of 1934 (the “Exchange Act”) and the rules promulgated by the SEC thereunder.

RADA has supplied all information contained or incorporated by reference into this proxy statement/prospectus relating to RADA and DRS has supplied all such information relating to DRS and Merger Sub. RADA and DRS have both contributed to the information related to the merger contained in this proxy statement/prospectus.

Neither RADA nor DRS have authorized anyone to provide you with information different from, or in addition to, that contained in this proxy statement/prospectus. Neither RADA nor DRS take any responsibility for, and can provide no assurances as to the reliability of, any information that others may give you. The information contained in this proxy statement/prospectus is only accurate as of the date of this proxy statement/prospectus, regardless of the time of delivery of this proxy statement/prospectus and any sale of shares of DRS common stock. You should not assume that the information incorporated by reference into this proxy statement/prospectus is accurate as of any date other than the date of the incorporated document. Neither the delivery of this proxy statement/prospectus to RADA shareholders nor the issuance by DRS of shares of DRS common stock pursuant to the merger agreement will create any implication to the contrary.

This proxy statement/prospectus does not constitute an offer to sell, or a solicitation of an offer to buy, any securities, or the solicitation of a proxy, in any jurisdiction in which or from any person to whom it is unlawful to make any such offer or solicitation in such jurisdiction.

We use the following terms in this proxy statement/prospectus:

•“Leonardo S.p.A.” means Leonardo - Società per azioni, an Italian società per azioni listed on the Milan Stock Exchange, and the ultimate parent company of DRS;

•“Merger Sub” means Blackstart Ltd, a wholly owned subsidiary of DRS organized under the laws of the State of Israel for the purpose of completing the merger;

•“RADA” means RADA Electronic Industries Ltd., a company organized under the laws of the State of Israel, together with its consolidated subsidiaries, unless the context refers only to RADA Electronic Industries Ltd. as a corporate entity;

•“US Holding” means Leonardo US Holding, Inc., a Delaware corporation, and a wholly owned subsidiary of Leonardo S.p.A.;

•“we”, “us”, “our”, “DRS” and the “Company” mean Leonardo DRS, Inc. together with its consolidated subsidiaries, unless otherwise indicated or the context refers only to Leonardo DRS, Inc. as a corporate entity; and

•“combined company” means DRS immediately following completion of the merger and the other transactions contemplated by the merger agreement.

MARKET AND INDUSTRY DATA

This proxy statement/prospectus includes or incorporates by reference estimates regarding market and industry data and forecasts, which are based on publicly available information, industry publications and surveys, reports from government agencies, reports by market research firms and our own estimates based on our management’s knowledge of, and experience in, the defense industry and market segments in which we compete. Third-party industry publications and forecasts generally state that the information contained therein has been obtained from sources generally believed to be reliable. Our estimates involve risks and uncertainties and are subject to change based on various factors, including those discussed in the sections entitled “Risk Factors”, “Special Note Regarding Forward-Looking Statements and Information” and “Information About DRS—Management’s Discussion and Analysis of Financial Condition and Results of Operations”.

SERVICE MARKS, TRADEMARKS AND TRADE NAMES

RADA and DRS hold and license various service marks, trademarks and trade names that we deem particularly important to the marketing conducted by their respective businesses. This proxy statement/prospectus also contains trademarks, service marks and trade names of other companies which are the property of their respective holders. Neither RADA nor DRS intend their use or display of such names or marks to imply relationships with, or endorsements by, any other company other than explicitly stated.

PRESENTATION OF FINANCIAL INFORMATION

We have made rounding adjustments to some of the figures included in this proxy statement/prospectus. Accordingly, numerical figures shown as totals in some tables may not be an arithmetic aggregation of the figures that precede them. Unless otherwise indicated, all references to “U.S. dollars”, “dollars”, “U.S. $” and “$” in this proxy statement/prospectus are to the lawful currency of the United States of America, and all references to “NIS” are to New Israeli Shekels.

In this proxy statement/prospectus, DRS presents certain financial measures that are not calculated in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”), such measures referred to herein as “non-GAAP”, including Adjusted EBITDA, Adjusted EBITDA Margin, Adjusted EPS, Leverage Ratio and Free Cash Flow. DRS also presents certain Revenue, Adjusted EBITDA and Net Financial Debt measures for DRS and RADA on a combined basis. RADA presents Adjusted EBITDA, which is a non-GAAP measure. You should review the reconciliation and accompanying disclosures carefully in connection with your consideration of such non-GAAP measures and note that the way in which we calculate these measures may not be comparable to similarly titled measures employed by other companies.

TABLE OF CONTENTS


			Page
Questions and Answers			1
Summary			10
Summary Consolidated Financial Data			29
Summary Unaudited Pro Forma Condensed Combined Financial Information			32
Risk Factors			33
Special Note Regarding Forward Looking Statements and Information			97
The RADA Extraordinary General Meeting			99
Unaudited Pro Forma Condensed Combined Financial Statements			103
Recapitalization			120
Information About DRS			122
Proposal 1: Approval and Adoption of the Merger Proposal			210
The Merger			211
The Merger Agreement			257
Other Agreements Related to The Merger			289
Material U.S. Federal Income Tax Consequences			293
Material Israeli Income Tax Consequences			299
Description of Capital Stock			302
Comparison of Rights of RADA Shareholders and DRS Stockholders			307
Principal Stockholders of the Company Before and After the Merger			320
Certain Beneficial Owners of RADA share s			322
Validity of Securities			324
Proposal 2: Approval to Purchase a Seven-Year “Tail” Endorsement to R ADA ’s Current Directors’ and Officers’ Liability Insurance Policy			325
Proposal 3: Approval of Payment of a Transaction Bonus to RADA's Chief Executive Officer			326
Proposal 4: Approval of Payment of a Transaction Bonus to RADA's Chairman of the Board			327
Proposal 5: Approval of Payment of a Transaction Bonus to RADA's Chief Financial Officer			328
Proposal 6: Approval of the Grant of Retention Awards			329
Experts			331
Where you Can Find More Information; Incorporation by Reference			332
Financial Statements of the Company			F -1
Annex A—Agreement and Plan of Merger (as amended)			A -1
Annex B—Opinion of RADA Financial Advisor			B-1
Annex C—RADA Proxy Card			C-1

QUESTIONS AND ANSWERS ABOUT THE MERGER

The following are some questions that you may have regarding the merger, the merger agreement, the shares of DRS common stock to be issued pursuant to the merger and brief answers to those questions. These questions and answers may not address all questions that may be important to you. You should read carefully the remainder of this proxy statement/prospectus because the information in this section does not provide all the information that might be important to you with respect to the merger. Please see “Where You Can Find More Information; Incorporation by Reference”.

Questions and Answers about the Merger

Q: Why am I receiving this proxy statement/prospectus?

A: You are receiving this proxy statement/prospectus because, as of the record date, you owned one or more RADA shares. DRS and RADA have entered into a merger agreement pursuant to which, if the closing conditions set forth in the merger agreement are satisfied or waived, Merger Sub (as the target company, or Chevrat Ha’Ya’ad) will be merged with and into RADA (as the absorbing company, or HaChevra Ha’Koletet) with RADA as the surviving company of the merger and thereby becoming a wholly owned subsidiary of DRS. This proxy statement/prospectus describes RADA’s proposal to the shareholders of RADA to approve the merger agreement and the transactions contemplated by the merger agreement, including the merger and related matters on which RADA would like its shareholders to vote. This proxy statement/prospectus also gives you information about DRS and RADA and other background information to assist you in making an informed decision.

Q: Who is DRS?

A: DRS is a leading provider of defense products and technologies including advanced sensing, network computing, force protection, and electrical power conversion and propulsion, headquartered in Arlington, Virginia. DRS has a 50-year legacy of designing and manufacturing innovative and differentiated products and solutions for military applications. DRS’s ultimate parent and majority stockholder is Leonardo S.p.A., a global high-technology company, which is among the top ten world players in Aerospace, Defense and Security and Italy’s main industrial company and has a significant industrial presence in Italy, the United Kingdom, Poland and the USA, where it also operates through subsidiaries such as DRS.

Q: What is the merger?

A: The merger is a transaction in which Merger Sub will merge with and into RADA, with RADA thereby becoming a wholly owned subsidiary of DRS and RADA shareholders receiving shares of DRS common stock, pursuant to the merger agreement, dated June 21, 2022, by and among DRS, RADA and Merger Sub. The boards of directors of DRS and RADA both approved the merger agreement and the transactions contemplated thereby.

The closing of the merger is expected to take place at 2:00 p.m. (Israel time) on the third business day following the day on which the last of the conditions for completion of the merger contained in the merger agreement (other than those conditions that by their nature are to be satisfied or waived only at the closing, but subject to the satisfaction or waiver of those conditions) is satisfied or waived in accordance with the merger agreement or on such other date as DRS and RADA may mutually agree in writing. This proxy statement/prospectus includes important information about the merger, the merger agreement (a copy of which is attached as Annex A to this proxy statement/prospectus), the shares of DRS common stock to be issued pursuant to the merger and the extraordinary general meeting of the holders of RADA shares to be held on October 19, 2022 beginning at 10:00 a.m. (Israel time) at the offices of RADA at 7 Giborei Israel Street, Netanya, Israel (which meeting and any adjournments or postponements thereof is referred to as the “RADA extraordinary general meeting”). RADA shareholders should read this information carefully and in its entirety.

Q: What will I receive in the merger?

A: As discussed in more detail under “The Merger Agreement—Merger Consideration”, at the effective time, by virtue of the merger, each RADA share issued and outstanding immediately prior to the effective time (other than

RADA shares owned by DRS, Merger Sub or any other direct or indirect wholly owned subsidiary of DRS, or RADA shares owned by RADA or any direct or indirect wholly owned subsidiary of RADA, and in each case not held on behalf of third parties, referred to as “excluded shares”) will be converted into and become exchangeable for one share of DRS common stock. Currently, DRS common stock is not publicly traded. Following the effectiveness of the merger, DRS common stock is expected to be listed and traded on the NASDAQ and the Tel Aviv Stock Exchange, which is referred to as the “TASE”, under the symbol “DRS”.

Immediately prior to the effective time, the shares of DRS common stock held by DRS’s direct parent company, US Holding, will be split (rounded up to the nearest whole share), as necessary, such that, immediately following the effective time and the issuance of the shares of DRS common stock to holders of RADA shares and the treatment of options to purchase RADA shares as described in the below section titled “The Merger Agreement—Treatment of Equity Awards”: (A) US Holding will hold 80.5% of the issued and outstanding shares of DRS common stock on a fully diluted basis (with US Holding’s ownership percentage including 50% of any awards or other equity interests that DRS may issue pursuant to entitlements under any grants of One-Time Awards (as defined below) and the foregoing percentage calculation excluding any awards or other equity interests that DRS may issue pursuant to entitlements under the DRS’s long-term incentive plan and 50% of any awards or other equity interests that DRS may issue pursuant to entitlements in connection with any grants of One-Time Awards, and such foregoing percentage will assume a reference price for RADA options (as defined below) equal to the volume-weighted average price of the RADA shares on the NASDAQ Capital Market for the ten trading days immediately prior to the closing date); and (B) the holders of RADA shares and RADA options (or DRS options issued pursuant to the provisions of the merger agreement) will hold or have entitlements to 19.5% of the issued and outstanding shares of DRS common stock on a fully diluted basis (the foregoing percentage calculation excluding any awards or other equity interests that DRS may issue pursuant to entitlements under the DRS long-term incentive plan or the issuance of any One-Time Awards).

Q: Is the exchange ratio subject to adjustment based on changes in the price of RADA shares or for other reasons?

A: The exchange ratio is fixed, which means that it will not change between now and the effective date of the merger, regardless of whether the market price of RADA shares changes, except for certain adjustments described in the following paragraph. The market price of RADA shares has fluctuated since the date of the announcement of the merger agreement and is expected to continue to fluctuate from the date of this proxy statement/prospectus to the date of the RADA extraordinary general meeting and the date the merger is completed. The market price of RADA shares, immediately prior to the merger, could be greater than, less than or the same as the market price of RADA shares on the date of this proxy statement/prospectus or at the time of the RADA extraordinary general meeting. Accordingly, you should obtain current stock price quotations for RADA shares before deciding how to vote with respect to the proposals described in this proxy statement/prospectus.

However, if, prior to the effective time the issued and outstanding RADA shares or shares of DRS common stock (or securities convertible or exchangeable into or exercisable for such shares), will have been changed into a different number of shares or securities or a different class by reason of any reclassification, stock split (including a reverse stock split), stock dividend or distribution, recapitalization, merger, issuer tender or exchange offer, or other similar transaction, or a stock dividend with a record date within such period has been declared, then the merger consideration will be equitably adjusted to provide holders the same economic effect as contemplated by the merger agreement prior to such event, including to reflect the post-closing equity split (as defined in “Summary—Merger Consideration”). For further discussion, see “The Merger Agreement—Adjustments to Prevent Dilution”.

Q: When is the merger expected to be completed?

A: We currently expect the merger to be completed during the fourth quarter of 2022, subject to the satisfaction or waiver of certain closing conditions set forth in the merger agreement, as further described in the section entitled “The Merger Agreement—Conditions to the Completion of the Merger”. It is possible that factors outside the control of DRS and RADA could result in the merger being completed at a later time or not at all. There may be a substantial amount of time between the date on which the RADA extraordinary general meeting is held and the completion of the merger. The merger will become effective following the satisfaction or waiver of the conditions to

closing contemplated in the merger agreement upon the issuance by the Companies Registrar of the State of Israel (the “Companies Registrar”) of a certificate of merger (such date referred to as the “effective time”).

Q: If the merger is completed, will my shares of DRS common stock be listed for trading?

A: Yes. Currently, DRS common stock is not publicly traded. Following the effectiveness of the merger, DRS common stock is expected to be listed and traded on the NASDAQ and the TASE, under the symbol “DRS”.

Q: Are RADA shareholders entitled to exercise dissenters’, appraisal, cash exit or similar rights?

A: RADA shareholders will not be entitled to exercise dissenters’, appraisal, cash exit or similar rights in connection with the merger.

Q: What are the significant conditions to the completion of the merger?

A: Each of DRS’s and RADA’s obligation to consummate the merger is subject to the satisfaction or waiver of a number of conditions specified in the merger agreement, including, among others, receipt of the requisite RADA shareholder vote; approval from the interagency Committee on Foreign Investment in the United States (“CFIUS”); approval from the Defense Counterintelligence and Security Agency (“DCSA”); approval from the Secretary of State at the Department of Business, Energy and Industrial Strategy of the United Kingdom pursuant to the United Kingdom National Security and Investment Act 2021 (the “UK NSIA”) (which approval was obtained on August 25, 2022); and all other requisite consents, orders, approvals, filings and declarations and all expirations of waiting periods required under the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended (the “HSR Act”) solely to the extent that DRS, as promptly as practicable following the date that is 60 days prior to the anticipated closing date, determines in its reasonable discretion that an applicable exemption from the HSR Act is no longer available in connection with the transactions; at least 50 days having elapsed after the filing of the merger proposal with the Israeli Companies Registrar and at least 30 days having elapsed after the requisite RADA shareholder vote in accordance with Israeli law; approval of the merger by each of the Israeli Ministry of Defense’s Defense Export Control Agency (which approval was obtained on May 23, 2022) and the Israeli Director of Security of the Defense Establishment; the effectiveness of the registration statement of which this proxy statement/prospectus forms a part; either the receipt of certain exemptions from the Israel Securities Authority (the “ISA”) in respect of prospectus requirements under the Israeli Securities Law, 5728-1968 (“ISL”) or the publication of a prospectus in accordance with the ISL and receipt of approval from the ISA for the Israeli prospectus; and the other conditions described under “The Merger Agreement—Conditions to the Completion of the Merger”.

Q: When will I receive the merger consideration?

A: RADA and DRS expect to consummate the merger following the satisfaction or waiver of the closing conditions described above.

If your RADA shares are held in book-entry form through The Depositary Trust Company (“DTC”), our exchange agent will transmit to DTC or its nominees on or as soon as reasonably practicable after the effective date, upon surrender of RADA shares held of record by DTC or its nominees in accordance with DTC’s customary procedures, the merger consideration, in each case, that such holder has the right to receive pursuant to the merger agreement.

If you held certificates representing RADA shares prior to the merger, the exchange agent will send you instructions for exchanging your RADA shares for shares of DRS common stock promptly after the effective time.

Q: What happens if the merger is not completed?

A: If the RADA shareholders do not approve the merger proposal and related matters or if the merger is not completed for any other reason, then RADA shareholders will continue to hold their RADA shares. RADA will remain a publicly traded company listed on the NASDAQ and the TASE. RADA shareholders will continue to be subject to the same risks and opportunities as currently with respect to their ownership of RADA shares.

In addition, if the merger agreement is terminated under certain circumstances specified in the merger agreement, RADA may be required to pay DRS a termination fee in the amount of $40 million, as further discussed in “The Merger Agreement—Termination Fees”.

Q: What will happen to my RADA equity awards?

At the effective time, by virtue of the merger and without any action on the part of the holder thereof, each outstanding option to purchase a share of RADA shares (a “RADA option”), whether vested or unvested, granted pursuant to the 2015 Share Option Plan or the 2021 Equity Incentive Plan (together, referred to as the “RADA option plans”) will be assumed by DRS and substituted with an option to purchase shares of DRS common stock (a “DRS option”) in accordance with the terms of the Leonardo DRS Inc. 2022 Omnibus Equity Compensation Plan (the “Omnibus Plan”) and respective award agreement, in accordance with the terms of the option tax ruling (as described in the section entitled “Tax Rulings” below). The right of each holder of a RADA option to exercise the DRS option will be subject to substantially the same terms and conditions, including the applicable vesting schedule, vesting restrictions, continued service requirements and right of vesting upon a qualifying termination of employment, as were applicable to the RADA option immediately prior to the effective time. The number of shares of DRS common stock subject to each DRS option will be equal to the number of RADA shares subject to such RADA option immediately prior to the effective time multiplied by the exchange ratio, rounded down to the nearest whole share, and the per share exercise price under each such DRS option will be equal to the exercise price per RADA share immediately prior to the effective time, divided by the exchange ratio, rounded up to the nearest whole cent.

For more details on the calculation of each DRS option’s exercise price and the conversion of RADA options to DRS options, see the section entitled “The Merger Agreement—Treatment of Equity Awards” beginning on page 258.

Q: Are there any risks in the merger that I should consider?

A: Yes. You should read and carefully consider the risk factors set forth in the section titled “Risk Factors” beginning on page 33.

Q: What are the material tax consequences of the merger to RADA shareholders?

A: The tax consequences of the merger for any particular shareholder will depend on the shareholder’s particular facts and circumstances. Moreover, the description below and elsewhere in this proxy statement/prospectus does not relate to the tax laws of any jurisdiction other than the United States and Israel. Accordingly, shareholders are urged to consult their tax advisors to determine the tax consequences of the merger to them in light of their particular circumstances, including the effect of any state, local or national law.

U.S. tax consequences

As further described below in the section entitled “Material United States Federal Income Tax Consequences” the merger is intended to qualify as a tax-free “reorganization” within the meaning of Section 368(a) of the Internal Revenue Code of 1986, as amended (the “Code”). Assuming that the merger is so treated, RADA shareholders will not recognize gain or loss for U.S. federal income tax purposes on their receipt of DRS common stock in exchange for their RADA shares in the merger.

RADA shareholders should read the section entitled “Material United States Federal Income Tax Consequences” beginning on page 293 of this proxy statement/prospectus for a more complete discussion of the material United States federal income tax consequences of the merger.

The United States federal income tax consequences described above may not apply to all holders of RADA shares. Your tax consequences will depend on your individual situation. Accordingly, we strongly urge you to consult your tax advisor for a full understanding of the particular tax consequences of the merger to you.

Israeli tax consequences

Although the exchange of RADA shares for the merger consideration would generally be treated as a sale and subject to Israeli tax both for Israeli and non-Israeli resident shareholders of RADA, certain relief and/or exemptions may be available under Israeli law or under applicable tax treaties. In addition, RADA, with the assistance of DRS, has submitted an application for a ruling from the Israel Tax Authority confirming the deferral of the capital gains tax event for RADA shareholders who elect to be part of such ruling (and generally hold less than 5% of RADA's issued and outstanding shares), regarding the exchange of RADA shares for the merger consideration, pursuant to Section 104H of the Israeli Income Tax Ordinance [New Version], 1961, as amended, all subject to the conditions to be detailed in such ruling.

This proxy statement/prospectus contains a discussion of the material Israeli income tax consequences of the merger and the ownership and disposition of DRS common stock received in the merger. This discussion does not address any non-Israeli tax consequences. You should consult your own tax advisors regarding the particular Israeli income tax consequences to you of the merger and of the ownership and disposition of DRS common stock received in the merger in light of your particular circumstances, as well as the particular tax consequences to you under any other tax laws.

For additional information, please refer to the section entitled “Material Israeli Income Tax Consequences”.

The Israeli tax consequences described above may not apply to all holders of RADA shares. Your tax consequences will depend on your individual situation. Accordingly, we strongly urge you to consult your tax advisor for a full understanding of the particular tax consequences of the merger to you.

Questions and Answers about the RADA Extraordinary General Meeting

Q: When and where will the RADA extraordinary general meeting be held?

A: The RADA extraordinary general meeting of the holders of RADA shares will be held on October 19, 2022 beginning at 10:00 a.m. (Israel time) at the offices of RADA at 7 Giborei Israel Street, Netanya, Israel.

Q: Who is entitled to vote at the extraordinary general meeting?

A: Only RADA shareholders with RADA shares registered in their name or names as of the close of trading on September 14, 2022, the record date, will be entitled to vote at the extraordinary general meeting or at any adjournment or postponement thereof. As of the close of trading on September 7, 2022, RADA had 49,726,194 RADA shares outstanding. Each RADA share outstanding as of the record date is entitled to one vote upon the matter presented at the RADA extraordinary general meeting.

Q: What proposals will be considered at the extraordinary general meeting?

A: At the extraordinary general meeting, you will be asked to consider and vote on the following proposals:

1.The approval and adoption of (i) the merger agreement; (ii) the merger; and (iii) all other transactions contemplated by the merger agreement, all upon the terms and subject to the conditions set forth in the merger agreement (the “merger proposal”);

2.The approval to purchase a seven-year “tail” endorsement to RADA’s current directors’ and officers’ liability insurance policy;

3.The approval of payment of a transaction bonus to RADA’s Chief Executive Officer;

4.The approval of payment of a transaction bonus to the Executive Chairman of the RADA board of directors;

5.The approval of payment of a transaction bonus to RADA’s Chief Financial Officer; and

6.The approval of the grant of retention awards by DRS to certain office holders of RADA.

RADA cannot complete the merger unless RADA shareholders approve the merger proposal (Proposal 1). However, the completion of the merger is not contingent on the approval of Proposals 2, 3, 4, 5, or 6 above.

Q: What constitutes a quorum?

A: No less than two RADA shareholders present in person or by proxy, and holding or representing between them at least at least 25% of the voting power of RADA, shall constitute a quorum at the extraordinary general meeting. If within one-half hour from the time appointed for the holding of the extraordinary general meeting a quorum is not present, the extraordinary general meeting shall be adjourned to October 26, 2022, at the same time and place. At such adjourned meeting, any two shareholders present in person or by proxy, shall constitute a quorum.

Broker non-votes and abstentions will be counted as present at the extraordinary general meeting for the purpose of determining whether a quorum is present.

Q: What vote of RADA shareholders is required to approve the merger proposal and the other proposals to be considered at the extraordinary general meeting?

A: The approval of the merger proposal requires the affirmative vote of holders of a majority of the RADA shares present, in person or by proxy, and voting on the merger proposal (not taking into consideration abstentions or broker non-votes) excluding any RADA shares that are held by DRS, Merger Sub or (a) a person holding, directly or indirectly, either (i) 25% or more of the voting rights of DRS or Merger Sub, or (ii) the right to appoint 25% or more of the directors of DRS or Merger Sub, or (b) one of such person’s spouse, siblings, parents, grandparents, descendants, spouse’s descendants, siblings, or parents, or the spouse of any such person, or a corporation controlled by any one or more of such persons or by DRS or Merger Sub (any of (a) or (b), a “DRS Related Person”).

The approval of each of the other proposals requires the affirmative vote of a majority of the RADA shares present, in person or by proxy, and voting on such proposal (not taking into consideration abstentions or broker non-votes). In addition, in order to approve each of (i) Proposal 2 (the purchase of the “tail” endorsement to the directors’ and officers’ liability insurance policy); (ii) Proposal 3 (the payment of a transaction bonus to the Chief Executive Officer of RADA); (iii) Proposal 4 (the payment of a transaction bonus to the Executive Chairman of the RADA board of directors); (iv) Proposal 5 (the payment of a transaction bonus to the Chief Financial Officer of RADA); and (v) Proposal 6 (the grant of the retention awards by DRS to certain office holders of RADA), the shareholders’ approval must either (i) include at least a majority of the RADA shares voted by shareholders who are not controlling shareholders (within the meaning of the ICL) and who are not shareholders who have a personal interest (within the meaning of the ICL) in the approval of such proposal, not taking into consideration abstentions or broker non-votes, or (ii) be obtained such that the total RADA shares of non-controlling shareholders and non-interested shareholders voted against such proposal do not represent more than two percent of the outstanding RADA shares.

Q: How does RADA's board of directors recommend that I vote?

A: RADA’s board of directors recommends a vote “FOR” the merger proposal and the other proposals to be considered at the extraordinary general meeting.

For a discussion of the factors that RADA’s board of directors considered in determining to recommend the approval and adoption of the merger agreement, the merger and all other transactions contemplated by thereby, see “The Merger—RADA’s Reasons for the Merger”.

Q: Do any of RADA’s directors or executive officers have any interests in the merger that may be different from, or in addition to, my interests as a RADA shareholder?

A: In considering the proposal to be voted on at the extraordinary general meeting, you should be aware that RADA’s directors and executive officers have interests that may be different from, or in addition to, the interests of the RADA shareholders generally. For more information, see “The Merger—Interests of RADA Directors and Executive Officers in the Merger”.

Q: What do I need to do now?

A: After carefully reading and considering the information contained in this proxy statement/prospectus, including the annexes and the other documents incorporated by reference in this proxy statement/prospectus, please ensure your RADA shares are voted at the extraordinary general meeting by completing, dating, signing and mailing the enclosed proxy card in the envelope provided at your earliest convenience and in any event so as to be received in a timely manner as discussed in this proxy statement/prospectus. Your RADA shares can be voted at the extraordinary general meeting only if you are present or represented by a valid proxy. In order to provide for proper counting of your shareholder vote, in the enclosed proxy you are required to indicate whether you are a controlling shareholder of RADA, and whether you have a personal interest in (i) Proposal 2 (the purchase of the “tail” endorsement to the directors’ and officers’ liability insurance policy); (ii) Proposal 3 (the payment of a transaction bonus to the Chief Executive Officer of RADA); (iii) Proposal 4 (the payment of a transaction bonuses to the Executive Chairman of the RADA board of directors); (iv) Proposal 5 (the payment of a transaction bonus to the Chief Financial Officer of RADA); or (v) Proposal 6 (the grant of retention awards by DRS to certain office holders of RADA); and, with respect to Proposal 1, indicate whether or not you are a shareholder listed in Section 320(c) of the ICL (i.e., whether you are a DRS Related Person).

To make this indication with respect to Proposals 1 through 6, check the box “YES” or “NO” in Items 1A, 2A, 3A, 4A, 5A and 6A, respectively, in the enclosed proxy card.

Q: What happens if I sell my RADA shares before the extraordinary general meeting?

A: The record date for the extraordinary general meeting is earlier than the date of the extraordinary general meeting. If you own RADA shares on the record date and transfer your RADA shares after the record date but before the time of the extraordinary general meeting, you will retain your right to vote such RADA shares at the extraordinary general meeting, but the right to receive the merger consideration will pass to the person to whom you transferred your RADA shares. In order to receive the merger consideration, you must hold your RADA shares through the completion of the merger.

Q: How do I cast my vote if I am a RADA shareholder of record?

A: If you are a RADA shareholder of record, you may vote in person at the extraordinary general meeting or by submitting a proxy for the extraordinary general meeting. In order for a proxy to be counted, it must be a duly executed proxy and received not later than 10:00 a.m. (Israel time) on October 17, 2022. This will be deemed to have occurred only if such proxy is received by the above date and time, either by RADA at its principal executive offices at 7 Giborei Israel Street, Netanya, Israel, or by RADA’s transfer agent (other than proxies that are revoked or superseded before they are voted). If you submit an executed proxy but do not specify how to vote your proxy, your RADA shares will not be voted at the extraordinary general meeting. RADA shares represented by any proxy received after the times specified above will not be counted as present at the meeting and will not be voted. For more detailed instructions on how to vote, see the section of this proxy/prospectus titled “The RADA Extraordinary General Meeting”. If two or more persons are registered as joint owners of any RADA share, the right to attend the extraordinary general meeting shall be conferred upon all of the joint owners, but the right to vote at the extraordinary general meeting and/or the right to be counted as part of the quorum required for the extraordinary general meeting shall be conferred exclusively upon the senior among the joint owners attending the extraordinary

general meeting, in person or by proxy, and for this purpose seniority shall be determined by the order in which the names stand on RADA’s shareholder register.

Q: How do I cast my vote if my RADA shares are held in “street name” by my broker or through members of the TASE?

A: If you hold your RADA shares in “street name” through a bank, broker or other nominee you should follow the instructions on the form you receive from your bank, broker or other nominee. If your RADA shares are held in “street name” and you wish to vote such shares by attending the extraordinary general meeting in person, you will need to obtain a proxy from your bank, broker or other nominee. If your RADA shares are held in “street name”, you must contact your bank, broker or other nominee to change or revoke your voting instructions. If you hold your RADA shares through members of the TASE, you may vote in person or vote through the proxy card by completing, signing, dating and mailing the proxy card with a copy of your identity card, passport or certificate of incorporation, as the case may be, to RADA’s offices. If you hold shares through members of the TASE and intend to vote your shares either in person or by proxy, you must deliver to RADA an ownership certificate confirming your ownership of RADA shares on the record date, which must be certified by a recognized financial institution, as required by the Israeli Companies Regulations (Proof of Ownership of Shares for Voting at General Meeting) of 2000, as amended. Alternatively, if you hold shares through members of the TASE, you may vote electronically via MAGNA (the electronic voting system of the ISA) up to 10:00 a.m. (Israel time) on October 17, 2022. You should receive instructions about electronic voting from the TASE member through which you hold your shares.

Q: What will happen if I abstain from voting on the merger proposal or any of the other proposals to be considered at the extraordinary general meeting?

A: Proxies submitted with instructions to abstain from voting and broker non-votes will not be considered to be votes “FOR” or “AGAINST” the merger proposal or any other proposal and will have no effect on the result of the vote.

Q: Can I change my vote after I have delivered my proxy?

A: You may revoke your proxy at any time before the vote is taken at the extraordinary general meeting by (a) delivering to RADA at its principal executive offices located at 7 Giborei Israel Street, Netanya, Israel, Attention: Chief Financial Officer, a written notice of revocation, bearing a later date than the proxy, stating that the proxy is revoked, (b) by properly submitting a later-dated proxy relating to the same RADA shares or (c) by attending the extraordinary general meeting and voting in person (although attendance at the extraordinary general meeting will not, by itself, revoke a proxy). RADA shares represented by properly executed proxies received by us no later than 10:00 a.m. (Israel time) on October 17, 2022 will, unless such proxies have been previously revoked or superseded, be voted at the extraordinary general meeting in accordance with the directions on the proxies. Written notices of revocation and other communications concerning the revocation of a previously executed proxy should be addressed to RADA at its principal executive offices located at 7 Giborei Israel Street, Netanya, Israel, Attention: Chief Financial Officer. If your RADA shares are held in “street name”, you must contact your bank, broker or other nominee to change or revoke your voting instructions. Please note that if you hold RADA shares through a TASE member and you voted electronically via the electronic voting system of the ISA, you may change or revoke your vote using the electronic voting system up to the time by which you may submit your vote using such system (i.e., up to 10:00 a.m. (Israel time) on October 17, 2022).

Q: If I hold my RADA shares in certificated form, should I send in my share certificates now?

A: No. With respect to certificates representing RADA shares, as promptly as reasonably practicable after the effective time (but no later than the third business day thereafter), the exchange agent will mail to each holder of record of each such certificate (i) a notice advising such holders of the effectiveness of the merger; (ii) a letter of transmittal in customary form; (iii) a declaration and/or valid tax certificate or such other forms as may be required under any applicable law or pursuant to the terms of the merger agreement; and (iv) instructions for surrendering such share certificate (or affidavit of loss in lieu of such certificate as provided in the merger agreement) to the exchange agent.

Upon surrender to the exchange agent of such certificate (or affidavit of loss in lieu of such certificate as provided in the merger agreement) together with a duly executed and completed letter of transmittal and such other documents as may reasonably be required pursuant to such instructions, the exchange agent will mail to each holder of record of any such certificate in exchange therefore, as promptly as reasonably practicable thereafter a statement reflecting the number of whole shares of DRS common stock, if any, that such holder is entitled to receive pursuant to the merger agreement in the name of such record holder. For further information, see “The Merger Agreement—Exchange of Shares”.

Q: Who can help answer my questions?

A: If you have any further questions about the merger or if you need additional copies of this proxy statement/prospectus, you can contact:

RADA Investor Contact

Avi Israel, CFO

Telephone: +972 76 538 6200

Email: mrkt@rada.com

DRS Investor Contact

Cody Slach or Jeff Grampp, CFA Gateway Group

Telephone: +1 949 574 3860

Email: DRS@GatewayIR.com

Q: Where can I find more information about the companies?

A: You are urged to carefully read this proxy statement/prospectus, including its annexes and the documents incorporated by reference into this proxy statement/prospectus. You can find more information about DRS and RADA in the documents described under “Where You Can Find More Information; Incorporation by Reference”.

SUMMARY

For your convenience, provided below is a brief summary of certain information contained in this proxy statement/prospectus. This summary highlights selected information from this proxy statement/prospectus and does not contain all of the information that may be important to you as a RADA shareholder. To understand the merger fully and for a more complete description of the terms of the merger, you should read carefully this entire proxy statement/prospectus, its annexes and the other documents to which you are referred. Items in this summary include a page reference directing you to a more complete description of those items. You may obtain the information incorporated by reference into this proxy statement/prospectus without charge by following the instructions under the section entitled “Where You Can Find More Information; Incorporation by Reference”.

Information about DRS (Page 122)

DRS is a leading technology company that provides solutions to defense markets worldwide. These solutions provide battlefield superiority today while shaping the battlefield of tomorrow for the U.S. military and our allies abroad. We focus on four segments of the wider growing defense marketplace, including advanced sensing, network computing, force protection, and electrical power conversion and propulsion. We are focused on these market segments because they are growing faster than the overall defense budgets, we have deep technology advantages in each, and we believe the future demand will increase significantly in these segments. This focus is rooted in our belief that our technologies will not only support our customers in today’s mission but will also underpin their strategy to migrate towards more autonomous, dynamic, interconnected, and multi-domain capabilities needed to win in tomorrow’s battlefields. We expect that our customer’s focus on countering the pacing threat from China and the acute threat from Russia while simultaneously pursuing a counter-terrorism strategy against asymmetric organizations and actors creates an increasing opportunity for DRS’s core technologies and solutions.

DRS benefits from a 50-year legacy of designing and manufacturing innovative and differentiated products and solutions for military applications. The result is a current installed base of products on nearly every platform in the US military. This includes products on every Army combat vehicle, every Naval combatant, every submarine, nearly all Air Force aircraft, and many others. From our earliest products that were sonar systems instrumental in detecting enemy submarines, to today’s best-in-class products including electro-optical and electronic warfare sensors and systems, we have continually developed advanced technologies to address complex military challenges. We continue to target our investments toward high growth areas of defense budgets. Our diverse array of defense systems and solutions are used across land, air, sea, space, and cyber domains, and are offered to all branches of the U.S. military, major aerospace and defense prime contractors, government intelligence agencies, and international military customers.

Our alignment with some of the top defense priorities to address the greatest threats to the U.S. and its allies has allowed us to achieve a 10% compounded annual growth rate (“CAGR”) in revenues from the year ended December 31, 2017 through the year ended December 31, 2021. This growth, which exceeded the DoD budget CAGR of 3.8% during this period, drove our annual revenue to approximately $2.9 billion for the year ended December 31, 2021. During the same five year period, our net earnings improved by $245 million to $154 million, our operating earnings grew $187 million to $236 million and our Adjusted EBITDA grew $129 million to $310 million (CAGR of 14%). Adjusted EBITDA is a non-GAAP measure. These financial metrics do not reflect the impact of certain dispositions with respect to which we entered into definitive agreements prior the announcement of the merger and which were completed in 2022. See “Management’s Discussion and Analysis of Financial Condition and Results of Operations—Key Financial and Operating Measures—Non-GAAP Financial Measures” for a reconciliation of Adjusted EBITDA to net earnings.

The U.S. future fighting force is expected to be increasingly autonomous. Future platforms are also expected to require greater capabilities in sensing, computing, self-protection, and power to allow them to reduce human dependencies to improve reaction time, increase effectiveness and enhance soldier safety. Our core technologies enable autonomous platforms and manned-unmanned teaming. Our customers are expecting future platforms where sensor data can be fused, aggregated, and understood. Once situational understanding is achieved, it can be rapidly communicated to the command structure. This drive for increased autonomy is shifting value from the platform itself to its electronics and sensors. We are helping to shape these requirements by developing and offering smaller,

integrated, and more modular (and thereby able to support a range of platforms and subsystems) and more capable systems using DRS’s core technologies.

Across the spectrum of multi-domain operations on the future battlefield, we believe DRS’s core capabilities in sensing, network computing, force protection, and power and propulsion will help U.S. and allied military forces to maintain a strategic advantage over their enemies. Our technology supports our customers’ heightened needs and is positioned to enable future battlefield platforms designed to maintain dominance.

Our Company consists of seven business units which are organized as two operating segments: Advanced Sensors and Computing and Integrated Mission Systems. Following is additional information on each our operating segments. For information regarding segment performance see “Management’s Discussion and Analysis of Financial Condition and Results of Operations” in this proxy statement/prospectus.

Parties to the Merger (Page 222)

Leonardo DRS, Inc.

DRS is a Delaware corporation, headquartered in Arlington, Virginia, and is a leading provider of defense products and technologies including advanced sensing, network computing, force protection, and electrical power conversion and propulsion.

DRS’s principal executive offices are located at 2345 Crystal Drive, Suite 1000 Arlington, VA 22202. DRS’s main telephone number is (703) 416-8000, and its website is www.leonardodrs.com. Information contained on DRS’s website or that can be accessed through its website is not incorporated into and does not constitute a part of this proxy statement/prospectus. DRS has included its website address only as an inactive textual reference and does not intend it to be an active link to its website.

The common stock of DRS, par value $0.01 per share (“DRS common stock”), is not currently publicly traded.

RADA Electronic Industries Ltd.

RADA is a company organized under the laws of Israel, headquartered in Netanya, Israel, and is a global defense electronics company, specializing in the development, manufacture, marketing and sales of tactical land radars for defense forces and for critical infrastructure protection applications, and military avionics for manned and unmanned aircraft.

RADA’s principal executive offices are located at 7 Giborei Israel Street, Netanya 4250407, Israel. RADA’s main telephone number is +972 76 538 6200, and its website is www.rada.com. Information contained on RADA’s website or that can be accessed through its website is not incorporated into and does not constitute a part of this proxy statement/prospectus. RADA has included its website address only as an inactive textual reference and does not intend it to be an active link to its website.

The ordinary shares of RADA, par value New Israeli Shekel 0.03 per share (“RADA shares”), are traded on the NASDAQ and the TASE under the symbol “RADA”.

Blackstart Ltd

Blackstart Ltd, is a company organized under the laws of the State of Israel and a wholly owned subsidiary of DRS (“Merger Sub”) which was organized for the purpose of effecting the merger. Merger Sub has not conducted any activities other than those incidental to its formation and the matters contemplated by the merger agreement. The principal executive offices of Merger Sub are located at 2345 Crystal Drive, Suite 1000 Arlington, VA 22202 and its telephone number is (703) 416-8000.

The Merger and The Merger Agreement (Page 211 and 257)

DRS, Merger Sub and RADA have entered into the merger agreement, which provides for the merger of Merger Sub, a wholly owned subsidiary of DRS organized under the laws of Israel, with and into RADA. As a result of the

merger, Merger Sub (as the target company, or Chevrat Ha’Ya’ad) will be merged with and into RADA (as the absorbing company, or HaChevra Ha’Koletet) as the surviving company of the merger, with RADA thereby becoming a wholly owned subsidiary of DRS. A copy of the merger agreement is attached to this proxy statement/prospectus as Annex A. We encourage you to read the merger agreement carefully and in its entirety, as it is the legal document that governs the merger.

The following diagrams illustrate the simplified structure of DRS, RADA and Merger Sub prior to the consummation of the merger, as well as after the consummation.

Merger Consideration (Page 258)

At the effective time, by virtue of the merger and without any action on the part of the parties or any holder of any capital stock of RADA, each RADA share issued and outstanding immediately prior to the effective time (other than RADA shares owned by DRS, Merger Sub or any other direct or indirect wholly owned subsidiary of DRS, or RADA shares owned by RADA or any direct or indirect wholly owned subsidiary of RADA, and in each case not held on behalf of third parties, referred to as “excluded shares”) will be converted into and become exchangeable for one share of DRS common stock.

Immediately prior to the effective time, the shares of DRS common stock held by US Holding will be split (rounded up to the nearest whole share), as necessary, such that, immediately following the effective time and the issuance of the shares of DRS common stock to holders of RADA shares and the treatment of options to purchase RADA shares as described in the below section titled “Treatment of Equity Awards”: (A) US Holding will hold 80.5% of the issued and outstanding shares of DRS common stock on a fully diluted basis (with US Holding’s ownership percentage including 50% of any awards or other equity interests that DRS may issue pursuant to entitlements under any grants of certain one-time special awards of restricted stock units and performance-based restricted stock units (“One-Time Awards”) and the foregoing percentage calculation excluding any awards or other equity interests that DRS may issue pursuant to entitlements under the DRS’s long-term incentive plan and 50% of any awards or other equity interests that DRS may issue pursuant to entitlements in connection with any grants of One-Time Awards, and such foregoing percentage will assume a reference price for RADA options equal to the volume-weighted average price of the RADA shares on the NASDAQ for the ten trading days immediately prior to the closing date); and (B) the holders of RADA shares and RADA options (or DRS options issued pursuant to the provisions of the merger agreement, as summarized under “Treatment of Equity Awards” below) and other RADA

securities will hold or have entitlements to 19.5% of the issued and outstanding shares of DRS common stock on a fully diluted basis (such split, the “stock split”, and the equity ownership of DRS immediately following the closing, the “post-closing equity split”). The foregoing percentage calculation excludes any awards or other equity interests that DRS may issue pursuant to entitlements under the DRS long-term incentive plan or the issuance of any One-Time Awards.

At the effective time, all excluded shares, by virtue of the merger and without any action on the part of the parties or any holder of any excluded shares, will cease to be outstanding, will be cancelled and will cease to exist, and no payment will be made in respect of such shares.

Treatment of Equity Awards (Page 258)

At the effective time, by virtue of the merger and without any action on the part of the holder thereof, each outstanding option to purchase one or more RADA shares (a “RADA option”), whether vested or unvested, granted pursuant to the 2015 Share Option Plan or the 2021 Equity Incentive Plan (together, referred to as the “RADA option plans”) will be assumed by DRS and substituted with an option to purchase shares of DRS common stock (a “DRS option”) in accordance with the terms of the Leonardo DRS Inc. 2022 Omnibus Equity Compensation Plan (the “Omnibus Plan”) and respective award agreement, in accordance with the terms of the option tax ruling (as described in the section entitled “Tax Rulings” below). The right of each holder of a RADA option to exercise the DRS option will be subject to substantially the same terms and conditions, including the applicable vesting schedule, vesting restrictions, continued service requirements and right of vesting upon a qualifying termination of employment, as were applicable to the RADA option immediately prior to the effective time. The number of shares of DRS common stock subject to each DRS option will be equal to the number of RADA shares subject to such RADA option immediately prior to the effective time multiplied by the exchange ratio, rounded down to the nearest whole share, and the per share exercise price under each such DRS option will be equal to the exercise price per RADA share immediately prior to the effective time, divided by the exchange ratio, rounded up to the nearest whole cent.

DRS’s Reasons for the Merger (Page 244)

At a special meeting held on June 15, 2022, the DRS board of directors determined that the merger agreement, and the transactions contemplated thereby, including the merger (the “transactions”) were advisable and fair to and in the best interests of its stockholder and approved the merger agreement, and the transactions, on the terms and conditions set forth in the merger agreement.

In reaching its decision DRS’s board of directors, as described in the section entitled “The Merger—Background of the Merger” beginning on page 223, held a number of meetings, consulted with DRS’s senior management and its outside financial advisor J.P. Morgan Securities LLC and outside legal advisors Sullivan & Cromwell LLP and Herzog Fox & Neeman, and considered the business, assets and liabilities, results of operations, financial performance, strategic direction and prospects of RADA and determined that the merger was in the best interests of DRS and its stockholder.

In making its determination, DRS’s board of directors focused on a number of factors, including those listed in the section entitled “The Merger—DRS's Reasons for the Merger” beginning on page 244.

RADA’s Reasons for the Merger (Page 229)

At a special meeting held on June 20, 2022, RADA’s board of directors approved and declared advisable the merger agreement, the other transaction documents and the transactions contemplated thereby.

In reaching its decision to approve and declare advisable the merger agreement, the other transaction documents and the transactions contemplated thereby, RADA’s board of directors, as described in the section entitled “The Merger—Background of the Merger” beginning on page 223, held a number of meetings, consulted with RADA’s senior management, its outside legal advisors, DLA Piper LLP (US) (“DLA Piper”) and S. Friedman, Abramson & Co., Law Offices, and its financial advisor, Evercore Group L.L.C. (“Evercore”), and considered the business, assets and liabilities, results of operations, financial performance, strategic direction and prospects of RADA and DRS and

determined that the merger was in the best interests of RADA. At its special meeting held on June 20, 2022, after due consideration and consultation with RADA’s senior management and outside legal and financial advisors, RADA’s board of directors approved and declared advisable the merger agreement, the other transaction documents and the transactions contemplated thereby.

In making its determination, RADA’s board of directors focused on a number of factors, including those listed in the section entitled “The Merger—RADA's Reasons for the Merger” beginning on page 229.

Opinion of RADA’s Financial Advisor (Page 232)

Pursuant to an engagement letter dated as of July 6, 2020 (as amended June 6, 2021), RADA engaged Evercore to act as its financial advisor in connection with a possible strategic transaction involving RADA. As part of this engagement, RADA requested that Evercore evaluate the fairness of the exchange ratio pursuant to the merger agreement taking into account the stock split, from a financial point of view, to the holders of the RADA shares.

At a meeting of the RADA board of directors held on June 20, 2022, Evercore rendered to the RADA board of directors its oral opinion, subsequently confirmed in writing, that as of June 20, 2022 and based upon and subject to the assumptions, limitations, qualifications and conditions described in Evercore’s written opinion, the exchange ratio pursuant to the merger agreement taking into account the stock split, was fair, from a financial point of view, to the holders of the RADA shares.

The full text of the written opinion of Evercore, dated as of June 20, 2022, which sets forth, among other things, the procedures followed, assumptions made, matters considered and qualifications and limitations on the scope of review undertaken in rendering its opinion, is attached as Annex B to this proxy statement/prospectus and is incorporated by reference in its entirety into this proxy statement/prospectus. You are urged to read this opinion carefully and in its entirety. Evercore’s opinion was addressed to, and provided for the information and benefit of, the RADA board of directors in connection with their evaluation of the transactions. The opinion does not constitute a recommendation to the RADA board of directors or to any other persons in respect of the transactions, including as to how any holder of RADA shares should vote or act in respect of the transactions. Evercore’s opinion does not address the relative merits of the transactions, as compared to other business or financial strategies that might be available to RADA, nor does it address the underlying business decision of RADA to engage in the transactions.

For further information, see the section of this proxy statement/prospectus entitled “The Merger—Opinion of RADA’s Financial Advisor” beginning on page 232 and the full text of the written opinion of Evercore attached as Annex B to this proxy statement/prospectus.

Information About the RADA Extraordinary General Meeting (Page 99)

An extraordinary general meeting of RADA’s shareholders to approve the merger will be held on October 19, 2022 at 10:00 a.m., Israel time, at RADA’s principal executive offices at 7 Giborei Israel Street, Netanya, Israel.

Completion of the merger is conditioned on a vote by the requisite majority of RADA shareholders to approve and adopt (i) the agreement and plan of merger date June 21, 2022, among DRS, Merger Sub, and RADA; and (ii) all other transactions contemplated by the merger agreement, all upon the terms and subject to the conditions set forth in the merger agreement (the “merger proposal”).

Only RADA shareholders with RADA shares registered in his, her, its or their name or names as of the close of trading on September 14, 2022, the record date for the meeting, are entitled to vote the RADA shares they held on the record date at the meeting. As of the close of trading on September 7, 2022, 49,726,194 RADA shares were outstanding. Each RADA share outstanding as of the record date is entitled to one vote upon each of the matters presented at the meeting.

indirectly, either (i) 25% or more of the voting rights of DRS or Merger Sub, or (ii) the right to appoint 25% or more of the directors of DRS or Merger Sub, or (b) one of such person’s spouse, siblings, parents, grandparents, descendants, spouse’s descendants, siblings, or parents, or the spouse of any such person, or a corporation controlled by any one or more of such persons or by DRS or Merger Sub (any of (a) or (b), a “DRS Related Person”).

Abstentions and broker non-votes will not be treated as having been voted in respect of the merger. Consequently, assuming a quorum is present at the meeting, broker non-votes and abstentions will have no effect on the voting with respect to the merger.

RADA is unaware at this time of any other matters that will come before the meeting.

Interests of DRS’s Directors and Executive Officers in the Merger (Page 255)

RADA shareholders should be aware that DRS’s directors and executive officers have interests in the merger that are different from, or in addition to, those of DRS stockholders generally. These interests include, among others:

•Upon the closing of the merger, certain executive officers will be granted One-Time Awards in the form of restricted stock units (“RSUs”) and performance-based restricted stock units (“PRSUs”) pursuant to the Omnibus Plan. For more information on the form and terms of the One-Time Awards, see the section entitled “The Merger—Interests of DRS’s Directors and Executive Officers in the Merger” beginning on page 255.

•DRS’s directors and executive officers are entitled to continued indemnification and insurance coverage under the merger agreement.

Members of the DRS board of directors were aware of and considered these interests, among other matters, in evaluating and negotiating the merger agreement and approving the merger. For more information, see the section entitled “The Merger—Interests of DRS’s Directors and Executive Officers in the Merger” beginning on page 255.

Interests of RADA’s Directors and Executive Officers in the Merger (Page 253)

RADA shareholders should be aware that some of RADA’s directors and executive officers have interests in the merger that are different from, or in addition to, those of RADA shareholders generally. These interests include, among others:

•Subject to RADA shareholder approval, to the extent required, and compliance with the ICL, RADA undertook to pay transaction bonuses in the aggregate amount of $3,800,000, in cash, to Mr. Dubi Sella, Mr. Yossi Ben Shalom, Mr. Avi Israel and Mr. Max Cohen in connection with the merger, each of which will be paid immediately prior to and contingent upon the occurrence of the closing of the merger. For more information, see the section entitled “The Merger—Interests of RADA’s Directors and Executive Officers in the Merger—Transaction Bonuses” beginning on page 253.

•Contingent on the closing of the merger, the approval of the compensation committee of the DRS board of directors (the “DRS compensation committee”) and the approval of the RADA shareholders, DRS will grant retention awards (the “Retention Awards”) in the form of RSUs pursuant to the Omnibus Plan to certain office holders of RADA. For more information on the form and terms of the Retention Awards, see the section entitled “The Merger—Interests of RADA’s Directors and Executive Officers in the Merger—Retention Awards” beginning on page 253.

•Some of the RADA options previously granted to each of Mr. Yossi Ben Shalom, Mr. Guy Zur, Mr. Yossi Weiss, Prof. Alon Dumanis, Ms. Ofra Brown, Mr. Dubi Sella, Mr. Avi Israel, Mr. Yaniv Dorani, Mr. Oleg Kiperman, Mr. Alon. Amitay, Mr. William (Bill) Watson, Mr. Max Cohen and Mr. Scott Wood will vest in full ten days prior to the closing of the merger and the rest, subject to DRS’s approval, will vest immediately thereafter, in each case pursuant to the terms of such options. For more information, see the

section entitled “The Merger—Interests of RADA’s Directors and Executive Officers in the Merger—Treatment of RADA Options” beginning on page 254.

•All members of the RADA board of directors as well as all of its executive officers will be entitled to indemnification and insurance coverage by or through RADA. DRS agreed to cause RADA to fulfill such indemnification and insurance obligations following the consummation of the merger pursuant to the terms of the merger agreement. For more information, see the section entitled “The Merger Agreement—Indemnification; Directors’ and Officers’ Insurance” beginning on page 280.

Members of the RADA board of directors were aware of and considered these interests, among other matters, in evaluating and negotiating the merger agreement and approving the merger. For more information, see the section entitled “The Merger—Interests of RADA’s Directors and Executive Officers in the Merger” beginning on page 253.

Principal Stockholders of the Company Before and After the Merger (Page 320)

Prior to the completion of the merger, all of the shares of DRS common stock have been owned by US Holding, a wholly owned subsidiary of Leonardo S.p.A. Immediately following the merger, US Holding is expected to hold 80.5% of the issued and outstanding shares of DRS common stock on a fully diluted basis (which ownership percentage includes 50% of any awards or other equity interests that DRS may issue pursuant to entitlements under any grants of One-Time Awards, as described further in the section “The Merger Agreement—Merger Consideration”). Certain directors and named executive officers of DRS will beneficially own DRS common stock following the merger as described in further detail in the section entitled “Principal Stockholders of the Company Before and After the Merger” beginning on page 320.

Certain Beneficial Owners of RADA Shares (Page 322)

At the close of business on September 7, 2022, directors and executive officers of RADA beneficially owned approximately 3,393,312 RADA shares, collectively representing 6.64% of RADA shares issued and outstanding on September 7, 2022. Under SEC rules, a person is deemed to be a “beneficial owner” of a security if that person has or shares voting power or investment power, which includes the power to dispose of or to direct the disposition of such security. A person is also deemed to be a beneficial owner of any securities of which that person has a right to acquire beneficial ownership within 60 days. Securities that can be so acquired are deemed to be outstanding for purposes of computing such person’s ownership percentage, but not for purposes of computing any other person’s percentage. Under these rules, more than one person may be deemed to be a beneficial owner of the same securities, and a person may be deemed to be a beneficial owner of securities as to which such person has no economic interest. For more information regarding the security ownership of RADA directors and executive officers, see the information provided in the section entitled “Certain Beneficial Owners of RADA shares” beginning on page 322.

Regulatory Approvals (Page 252)

The completion of the merger is subject to the receipt of certain approvals from, and/or making certain filings with, regulatory authorities in the United States, the United Kingdom and Israel.

With respect to the United States, the parties have determined that the merger is exempt from the premerger notification requirements of the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended (the “HSR Act”). As such, the merger is not expected to be subject to any filing requirements with U.S. federal competition authorities, however the merger may be subject to expiration of the applicable waiting period (or any extensions thereof) under the HSR Act, solely to the extent that DRS, as promptly as practicable following the date that is 60 days prior to the anticipated closing date, determines in its reasonable discretion that an applicable exemption from the HSR Act is no longer available in connection with the transactions. The merger also cannot be completed until approval has been obtained from the interagency Committee on Foreign Investment in the United States (“CFIUS”). DRS and RADA submitted a draft joint voluntary notice to CFIUS with respect to the merger on August 3, 2022 and a formal joint voluntary notice on August 24, 2022, and CFIUS accepted the notice and began formal review on September 8, 2022. The completion of the merger is also subject to approval from the Defense Counterintelligence and Security Agency (“DCSA”).

With respect to the United Kingdom, the new investment screening regime under the National Security and Investment Act 2021 (the “UK NSIA”) came into full effect on January 4, 2022. Pursuant to the new investment screening regime, certain transactions involving entities that carry on specified activities in the United Kingdom must be approved by the Secretary of State at the Department of Business, Energy and Industrial Strategy of the United Kingdom (the “UK Secretary of State”) before closing. DRS submitted a notice pursuant to the UK NSIA (the “UK NSIA Notice”) to the UK Secretary of State on July 18, 2022 and which notice was accepted as complete on July 20, 2022. UK NSIA approval was obtained on August 25, 2022.

RADA has also sought and received approval from the Israeli Ministry of Defense’s Defense Export Control Agency, and has sought approval from the Israeli Director of Security of the Defense Establishment.

At any time before or after consummation of the merger, notwithstanding the determination by DRS that the merger is exempt from the premerger notification requirements of the HSR Act, the Department of Justice (“DOJ”), the Federal Trade Commission (“FTC”), or any state or foreign governmental entity, could take such action under antitrust, competition or other foreign investment laws or regulations as each deems necessary or desirable in the public interest, including seeking to enjoin the completion of the merger or seeking divestiture of substantial assets of DRS and RADA. Private parties also may seek to take legal action under the antitrust, competition or other foreign investment laws under certain circumstances. There can be no assurance that the DOJ, FTC, or any other state or foreign governmental entity or any private party will not attempt to challenge the merger on antitrust, competition, foreign investment or other grounds, and, if such a challenge is made, there can be no assurance as to its result.

No Appraisal Rights (Page 101)

Under the ICL, holders of RADA shares are not entitled to statutory appraisal rights in connection with the merger.

Conditions to the Completion of the Merger (Page 283)

Each party’s obligation to consummate the merger is subject to the satisfaction or waiver at or prior to the effective time of each of the following conditions:

•receipt of the required vote of RADA shareholders to approve the merger agreement (the “requisite RADA vote”);

•the shares of DRS common stock issuable to the holders of RADA shares pursuant to the merger agreement must have been authorized for listing on the NASDAQ upon official notice of issuance;

•obtaining approval from CFIUS, DCSA and the UK Secretary of State pursuant to the UK NSIA (which UK NSIA approval was obtained on August 25, 2022) and all other requisite consents, orders, approvals, filings and declarations and all expirations of waiting periods required under the HSR Act solely to the extent that DRS, as promptly as practicable following the date that is 60 days prior to the anticipated closing date, determines in its reasonable discretion that an applicable exemption from the HSR Act is no longer available in connection with the transactions (all such authorizations, consents, orders, approvals, filings and declarations and the lapse of all such waiting periods, the “requisite regulatory approvals”), and the continued full force and effectiveness of the requisite regulatory approvals;

•the absence of any law or order (whether temporary, preliminary or permanent) enacted, issued, promulgated, enforced or entered by any governmental entity that is in effect and restrains, enjoins, makes illegal or otherwise prohibits the consummation of the merger and the other transactions contemplated by the merger agreement;

•the effectiveness of the registration statement of which this proxy statement/prospectus forms a part and the absence of a stop order or proceedings seeking a stop order by the SEC;

•at least 50 days having elapsed after the filing of the merger proposal with the Israeli Companies Registrar and at least 30 days having elapsed after the requisite RADA vote in accordance with Israeli Law;

•either (A) DRS must have obtained (i)(a) an exemption or agreement from the ISA to exempt or agree not to take any action in connection with the issuance of DRS common stock without a publication of a prospectus in accordance with the ISL and (b) an exemption from the requirements of the ISL concerning the publication of an Israeli prospectus in respect of the new stock incentive plan and any grants thereunder including the exchange of RADA options for DRS options in accordance with the provisions of the merger agreement, pursuant to Section 15D of the ISL, or alternatively the ISA’s confirmation that the exchange of RADA options for DRS options is exempt from prospectus requirements or does not trigger prospectus requirements and (ii) approval from ISA and the TASE of a request to register all of DRS common stock for trading on the TASE and to apply to DRS the reporting arrangements under Chapter E3 of the ISL; or (B) DRS, at is sole discretion, elected to publish a prospectus in accordance with the ISL and received the approval of the ISA for the Israeli prospectus; and

•the provision of evidence from DRS to RADA that the new stock incentive plan has been adopted.

In addition, the obligations of DRS and Merger Sub to consummate the merger are subject to the satisfaction or waiver by DRS of the following additional conditions:

•each of the representations and warranties of RADA regarding organization, good standing and qualification, capital structure (except for de minimis inaccuracies), corporate authority, approval and fairness, the RADA no Material Adverse Effect (“MAE”) representation, takeover statutes and stockholders rights agreements and brokers and finders must have been true and correct as of the date of the merger agreement and as of the closing (except to the extent that any such representation and warranty expressly speaks as of a particular date or period of time, in which case such representation and warranty must be so true and correct as of such particular date or period of time);

•each other representation and warranty of RADA set forth in the merger agreement must have been true and correct as of the date of the merger agreement and as of the closing (except to the extent that any such representation and warranty expressly speaks as of a particular date or period of time, in which case such representation and warranty must be so true and correct as of such particular date or period of time), except for any failure of any such representation and warranty to be so true and correct (without giving effect to any qualification by materiality or material adverse effect contained therein) that would not, individually or in the aggregate, reasonably be expected to have a material adverse effect with respect to RADA;

•RADA must have performed in all material respects all obligations required to be performed by it under the merger agreement at or prior to the closing;

•since the date of the merger agreement, there must not have occurred any effect that, individually or in the aggregate, has had or would reasonably be expected to have a material adverse effect with respect to RADA;

•the receipt by DRS and Merger Sub of a certificate signed by an executive officer of RADA certifying that the conditions set forth in the four immediately preceding bullets have been satisfied;

•all requisite regulatory approvals must have been filed, occurred or been obtained (as applicable) and must be in full force and effect without the imposition of any term, condition or consequence the acceptance of which would constitute a substantial detriment; and

•obtaining the approval and the continued full force and effectiveness of the approval of the transactions contemplated by the merger agreement by the Israeli Ministry of Defense’s Export Control Agency (which approval was obtained on May 23, 2022) and the Israeli Director of Security of the Defense Establishment, without the imposition of any condition, term or consequence the acceptance of which would constitute a substantial detriment.

In addition, the obligation of RADA to consummate the merger is subject to the satisfaction or waiver by RADA of the following additional conditions:

•each of the representations and warranties of DRS regarding organization, good standing and qualification, capital structure of DRS and Merger Sub (except for de minimis inaccuracies), corporate authority and approval, the DRS no MAE representation, and brokers and finders must have been true and correct as of the date of the merger agreement and as of the closing (except to the extent that any such representation and warranty expressly speaks as of a particular date or period of time, in which case such representation and warranty must be so true and correct as of such particular date or period of time);

•each other representation and warranty of DRS and Merger Sub set forth in the merger agreement must have been true and correct as of the date of the merger agreement and as of the closing (except to the extent that any such representation and warranty expressly speaks as of a particular date or period of time, in which case such representation and warranty must be so true and correct as of such particular date or period of time), except for any failure of any such representation and warranty to be so true and correct (without giving effect to any qualification by materiality or parent material adverse effect contained therein) that would not, individually or in the aggregate, reasonably be expected to have a material adverse effect with respect to DRS;

•each of DRS and Merger Sub must have performed in all material respects all obligations required to be performed by it under the merger agreement at or prior to the closing;

•the receipt by RADA of a certificate signed by an executive officer of DRS certifying that the conditions set forth in the four immediately preceding bullets have been satisfied.

No Solicitation of Acquisition Proposals (Page 272)

From and after the date of the merger agreement until the earlier of the closing or the valid termination of the merger agreement, except as expressly permitted by the merger agreement, RADA has agreed that it will not, and none of its subsidiaries will, and RADA will not authorize any of its directors, officers, employees, principals, partners, managers, members, consultants, investment bankers, financial advisors, legal counsel, attorneys in fact, accountants or other advisors, agents or other representatives, in each case acting in their capacity as such (collectively, “representatives”) to, directly or indirectly:

•initiate, solicit, propose, knowingly or intentionally encourage, knowingly or intentionally take any action to or facilitate any inquiry or the making of any proposal or offer that constitutes, or would reasonably be expected to lead to, an acquisition proposal;

•engage in, continue or otherwise participate in any discussions with or negotiations relating to any acquisition proposal or any inquiry, proposal or offer that would reasonably be expected to lead to an acquisition proposal;

•provide any information to any person in connection with any acquisition proposal or any proposal or offer that would reasonably be expected to lead to an acquisition proposal;

•otherwise knowingly or intentionally facilitate any effort or attempt to make an acquisition proposal; or

•except as expressly permitted by, and after compliance with, the provisions of the merger agreement with respect to a change of recommendation or termination of the merger agreement by RADA prior to receipt of the requisite RADA shareholder vote if the RADA board of directors has authorized RADA to enter into an alternative acquisition agreement in response to a superior proposal and pays the termination fee pursuant to the merger agreement, as applicable, cause or permit RADA to enter into an alternative acquisition agreement.

Notwithstanding the restrictions described above, prior to the time, but not after, the requisite RADA vote is obtained, in response to an unsolicited, bona fide written acquisition proposal that did not arise from or in connection with a breach of the above obligations, RADA may:

•contact the person or any of its representatives who has made such acquisition proposal solely to clarify the terms of such acquisition proposal so that the RADA board of directors (or any committee thereof) may inform itself about such acquisition proposal;

•provide information in response to a request therefor (including non-public information regarding it or any of its subsidiaries) to the person who made such acquisition proposal, provided that such information has previously been made available to, or is made available to, DRS prior to or concurrently with the time such information is made available to such person and that, prior to furnishing any such information, RADA negotiates and receives from the person making such acquisition proposal an executed confidentiality agreement with terms not less restrictive to the other party than the terms in the confidentiality agreement executed by RADA and DRS are on DRS (an “acceptable confidentiality agreement”); and

•participate in any discussions or negotiations with any such person regarding such acquisition proposal;

in each case, if, and only if, prior to doing so, the RADA board of directors determines in good faith after consultation with outside legal counsel that (A) based on the information then available and after consultation with its financial advisor, such acquisition proposal either constitutes a superior proposal or would reasonably be expected to result in a superior proposal and (B) failure to take such action would reasonably be expected to be inconsistent with the directors’ exercise of fiduciary duties under applicable law.

A “superior proposal” means an unsolicited, bona fide written acquisition proposal made after the date of the merger agreement that would result in a person or a group (as defined under Section 13 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”)), other than DRS or any of its subsidiaries or controlled affiliates, becoming the beneficial owner of, directly or indirectly, more than 50% of the total voting power of the equity securities of RADA (or of the surviving entity in a merger involving RADA as applicable) or more than 50% of the consolidated net revenues, net income or total assets (including equity securities of its subsidiaries), of RADA that the RADA board of directors has determined in good faith, after consultation with outside legal counsel and its financial advisor that if consummated, would result in a transaction more favorable to RADA’s shareholders from a financial point of view than the merger (after taking into account any revisions to the terms of the merger agreement proposed by RADA pursuant to the terms of the merger agreement).

No Change of Recommendation (Page 274)

The RADA board of directors, including any committee thereof, has agreed that, except as otherwise set forth in the merger agreement, it will not:

•withhold, withdraw, qualify or modify (or publicly propose or resolve to withhold, withdraw, qualify or modify) the RADA recommendation;

•fail to include the RADA recommendation in this proxy statement/prospectus;

•fail to recommend, within ten (10) business days after the commencement of an acquisition proposal through a tender or exchange offer pursuant to Rule 14d-2 under the Exchange Act for outstanding RADA shares (other than by DRS or an affiliate of DRS), against acceptance of such tender offer or exchange offer by its shareholders;

•fail to publicly reaffirm the RADA recommendation within ten (10) business days after receipt of a written request by RADA to do so following an acquisition proposal (or modification to the financial terms thereof or modification of any other material term thereof) becoming publicly known or being delivered to RADA or any of its subsidiaries or its or their representatives; or

•approve or recommend (it being understood that an internal discussion among the directors of the RADA board of directors with respect to an acquisition proposal will not in and of itself constitute a

recommendation) or publicly declare advisable or publicly propose to enter into, any letter of intent, memorandum of understanding, agreement in principle, acquisition agreement, merger agreement, option agreement, joint venture agreement, partnership agreement or other agreement (other than an acceptable confidentiality agreement) relating to or providing for any acquisition proposal, (an “alternative acquisition agreement”), and any of the actions set forth in the this bullet or the preceding four bullets, or any resolution or agreement to do any of the forgoing, which is referred to as a “change of recommendation”.

Notwithstanding anything in the merger agreement to the contrary, prior to the time the required RADA vote is obtained the RADA board of directors may effect a change of recommendation if:

•either (A) an unsolicited, bona fide written acquisition proposal that did not arise from or in connection with a breach of the obligations set forth in the merger agreement is received by RADA and is not withdrawn, and the RADA board of directors determines in good faith, after consultation with outside legal counsel and its financial advisor, that such acquisition proposal constitutes a superior proposal or (B) an intervening event (as defined below) has occurred; and

•the RADA board of directors determines in good faith, after consultation with outside legal counsel and its financial advisor, that failure to effect a change of recommendation in response to such superior proposal or intervening event, as applicable, would reasonably be expected to be inconsistent with the directors’ exercise of fiduciary duties under applicable law.

Prior to making any change of recommendation or taking any action to terminate the merger agreement, RADA is required to deliver a written notice of such action and the basis for such change of recommendation by 5:00 p.m. Israel time on the fifth (5th) business day after the date on which RADA has given DRS such written notice (such period, the “match period”), which notice must set forth in writing that the RADA board of directors intends to consider whether to take such action; and in the case of a superior proposal, comply in all material respects in form, substance and delivery with the provisions of the merger agreement, and in the case of an intervening event, including a reasonable description of such intervening event. After giving such notice and prior to effecting such change of recommendation or taking such action to terminate the merger agreement pursuant to its terms, RADA must, and must cause its subsidiaries and its and their employees, financial advisor, outside legal counsel and other representatives to, negotiate in good faith with DRS (to the extent DRS wishes to negotiate) to make such revisions to the terms of the merger agreement as would permit the RADA board of directors not to effect a change of recommendation or to take such action to terminate the merger agreement pursuant to its terms in response thereto. At the end of the match period, prior to taking action to effect a change of recommendation or taking action to terminate the merger agreement pursuant to its terms, the RADA board of directors must take into account any changes to the terms of the merger agreement proposed by DRS in writing and any other information offered by DRS in response to the notice, and must have determined in good faith after consultation with outside legal counsel and its financial advisor that (A) in the case of a superior proposal, the superior proposal would continue to constitute a superior proposal, and (B) in the case of an intervening event, that the failure to effect a change of recommendation in response to such intervening event would reasonably be expected to be inconsistent with the directors’ exercise of fiduciary duties under applicable law, in each case, if such changes offered in writing were to be given effect. Any modification or amendment to any acquisition proposal will be deemed to be a new acquisition proposal for purposes of the merger agreement except that the advance written notice obligation set forth above will instead end at 5:00 p.m. Israel time on the third business day after the date on which RADA has given DRS a change of recommendation notice.

An “intervening event” means any material positive effect after the date of the merger agreement on the financial condition, properties, assets, operations, liabilities, business or results of operations of RADA and its subsidiaries, taken as a whole, that was not known by nor was reasonably foreseeable to the RADA board of directors or RADA management as of the date of the merger agreement and the material consequences of which were not reasonably foreseeable, as of the date of the merger agreement but become known to the RADA board of directors and RADA management prior to the receipt of requisite RADA vote. “Intervening Event” will exclude any effect related to (i) any acquisition proposal or a superior proposal or any inquiry or communications or matters relating thereto; (ii) the fact that RADA meets any internal or public projections or forecasts or estimates of revenues or earnings for any period (it being understood that the underlying cause of such fact may be taken into

consideration); (iii) the failure of DRS to meet any internal or public projections or forecasts or estimates of revenues or earnings for any period (it being understood that the underlying cause of such failure may be taken into consideration); or (iv) any change in the market price or change in the trading volume of the RADA shares (it being understood that the underlying cause of any such change may be taken into consideration).

Nothing contained in the merger agreement will prevent RADA from complying with its disclosure obligations under Israeli or United States federal or state law with regard to an acquisition proposal or making any disclosure to its shareholders, in each case, if the RADA board of directors determines in good faith (after consultation with and receiving advice of its outside legal counsel) that the failure to do so would violate the directors’ fiduciary duties under applicable law, except that any such disclosure or statement that constitutes or contains a change of recommendation will be subject to the terms of the merger agreement and DRS will have the right to terminate the merger agreement as set forth in the merger agreement unless RADA expressly and promptly (and in any event within 24 hours) reaffirms in a public statement the company recommendation, it being understood that a “stop, look and listen” or similar communication of the type contemplated by Rule 14d-9(f) under the Exchange Act will not be deemed to be a change of recommendation.

Termination of the Merger Agreement (Page 285)

Termination by Mutual Consent

The merger agreement may be terminated and the merger may be abandoned at any time prior to the effective time by mutual written consent of RADA and DRS by action of their respective boards of directors.

Termination by Either DRS or RADA

Either DRS or RADA may terminate the merger agreement by action of its respective board of directors at any time prior to the effective time if:

•the merger has not been completed by 5:00 p.m. (Israel time) on June 30, 2023 (the “outside date”) although such right to terminate will not be available to any party that has breached its obligations set forth in the merger agreement in any manner that will have proximately contributed to the occurrence of the failure of a condition to the consummation of the merger prior to the outside date (the “outside date termination”);

•the requisite RADA vote has not been obtained at the RADA extraordinary general meeting or at any adjournment or postponement thereof taken in accordance with the merger agreement (“no requisite RADA vote termination”); or

•any law or governmental order permanently restraining, enjoining or otherwise prohibiting consummation of the merger has become final and non-appealable; provided that the right to such termination will not be available to any party that has breached its obligations set forth in the merger agreement in any manner that will have proximately contributed to the occurrence of the failure of a condition to the consummation of the merger.

Termination by DRS

DRS may terminate the merger agreement and the merger may be abandoned at any time prior to the effective time by action of the DRS board of directors:

•prior to the time the requisite RADA vote is obtained, if:

•the RADA board of directors has made a change of recommendation;

•RADA materially breaches its “no shop” obligations under the merger agreement as a result of or in connection with actions taken (or failed to be taken) by certain key employees of RADA or RADA’s financial advisors or legal advisors; or

•RADA materially breaches its “no shop” obligations under the merger agreement and such breach has resulted in the receipt of any acquisition proposal, with this bullet and the foregoing bullet referred to as a “no shop breach termination”; or

•if at any time prior to the effective time, there has been a breach by RADA of any representation, warranty, covenant or agreement set forth the merger agreement, or if any representation or warranty of RADA will have become untrue, in either case, such that the conditions in the merger agreement regarding the accuracy of RADA’s representations and warranties and the performance of its obligations would not be satisfied and such breach or failure to be true and correct is not curable prior to the outside date, or if curable prior to the outside date, has not been cured within the earlier of 30 days after the giving of notice thereof by DRS to RADA or three business days prior to the outside date, provided however that the right to terminate the merger agreement pursuant to this section will not be available to DRS if it has breached its obligations set forth the merger agreement in any manner that will have proximately contributed to the occurrence of the failure of a condition to the consummation of the merger (the “RADA material breach termination”).

Termination by RADA

RADA may terminate the merger agreement and the merger may be abandoned by the RADA board of directors if:

•prior to the time the requisite RADA vote is obtained, the RADA board of directors authorizes RADA to enter into an alternative acquisition agreement in response to a superior proposal, in accordance with the terms and subject to the conditions of the merger agreement, and RADA immediately prior to or concurrently with such termination pays to DRS in immediately available funds the RADA termination fee (such termination, the “fiduciary out termination”);

•at any time prior to the effective time, there has been a breach by DRS or Merger Sub of any representation, warranty, covenant or agreement set forth the merger agreement, or if any representation or warranty of DRS or Merger Sub will have become untrue, in either case, such that the conditions in the merger agreement regarding the accuracy of DRS’s or Merger Sub’s representations and warranties and the performance of their obligations would not be satisfied and such breach or failure to be true and correct is not curable prior to the outside date, or if curable prior to the outside date, has not been cured within the earlier of 30 days after the giving of notice thereof by RADA to DRS or three business days prior to the outside date, provided however that the right to terminate the merger agreement pursuant to this section will not be available to RADA if it has breached its obligations set forth the merger agreement in any manner that will have proximately contributed to the occurrence of the failure of a condition to the consummation of the merger (such termination, the “DRS material breach termination”); or

•at any time after the date of the merger agreement but prior to the effective time or earlier termination of the merger agreement, DRS materially breaches its obligations with respect to an alternative offering.

Termination Fee (Page 287)

RADA will be required to pay to DRS a termination fee of $40 million (the “RADA termination fee”) if the merger agreement is terminated:

•(i) by either party because the merger has not been consummated prior to the outside date, (ii) by either party upon the requisite RADA vote not being obtained or (iii) upon a RADA material breach termination and, in each case,

•(A) an alternative acquisition proposal has been made to RADA or any of its subsidiaries or publicly to any of its shareholders, or

•(B) any person has publicly announced an intention to make an acquisition proposal and such proposal has not been publicly withdrawn at least five business days prior to the date of termination with respect to the outside date termination or the RADA material breach termination, or

•(C) five business days before the RADA extraordinary general meeting, with respect to the no requisite RADA vote termination, and within twelve months of such termination, RADA or any of its subsidiaries has entered into an alternative acquisition agreement or otherwise consummated an acquisition proposal or an acquisition proposal is consummated;

•by DRS prior to obtaining the requisite RADA vote, either (A) because the RADA board of directors effected a change of recommendation or (B) pursuant to a no shop breach termination;

•by RADA pursuant to the fiduciary out termination; or

•by RADA pursuant to a no requisite RADA vote termination, at a time when DRS would have been entitled to effect a no shop breach termination.

Accounting Treatment (Page 256)

DRS and RADA prepare their respective financial statements in accordance with U.S. GAAP. The merger will be accounted for as an acquisition of RADA by DRS under the acquisition method of accounting in accordance with U.S. GAAP. DRS will be treated as the acquiror for accounting purposes.

Material U.S. Federal Income Tax Consequences (Page 293)

As further described below in the section entitled “Material United States Federal Income Tax Consequences”, the merger is intended to qualify as a tax-free “reorganization” within the meaning of Section 368(a) of the Code. Assuming that the merger is so treated, the exchange of RADA shares for shares of DRS common stock will be tax-free to U.S. holders (as defined below under the section entitled “Material U.S. Federal Income Tax Consequences”).

You should read the section entitled “Material U.S. Federal Income Tax Consequences” beginning on page 293 of this proxy statement/prospectus for a more complete discussion of the material United States federal income tax consequences of the merger.

Material Israeli Tax Consequences of the Merger (Page 299)

Comparison of Rights of RADA Shareholders and DRS Stockholders (Page 307)

Upon completion of the merger, RADA shareholders receiving shares of DRS common stock will become stockholders of the combined company, and their rights will be governed by Delaware law and the governing corporate documents of the combined company in effect at the effective time, copies of which are attached as exhibits to this proxy statement/prospectus. RADA shareholders will have different rights once they become stockholders of the combined company due to differences between Delaware and Israeli law and the governing corporate documents of RADA and the governing corporate documents of the combined company. These

differences are described in more detail under the section entitled “Comparison of Rights of RADA Shareholders and DRS Stockholders” beginning on page 307.

NASDAQ and TASE Listings; Delisting and Deregistration of RADA shares (Page 252)

DRS has agreed to use its reasonable best efforts to cause DRS common stock, including the shares of DRS common stock to be issued in the merger, to be approved for listing on the NASDAQ and the TASE, subject to official notice of issuance, prior to the completion of the merger. Upon completion of the merger, DRS common stock is expected to be listed on the NASDAQ and the TASE under the ticker symbol “DRS”.

If the merger is completed, RADA shares will be delisted from the NASDAQ and the TASE and deregistered under the Exchange Act and the Israeli Securities Law, and RADA will no longer be required to file periodic reports with the SEC with respect to RADA shares.

Risk Factors (Page 33)

In evaluating the merger agreement, the merger or the issuance of shares of DRS common stock in the merger, you should carefully read this proxy statement/prospectus and give special consideration to the summary of risk factors described below together with all the other information included in this proxy statement/prospectus and the risk factors discussed in the section entitled “Risk Factors” beginning on page 33. Certain of the risks related to the merger, DRS’s business, RADA’s business and the combined company, include, but are not limited to, the following:

•Because the exchange ratio is fixed and will not be adjusted in the event of any change in either DRS’s or RADA’s share price, the value of the combined company is uncertain. The shares of DRS common stock to be received by RADA shareholders as a result of the merger will have rights different from the RADA shares.

•Until the completion of the merger or the termination of the merger agreement in accordance with its terms, DRS and RADA are each prohibited from entering into certain transactions and taking certain actions that might otherwise be beneficial to DRS or RADA and their respective stockholders and shareholders. Whether or not the merger is completed, the pendency of the merger could cause disruptions in the businesses of DRS and RADA, which could have an adverse effect on their respective businesses and financial results.

•DRS and RADA must obtain certain regulatory approvals and clearances to consummate the merger, and satisfy certain closing conditions which, if delayed, not satisfied or granted, or granted with unacceptable conditions, could prevent, substantially delay or impair consummation of the merger, result in additional expenditures of money and resources or reduce the anticipated benefits of the merger.

•Failure to attract, motivate and retain executives and other key employees could diminish the anticipated benefits of the merger.

•The directors and executive officers of DRS and RADA have interests and arrangements that may be different from, or in addition to, those of DRS and RADA shareholders generally.

•RADA shareholders will not be entitled to dissenters’, appraisal, cash exit or similar rights in the merger.

•DRS depends on U.S. defense spending for the vast majority of DRS’s revenues. Disruptions or deteriorations in DRS’s relationships with the relevant agencies of the U.S. government could have a material adverse impact on DRS’s business, financial condition and results of operations.

•Significant delays or reductions in appropriations for DRS’s and RADA’s programs and changes in U.S. or foreign government priorities and spending levels more broadly may negatively impact DRS’s and RADA’s businesses and could have a material adverse impact on DRS’s or RADA’s business, financial condition and results of operations.

•The COVID-19 pandemic and related impacts have had and are likely to continue to have an adverse impact on DRS’s and RADA’s business, financial condition and results of operations.

•DRS and RADA operate in a highly regulated environment and are subject to a number of procurement, international trade, and other rules and regulations and requirements, including in the case of DRS the National Industrial Security Program Operating Manual, related to the defense industry, their products and the business they operate. If DRS or RADA fail to comply with such rules, regulations or other requirements, they may be unable to compete for or perform on contracts, and may be subject to civil and/or criminal penalties and/or administrative sanctions.

•DRS may not realize the full value of DRS’s total estimated remaining contract value or bookings.

•DRS and RADA face intense competition and may suffer losses if they fail to compete efficiently, or if their products fail to achieve market acceptance, which could adversely affect DRS’s or RADA’s business, financial condition and results of operations.

•Contractual disputes with industry participants or the inability of DRS’s or RADA’s key suppliers to timely deliver components, parts or services, could cause their products, systems, or services to be produced or delivered in an untimely or unsatisfactory manner.

•DRS and RADA are susceptible to a security breach, through cyber attack, cyber intrusion, insider threats or otherwise, and to other significant disruptions of their IT networks and related systems or of those they operate for their customers.

•DRS and RADA may be at greater risk from terrorism and other threats to their physical security and personnel, than other companies.

•DRS and RADA may not be able to fully exploit or obtain patents or other intellectual property protections necessary to secure their proprietary technology. Third parties have claimed in the past and may claim in the future that DRS or RADA is infringing directly or indirectly upon their intellectual property rights, and third parties may infringe upon DRS’s or RADA’s intellectual property rights.

•DRS’s reputation and ability to do business may be impacted by the improper conduct of DRS’s employees, agents, affiliates, subcontractors, suppliers, business partners or joint ventures in which DRS participates. DRS remains subject to reputational and other risks as a result of the conviction of the chief executive officer of Leonardo S.p.A. on charges of false statements and market manipulation related to his previous role as chairman of the Italian banking entity, Banca Monte dei Paschi di Siena.

•The outcome of litigation, arbitration, investigations, claims, disputes, enforcement actions and other legal proceedings in which DRS is involved from time to time is unpredictable, and an adverse decision in any such matter could have a material adverse impact on DRS’s business, financial condition and results of operations.

•DRS’s business could be harmed in the event of a prolonged work stoppage. A failure by DRS or RADA to attract and retain technical and other key personnel could reduce DRS’s or RADA’s revenues and their operational effectiveness.

•DRS cannot predict the consequences of future geo-political events, but they may adversely affect the markets in which DRS operates, DRS’s ability to insure against risks, DRS’s operations or results of operations. Political, economic and military instability in Israel may disrupt RADA’s operations and negatively affect RADA’s business condition, harm RADA’s results of operations and adversely affect RADA’s share price.

•DRS operates under a commitment letter, dated as of February 26, 2021 (the letter, together with all of its requirements, the “Commitment Letter”) with the DoD that regulates significant areas of DRS’s governance. If DRS fails to comply with the Commitment Letter DRS’s classified U.S. government

contracts could be terminated, which could have a material adverse impact on DRS’s business, financial condition and results of operations.

•DRS’s ultimate majority stockholder, Leonardo S.p.A., may have interests that are different from, or conflict with, those of DRS’s other stockholders, and Leonardo S.p.A.’s significant (indirect) ownership in DRS may discourage change of control transactions.

•RADA has a history of operating losses and may not be able to sustain profitable operations in the future. To the extent that RADA incurs operating losses in the future, RADA may not have sufficient working capital to fund RADA’s operations.

•RADA depends on sales to key customers and the loss of one or more of RADA’s key customers would result in a loss of a significant amount of RADA’s revenues.

•The combined company may not be able to retain customers or suppliers or customers or suppliers may seek to modify contractual obligations with the combined company, which could have an adverse effect on the combined company’s business and operations.

•Combining the businesses of DRS and RADA may be more difficult, costly or time-consuming than expected and the combined company may fail to realize the anticipated benefits of the merger, which may adversely affect the combined company’s business results and negatively affect the value of the common stock of DRS following the merger.

SUMMARY HISTORICAL CONSOLIDATED FINANCIAL INFORMATION OF DRS

The financial information included in the Consolidated Statements of Earnings (Loss) Data for the years ended December 31, 2021, 2020 and 2019, and the Consolidated Balance Sheet Data as of December 31, 2021 and 2020 has been derived from our audited consolidated financial statements included elsewhere in this proxy statement/prospectus. The financial information included in Consolidated Statements of Earnings for the six months ended June 30, 2022 and 2021 and for the Consolidated Balance Sheet data as of June 30, 2022 have been derived from our 2022 unaudited quarterly Consolidated Financial Statements. The unaudited quarterly Consolidated Financial Statements have been prepared on the same basis as the audited Consolidated Financial Statements and in the opinion of management, reflect all adjustments necessary for the fair presentation of the Consolidated Financial Statements. The financial information below does not reflect the impact of disposition activities for which we entered into definitive agreements prior to the announcement of the merger. This summary consolidated financial data should be read in conjunction with the section entitled “Information About DRS—Management’s Discussion and Analysis of Financial Condition and Results of Operations”, “DRS’s Unaudited Financial Projections”, “Unaudited Pro Forma Condensed Combined Financial Statements” and the financial statements of DRS included elsewhere in this proxy statement/prospectus. Historical results are not indicative of future operating results.


	Six Months Ended June 30,						Year Ended December 31,
($ in millions, except for per share data)	2022			2021			2021			2020			2019
Data:
Total revenues	$	1,239		$	1,339		2,879			$	2,778		$	2,714
Operating earnings	98			102			236			181			163
Net earnings (loss)	$	61		$	61		$	154		$	85		$	75
Basic and diluted earnings (loss) per share: (1)	0.42			0.42			1.06			0.59			0.52
Consolidated Statement of Cash Flows Data:
Net cash provided by (used in) operating activities	$	(242)		$	(185)		$	178		$	125		$	157
Other Financial Data:
Adjusted EBITDA (2)	$	140		$	140		$	310		$	268		$	234
Adjusted EBITDA Margin (2)	11.3		%	10.4		%	10.8		%	9.6		%	8.6		%
Free cash flow (2)	$	(264)		$	(214)		$	118		$	74		$	110
Backlog (3)	$	3,051		$	3,387		$	2,861		$	3,291		$	2,844
Bookings (3)	$	1,430		$	1,435		$	2,595		$	3,055		$	2,923

__________________

(1)Gives effect to a 1,450,000-for-1 forward stock split on our common stock effected on February 25, 2021.

(2)Adjusted EBITDA, Adjusted EBITDA Margin and free cash flow are non-GAAP measures. Refer to “Information About DRS—Management’s Discussion and Analysis of Financial Condition and Results of Operations—Key Financial and Operating Measures—Non-GAAP Financial Measures” for definitions, additional discussion of management’s use of non-GAAP measures as supplemental financial measures and reconciliations of net earnings (loss) to Adjusted EBITDA and net cash provided by operating activities to free cash flow. Adjusted EBITDA, Adjusted EBITDA Margin and free cash flow may not be comparable to similarly titled non-GAAP measures of other companies as other companies may have calculated the measures differently.

(3)Refer to “Information About DRS—Management’s Discussion and Analysis of Financial Condition and Results of Operations—Key Financial and Operating Measures” for the definition and additional discussion of management’s use of backlog and bookings as key operating and financial measures.


Consolidated Balance Sheet Data	Year Ended December 31,
($ in millions)	2021		2020		2019
Cash and cash equivalents	$	240	$	61	$	85
Total assets	3,069		2,956		2,888
Long-term debt	352		374		656
Total shareholder’s equity	1,593		1,427		1,019

SUMMARY HISTORICAL CONSOLIDATED FINANCIAL INFORMATION OF RADA

The following tables present selected consolidated summary financial data for RADA, as of and for each of the fiscal years of RADA ended December 31, 2021, 2020, and 2019 and as of and for the six months ended June 30, 2022 and 2021. The selected historical consolidated statement of operations data set forth with respect to the fiscal years ended December 31, 2021 and 2020, and the consolidated balance sheet data as of December 31, 2021 and 2020, have been derived from the audited financial statements included in RADA’s Annual Report on Form 20‑F for the year ended December 31, 2021, which is incorporated by reference into this proxy statement/prospectus, and have been prepared in accordance with U.S. GAAP. The consolidated statement of operations data set forth in this section with respect to the fiscal year ended December 31, 2019, and the consolidated balance sheet data as of December 31, 2019, have been derived from audited consolidated financial statements for such year, which are not incorporated by reference into this proxy statement/prospectus, and have also been prepared in accordance with U.S. GAAP. The consolidated statement of operations data set forth in this section with respect to the six months ended June 30, 2022 and 2021 and as of June 30, 2022 have been derived from RADA’s unaudited condensed consolidated financial information consisting of a balance sheet and statement of operations included as Exhibit 99.1 to its Report on Form 6-K furnished with the SEC on August 17, 2022, which financial information is incorporated by reference into this proxy statement/prospectus. The unaudited balance sheet data as of June 30, 2021 have been derived from unaudited financial information that is not incorporated into this proxy statement/prospectus. The unaudited interim financial information has been prepared on a basis consistent with RADA’s audited financial statements and, in the opinion of RADA’s management, includes all adjustments that RADA’s management considers necessary for the fair statement of the information for the unaudited periods.

The information set forth below is not necessarily indicative of future results and should be read together with the other information contained in RADA’s Annual Report on Form 20-F for the year ended December 31, 2021 filed with the SEC. See the section entitled “Where You Can Find More Information; Incorporation by Reference” in this proxy statement/prospectus.


	Six Months Ended June 30,				Year Ended December 31,
($ in millions, except for per share data)	2022		2021		2021		2020		2019
Data:
Revenues	$	46	$	53	$	117	$	76	$	44
Operating income (loss)	$	(4)	$	8	$	20	$	5	$	(2)
Net income (loss)	$	(5)	$	14	$	25	$	6	$	(2)
Basic net income (loss) per RADA Share(1)	$	(0.10)	$	0.30	$	0.52	$	0.13	$	(0.05)
Diluted net income (loss) per RADA Share(2)	$	(0.10)	$	0.29	$	0.50	$	0.13	$	(0.05)
Other Financial Data:
Adjusted EBITDA(3)	$	3	$	11	$	27	$	10	$	—

__________________

(1)The weighted average number of RADA shares used for computing basic net income (loss) per share for the six months ended June 30, 2022 and 2021 and for the year ended December 31, 2021, 2020 and 2019 were 49,592,329; 47,145,784, 48,255,097; 43,321,058; and 38,148,756 respectively.

(2)The weighted average number of RADA shares used for computing diluted net income (loss) per share for the six months ended June 30, 2022 and 2021 and for the year ended December 31, 2021, 2020 and 2019 were 51,120,644; 49,123,135, 50,077,416; 44,565,379; and 38,841,866 respectively.

(3)Adjusted EBITDA is a non-GAAP measure. Refer to “The Merger—Certain Unaudited Combined Financial Information” for definitions and reconciliation to the most directly comparable U.S. GAAP measure.


Consolidated Balance Sheet Data	Year Ended December 31,
($ in millions)	2021		2020		2019
Cash and cash equivalents	$	79	$	36	$	14
Total assets	$	204	$	107	$	65
Total long-term liabilities	$	10	$	10	$	7
Total equity	$	156	$	72	$	41

SUMMARY UNAUDITED PRO FORMA CONDENSED COMBINED FINANCIAL INFORMATION

The following tables set forth summary selected unaudited pro forma condensed combined financial information (which is herein referred to as the “summary pro forma financial information”), presented to illustrate the estimated effects of the proposed business combination including certain accounting adjustments, which were prepared in accordance with U.S. GAAP using the acquisition method of accounting with DRS designated as the accounting acquirer of RADA. See “The Merger—Accounting Treatment” and “Unaudited Pro Forma Condensed Combined Financial Statements”. Pursuant to the merger agreement, RADA’s business will be brought under DRS through the merger. Pursuant to the merger, each RADA share will be converted into the right to receive one share of DRS common stock.

The summary pro forma financial information is presented for illustrative purposes only and is not necessarily indicative of the operating results or financial position that would have occurred if the merger had been completed as of the beginning of the period presented, nor is it necessarily indicative of the future operating results or financial position of the combined business of DRS and RADA. In addition, the summary pro forma financial information includes adjustments which are preliminary and may be revised. There can be no assurance that such revisions will not result in material changes to the information presented. The summary selected unaudited pro forma condensed combined balance sheet data combines the consolidated balance sheets of DRS and RADA as of June 30, 2022 and gives effect to the proposed business combination as if it had occurred on March 31, 2022. The summary selected unaudited pro forma condensed combined statements of operations data combines the historical results of DRS and RADA for the six months ended June 30, 2022 and for the year ended December 31, 2021 and gives effect to the proposed business combination as if it had occurred on January 1, 2021. The summary pro forma financial information has been derived from and should be read in conjunction with the financial statements and the related notes of both DRS, included herein beginning on page F-28, and RADA, incorporated by reference to RADA’s Annual Report on Form 20-F for the fiscal year ended December 31, 2021 (filed with the SEC on March 24, 2022), respectively, and the Unaudited Pro Forma Condensed Combined Financial Statements, including the notes thereto, beginning on page F -2 of this document.


	Pro Forma Combined
(in millions, except share and per share data)	For the six months ended June 30, 2022		For the year ended December 31, 2021
Total revenues	$	1,150	$	2,735
Operating earnings	$	73	$	172
Earnings before taxes	$	61	$	489
Net earnings	$	43	$	362
Earnings per share - Basic	$	0.17	$	1.39
Earnings per share - Diluted	$	0.16	$	1.38


(in millions)	Pro Forma Condensed Combined As of June 30, 2022
Total current assets	$	1,518
Total assets	$	3,466
Total current liabilities	$	927
Total noncurrent liabilities	$	512
Total stockholder’s equity	$	2,027
Total liabilities and stockholder’s equity	$	3,466

RISK FACTORS

In deciding whether to vote for the adoption of the merger agreement, you are urged to carefully consider all of the information included or incorporated by reference in this proxy statement/prospectus, which are listed in the section entitled “Where You Can Find More Information; Incorporation by Reference”. In addition, you are urged to carefully consider the following material risks relating to the merger, the business of DRS, the business of RADA and the business of the combined company. The list of summary risk factors below should be read in conjunction with the remainder of this “Risk Factors” section and should not be relied upon as an exhaustive summary of the material risks we face.

Risks Relating to the Merger

Because the exchange ratio is fixed and will not be adjusted in the event of any change in RADA’s share price, the value of the shares of the combined company is uncertain.

Upon completion of the merger, each RADA share outstanding immediately prior to the merger, other than excluded shares (as defined in the section entitled “The Merger—Exchange Ratio” beginning on page 223), will be converted into and become exchangeable for one share of DRS common stock. This exchange ratio is fixed in the merger agreement (subject to certain adjustments described in “The Merger Agreement—Adjustments to Prevent Dilution” on page 262) and will not be adjusted for changes in the market price of RADA shares. The market price of RADA shares has fluctuated since the date of the announcement of the merger agreement and will continue to fluctuate from the date of this proxy statement/prospectus to the date of the RADA extraordinary general meeting and the date the merger is completed. The market price of RADA shares, immediately prior to the merger, could be greater than, less than or the same as the market price of RADA shares on the date of this proxy statement/prospectus or at the time of the RADA extraordinary general meeting.

Because the value of the merger consideration will depend on the market price of RADA shares at the time the merger is completed, RADA shareholders will not know or be able to determine at the time of the RADA extraordinary general meeting the market value of the merger consideration they would receive upon completion of the merger.

Stock price changes may result from a variety of factors, including, among others:

•general market and economic conditions;

•changes in DRS’s and RADA’s respective businesses, operations and prospects;

•reductions or changes in U.S. government spending or budgetary policies;

•market assessments of the likelihood that the merger will be completed;

•interest rates, general market, industry and economic conditions and other factors generally affecting the price of RADA’s shares;

•federal, state and local legislation, governmental regulation and legal developments in the U.S., Israel and other jurisdictions or relating to the industry segments in which RADA and DRS operate; and

•the timing of the merger and regulatory considerations.

Many of these factors are beyond DRS’s and RADA’s control, and neither DRS nor RADA is permitted to terminate the merger agreement solely due to a decline in the market price of RADA shares. Holders of RADA shares are urged to obtain current market quotations for RADA shares.

The market price for shares of common stock of the combined company following the completion of the merger may be affected by factors different from, or in addition to, those that historically have affected or currently affect the market prices of RADA shares.

Upon consummation of the merger, RADA shareholders will hold shares of DRS common stock and will no longer hold RADA shares. DRS’s businesses differ from those of RADA, and RADA’s businesses differ from those of DRS, and, accordingly, the results of operations of the combined company will be affected by some factors that are different from those currently or historically affecting the results of operations of DRS and those currently or historically affecting the results of operations of RADA. The results of operations of the combined company may also be affected by factors different from those that currently affect or have historically affected either DRS or RADA. As of the date of this proxy statement/prospectus, RADA and DRS expect that US Holding will hold 80.5% of the issued and outstanding shares of DRS common stock on a fully diluted basis immediately following the completion of the merger (which ownership percentage includes 50% of any awards or other equity interests that DRS may issue pursuant to entitlements under any grants of One-Time Awards, as calculated pursuant to the merger agreement), and holders of RADA shares, RADA vested options, RADA unvested options (or DRS options issued pursuant to the merger agreement) and other RADA securities as of immediately prior to the completion of the merger will hold or have entitlements to, in the aggregate, 19.5% of the issued and outstanding shares of DRS common stock on a fully diluted basis immediately following the completion of the merger (as described further in the section “The Merger Agreement—Merger Consideration”), and the relative sizes of DRS and RADA prior to the merger may increase or decrease the effect of such factors on the results of operations of the combined company. For a discussion of the businesses of each of DRS and RADA and some important factors to consider in connection with those businesses, please see the section entitled “Information About DRS” beginning on page 122 and the documents and information included elsewhere in this proxy statement/prospectus or incorporated by reference into this proxy statement/prospectus and listed under the section entitled “Where You Can Find More Information; Incorporation by Reference” beginning on page 332.

The lack of a public market for DRS common stock makes it more difficult to evaluate the fairness of the merger.

The outstanding common stock of DRS is privately held and is not traded in any public market. The lack of a public market makes it more difficult to determine the value of DRS. Because the percentage of DRS equity to be issued to RADA shareholders was determined based on negotiations between the parties to the merger agreement, it is possible that the value of the DRS shares to be issued to RADA shareholders in connection with the merger will be greater than the fair value of RADA. Alternatively, it is possible that the value of the DRS shares to be issued in connection with the merger will be less than the fair value of RADA.

The shares of DRS common stock to be received by RADA shareholders as a result of the merger will have rights different from the RADA shares.

Upon consummation of the merger, the rights of RADA shareholders, who will become stockholders of DRS, will be governed by the amended and restated certificate of incorporation and amended and restated bylaws of DRS, a Delaware corporation. The rights associated with RADA shares are different from the rights which will be associated with the common stock of DRS. See the section entitled “Comparison of Rights of RADA Shareholders and DRS Stockholders” beginning on page 307 for a discussion of these rights.

RADA shareholders will each have reduced ownership and voting interest in and will exercise less influence over management of DRS.

RADA shareholders currently have the right to vote in the election of the RADA board of directors and on other matters affecting RADA. Upon consummation of the merger, each RADA shareholder will become a stockholder of DRS with a percentage ownership of DRS that is much smaller than such shareholder’s percentage ownership of RADA immediately prior to the merger. RADA and DRS expect that US Holding will hold 80.5% of the issued and outstanding shares of DRS common stock on a fully diluted basis immediately following the completion of the merger (which ownership percentage includes 50% of any awards or other equity interests that DRS may issue pursuant to entitlements under any grants of One-Time Awards, as calculated pursuant to the merger agreement), and holders of RADA shares, RADA vested options, RADA unvested options (or DRS options issued pursuant to the merger agreement) and other RADA securities as of immediately prior to the completion of the merger will hold

or have entitlements to, in the aggregate, 19.5% of the issued and outstanding shares of DRS common stock on a fully diluted basis immediately following the completion of the merger. Because of this, each RADA share will represent a much smaller percentage ownership of the combined company than it represented in RADA. In addition, Leonardo S.p.A. will be the ultimate majority stockholder of the combined company, and may have interests that are different from, or conflict with, those of RADA shareholders. At the effective time of the merger, and for the first full new term of the combined company’s board of directors following that time, the combined company’s board of directors will include eight directors of DRS and one director mutually agreed upon and selected from among candidates proposed by RADA, subject to fiduciary obligations under applicable law, as of immediately prior to the effective time. Accordingly, RADA shareholders will have less influence on the management and policies of the combined company than they now have on the management and policies of RADA.

Until the completion of the merger or the termination of the merger agreement in accordance with its terms, DRS and RADA are each prohibited from entering into certain transactions and taking certain actions that might otherwise be beneficial to DRS or RADA and their respective stockholders and shareholders.

After the date of the merger agreement and prior to the effective time, the merger agreement restricts DRS and RADA from taking specified actions without the consent of the other party and requires that DRS and RADA use their respective reasonable best efforts to conduct their businesses and that of their subsidiaries in the ordinary course of business consistent with past practice. These restrictions may prevent DRS or RADA from making appropriate changes to their respective businesses or organizational structures or from pursuing attractive business opportunities that may arise prior to the completion of the merger and could have the effect of delaying or preventing other strategic transactions. Adverse effects arising from the pendency of the merger could be exacerbated by any delays in consummation of the merger or termination of the merger agreement. See the sections entitled “The Merger Agreement—Restrictions on RADA’s Business Prior to the Effective Time” and “The Merger Agreement—Restrictions on DRS’s Business Prior to the Effective Time” beginning on page 268 and 271.

Difficulties in obtaining required approvals and satisfying closing conditions may prevent or delay completion of the merger.

The merger remains subject to a number of conditions to closing as specified in the merger agreement. These closing conditions include, among others, receipt of the requisite RADA shareholder vote; approval from CFIUS and DCSA; and all other requisite consents, orders, approvals, filings and declarations and all expirations of waiting periods required under the HSR Act solely to the extent that DRS, as promptly as practicable following the date that is 60 days prior to the anticipated closing date, determines in its reasonable discretion that an applicable exemption from the HSR Act is no longer available in connection with the transactions; at least 50 days having elapsed after the filing of the merger proposal with the Israeli Companies Registrar and at least 30 days having elapsed after the requisite RADA shareholder vote; approval of the merger by the Israeli Director of Security of the Defense Establishment; the effectiveness of the registration statement of which this proxy statement/prospectus forms a part; either the receipt of certain exemptions from the ISA in respect of prospectus requirements under the ISL or the publication of a prospectus in accordance with the ISL and receipt of approval from the ISA for the Israeli prospectus; and the other conditions described under “The Merger Agreement—Conditions to the Completion of the Merger”. The obligation of each of RADA and DRS to consummate the merger is also conditioned on, among other things, the absence of a material adverse effect on the other party, the truth and correctness of the representations and warranties made by the other party on the date of the merger agreement and on the closing date (subject to certain materiality qualifiers), and the performance by the other party in all material respects of its obligations under the merger agreement. No assurance can be given that the required shareholder, governmental and regulatory consents and approvals will be obtained or that the required conditions to closing will be satisfied, and, if all required consents and approvals are obtained and the conditions are satisfied, no assurance can be given as to the terms, conditions and timing of the consents and approvals. Any delay in completing the merger could cause the combined company not to realize, or to be delayed in realizing, some or all of the benefits that DRS and RADA expect to achieve if the merger is successfully completed within its expected time frame. For a more complete summary of the conditions that must be satisfied or waived prior to completion of the merger, see the section entitled “The Merger Agreement—Conditions to the Completion of the Merger” beginning on page 283.

In addition, if the merger is not completed by 5:00 p.m. (Israel time) on June 30, 2023, either DRS or RADA may choose to terminate the merger agreement by action of its respective board of directors. DRS or RADA may

also elect to terminate the merger agreement in certain other circumstances, and the parties may mutually decide to terminate the merger agreement at any time prior to the closing date, before or after RADA shareholder approval is received, as applicable. For more information, see the sections entitled “Risk Factors—Risk Factors Relating to the Merger—The merger agreement may be terminated in accordance with its terms and the merger may not be consummated” and “The Merger Agreement—Termination of the Merger Agreement”.

DRS and RADA must obtain certain regulatory approvals and clearances to consummate the merger, which, if delayed, not granted or granted with conditions not presently anticipated, could prevent, substantially delay or impair consummation of the merger, result in additional expenditures of money and resources or reduce the anticipated benefits of the merger.

The completion of the merger remains subject to the receipt of approvals from and/or making certain filings with a number of government authorities, including CFIUS, DCSA, the Israeli Director of Security of the Defense Establishment, as further described in the section entitled “The Merger—Regulatory Approvals” beginning on page 252. With respect to these jurisdictions and authorities, DRS and RADA have either filed or intend to file requisite materials to obtain such approvals and intend to prepare and file additional notices and applications to satisfy the filing requirements and to obtain the regulatory clearances that are required or advisable. Failure to obtain the necessary clearance in any of these jurisdictions or with any of these authorities could substantially delay or prevent the consummation of the merger, which could negatively impact both DRS and RADA. The completion of the merger could be substantially delayed. The votes to adopt the merger agreement could therefore occur substantially in advance of obtaining regulatory approval. A delay could, among other things, increase the chance that: an event occurs that constitutes a material adverse effect with respect to DRS or RADA and thereby may cause the failure of a RADA closing condition or DRS closing condition, respectively; other adverse effects with respect to DRS or RADA could occur, such as the loss of key personnel, potentially affecting the success of the combined company; or an event could occur that causes a failure of a DRS closing condition or RADA closing condition or that adversely impacts the value of DRS common stock, and thus has a negative impact on the value of the merger consideration.

As a condition to granting the necessary approvals or clearances, certain governmental agencies may impose requirements, limitations or costs or require divestitures or place restrictions on the conduct of the business of the combined company after the completion of the merger (including on access to or sharing of information between certain personnel or businesses of the combined company). Any one of these requirements, limitations, costs, divestitures or restrictions could jeopardize or delay the completion of or reduce the anticipated benefits of the merger.

Under the merger agreement, DRS and RADA generally must use their respective reasonable best efforts to obtain all regulatory approvals required to complete the merger as soon as reasonably practicable. However, neither DRS nor RADA, nor their respective subsidiaries or affiliates, shall be required, prior to consummation of the merger, to sell, lease, license, transfer, dispose of, divest or otherwise encumber or hold separate pending any action any of their respective assets, licenses, operations, rights, product lines, businesses or interest therein that would individually or in the aggregate have a material impact on the business or financial condition of DRS or any of its affiliates or RADA or any of its respective subsidiaries or would reasonably be expected to materially impair the benefits to DRS reasonably expected to be realized from consummation of the merger (including the loss of any reasonably expected synergies). For more information see the section entitled “The Merger—Regulatory Approvals” beginning on page 252.

Failure to attract, motivate and retain executives and other key employees could diminish the anticipated benefits of the merger.

The success of the merger will depend in part on the retention of personnel critical to the business and operations of the combined company due to, for example, their technical skills or management expertise. Competition for qualified personnel can be intense.

Current and prospective employees of DRS and RADA may experience uncertainty about their future role with DRS and RADA until strategies with regard to these employees are announced or executed, which may impair DRS’s and RADA’s ability to attract, retain and motivate key management, sales, marketing, technical and other

personnel prior to and following the merger. Employee retention may be particularly challenging during the pendency of the merger, as employees of DRS and RADA may experience uncertainty about their future roles with the combined company. If DRS and RADA are unable to retain personnel, including DRS’s and RADA’s key management, who are critical to the successful integration and future operations of the companies, DRS and RADA could face disruptions in their operations, loss of existing customers, loss of key information, expertise or know-how, and unanticipated additional recruitment and training costs. In addition, the loss of key personnel could diminish the anticipated benefits of the merger.

At the effective time, each outstanding RADA option, whether vested or unvested, granted pursuant to the RADA option plans will be assumed by DRS and substituted with a DRS option in accordance with the terms of the Omnibus Plan and respective award agreement, in accordance with the terms of the option tax ruling (as described in the section entitled “Tax Rulings” below). The right of each holder of a RADA option to exercise the DRS option will be subject to substantially the same terms and conditions, including the applicable vesting schedule, vesting restrictions, continued service requirements and right of vesting upon a qualifying termination of employment, as were applicable to the RADA option immediately prior to the effective time. The number of shares of DRS common stock subject to each DRS option will be equal to the number of RADA shares subject to such RADA option immediately prior to the effective time multiplied by the exchange ratio, rounded down to the nearest whole share, and the per share exercise price under each such DRS option will be equal to the exercise price per RADA share immediately prior to the effective time, divided by the exchange ratio, rounded up to the nearest whole cent. See the section entitled “The Merger Agreement—Treatment of Equity Awards” beginning on page 258 and the section entitled “The Merger—Interests of RADA’s Directors and Executive Officers in the Merger” beginning on page 253 for further discussion.

If key employees of DRS or RADA depart, the integration of the companies may be more difficult and the combined company’s business following the merger may be harmed. Furthermore, the combined company may have to incur significant costs in identifying, hiring and retaining replacements for departing employees and may lose significant expertise and talent relating to the business of each of DRS or RADA, and the combined company’s ability to realize the anticipated benefits of the merger may be adversely affected. In addition, there could be disruptions to or distractions for the workforce and management associated with activities of labor unions or integrating employees into the combined company. Accordingly, no assurance can be given that the combined company will be able to attract or retain key employees of DRS and RADA to the same extent that those companies have been able to attract or retain their own employees in the past.

The merger, including uncertainty regarding the merger, may cause customers, suppliers or strategic partners to delay or defer decisions concerning DRS and RADA or seek to change or cancel existing business relationships and adversely affect each company’s ability to effectively manage their respective businesses.

The merger will happen only if the stated conditions are satisfied or waived, including the adoption of the merger agreement by RADA’s shareholders and the receipt of regulatory approvals, among other conditions. Many of the conditions are outside the control of DRS and RADA, and both parties also have certain rights to terminate the merger agreement. Accordingly, there may be uncertainty regarding the completion of the merger. The merger, or this uncertainty may cause customers, suppliers, vendors, strategic partners or others that deal with DRS and RADA to delay or defer entering into contracts with DRS and RADA or making other business decisions concerning DRS and RADA or seek to change or cancel existing business relationships with DRS and RADA, which could negatively affect their respective businesses. Any delay or deferral of those decisions or changes in existing agreements could have a material adverse effect on the respective businesses of DRS and RADA, regardless of whether the merger is ultimately completed.

In addition, the merger agreement restricts DRS, RADA and their respective subsidiaries from making certain acquisitions and taking other specified actions until the merger occurs without the consent of the other parties. These restrictions may prevent DRS and RADA from pursuing attractive business opportunities or strategic transactions that may arise prior to the completion of the merger. See the section entitled “The Merger Agreement—Restrictions on RADA’s Business Prior to the Effective Time” and “The Merger Agreement—Restrictions on DRS’s Business Prior to the Effective Time” beginning on page 268 and 271 for a description of the restrictive covenants to which each of DRS and RADA is subject.

Whether or not the merger is completed, the announcement and pendency of the merger could cause disruptions in the businesses of DRS and RADA, which could have an adverse effect on their respective businesses and financial results.

Whether or not the merger is completed, the pendency of the merger could cause disruptions in the businesses of DRS and RADA. Specifically:

•current and prospective employees of DRS and RADA will experience uncertainty about their future roles with the combined company, which might adversely affect DRS’s and RADA’s abilities to retain key managers and other employees; and

•the attention of management of each of DRS and RADA may be directed toward the completion of the merger.

In addition, DRS and RADA have each diverted significant management resources in an effort to complete the merger and are each subject to restrictions contained in the merger agreement on the conduct of their respective businesses. If the merger is not completed, DRS and RADA will have incurred significant costs, including the diversion of management resources, for which they will have received little or no benefit.

The merger may not be completed on the terms or timeline currently contemplated, or at all, and the failure to complete the merger could adversely impact the market price of RADA shares, as well as its business and operating results.

The consummation of the merger is subject to certain conditions, as described in this proxy statement/prospectus section entitled “The Merger Agreement—Condition to the Completion of the Merger” beginning on page 253. There is no assurance that these conditions will be met or that the merger will be completed on the terms or timeline currently contemplated, or at all. If the merger is not completed for any reason, the price of RADA shares may decline. RADA and DRS also could experience negative reactions from employees, customers, suppliers or other third parties if the merger is not completed. At the same time, the management’s time and resources or both DRS and RADA may have been spent on matters related to the merger that could otherwise have been committed to pursuing other opportunities available to RADA and DRS that may have been beneficial to their respective shareholders.

DRS and RADA have expended and will continue to expend significant management time and resources and have incurred and will continue to incur significant expenses related to the merger, including legal, advisory, printing and financial services fees related to the merger. Several of these expenses must be paid regardless of whether the merger is consummated. Even if the merger is completed, any delay in the completion of the merger could diminish the anticipated benefits of the merger or result in additional transaction expenses, loss of revenue or other effects associated with uncertainty about the merger.

The merger agreement may be terminated in accordance with its terms and the merger may not be consummated.

Either DRS or RADA may terminate the merger agreement under certain circumstances, including, among other reasons, if the merger is not completed by 5:00 p.m. (Israel time) on June 30, 2023. In addition, if the merger agreement is terminated under certain circumstances specified in the merger agreement, RADA may be required to pay DRS a termination fee in the amount of $40 million. See the section entitled “The Merger Agreement—Termination of the Merger Agreement” beginning on page 285 and the section entitled “The Merger Agreement—Termination Fees” beginning on page 287 for a more complete discussion of the circumstances under which the merger agreement could be terminated and when a termination fee may be payable by RADA.

Any termination of the merger agreement could negatively impact DRS and RADA.

If the merger is not completed for any reason, including as a result of RADA shareholders failing to adopt the merger agreement, the ongoing businesses of DRS and RADA may be adversely affected and, without realizing any

of the benefits of having completed the merger, DRS and RADA would be subject to a number of risks, including the following:

•RADA may experience negative reactions from the financial markets, including negative impacts on its stock price;

•each company may experience negative reactions from its suppliers, customers, regulators and employees;

•each company will be required to pay certain investment banking, legal, financing and accounting costs and associated fees and expenses relating to the merger, some of which will be required to be paid whether or not the merger is completed;

•the merger agreement places certain restrictions on the conduct of each company’s business prior to completion of the merger and such restrictions, the waiver of which is subject to the consent of the other company (not to be unreasonably withheld, conditioned or delayed), which may prevent DRS or RADA from taking certain other specified actions during the pendency of the merger (see the sections entitled “The Merger Agreement—Restrictions on RADA’s Business Prior to the Effective Time” and “The Merger Agreement—Restrictions on DRS’s Business Prior to the Effective Time” beginning on page 271 for a description of the restrictive covenants applicable to DRS and RADA); and

•matters relating to the merger (including integration planning) will require substantial commitments of time and resources by DRS management and RADA management, which would otherwise have been devoted to day-to-day operations and other opportunities that may have been beneficial to DRS or RADA, as applicable, as an independent company.

The directors and executive officers of DRS and RADA have interests that may be different from, or in addition to, those of DRS stockholders and RADA shareholders generally.

When considering the recommendations of the boards of directors of DRS or RADA, as applicable, with respect to the proposals described in this proxy statement/prospectus, stockholders should be aware that the directors and executive officers of each of DRS and RADA may have interests in the merger, which are different from, or in addition to, those of DRS stockholders and RADA shareholders, generally. These interests include the continued employment of certain executive officers of DRS and RADA by the combined company, the continued service of certain independent directors and executive directors of DRS and RADA as directors of the combined company, the treatment in the merger of outstanding equity, equity-based and incentive awards, severance arrangements, other compensation and benefit arrangements and the right to continued indemnification of former DRS and RADA directors and officers by the combined company.

RADA shareholders should be aware of these interests when they consider the recommendation of the RADA board of directors that they vote to adopt the merger agreement. The RADA board of directors was aware of these interests when it approved and declared advisable the merger agreement and the transactions contemplated thereby, including the merger (the “transactions”), on the terms and subject to the conditions set forth in the merger agreement and recommended that RADA shareholders approve the merger. The interests of RADA directors and executive officers are described in more detail in the section entitled “The Merger—Interests of RADA’s Directors and Executive Officers in the Merger” beginning on page 253. Likewise, the interests of DRS’s directors and executive officers are described in more detail in the section entitled “The Merger—Interests of DRS’s Directors and Executive Officers in the Merger” beginning on page 255.

DRS or RADA may waive one or more of the closing conditions without re-soliciting shareholder approval or amending this proxy statement/prospectus.

DRS or RADA may determine to waive, in whole or part, one or more of the conditions of its obligations to consummate the merger. DRS and RADA currently expect to evaluate the materiality of any waiver and its effect on DRS stockholders and RADA shareholders in light of the facts and circumstances at the time to determine whether any amendment of this proxy statement/prospectus or any re-solicitation of proxies is required in light of such waiver. Any determination whether to waive any condition to the merger or as to amending this proxy statement/

prospectus as a result of a waiver will be made by DRS or RADA, as applicable, at the time of such waiver based on the facts and circumstances as they exist at that time.

The merger agreement contains provisions that could discourage a potential competing acquirer that might be willing to provide additional value to acquire or merge with either DRS or RADA.

The merger agreement contains “no shop” provisions that restrict RADA’s ability to, among other things (each as described under the section entitled “The Merger Agreement—No Solicitation of Acquisition Proposals” beginning on page 272):

•initiate, solicit, propose, knowingly or intentionally encourage or knowingly or intentionally take any action to or facilitate any inquiry or the making of any proposal or offer that constitutes or would reasonably be expected to lead to, an acquisition proposal;

•provide any information to any person in connection with any acquisition proposal or any proposal or offer that would reasonably be expected to lead to an acquisition proposal; or

•otherwise knowingly or intentionally facilitate any effort or attempt to make an acquisition proposal.

Furthermore, there are only limited exceptions to the requirement under the merger agreement that RADA’s board of directors not withhold, withdraw, qualify or modify the RADA recommendation (as defined in the section entitled “The Merger Agreement—Representations and Warranties” beginning on page 263). Although RADA’s board of directors is permitted to change its recommendation, after complying with certain procedures set forth in the merger agreement, if it does so DRS may terminate the merger agreement and collect a termination fee from RADA in the amount of $40 million. Prior to making any change of recommendation or taking any action to terminate the merger agreement, RADA must provide notice to DRS of such action and the basis for such change of recommendation, and negotiate in good faith with DRS to make such revisions to the terms of the merger agreement as would permit the RADA board of directors not to effect a change of recommendation or to take such action to terminate the merger agreement, For more information, see the sections titled “The Merger Agreement—Change of Recommendation”, “The Merger Agreement—Termination of the Merger Agreement” and “The Merger Agreement—Termination Fees”.

These provisions could discourage a potential competing acquirer from considering or proposing an acquisition or merger, even if it were prepared to pay consideration with a higher value than that implied by the exchange ratio in the merger, or might result in a potential competing acquirer proposing to pay a lower per share price than it might otherwise have proposed to pay because of the added expense of the termination fee.

Each of DRS and RADA will incur significant transaction, merger-related and restructuring costs in connection with the merger.

DRS and RADA have incurred and expect to incur significant non-recurring costs associated with combining the operations of the two companies, as well as transaction fees and other costs related to the merger. These costs and expenses include fees paid to financial, legal and accounting advisors, facilities and systems consolidation costs, severance and other potential employment-related costs, including payments that may be made to certain DRS executives and RADA executives, filing fees, printing expenses and other related charges. DRS and RADA will incur some of these costs regardless of whether the merger is completed.

The combined company also will incur restructuring and integration costs in connection with the merger. The costs related to restructuring will be expensed as a cost of the ongoing results of operations of either DRS or RADA or the combined company. Although DRS and RADA expect that the elimination of duplicative costs, as well as the realization of other efficiencies related to the integration of the businesses, may offset incremental transaction, merger-related and restructuring costs over time, any net benefit may not be achieved in the near term or at all.

While both DRS and RADA have assumed that a certain level of expenses would be incurred in connection with the merger and the other transactions contemplated by the merger agreement, there are many factors beyond their control that could affect the total amount or the timing of the integration and implementation expenses.

RADA shareholders will not be entitled to dissenters’, appraisal, cash exit or similar rights in the merger.

Dissenters’, appraisal, cash exit or similar rights are statutory rights that, if applicable under law, enable stockholders of a corporation to dissent from an extraordinary transaction, such as a merger, and to demand that the corporation pay the fair value for their shares as determined by a court in a judicial proceeding instead of receiving the consideration offered to the stockholders in connection with the transaction. Under Israeli law, RADA shareholders are not entitled to dissenters’, appraisal, cash exit or similar rights in connection with the merger. See “No Appraisal Rights” beginning on page 101 of this proxy statement/prospectus.

If it is determined the merger does not qualify as a tax-free “reorganization” for U.S. federal income tax purposes, U.S. holders of RADA shares will generally recognize capital gain or loss as a result of the merger.

As further described below in “Material U.S. Federal Income Tax Consequences” beginning on page 293 of this proxy statement/prospectus, the merger is intended to qualify as a tax-free “reorganization” within the meaning of Section 368(a) of the Code. However, there is no assurance that the Internal Revenue Service (the “IRS”) will not take a contrary position regarding the tax treatment of the merger or that any such contrary position would not be sustained, nor is the receipt of any tax opinion a condition to the closing of the merger. If it is determined the merger does not qualify as a tax-free “reorganization”, the merger would be a taxable transaction to RADA shareholders for U.S. federal income tax purposes. In that case, a U.S. holder (as defined below in the section entitled “Material U.S. Federal Income Tax Consequences”) would generally recognize capital gain or loss measured by reference to the fair market value of DRS common stock received in exchange for such U.S. holder’s RADA shares. For more information about the tax consequences related to the company merger, see the section entitled “Material U.S. Federal Income Tax Consequences—Tax Consequences of the Merger” of this proxy statement/prospectus.

Even if the merger qualifies as a “reorganization” under Section 368(a) of the Code, a U.S. holder may still recognize gain as a result of the merger if RADA is or was classified as a “passive foreign investment company” for any taxable year during which a U.S. holder held RADA shares.

Even if the merger qualifies as a “reorganization” within the meaning of Section 368(a) of the Code, if RADA was a “passive foreign investment company” (a “PFIC”) for any taxable year during which a U.S. holder (as defined below in the section entitled “Material U.S. Federal Income Tax Consequences”) owned RADA shares, certain adverse U.S. federal income tax consequences, including recognition of gain, could apply to such U.S. holder as a result of the merger, unless certain exceptions apply. However, these rules are in proposed form, and therefore the applicability of these rules is uncertain. U.S. holders of RADA shares should consult their tax advisors regarding the possible classification of RADA as a PFIC and the resulting U.S. federal income tax considerations. See the section entitled “Material U.S. Federal Income Tax Consequences—U.S. Federal Income Taxation of U.S. Holders—Passive Foreign Investment Company Rules” beginning on page 294.

DRS could be liable for certain tax liabilities, including tax liabilities of US Holding and its subsidiaries, under tax law and the tax allocation agreement.

DRS is a party to a tax allocation agreement (the “tax allocation agreement”) with members of an affiliated group, as defined in Section 1504(a) of the Code, members of one or more consolidated, combined, unitary or similar state and local tax groups (the “state members”) and additional parties who are part of an “expanded affiliated group” for certain tax purposes. Under the tax allocation agreement, we are responsible for U.S. federal and state tax liability attributable to us or any of our subsidiaries, as determined under the tax allocation agreement, for prior taxable periods beginning with the first consolidated taxable year of US Holding that included DRS (i.e., the taxable year ended December 31, 2008) and for future taxable periods in which we are a member of any consolidated, combined or unitary tax return with US Holding or its subsidiaries. In addition, to the extent US Holding fails to pay taxes imposed with respect to any consolidated, combined or unitary tax return of US Holding or any of its subsidiaries that includes us or any of our subsidiaries, the relevant taxing authority could seek to collect such taxes (including taxes for which US Holding or any of its subsidiaries is responsible under the tax

allocation agreement) from us or our subsidiaries. For a description of the tax allocation agreement, see “Information About DRS—Certain Relationships and Related Transactions and Director Independence—Relationship with Leonardo S.p.A.—Tax Allocation Agreement”.

Lawsuits filed against DRS or RADA, or against DRS or RADA directors, challenging the merger, and an adverse ruling in any such lawsuit may prevent the merger from becoming effective or becoming effective within the expected time frame.

Transactions like the proposed merger are frequently subject to litigation or other legal proceedings, including actions alleging that the RADA board of directors breached their fiduciary duties to their shareholders by entering into the merger agreement, by failing to obtain a greater value in the transaction for their shareholders or otherwise. For example, a complaint has been filed as individual action in the United States District Court for the Southern District of New York captioned Davidman v. RADA Electronics Industries Limited et al 22-cv-06899 (filed August 12, 2022). The complaint generally alleges that the preliminary proxy statement/prospectus filed as part of the Registration Statement on Form S-4 filed on August 3, 2022 misrepresented and/or omitted certain purportedly material information. The complaint asserts violations of Sections 14(a) and 20(a) of the Exchange Act against RADA and the members of the RADA board of directors. The complaint seeks, among other things, an injunction enjoining the consummation of the merger, if the merger is consummated rescinding it or awarding rescissory damages to the plaintiff, costs of the action, including plaintiff’s reasonable attorneys’ and experts’ fees, and other relief the court may deem just and proper. In addition to the complaint, certain purported shareholders of RADA sent demand letters alleging certain deficiencies in the registration statement of which this proxy statement/prospectus forms a part. We believe that these claims are legally deficient and without merit and intend to vigorously defend against any litigation or other legal proceedings brought against DRS or RADA, or against the DRS or RADA board of directors. Neither RADA nor DRS can predict the outcome of any such matters and defenses might not be successful. An adverse outcome in such matters, as well as the costs and efforts of a defense even if successful, could have a material adverse effect on the business, results of operation or financial position of DRS, RADA or the combined company, including through the possible diversion of either company’s resources or distraction of key personnel. If additional similar complaints are filed or demands sent, RADA and DRS may not necessarily disclose such additional filings or demands.

Furthermore, one of the conditions to the completion of the merger is that no injunction by any court or other governmental entity of competent jurisdiction will be in effect that prevents, enjoins or makes illegal the consummation of the merger. As such, if any of the plaintiffs are successful in obtaining an injunction preventing the consummation of the merger, that injunction may prevent the merger from becoming effective or from becoming effective within the expected time frame.

Risks Relating to DRS’s Business

In this section, unless context requires otherwise, references to “we”, “our” or “us” refer to DRS before the completion of the merger.

We depend on U.S. defense spending for the vast majority of our revenues. Disruptions or deteriorations in our relationships with the relevant agencies of the U.S. government could have a material adverse impact on our business, financial condition and results of operations.

We depend on revenues from contracts and subcontracts with the U.S. government, including defense-related programs with the Department of Defense (“DoD”) and intelligence community. Revenues derived directly or indirectly from contracts with the U.S. government represented approximately 86%, 84% and 89% of our total revenues for the years ended December 31, 2021, 2020, and 2019, respectively, with revenues principally derived directly or indirectly from contracts with the U.S. Army and U.S. Navy, which represented 38% and 31%, respectively, of our total revenues for the year ended December 31, 2021. Because our customer base is concentrated within the U.S. defense industry, any disruption or deterioration in our relationship with the U.S. government and its prime contractors, or any change in the U.S. government’s willingness to commit substantial resources to the continued purchase of our products, could significantly reduce our revenues and have a material adverse impact on our business, financial condition and results of operations.

Significant delays or reductions in appropriations for our programs and changes in U.S. government priorities and spending levels more broadly may negatively impact our business and could have a material adverse impact on our business, financial condition and results of operations.

The availability of U.S. government funding for significant programs in which we participate may be impacted by a number of factors beyond our control including the overall federal budget, changes in spending priorities and defense spending levels, sequestration, the appropriations process, use of continuing resolutions (with restrictions, e.g., on starting new programs) and the permissible level of federal debt. These factors may also delay purchasing or payment decisions by our customers. In the event government funding for significant programs in which we participate becomes unavailable, or is reduced or delayed, our contract or subcontract under such programs may be terminated or adjusted by the U.S. government or the prime contractor. U.S. government priorities and spending levels have fluctuated and may continue to fluctuate over time. We cannot predict the impact on existing, follow-on, replacement or future programs from potential changes in priorities whether due to changes in defense spending levels, the threat environment, procurement strategy, military strategy and planning and/or changes in social, economic or political priorities, including in response to the COVID-19 pandemic. As the DoD budget represents the largest part of the federal discretionary budget, it is possible that non-defense discretionary outlays might exert downward pressure on defense spending. The U.S. government may also delay, modify or cancel ongoing competitive bidding processes, procurements and programs, as well as change its acquisition strategy. A significant shift in government priorities, programs or acquisition strategies could have a material adverse impact on our business, financial condition and results of operations.

Considerable uncertainty exists regarding future budget and program decisions, including U.S. defense spending priorities, what challenges budget reductions will present for the defense industry, whether annual appropriations bills for all agencies will be enacted for U.S. government fiscal year 2023 and thereafter, and how the Biden administration will approach those decisions through the budgeting process. The U.S. government’s budget deficit and the national debt could significantly affect government budgeting priorities and could have an adverse impact on our business, financial condition and results of operations in a number of ways, including the following:

•the U.S. government could reduce or delay its spending on, or reprioritize its spending away from, defense programs in which we participate;

•U.S. defense spending could be impacted by alternate arrangements, which increases the uncertainty as to, and the difficulty in predicting, U.S. government spending priorities and levels;

•we may experience reduced or delayed orders or payments or other responses to economic difficulties experienced by our customers and prospective customers, including U.S. Federal, state and local governments; and

•the U.S. government could reduce the outsourcing of functions that we are currently contracted to provide, including as a result of increased insourcing by various U.S. government agencies due to changes in the definition of “inherently governmental” work, such as proposals to limit contractor access to sensitive or classified information and work assignments.

The COVID-19 pandemic and related government and health authority responses have had and may continue to have an adverse impact on our business, financial condition and results of operations.

In March 2020, COVID-19 was recognized as a pandemic by the World Health Organization and declared a national emergency by the U.S. government. We are closely monitoring the impact of the COVID-19 pandemic on all aspects of our business and geographies, including how it is impacting our workforce, communities, suppliers, subcontractors and customers. The COVID-19 pandemic has created significant volatility, uncertainty and economic disruption, which has adversely affected, and is expected to continue to adversely affect, our business operations, and could materially and adversely affect our business, financial condition and results of operations.

In addition to volatility in the overall demand environment for our products, systems and services, we restricted the operations in our facilities, and we may again to restrict operations if we deem it necessary or if recommended or mandated by governmental authorities which would have a further adverse impact on us. We also implemented

enhanced health leave benefits and incurred other costs related to the COVID-19 pandemic. We incurred $6 million and $12 million of expenditures for December 31, 2021 and December 31, 2020, respectively to ensure a safe work environment for our employees. Although we offset a portion of the cash impacts from COVID-19 pursuant to Section 3610 of the Coronavirus Aid, Relief and Economic Securities Act (the “CARES Act”), allowing for a deferral of social security payroll tax payments and pension related contributions, we may not be able to fully offset COVID-19 related costs. We are designated as an essential business in the primary jurisdictions in which we operate, but if we lose that designation, we may be subject to additional restrictions on our operations. We may be unable to perform fully on our contracts and our costs may increase as a result of the COVID-19 outbreak. These cost increases may not be fully recoverable or adequately covered by insurance. See “Information About DRS—Management’s Discussion and Analysis of Financial Condition—Business Overview and Considerations—Impacts of COVID-19 On Our Business” in this proxy statement/prospectus.

On September 9, 2021, President Biden released an executive order that requires all employees of federal contractors to be vaccinated. In light of certain court orders, the Office of Management and Budget has stated that the U.S government will not take action to enforce the requirements of the executive order at this time. If ultimately upheld, there is a risk that some of our employees will not comply and have to be replaced. Our employees are highly skilled, have critical knowledge, and in some cases have security clearances to be able to work on highly sensitive programs. These employees will not be easy to replace, if required by the regulations implementing this executive order.

The extent to which the COVID-19 pandemic, or any mutation of this virus or a new virus that necessitates a similar national response, will impact us in the future will depend on numerous evolving factors and developments that we are unable to predict, including: the severity and transmission rate of the virus(es); the duration of the outbreak, including the risk of a resurgence of the virus in areas in which it appears to have been contained; the extent and effectiveness of containment actions; governmental, business and other actions (which could include limitations on our operations or mandates to provide products, systems or services); the continued success of measures taken by governmental authorities worldwide to stabilize the markets and support economic growth, which is unknown and may not be sufficient to address future market dislocations or avert severe and prolonged reductions in economic activity; the impacts on our supply chain; the impact of the pandemic on economic activity; the effects of additional business or facility closures or other changes to our operations; the health of and the effect on our workforce and our ability to meet staffing needs in our businesses and facilities, particularly if members of our workforce are quarantined as a result of exposure; any impairment in value of our tangible or intangible assets which could be recorded as a result of a weaker economic conditions; and the potential effects on our internal controls, including those over financial reporting, as a result of remote working environments and other conditions such as shelter-in-place and similar orders that apply to our employees and business partners, among others. In addition, disruptions in the credit or financial markets or impacts on our credit ratings from the pandemic could adversely affect our ability to access capital on favorable terms and continue to meet our liquidity needs, all of which are highly uncertain and cannot be predicted. This situation continues to evolve, sometimes rapidly, and additional impacts may arise that we are not aware of currently.

The impacts of the COVID-19 pandemic may exacerbate other risks described in this section, any of which could have a material adverse impact on our business, financial condition and results of operations.

The COVID-19 pandemic and related disruption to supply chains, including for electric and electronic components, may impact our ability to obtain needed materials for our products which could materially adversely impact our business, financial conditions and results of operations.

The COVID-19 pandemic has the potential to significantly impact our supply chains, including our access to vital products and services we source from suppliers and vendors. Our supply chains could be impacted if the operations of our suppliers, logistics and other service providers are disrupted, temporarily closed or experience worker shortages. In particular, we rely on smaller suppliers for some materials and underlying components needed for our products and these suppliers may be particularly vulnerable to COVID-19 related disruptions. To the extent that there is a slow-down in production from our suppliers, limiting our own production capacity, this could adversely affect our revenues and profit for a reporting period or beyond. Further, the COVID-19 pandemic could cause delay, or limit the ability of the U.S. government and other customers to perform, including in making timely

payments to us. We have increased, and may continue to increase, our inventories of materials or components used in our products in order to mitigate any effects of supply chain disruptions on our business which may carry additional risks; for further information see “—Our Business may be harmed if we are unable to appropriately manage our inventory”. Any effect on our suppliers, other service providers and customers could materially adversely impact our business, financial condition and results of operations.

The COVID-19 pandemic has had, and may continue to have, a significant impact on the availability of electric and electronic components, including micro-electronics. The world-wide impact of the pandemic, including the lack of forecasting accuracy by the world’s largest microelectronics manufacturers has caused shortages for a number of industries, from automotive manufacturers to defense contractors. While the capacity and forecasting accuracy is expected to improve over time, the demand for microelectronics is likely to continue at a pace that exceeds those corrections. We have been able to forecast and reserve components with long enough notice to minimize impacts to revenue, but this could change due to dynamic market conditions. These effects could materially adversely impact our business, financial conditions and results of operations.

Contractual disputes with industry participants or the inability of our key suppliers to timely deliver our components, parts or services, could cause our products, systems or services to be produced or delivered in an untimely or unsatisfactory manner.

We act as subcontractor on many contracts and engage subcontractors on many of our own contracts. We may have disputes with our contractual counterparts, including regarding the quality and timeliness of work performed by a subcontractor, customer concerns about a subcontract or subcontractor, our failure to extend existing task orders or issue new task orders under a subcontract, our hiring of personnel of a subcontractor or as a subcontractor or our counterpart’s failure to adhere to flow down requirements, including cyber governance or comply with other applicable law. In addition, there are certain parts, components and services for many of our products, systems and services that we source from other manufacturers or vendors. Some of our suppliers, from time to time, experience financial and operational difficulties, which may impair their ability to supply the materials, components, subsystems and services that we require.

For example, we have recently witnessed shortages of electronic components that are used in automotive, cell phones and other electronics, in general, causing disruptions to multiple industries such as automotive manufacturing and personal electronics. Shortages of similar components that we use could negatively impact our supply chain and manufacturing processes, as well as our ability to deliver on our contracts. Impacts from the COVID-19 pandemic have created or exacerbated existing materials shortages, resulted in supplier business closures and disrupted our supply chain. See also “—The COVID-19 pandemic and related disruption to supply chains, including for electric and electronic components, may impact our ability to obtain needed materials for our products which could materially adversely impact our business, financial conditions and results of operations”. Future impacts from the pandemic remain highly uncertain as the situation continues to evolve, sometimes rapidly.

In addition, our supply chain may be disrupted by trade conflicts and tariffs imposed on products, as well as other external events, including natural disasters, extreme weather conditions, future medical epidemics or pandemics, acts of terrorism, cyber attacks and labor disputes, governmental actions and legislative or regulatory changes, such as product certification or stewardship requirements, sourcing restrictions, product authenticity and climate change or greenhouse gas emission standards. These or any further political or governmental developments or health concerns could result in social, economic and labor instability. Any inability to develop alternative sources of supply on a cost-effective and timely basis could materially impair our ability to manufacture and deliver products, systems and services to our customers.

We may have disputes with our subcontractors or suppliers; material supply constraints or problems; or component, subsystems or services problems in the future. Also, our subcontractors and other suppliers may not be able to acquire or maintain the quality of the materials, components, subsystems and services they supply, which might result in greater product returns, service problems and warranty claims and could harm our business, financial condition and results of operations. Further, warranty claims brought by our customers related to third-party components and materials may arise after our ability to bring corresponding warranty claims against such suppliers expire, which could result in costs to us. In addition, in connection with our government contracts, we are required

to procure certain materials, components and parts from supply sources directed or approved by the U.S. government and we rely on our subcontractors and suppliers to comply with applicable laws, regulations and other requirements regarding procurement of counterfeit, unauthorized or otherwise non-compliant parts or materials, including parts or materials they supply to us, and in some circumstances, we rely on their certifications as to their compliance. From time to time, we use components for which there is only one supplier and that supplier may be unable to meet our needs. The inability of our suppliers to perform, or their inability to perform adequately, could also result in the need for us to transition to alternate suppliers, which could result in significant incremental cost and delay or the need for us to provide other resources to support our existing suppliers. Each of these subcontractor and supplier risks could have a material adverse impact on our business, financial condition and results of operations.

Global, market and economic conditions, including inflation and interest rate changes, may negatively impact our business, financial condition and share price.

Although historically our operations have not been materially affected by inflation and we have been successful in adjusting prices to our customers to reflect changes in our material and labor costs, the rate of current inflation and resulting pressures on our costs and pricing could adversely impact our business and financial results. Inflation can adversely affect us by increasing our operating costs, including our materials, freight and labor costs, which are already under pressure due to supply chain constraints and the continuing effects of the COVID-19 pandemic. Trade sanctions and disruptions to the global economy (including from the COVID-19 pandemic and related government and other health authority responses) have led to additional inflation which may negatively impact the global supply chain and could have a material adverse effect on our ability to secure needed supplies for our manufactured products.

As interest rates rise to address inflation, such increases will also impact our financing arrangements and will result in borrowed funds becoming more expensive to us over time. If conditions worsen or do not improve, it may become more difficult for us to complete debt or equity financings which may be necessary for us to operate our business. Such financings may not only become more costly, but also more difficult to complete, and more dilutive. Similar financing pressures from inflation also can have a negative impact on customers’ willingness to purchase our products in the same volumes and at the same rates as previously anticipated. In a highly inflationary environment, we may be unable to raise the sales prices of our products at or above the rate of inflation, which could reduce our profit margins having a material adverse effect business, results of operations and financial condition.

Concerns over inflation, geopolitical issues, global financial markets and the COVID-19 pandemic have led to increased economic instability, diminished expectations for the global economy and expectations of slower global economic growth. Our business may be adversely affected by any such economic instability or unpredictability.

In addition, there is a risk that one or more of our suppliers or other partners could be negatively affected by global economic instability, which could adversely affect our ability to operate efficiently and timely complete our operational goals.

Our results of operations and cash flows are substantially affected by our mix of fixed-price, cost-plus and time-and-material type contracts. In particular, fixed-price contracts (which are the large majority of our contracts) subject us to the risk of loss in the event of cost overruns or higher than anticipated inflation.

We generate revenue through various fixed-price, cost-plus and time-and-material contracts. For a general description of our U.S. government contracts and subcontracts, including a discussion of revenue generated thereunder and of cost-reimbursable versus fixed-price contracts please see “Information About DRS—Management’s Discussion and Analysis of Financial Condition and Results of Operations” in this proxy statement/prospectus.

For the years ended December 31, 2021, 2020, and 2019, we derived approximately 87%, 87% and 86%, respectively, of our revenue from fixed-price contracts. We assume financial risk on fixed-price contracts because we bear the risk of potential cost overruns, particularly for firm fixed-price contracts in which we assume all of the cost burden. Our failure to anticipate risks or technical problems, estimate costs accurately or control costs during performance will reduce our profit or cause a loss on these contracts. U.S. government contracts can expose us to potentially large losses because the U.S. government can hold us responsible for completing a project or, in certain

circumstances, paying the entire cost of its replacement by another provider regardless of the size or foreseeability of any cost overruns that occur over the life of the contract. Because many of these contracts involve new technologies and applications and can last for years, unforeseen events, such as technological difficulties, engineering or development challenges, fluctuations in raw materials prices, higher than expected inflation, increased labor costs, problems with our suppliers and cost overruns, can result in the contractual price becoming less favorable or even unprofitable to us over time. Furthermore, if we do not meet contract deadlines or specifications, we may need to renegotiate contracts on less favorable terms, be forced to pay penalties or liquidated damages or suffer significant losses if the customer terminates our contract. In addition, some of our contracts have provisions relating to cost controls and audit rights, and if we fail to meet the terms specified in those contracts, we may not realize their full benefits. For further information, see “—We operate in a highly regulated environment and are routinely audited and reviewed by the U.S. government and its agencies”. Our results of operations depend on our ability to maximize our earnings from our contracts. Cost overruns could have a material adverse impact on our business, financial condition and results of operations.

We are subject to the U.S. government’s requirements, including the DoD’s National Industrial Security Program Operating Manual, for our facility security clearances, which are prerequisites to our ability to perform on classified contracts for the U.S. government.

We require a facility security clearance to perform on classified contracts for the DoD and certain other U.S. government agencies. Security clearances are subject to regulations and requirements including, among others, the National Industrial Security Program Operating Manual (the “NISPOM”), which specifies the requirements for the protection of classified information released or disclosed in connection with classified U.S. government contracts. DCSA manages the facility clearance process under the NISPOM.

We require certain facility and personnel security clearances to perform our classified U.S. government business. As such, we must comply with the requirements of the NISPOM and other applicable U.S. government industrial security regulations, including extensive requirements related to cybersecurity. If we were to violate the terms and requirements of the NISPOM or such industrial security regulations (which apply to us under the terms of classified contracts), or if one or more of our facility or personnel security clearances is invalidated or terminated, we may not be able to continue to perform our existing classified contracts and may not be able to enter into new classified contracts, which could adversely affect our revenues. Failure to comply with the NISPOM or other security requirements may result in loss of access to classified information and subject us to civil and criminal penalties and administrative sanctions, including termination of contracts, forfeiture of profits, suspension of payments, fines and suspension or prohibition from doing business with the U.S. government, which could have a material adverse impact on our business, financial condition and results of operations.

Additionally, the NISPOM requires that a corporation maintaining a facility security clearance be effectively insulated from foreign ownership, control and influence (“FOCI”). In addition to other factors, a company is considered to be operating under FOCI whenever a foreign interest has the power, direct or indirect, whether or not exercised, to direct or decide matters affecting the management or operations of that company in a manner that may result in unauthorized access to classified information, may adversely affect the performance of classified contracts, or may undermine U.S. security or export controls.

Leonardo S.p.A., an Italian company listed on the Milan Stock Exchange, is the ultimate parent company of US Holding which, in turn, prior to the merger owns all of our outstanding common stock. As a result, we are deemed to be operating under FOCI. Furthermore, the Italian state beneficially owns approximately 30.2% of Leonardo S.p.A.’s voting power (through its ownership of approximately 30.2% of the outstanding ordinary shares of Leonardo S.p.A.). In order to be permitted to maintain our security clearances and our access to classified data and to perform or bid on classified programs, we are required to mitigate FOCI through a commitment letter, dated as of February 26, 2021 (the letter, together with all of its requirements, the “Commitment Letter”), which relates to a proxy agreement we previously entered into, dated as of October 26, 2017, with DCSA. The Commitment Letter also details other interim requirements for the mitigation of FOCI. In addition, the DoD or other U.S. government agencies may impose further requirements or protections to ensure compliance with relevant rules and regulations due to RADA’s personnel and operations being located in Israel. For additional information on the terms and requirements of the proxy agreement, see “—We operate under a Commitment Letter with DCSA that regulates

significant areas of our governance. If we fail to comply with the Commitment Letter, our classified U.S. government contracts could be terminated, which could have a material adverse impact on our business, financial condition and results of operations”.

While we currently mitigate FOCI under the Commitment Letter, DCSA and DoD reserve the right to impose such additional security safeguards as they believe necessary in order to prevent unauthorized access to classified and controlled unclassified information, respectively, and any U.S. government agency may deny or revoke our access to classified and controlled unclassified information under its jurisdiction if it considers it necessary to protect national security. While we currently do not expect to need any further FOCI mitigation agreements in respect of the merger with RADA, this expectation may change and failure to maintain an agreement with DCSA regarding the appropriate FOCI mitigation arrangement could result in invalidation or termination of our facility security clearances, which in turn would mean that we would not be able to perform under current or enter into future contracts with the U.S. government requiring facility security clearances.

We depend on revenues from contracts and subcontracts with the U.S. government, including defense-related programs with the DoD and a broad range of programs with each of the service branches. Revenues derived directly or indirectly from contracts with the U.S. government were approximately 86%, 84% and 89% of our total revenues for the years ended December 31, 2021, 2020, and 2019, respectively. If we fail to maintain an agreement with DCSA regarding the appropriate FOCI mitigation arrangement or otherwise fail to comply with the NISPOM, this could have a material adverse impact on our business, financial condition and results of operations. For further information, see “—We depend on U.S. defense spending for the vast majority of our revenues. Disruptions or deteriorations in our relationships with the relevant agencies of the U.S. government could have a material adverse impact on our business, financial condition and results of operations”.

We depend on U.S. government contracts, which often are only partially funded and are subject to immediate termination. The termination or failure to fund one or more of these contracts could have a material adverse impact on our business, financial condition and results of operations.

Over its lifetime, a U.S. government program may be implemented by the award of many different individual contracts and subcontracts. The funding of U.S. government programs is subject to Congressional appropriations. U.S. government appropriations in turn are affected by general U.S. government budgetary issues and related legislation. Although multi-year contracts may be authorized and appropriated in connection with major procurements, Congress generally appropriates funds on a government fiscal year basis, which runs from October 1 to September 30. Procurement funds are typically made available for obligation over the course of one to three years. Consequently, programs often initially receive only partial funding, and additional funds are obligated only as Congress makes further appropriations. We cannot predict the extent to which total funding and/or funding for individual programs will be included, increased or reduced as part of the annual appropriations process ultimately approved by Congress and the President or in separate supplemental appropriations or continuing resolutions, as applicable. The termination of funding for a U.S. government program would result in a loss of anticipated future revenue attributable to that program, which could have a material adverse impact on our business, financial condition and results of operations. In addition, the termination of a program or the failure to commit additional funds to a program that already has been started could result in lost revenue and increase our overall costs of doing business. The loss of revenues from our possible failure to obtain renewal or follow-on contracts may be significant because we depend on the U.S. government for a significant portion of our revenues. For further information, see “—We depend on U.S. defense spending for the vast majority of our revenues. Disruptions or deteriorations in our relationships with the relevant agencies of the U.S. government could have a material adverse impact on our business, financial condition and results of operations”.

In addition, U.S. government contracts may generally be terminated, in whole or in part, without prior notice at the U.S. government’s convenience upon payment only for work done and commitments made at the time of termination. For some contracts, we are a subcontractor and not the prime contractor, and in those arrangements, the U.S. government could terminate the prime contractor for convenience without regard for our performance as a subcontractor. We can give no assurance that one or more of our contracts will not be terminated under those circumstances. Also, we can give no assurance that we would be able to procure new contracts to offset the revenue or backlog lost as a result of any termination of our contracts. Because a significant portion of our revenue depends

on our performance and payment under our contracts, the loss of one or more large contracts could have a material adverse impact on our business, financial condition and results of operations.

In addition to termination for convenience, U.S. defense contracts are generally also terminable for default based on performance. Termination by the U.S. government, or one of its prime contractors, of a contract due to default could in addition to the loss of future revenue obligate us to pay for re-procurement costs in excess of the original contract price, net of the value of work accepted from the original contract, as well as other damages. For some contracts, we are a subcontractor and not the prime contractor, and in those arrangements, the U.S. government could terminate the prime contractor for default without regard for our performance as a subcontractor. Termination of a contract due to our default could also impair our reputation and our ability to compete for other contracts which could have a material adverse impact on our business, financial condition and results of operations. Additionally, our U.S. government contracts are heavily regulated and subject to audit and negative audit findings could result in the termination of these or other contracts or the failure to receive future awards, see “—We operate in a highly regulated environment and are routinely audited and reviewed by the U.S. government and its agencies”.

The U.S. government also has the ability to stop work under a contract for a limited period of time for its convenience. It is possible that the U.S. government, or one of its prime contractors, could invoke this ability across a limited or broad number of contracts. In the event of a stop work order, contractors are typically protected by provisions covering reimbursement for costs incurred on the contract to date and for costs associated with the temporary stoppage of work on the contract plus a reasonable fee. However, such temporary stoppages and delays could introduce inefficiencies and result in financial and other damages for which we may not be able to receive full recovery. They could also ultimately result in termination of a contract (or contracts) for convenience or reduced future orders.

We operate in a highly regulated environment and are routinely audited and reviewed by the U.S. government and its agencies.

We depend on U.S. government contracts, which are heavily regulated and subject to audit by the U.S. government and its agencies, such as the Defense Contract Audit Agency (“DCAA”), Defense Contract Management Agency (“DCMA”), the DoD Inspector General, and others. These agencies review performance on government contracts, direct and indirect rates and pricing practices, and compliance with applicable contracting and procurement laws, regulations and standards. They also review compliance with government standards for our business systems and the adequacy of our internal control systems and policies. Negative findings related to our business and accounting systems and financial controls and capability could result in our ineligibility for future cost-plus contracts. Costs ultimately disallowed or found to be improperly allocated to a specific contract will not be reimbursed or must be refunded if already reimbursed. We record contract revenue based on costs on which we expect to be paid after any final audit. However, we do not know the outcome of any future audits and adjustments in advance, and we may be required to reduce our revenue or profits materially upon completion and final negotiation of audits. As a result of certain cost reduction initiatives across our industry, we have experienced and may continue to experience an increased number of audits and/or a lengthened period of time required to close open audits. For example, the thresholds for certain allowable costs in the U.S., including compensation costs, have been significantly reduced; the allowability of other types of costs are being challenged, debated and, in certain cases, modified, all with potentially significant financial costs to the Company. We may also perform work for which we must file requests for equitable adjustments or claims seeking recovery for out-of-scope work to be compensated. While we may resort to other methods to pursue our claims or collect our receivables, these methods are expensive and time consuming and successful collection is not guaranteed. Failure to collect our receivables or prevail on our claims would have an adverse effect on our business, financial condition and results of operations.

If an audit uncovers improper or illegal activities, we may be subject to civil and criminal penalties, sanctions, termination of contracts, forfeiture of profits or suspension or debarment from doing business with the U.S. government. Whether or not illegal activities are alleged, the U.S. government has the ability to decrease or withhold certain payments when it deems systems subject to its review to be inadequate, with significant financial impact. In addition, we could suffer serious reputational harm if allegations of impropriety were made against us or our business partners and suppliers.

Additionally, we are reviewed and rated by our government clients on a contract by contract basis. The receipt of a negative review on one contract could cause us reputational harm and adversely affect our ability to win future contracts.

Due to our reliance on government contracts, negative audit findings or reviews for one or more of these contracts could have a material adverse impact on our business, financial condition and results of operations.

We are subject to a number of procurement, international trade, and other rules regulations and requirements related to our industry, our products, and the businesses we operate. If we fail to comply with such rules, regulations or other requirements we may be subject to civil and/or criminal penalties and/or administrative sanctions.

If we fail to comply with procurement regulations or other requirements, we may be subject to civil and/or criminal penalties and/or administrative sanctions, which may include termination or modification of contracts, forfeiture of profits, suspension of payments, fines and suspension or prohibition from doing business with the U.S. government, any of which could have a material adverse effect on our business, financial condition and results of operations.

We (again, including our subcontractors and others with whom we do business) are also subject to, and expected to perform in compliance with, a vast array of federal laws, regulations and requirements related to our industry, our products and the businesses we operate. These laws and regulations include, but are not limited to, the Anti-Kickback Act, the Arms Export Control Act, including the International Trade in Arms Regulations (“ITAR”), the Communications Act, the Defense Federal Acquisition Regulations, the Export Administration Regulations (“EAR”) (which includes anti-boycott provisions), the False Claims Act, the Federal Acquisition Regulation, the Foreign Corrupt Practices Act (“FCPA”), the Lobbying Disclosure Act, the Procurement Integrity Act, the Truthful Cost or Pricing Data Act, the Foreign Trade Regulations, the Foreign Investment Risk Review Modernization Act, the International Emergency Economic Powers Act, the Trading with the Enemy Act, and Executive Orders and regulations, administered by the U.S. Department of the Treasury, Office of Foreign Assets Control, as well as rules and regulations administered by the U.S. Customs and Border Protection and the Bureau of Alcohol, Tobacco, Firearms and Explosives. While we have implemented compliance programs that are intended to avoid violations of these federal laws, regulations and requirements, given the nature of our operations and the constant evolution of applicable laws, regulations and requirements, we may not be able to prevent future violations. If we are found to have violated such laws, regulations or requirements, we may be subject to reductions of the value of contracts; contract modifications or termination; the withholding of payments from our customer; the loss of export privileges; administrative or civil judgments and liabilities; criminal judgments or convictions, liabilities and consent or other voluntary decrees or agreements; other sanctions; the assessment of penalties, fines, or compensatory, treble or other damages or non-monetary relief or actions; or suspension or debarment.

If we or those with whom we do business do not comply with the laws, regulations and processes to which we are subject or if U.S. government practices or requirements change significantly, including with respect to the thresholds for allowable costs, it could affect our ability to compete and adversely impact our business, financial condition and results of operations.

The U.S. government’s organizational conflict of interest rules could limit our ability to compete successfully for new contracts or may require us to exit or wind down certain existing contracts, any of which could adversely affect our business, financial condition, results of operations and prospects.

Past efforts by the U.S. government to reform its procurement practices have focused, among other areas, on the separation of certain types of work to facilitate objectivity and avoid or mitigate organizational conflicts of interest, and the strengthening of regulations governing organizational conflicts of interest. Organizational conflicts of interest may arise from circumstances in which a contractor has:

•impaired objectivity during performance;

•unfair access to non-public information; or

•the ability to set the “ground rules” for another procurement for which the contractor competes.

A focus on organizational conflicts of interest issues has resulted in legislation and regulations aimed at increasing organizational conflicts of interest requirements, including, among other things, separating sellers of products and providers of advisory services in major defense acquisition programs. These organizational conflicts of interest regulations have led to increased bid protests related to arguments to disqualify or overturn awards based on conflict grounds.

Future legislation and regulations may increase the restrictions in current organizational conflicts of interest regulations and rules. To the extent that organizational conflicts of interest laws, regulations and rules limit our ability to successfully compete for new contracts or task orders with the U.S. government and/or commercial entities, or require us to exit certain existing contracts or wind down certain existing contracts, either because of organizational conflicts of interest issues arising from our business or because companies with which we are affiliated, including Leonardo S.p.A. and its subsidiaries (including US Holding), or with which we otherwise conduct business create organizational conflicts of interest issues for us, our business, financial condition, results of operations and prospects could be materially and adversely affected.

A failure to attract and retain technical and other key personnel could reduce our revenues and our operational effectiveness.

Our success depends largely upon the continued services of our executive officers and other key employees. We rely on our leadership team in the areas of research and development, operations, security, marketing, sales, customer experience, general and administrative functions, and on individual contributors in our research and development and operations. In addition, the relationships and reputation that many members of our senior management team have established and maintain with U.S. government personnel contribute to our ability to maintain strong customer relationships and to identify new business opportunities. From time to time, there may be changes in our executive management team resulting from the hiring or departure of executives, which could disrupt our business. We do not have employment agreements with our executive officers or other key personnel that require them to continue to work for us for any specified period and, therefore, they could terminate their employment with us at any time. The loss of one or more of our executive officers, especially our chief executive officer, or key employees could impair our ability to identify and secure new contracts, disrupt customer relations, cause us to be in breach of contracts that require us to maintain key personnel or otherwise harm our business. Changes in our executive management team may also cause disruptions in, and harm to, our business.

There is a high demand for qualified technical and other key personnel, and we believe that our future growth and success will depend upon our ability to attract, train and retain such personnel. Competition for personnel in the defense industry is intense, and there is a limited number of persons with knowledge of and experience in this industry. Additionally, some of our businesses are located in regions where competition for personnel is particularly intense. We have historically high levels of open job requisitions, and although we currently experience manageable rates of turnover for our technical personnel the rate of turnover may increase in the future and we may increasingly be unable to find replacement personnel. Our ability to hire personnel in specific sectors may also be limited by non-disclosure or non-solicit agreements that we have entered into. An inability to attract or maintain a sufficient number

of technical and other key personnel could have a material adverse effect on our contract performance or on our ability to capitalize on market opportunities.

Our operating results and growth opportunities are heavily dependent upon our ability to attract and retain sufficient personnel with security clearances and requisite skills in multiple areas, including science, technology, engineering and math. Additionally, as we grow our international business, it is increasingly important that we are able to attract and retain personnel with relevant local qualifications and experience. In addition, in a tightened labor market, we are facing increased competition for talent, both with traditional defense companies and commercial companies. If qualified personnel are scarce or difficult to attract or retain or if we experience a high level of attrition, generally or in particular areas, or if such personnel are unable to obtain security clearances on a timely basis, we could experience higher labor, recruiting or training costs in order to attract and retain necessary employees.

Approximately 440 (or 7.6%) of our employees are covered by collective agreements. We generally have been able to renegotiate renewals to expiring agreements without significant disruption of operating activities. If we encounter difficulties with renegotiations or renewals of collective bargaining arrangements or are unsuccessful in those efforts, we could incur additional costs and experience work stoppages. Union actions at our suppliers could also affect us. We cannot predict how stable our union relationships will be or whether we will be able to successfully negotiate successor collective bargaining agreements without impacting our financial condition. In addition, the presence of unions may limit our flexibility in dealing with our workforce. While a relatively small percentage of our employee base is unionized, work stoppages could negatively impact the specific business segments in which our unionized employees are employed including our ability to manufacture products or provide services on a timely basis, which could negatively impact our business, financial condition and results of operations.

On September 9, 2021, President Biden released an executive order that requires all employees of federal contractors to be vaccinated. Subsequently, a nationwide preliminary injunction was placed on the order. On August 26, 2022, the United States Court of Appeals for the Eleventh Circuit narrowed the scope of the injunction of the vaccine mandate. The Eleventh Circuit limited the preliminary injunction to the parties before the Court: seven States (Georgia, Alabama, Idaho, Kansas, South Carolina, Utah, and West Virginia), their agencies, and members of the construction-industry trade group Associated Builders and Contractors. We continue to monitor the progress of the appeal as well as the Safer Federal Workforce Task Force website for new guidance and updates to enforcement policy. Until the Task Force issues updated guidance, we will work with relevant contracting officers seeking direction. Following a final determination, there is a risk that some of our employees will not comply and may need to be replaced, if required by the regulations implementing this executive order.

If we are unable to attract and retain a qualified workforce, we may be unable to maintain our competitive position and it could have a material adverse impact on our business, reputation, financial condition and results of operations.

The U.S. government has and may continue to implement initiatives focused on efficiencies, affordability and cost growth and other changes to its procurement practices.

Our industry has experienced, and we expect will continue to experience, significant changes to business practices globally as a result of an increased focus on affordability, efficiencies, business systems, recovery of costs and a reprioritization of available defense funds to key areas for future defense spending. These initiatives and changes to procurement practices may change the way U.S. government contracts are solicited, negotiated and managed, which may affect whether and how we pursue opportunities to provide our products and services to the U.S. government, including the terms and conditions under which we do so. For example, in connection with these cost reduction initiatives the U.S. government is pursuing alternatives to shift additional responsibility and performance risks to the contractor. Changes in procurement practices favoring incentive-based fee arrangements, different award criteria, non-traditional contract provisions and government contract negotiation offers also may affect our results of operations and predictability. The U.S. government has been pursuing and may continue to pursue these and other policies that could negatively impact our profitability and adversely impact our business, financial condition and results of operations.

We use estimates in pricing and accounting for many of our programs, and changes in our estimates could adversely impact our business, financial condition and results of operations.

We enter into forward pricing rate agreements with our U.S. government clients that establish specific direct and indirect rates to be used in pricing all contracts with the applicable government agency for a specified period of time. This requires us to estimate the costs that we will incur in connection with future contracts. Failure to accurately estimate the costs that we will incur including as a result of changes in underlying assumptions, circumstances or estimates may materially reduce our profit or cause a loss on these contracts and adversely impact our business, financial condition and results of operations.

Additionally, accounting for our contracts requires judgment relative to assessing costs, including costs associated with customer-directed delays and reductions in scheduled deliveries, unfavorable resolutions of claims and contractual matters, judgments associated with estimating contract revenue and costs and assumptions for schedule and technical issues. Due to the size, nature and performance period of many of our contracts, the estimation of total revenue and cost at completion is complicated and subject to many variables. For example, we must make assumptions regarding: (i) the length of time to complete the contract because costs also include expected increases in wages and prices for supplies and materials; (ii) whether contracts should be accounted for as having one or more performance obligations based on the goods and services promised to the customer; (iii) incentives or penalties related to performance on contracts in estimating revenue and profit rates, and recording them when there is sufficient information for us to assess anticipated performance; and (iv) estimates of award fees in estimating revenue and profit rates based on actual and anticipated awards. Because of the significance of the judgments and estimation processes involved in accounting for our contracts, materially different amounts could be recorded if we used different assumptions or if the underlying circumstances were to change. Changes in underlying assumptions, circumstances or estimates may adversely impact our business, financial condition and results of operations.

We may not realize the full value of our total estimated remaining contract value or bookings, including as a result of reduction of funding or cancellation of our U.S. government contracts, which could have a material adverse impact on our business, financial condition and results of operations.

Our total backlog consists of funded and unfunded amounts. Funded backlog represents the revenue value of orders for services under existing contracts for which funding is appropriated or otherwise authorized less revenue previously recognized on these contracts. Unfunded backlog represents the revenue value of firm orders for products and services under existing contracts for which funding has not yet been appropriated less funding previously recognized on these contracts. We evaluate bookings which we define as the total value of contract awards received from the U.S. government for which it has appropriated funds and legally obligated such funds to the Company through a contract or purchase order, plus the value of contract awards and orders received from customers other than the U.S. government. As of December 31, 2021, our total remaining contract value was approximately $2,861 million with bookings of $2,595 million. We historically have not realized all of the revenue included in our total contract value or bookings, and we may not realize all of the revenue included in our total contract value or bookings in the future. There is a higher degree of risk in this regard with respect to unfunded backlog. In addition, there can be no assurance that our total bookings will result in actual revenue in any particular period. This is because the actual receipt, timing, and amount of revenue under contracts included in total contract value and bookings are subject to various contingencies, including Congressional appropriations, many of which are beyond our control. The actual receipt of revenue from contracts included in total estimated contract value and bookings may never occur or may be delayed because: a program schedule could change or the program could be canceled; a contract’s funding or scope could be reduced, modified, delayed, de-obligated or terminated early, including as a result of a lack of appropriated funds or cost cutting initiatives and other efforts to reduce U.S. government spending and/or the automatic federal defense spending cuts required by sequestration; in the case of funded backlog, the period of performance for the contract has expired or the U.S. government has exercised its unilateral right to cancel multi-year contracts and related orders or terminate existing contracts for convenience or default; in the case of unfunded backlog, funding may not be available. Our failure to replace canceled or reduced bookings could have a material adverse impact on our business, financial condition and results of operations. See “—We have unfunded obligations under our pension plans, and we use estimates in accounting for our pension plans and changes in our estimates could adversely affect our financial condition and results of operations”.

Our business may be harmed if we are unable to appropriately manage our inventory.

We are subject to the risk that the inventory we carry may decrease in value over time due to, among other things, changes in customer priorities and needs. Any increase in the level of inventories of finished goods, components and raw materials that we carry, including due to any failure to replace cancelled or reduced backlog or other shortfalls in anticipated sales, may increase our risk of inventory obsolescence and corresponding inventory write-downs and write-offs, and such amounts could be material. In response to impacts on our supply chain resulting from various factors, including the COVID-19 pandemic, we have increased our purchases of certain supplies, including electronic components necessary to manufacture our products. For further information see “—The COVID-19 pandemic and related disruption to supply chains, including for electric and electronic components, may impact our ability to obtain needed materials for our products which could materially adversely impact our business, financial conditions and results of operations”. If we are unable to appropriately manage our inventory balances it could have a material adverse impact on our business, financial condition and results of operations.

Our working capital requirements and cash flows are extremely variable and subject to fluctuation, which could have a material adverse effect on our business, financial condition and results of operations.

Our working capital requirements and cash flows have historically been, and are expected to continue to be, subject to significant fluctuations. Historically we have had negative cash flows in some quarters of the year, and we expect this pattern to continue in the future. See “Information About DRS—Management’s Discussion and Analysis of Financial Condition and Results of Operations” in this proxy statement/prospectus. If we are unable to manage fluctuations in cash flow, it could have a material adverse impact on our liquidity, as well as on our business, financial condition and results of operations. Factors which could result in fluctuations in our working capital and cash flows include:

•the quantity of product and service sales revenue achieved;

•the margins achieved on sales of products and services;

•the timing and collection of receivables;

•the timing and size of inventory and related component purchases;

•the timing of payment on payables and accrued liabilities; and

•the adequacy of our current financing arrangements and access to additional financing.

We cannot predict future capital needs, the sufficiency of our current financing or our ability to obtain additional financing if we need it.

Our operations are capital intensive and we rely heavily on financing, including working capital financing, such as factoring and supply chain financing. We may also enter into other types of financings in the future, including bank and bond financing and the other financing transactions as further described in the section entitled “Recapitalization”. Although we believe that our available cash resources, together with our retained earnings, are sufficient to meet our presently anticipated liquidity needs and capital expenditure requirements, we might in the future need to raise additional funds to, among other things:

•fund our operations;

•address fluctuations in cash flow (including negative cash flow periods);

•support more rapid growth of our business;

•develop new or enhanced products and solutions;

•respond to competitive pressures; and

•acquire companies or technologies.

We cannot guarantee that we will continue to be able to extend existing working capital financing on commercially reasonable terms or at all and we might be unable to obtain additional financing, if needed, on terms acceptable to us, if at all. In the past we have been reliant on our parent company for financing. If sufficient funds are not available or are not available on terms acceptable to us, our ability to fund our current operations, fund expansion, take advantage of acquisition opportunities, develop or enhance services or products, or otherwise respond to competitive pressures would be significantly limited. We have historically relied upon our ultimate majority stockholder Leonardo S.p.A. and its affiliates for financing, and may be required to obtain the consent of Leonardo S.p.A. or US Holding in order to obtain additional or alternative financing and there is no guarantee that their consent will be granted. See “Information About DRS—Certain Relationships and Related Transactions, and Director Independence—Transactions with Leonardo S.p.A. Affiliates—Financing Arrangements” and “—Our ultimate majority stockholder, Leonardo S.p.A., may have interests that are different from, or conflict with, those of our other stockholders, and their significant ownership in us may discourage change of control transactions”. The existing debt obligations of Leonardo S.p.A., which contain restrictions applicable to subsidiaries of Leonardo S.p.A., including us, may also negatively impact our ability to obtain additional financing on terms acceptable to us, if at all. In addition, any decline in the ratings of our corporate credit or any indications from the rating agencies that their ratings on our corporate credit are under surveillance or review with possible negative implications could adversely impact our ability to access capital. The merger agreement also requires that DRS use its reasonable best efforts to repay an existing intercompany loan from US Holding, and there is no guarantee that sufficient funds will be available on terms no less favorable than the existing intercompany loan in order to satisfy such requirement and repay such loan. These limitations could have a material adverse impact on our business, financial condition and results of operations.

The agreements governing our debt contain or may in the future contain various covenants that limit our ability to take certain actions and also require us to meet financial maintenance tests, and failure to comply with these covenants could have an adverse impact on our business, financial condition and results of operations.

Our current financing arrangements contain restrictions, covenants and events of default that, among other things, require us to satisfy certain financial tests and maintain certain financial ratios and restrict our ability to incur additional indebtedness and to refinance our existing indebtedness. For more information on our current financing arrangements see “Certain Relationships and Related Transactions, and Director Independence—Transactions with Leonardo S.p.A. Affiliates—Financing Arrangements”.

The terms of our current financing arrangements impose, and the terms of any future financing arrangements including the arrangements contemplated to be entered into in connection with the merger as further described in the section titled “Recapitalization” may impose various restrictions and covenants on us that could limit our ability to respond to market conditions, provide for capital investment needs or take advantage of business opportunities by limiting the amount of additional borrowings we may incur. These restrictions may include compliance with, or maintenance of, certain financial tests and ratios and may limit or prohibit our ability to, among other things:

•borrow money or guarantee debt;

•create liens;

•pay dividends or acquire our capital stock;

•make investments and acquisitions;

•enter into, or permit to exist, contractual limits on the ability of our subsidiaries to pay dividends to us;

•enter into new lines of business;

•enter into transactions with affiliates; and

•sell assets or merge with other companies.

Various risks, uncertainties and events beyond our control could affect our ability to comply with these restrictions and covenants. Failure to comply with any of the restrictions and covenants that may be in our current or

future financing arrangements could result in a default under those arrangements and under other arrangements that may contain cross-default provisions.

A default would permit lenders to accelerate the maturity of the debt under these arrangements and to foreclose upon any collateral securing the debt. Under these circumstances, we might not have sufficient funds or other resources to satisfy all of our obligations. In addition, the limitations imposed by our current or future financing agreements on our ability to incur additional debt and to take other actions might significantly impair our ability to obtain other financing.

To service indebtedness and fund other cash needs, we will require a significant amount of cash, and our ability to generate cash depends on many factors beyond our control.

Our ability to pay principal and interest on our anticipated debt obligations and to fund any planned capital expenditures and other cash needs will depend in part upon the future financial and operating performance of our Company and our subsidiaries. Prevailing economic conditions and financial, business, competitive, legislative, regulatory and other factors, many of which are beyond our control, will affect our ability to make these payments.

If we are unable to make payments or we are unable to refinance the debt or obtain new financing under these circumstances, we may consider other options, including:

•sales of assets;

•equity offerings;

•reductions or delays of capital expenditures, strategic acquisitions, investments and alliances; or

•negotiations with our lenders to restructure the applicable debt.

Some of our variable-rate indebtedness uses LIBOR as a benchmark for establishing the rate. For more information on our current financing arrangements see “Certain Relationships and Related Transactions, and Director Independence—Transactions with Leonardo S.p.A. Affiliates—Financing Arrangements”. Certain LIBOR rates have been discontinued as of January 1, 2021, and further rates are expected to be discontinued in 2023, and will be replaced with an alternative reference rate. The consequence of this development cannot be entirely predicted but could include an increase in the cost of our variable rate indebtedness. In connection with the consummation of the merger, we expect to implement additional financing arrangements as part of our efforts to align our capital structure more closely with other U.S. public companies as described further in the section entitled “Recapitalization”. Our business may not generate sufficient cash flow from operations, and future borrowings may not be available to us in an amount sufficient, to enable us to pay our anticipated indebtedness or to fund our other liquidity needs. We may need to refinance all or a portion of our anticipated indebtedness on or before maturity. We may not be able to refinance any of our anticipated debt on commercially reasonable terms, or at all. In addition, any increase in interest rates may increase the cost to us of our anticipated indebtedness or any refinancing thereof.

We face intense competition and may suffer losses if we fail to compete efficiently.

We operate in highly competitive markets and compete with many large, small and mid-tier defense contractors, including, at times, our customers, based on performance, cost, overall value, delivery and reputation. Our competitors continuously seek to expand their business relationships with the U.S. government and will continue these efforts in the future, and the U.S. government may choose to use other contractors. We expect that a majority of the business that we seek will be awarded through competitive bidding. The U.S. government has increasingly relied on certain types of contracts that are subject to multiple competitive bidding processes, including multi-vendor Indefinite Delivery Indefinite Quantity (“IDIQ”), Government wide Acquisition Contracts, General Services Administration Schedule and other multi-award contracts, which has resulted in greater competition and increased pricing pressure. Many of our larger competitors have significantly greater financial resources than we do and have more extensive or more specialized engineering, manufacturing and marketing capabilities than we do in some areas, including as a result of substantial industry consolidation, which increased the market share of certain of our competitors and enabled them to take advantage of economies of scale and develop new technologies. These larger

competitors may also benefit from supply chain leverage and pricing flexibility, including, in some cases, the ability to price contracts at a loss, due to their size. Larger competitors, for example, may decide to pursue contracts typically won by mid-tier contractors, such as us. Additionally, our smaller competitors may have lower overhead rates than we do, enabling them to compete effectively on pricing against mid-tier contractors such as us. A number of these competitors are also our suppliers and customers. Additionally, some customers, including the DoD, are increasingly purchasing “off the shelf” components from commercial suppliers in lieu of using traditional defense contractors to design and manufacture such items.

We may not be able to continue to win competitively awarded contracts or to obtain task orders under multi-award contracts. Further, the competitive bidding process involves significant cost and managerial time to prepare bids and proposals for contracts that may not be awarded to us or may be split with competitors, as well as the risk that we may fail to accurately estimate the resources and costs required to fulfill any contract awarded to us. Contracts awards are subject to bid protests from unsuccessful bidders, which typically extends the time until work on a contract can begin. Following any contract award, we may experience significant expense or delay, contract modification or contract rescission as a result of our competitors protesting or challenging contracts awarded to us in competitive bidding.

Preferences or set-asides for minority-owned, small and small disadvantaged businesses could impact our ability to be a prime contractor and limit our opportunity to work as a subcontractor on certain governmental procurements.

As a result of the Small Business Administration (“SBA”) set-aside program, the federal government may decide to restrict certain procurements only to bidders that qualify as minority-owned, small, or small disadvantaged businesses. We would not be eligible to perform as a prime contractor on those programs and in general would be restricted to no more than 49% of the work as a subcontractor on those programs. An increase in the amount of procurements under the SBA set-aside program may impact our ability to bid on new procurements as a prime contractor, limit our opportunity to work as a subcontractor or restrict our ability to compete on incumbent work that is placed in the set-aside program.

We depend in part upon our relationships and alliances with industry participants in order to generate revenue, which involves risks and uncertainties.

We rely on the strength of our relationships with other industry participants, including major prime contractors and small businesses, to form strategic alliances and we have entered, and expect to continue to enter, into joint venture, teaming, partnership, subcontractor and other arrangements. These activities involve risks and uncertainties, including the risk that a joint venture or applicable entity fails to satisfy its obligations, which may result in certain liabilities to us from guarantees and other commitments, the challenges in achieving strategic objectives and expected benefits of the business arrangement, the risk of conflicts arising between us and our partners and the difficulty of managing and resolving such conflicts and the business arrangements generally. In some cases, these relationships are subject to exclusivity arrangements which subject us to the risk that we may be forced to forego superior opportunities with a different partner. In addition, particularly where we act as a subcontractor and form teaming arrangements in which we and other contractors bid on particular contracts or programs, we often lack control over fulfillment of a contract and poor performance on the contract could impact our customer relationship, even when we perform as required. If partners in teaming arrangements suffer financial difficulties, face compliance or other reputational issues or fail to comply with the law, we may be adversely affected to the extent we are relying on such partners. Additionally, the U.S. Department of Justice and Federal Trade Commission have periodically and increasingly focused on ensuring competition in government acquisition and could challenge a teaming arrangement. If any of our existing relationships with our industry partners were impaired or terminated, or if we are unable to enter into future arrangements, we could also experience significant delays in the development of new products ourselves, and we would incur additional development costs. We would need to fund these costs internally or identify new industry partners.

Some of our industry partners and major customers are also potential competitors, which may impair the viability of new or continued strategic relationships. This position may create conflicts of interest and uncertainty in circumstances where we continue to operate as both a subcontractor for and a competitor to one of our industry

partners or customers, potentially jeopardizing potential revenue opportunities. While we must compete effectively in the marketplace, our future alliances may depend on our industry partners’ perception of us. Our ability to win new and/or follow-on contracts may be dependent upon our relationships within the defense industry.

We are susceptible to a security breach, through cyber attack, cyber intrusion, insider threats or otherwise, and to other significant disruptions of our IT networks and related systems or of those we operate for our customers.

We store sensitive data, including information relating to national security and other sensitive government functions, intellectual property and technology, proprietary business information, and confidential employee information such as personally identifiable or protected health information on our servers and databases. We are subject to laws and rules issued by U.S. and non-U.S. governments and agencies concerning safeguarding and maintaining information confidentiality including extensive and evolving cyber requirements of the DoD. We maintain an extensive network of technical security controls, policy enforcement mechanisms, monitoring systems and management oversight in order to address these threats. While these measures are designed to prevent, detect and respond to unauthorized activity in our systems, we still face the risk of a security breach with respect to that data, whether through cyber attack, cyber intrusion or insider threat via the Internet, malware, computer viruses, attachments to e-mails, persons inside our organization or with access to systems inside our organization, threats to the physical security of our facilities and employees or other significant disruption of our IT networks and related systems or those of our suppliers or subcontractors. The risk of security breaches may be higher during times of international conflict, like the current war in Ukraine, or during a natural disaster or pandemic (including COVID-19) due to remote working arrangements. As an advanced technology-based solutions provider, and particularly as a government contractor with access to national security and other sensitive government information, we face a heightened risk of a security breach or disruption from threats to gain unauthorized access to our and our customers’ proprietary or classified information on our IT networks and related systems and to the IT networks and related systems that we operate and maintain for certain of our customers. These types of information and IT networks and related systems are critical to the operation of our business and essential to our ability to perform day-to-day operations, and, in some cases, are critical to the operations of certain of our customers. We make significant efforts to maintain the security and integrity of these types of information and IT networks and related systems and have implemented various measures to manage the risk of a security breach or disruption. As is the case with many other companies, we have experienced cyber security incidents in the past, including Denial of Service attacks, ransomware, and attacks from suspected nation state actors. Our efforts and measures have not been effective in the case of every incident, but no incident has had a material negative impact on us to date. Sensitive data saved on networks, systems and facilities therefore remain vulnerable because of the risk that cybersecurity incidents, including, but not limited to, attempts to gain unauthorized access to data, potential security breaches, particularly cyber attacks and cyber intrusions, or disruptions, will occur in the future, and because the techniques used in such attempts are constantly evolving and generally are not recognized until launched against a target, and in some cases are designed not to be detected and, in fact, may not be detected. In some cases, the resources of foreign governments may be behind such attacks due to the nature of our business and the industries in which we operate. Accordingly, we may be unable to anticipate these techniques or to implement adequate security barriers or other preventative measures. Thus, it is impossible for us to entirely mitigate this risk, and there can be no assurance that future cyber security incidents will not have a material negative impact on us. A security breach or other significant disruption involving these types of information and IT networks and related systems could:

•disrupt the proper functioning of these networks and systems and, therefore, our operations and/or those of certain of our customers;

•result in the unauthorized access to, and destruction, loss, theft, misappropriation or release of, proprietary, confidential, sensitive or otherwise valuable information of ours, our customers or our employees, including trade secrets, which could be used to compete against us or for disruptive, destructive or otherwise harmful purposes and outcomes;

•result in litigation and governmental investigation and proceedings associated with cybersecurity incidents;

•compromise national security and other sensitive government functions;

•require significant management attention and resources to remedy the damages that result;

•result in costs which exceed our insurance coverage and/or indemnification arrangements;

•subject us to claims for contract breach, damages, credits, penalties or termination; and

•damage our reputation with our customers (particularly agencies of the U.S. government) and the general public.

Additionally, a failure to comply with the National Institute of Standards and Technology Special Publication 800-171 or the DoD’s cybersecurity requirements, including the Cyber Security Material Model Certificate (“CMMC”) which will require all contractors to receive specific third-party certifications relating to specified cybersecurity standards in order to be eligible for contract awards, whether or not resulting in a security breach or disruption, could restrict our ability to bid for, be awarded and perform on DoD contracts. The DoD expects that all new contracts will be required to comply with the CMMC by 2026, and initial requests for information and for proposal have already begun. We are in the process of evaluating our readiness and preparing for the CMMC, but to the extent we, or our subcontractors or other third parties on whom we rely, are unable to achieve certification in advance of contract awards that specify the requirement, we will be unable to bid on such contract awards or on follow-on awards for existing work with the DoD, depending on the level of standard as required for each solicitation, which could adversely impact our revenue, business, results of operations and financial condition. We will also be required to go through a recertification process every two years in order to maintain our certification. In addition, any obligations that may be imposed on us under the CMMC may be different from or in addition to those otherwise required by applicable laws and regulations, which may cause additional expense for compliance.

We must also rely on the safeguards put in place by customers, suppliers, vendors, subcontractors, partners in teaming arrangements or other third parties to minimize the impact of cyber threats, other security threats or business disruptions. These third parties may have varying levels of cybersecurity expertise and safeguards, and their relationships with government contractors, such as our Company, may increase the likelihood that they are targeted by the same cyber threats, including from foreign governments, we face. In the event of a breach affecting these third parties, our business and financial results could suffer materially. With respect to our commercial arrangements with these third parties, we have processes designed to require that the third parties and their employees and agents agree to maintain certain standards for the storage, protection and transfer of confidential, personal and proprietary information. However, we remain at risk of a data breach due to the intentional or unintentional non-compliance by a third party’s employee or agent, the breakdown of a third party’s data protection processes, which may not be as sophisticated as ours, or a cyber attack on a third party’s information network or systems.

The impact of these various factors is difficult to predict, but any of them could result in the loss of information or capabilities, harm to individuals or property, damage to our reputation, business delays or losses, contractual or regulatory actions and potential liabilities, any one of which could have a material adverse impact on our business, financial condition and results of operations.

Significant capital investments and other expenditures could be required to remedy cybersecurity problems and prevent future breaches, including costs associated with additional security technologies, personnel and experts. These costs, which could be material, could adversely impact our results of operations in the period in which they are incurred and may not meaningfully limit the success of future attempts to breach our information technology systems.

We may be at greater risk from terrorism and other threats to our physical security and personnel, than other companies.

As a defense contractor, we may be more likely than other companies to be a direct target of, or an indirect casualty of, physical attacks including by active shooters, terrorists or terrorist organizations. It is impossible to predict accurately the likelihood or impact of any attack on our industry generally or on our business. While we have implemented physical security protection measures, and business continuity plans and established backup systems, in the event of an attack or a threat of an attack, these security measures and contingency plans may be inadequate to

prevent significant disruptions in our business, technology or access to the infrastructure necessary to maintain our business. Such attack may harm our personnel, close our facilities or render our backup data and recovery systems inoperable. Damage to our facilities due to attacks may be significantly in excess of any amount of insurance recovery, and we may not be able to insure against such damage at a reasonable price or at all. The threat of attacks may also negatively affect our ability to attract and retain employees. Any of these events could have a material adverse effect on our business, financial condition and results of operations.

Our future success will depend on our ability to respond to the rapid technological changes in the markets in which we compete, our ability to introduce new or enhanced products and to enter into new markets.

The markets in which we compete are characterized by rapid technological developments and frequent new product introductions, enhancements and modifications. Our ability to develop new products and technologies that anticipate changing customer requirements, reduce costs and otherwise retain or enhance our competitive position in existing and new markets will be an important factor in our future results from operations. We will continue to make substantial capital expenditures and incur significant research and development costs aimed at improving our manufacturing capability, reducing costs, and developing and introducing new products and enhancements. If we fail to develop and introduce new products and technologies in a timely manner it could have a material adverse effect on our business, financial condition and results of operations. In addition, we cannot be certain that our new products and technologies will be successful or that customers will accept any of our new products.

Many of our contracts contain performance obligations that require innovative design capabilities, are technologically complex, require state-of-the-art manufacturing expertise or are dependent upon factors not wholly within our control. Failure to meet our contractual obligations could adversely affect our business, financial condition, results of operations, reputation and future prospects.

We design, develop and manufacture technologically advanced and innovative products and services, which are applied by our customers in a variety of environments, including some under highly demanding operating conditions, to accomplish challenging missions. Problems and delays in development or delivery, or system failures, as a result of issues with respect to design, technology, intellectual property rights, labor, inability to achieve learning curve assumptions, inability to manage effectively a broad array of programs, manufacturing materials or components, or subcontractor performance could prevent us from meeting requirements and create significant risk and liabilities. In addition, any obsolescence of components used in our products may require us to redesign our products, in whole or in part, which could cause increased costs. Similarly, failures to perform on schedule or otherwise to fulfill our contractual obligations could negatively affect our reputation and ability to win future business which could have a material adverse impact on our business, financial condition and results of operations.

In addition, our products cannot be tested and proven in all situations and are otherwise subject to unforeseen problems. Examples of unforeseen problems that could negatively affect revenue, schedule and results of operations include premature failure of products that cannot be accessed for repair or replacement, failure to perform in anticipated or unanticipated battlefield conditions, unintended explosions or similar events, problems with design, quality and workmanship, inadequate delivery of subcontractor components or services and degradation of product performance. These failures could result, either directly or indirectly, in loss of life or property. Among the factors that may affect revenue and results of operations could be inaccurate cost estimates, design issues, human factors, unforeseen costs and expenses not covered by insurance or indemnification from the customer, diversion of management focus in responding to unforeseen problems, loss of follow-on work, and, in the case of certain contracts, repayment to the government customer of contract cost and fee payments we previously received, or replacement obligations. See also “—Our results of operations and cash flows are substantially affected by our mix of fixed-price, cost-plus and time-and-material type contracts. In particular, fixed-price contracts subject us to the risk of loss in the event of cost overruns or higher than anticipated inflation” and “—We use estimates in pricing and accounting for many of our programs, and changes in our estimates could adversely impact our business, financial condition and results of operations”.

If we are unable to meet our obligations, including due to issues regarding the design, development or manufacture of our products or services, it could have a material adverse impact on our reputation, our ability to compete for other contracts and our business, financial condition and results of operations.

We may not be able to fully exploit or obtain patents or other intellectual property protections necessary to secure our proprietary technology.

We seek to protect our competitive position by seeking patents, proprietary information and other intellectual property protections when possible and appropriate. However, we do not have the right to prohibit the U.S. government from using certain technologies developed by us or to prohibit third-party companies, including our competitors, from using those technologies in providing products and services to the U.S. government. The U.S. government often obtains the right to royalty-free use of technologies or intellectual property that we develop under U.S. government contracts or with funding from the U.S. government. Further, while we may retain rights over any technology, product or intellectual property that we develop under U.S. government contracts or using funding from the U.S. government, this requires us to take timely affirmative measures to preserve our rights. We are sometimes able to commercially exploit those government-funded technologies and, in many cases, may assert our intellectual property rights to seek to block other non-government users thereof, but we cannot assure you that we will always have such rights and that when we do, that those efforts will be successful. In some cases it may not be appropriate to patent our intellectual property as this involves making the patented technology public. In such cases we may have limited means to protect our intellectual property.

While we enter into confidentiality and non-disclosure agreements with our employees, consultants, partners, customers and others to attempt to limit access to and distribution of proprietary and confidential information, it is possible that:

•some or all of our confidentiality agreements will not be honored;

•third parties will independently develop equivalent technology or misappropriate our technology or designs;

•disputes will arise with our strategic partners, customers or others concerning the ownership of intellectual property; or

•contractual provisions may not be enforceable in certain jurisdictions.

Also, despite the steps taken by us to protect our proprietary rights, it may be possible for unauthorized third parties to copy or reverse-engineer aspects of our products, develop similar technology independently or otherwise obtain and use information from our supply chain that we regard as proprietary and we may be unable to successfully identify or prosecute unauthorized uses of our technology.

Third parties have claimed in the past and may claim in the future that we are infringing directly or indirectly upon their intellectual property rights, and third parties may infringe upon our intellectual property rights.

Our ability to ensure a competitive market position and gain awards of contracts depends in part on our ability to ensure that our intellectual property is protected, that our intellectual property rights are not diluted or subject to misuse, that we are able to license certain third-party intellectual property on reasonable terms and that we are able to operate without infringing the intellectual property rights of others. Third parties have claimed in the past and may claim in the future that we are infringing directly or indirectly upon their intellectual property rights, and we may be found to be infringing or to have infringed directly or indirectly upon those intellectual property rights. For example, in June 2017 another defense contractor filed suit in the United States Court of Federal Claims alleging that the U.S. government had infringed upon four of its patents relating to night vision weapon systems under a contract awarded to one of our subsidiaries. Neither we nor our subsidiary were named as defendants in the case, and the U.S. government assumes all infringement liability. In 2020, we received a notification from a commercial customer claiming that, under an agreement between us and the customer relating to night vision weapon systems on a separate program, we would be required to indemnify the customer if it were to incur any costs as a result of these allegations.

Claims of intellectual property infringement might also require us to enter into costly royalty or license agreements. There can be no assurance that any of our patents and other intellectual property will not be challenged, invalidated, misappropriated or circumvented by third parties. Moreover, we may not be able to obtain royalty or

license agreements on terms acceptable to us, or at all. We also may be subject to significant damages or injunctions against development and sale of certain of our products, services and solutions. Our success depends in large part on our proprietary technology. We rely on a combination of patents, copyrights, trademarks, trade secrets, know-how, confidentiality provisions and licensing arrangements to establish and protect our intellectual property rights. Our efforts, however, to protect our intellectual property and proprietary rights may not be sufficient. In addition, the laws concerning intellectual property vary among nations and the protection provided to our intellectual property by the laws and courts of foreign nations may differ from and be more limited than the protection provided in the U.S. If we fail to successfully protect and enforce these rights, our competitive position could suffer. Our pending patent and trademark registration applications may not be issued, and/or competitors may challenge the validity or scope of our patents or trademark registrations. In addition, our patents may not provide us a significant competitive advantage. We may be required to spend significant resources to monitor and enforce our intellectual property rights. Litigation to determine the scope of intellectual property rights, even if ultimately successful, could be costly and could divert management’s attention away from other aspects of our business. As discussed further under “—We may not be able to fully exploit or obtain patents or other intellectual property protections necessary to secure our proprietary technology” we also do not have the right to prohibit the U.S. government from using certain technologies developed by us or to prohibit third-party companies, including our competitors, from using those technologies in providing products and services to the U.S. government, and in such circumstances our only recourse is to pursue an action for a reasonable royalty in the United States Court of Federal Claims.

We remain subject to reputational and other risks as a result of the conviction of the chief executive officer of Leonardo S.p.A. on charges of false statements and market manipulation related to his previous role as chairman of the Italian banking entity, Banca Monte dei Paschi di Siena.

In October 2020, an Italian court convicted Alessandro Profumo, the chief executive officer of our ultimate parent company, Leonardo S.p.A., on charges of false statements and market manipulation related to his previous role as chairman of the Italian banking entity, Banca Monte dei Paschi di Siena. The conviction, if ultimately upheld by the Italian Supreme Court, would prevent Mr. Profumo from continuing his current role at Leonardo S.p.A. While we have been advised by Leonardo S.p.A. that this conviction has been appealed by Mr. Profumo, we remain subject to reputational risk as a result of this ongoing proceeding. Additionally, the loss of continuity of leadership at our parent company, if the conviction is ultimately upheld, could disrupt our business in the short term. Any such disruption or reputational harm related to the proceeding could affect our ability to win new customer contracts and harm our existing relationships with customers, employees, suppliers, subcontractors and others with whom we do business, which could have an adverse impact on our business, financial condition and results of operations. For further discussion of risks relating to misconduct of our employees, business partners and other associated persons, including proceedings against the former chief executive officer of Leonardo S.p.A. and another Leonardo S.p.A. executive, see “—Our reputation and ability to do business may be impacted by the improper conduct of our employees, agents, affiliates, subcontractors, suppliers, business partners or joint ventures in which we participate”.

Our reputation and ability to do business may be impacted by the improper conduct of our employees, agents, affiliates, subcontractors, suppliers, business partners or joint ventures in which we participate.

We have implemented compliance controls, training, policies and procedures designed to prevent and detect misconduct from being committed by our employees, agents or business partners that would negatively impact our ability to be a U.S. government contractor or subcontractor and/or violate the laws of the jurisdictions in which we operate, including laws governing improper payments to government officials, such as the FCPA, the protection of export-controlled information, such as the ITAR or EAR, false claims, procurement integrity, cost accounting and billing, competition, information security and data privacy and the terms of our contracts. We cannot ensure, however, that our controls, training, policies and procedures will prevent or detect all misconduct. Additionally, we may have limited ability to control the conduct of our affiliates and we have been, and may in the future be, adversely impacted by misconduct of our affiliates. For example, in May 2019 the Italian Supreme Court overturned the 2014 convictions of the former chief executive officer of our ultimate parent, Leonardo S.p.A., and another Leonardo S.p.A. executive, of international bribery. While the convictions in Italy were overturned in a final non-appealable proceeding, the case continues to be the subject of a corruption trial in India. Therefore, we remain subject to reputational risk as a result of this ongoing action and future restrictions on our ability to sell to the Indian government.

This risk of improper conduct may increase as we continue to grow and expand our operations. If not prevented, improper actions by those with whom or through whom we do business (including our employees, agents, subcontractors, suppliers, business partners and joint ventures) could subject us to administrative, civil or criminal investigations and enforcement actions; monetary and non-monetary penalties; liabilities; and the loss of privileges and other sanctions, including suspension and debarment, which could negatively impact our reputation and ability to conduct business and could have a material adverse impact on our business, financial condition and results of operations. In addition, misconduct involving data security lapses resulting in the compromise of personal information or the improper use of our customers’ sensitive, export-controlled, or classified information could result in remediation costs, regulatory sanctions against us and serious harm to our reputation and could adversely impact our ability to continue to contract with the U.S. government.

We are subject to environmental laws and regulations, and our ongoing operations may expose us to environmental liabilities affecting our reputation, business, financial condition and results of operations.

Our operations are subject to federal, state, foreign and local environmental and health and safety laws and regulations. As a result, we have been involved from time to time in administrative or legal proceedings relating to environmental matters. We cannot assure you that the aggregate amount of future clean-up costs and other environmental liabilities will not be material. We could be subject to potentially significant fines or penalties, including criminal sanctions, if we fail to comply with these requirements. Additionally, we have made and will continue to be required to make significant capital and other expenditures in order to comply with these laws and regulations. The requirements of these laws and regulations are complex, change frequently and could become more stringent in the future. We cannot predict what environmental legislation or regulations will be enacted in the future, how existing or future laws or regulations will be administered or interpreted or what environmental conditions may be found to exist. Our products and services are also used in nuclear-related activities (including providing components for nuclear-powered platforms and sensors used in nuclear applications) and used in support of nuclear-related operations of third parties. Our business also involves the handling, transportation, storage and disposal of potentially dangerous chemicals and unstable materials and is subject to hazards inherent in such activities including chemical spills, storage tank leaks, discharges or releases of toxic or hazardous substances or gases and other hazards incident to the handling, transportation, storage and disposal of dangerous chemicals. Also, in the future, contamination may be found to exist at our current or former facilities or at off-site locations to which we or certain companies that we have acquired or previously owned may have sent waste, and we could be held liable for such contamination. For example, a government site within a national park for which we may be deemed a potentially responsible party has been subject to a government investigation since July 2000. The remediation of such contamination, or the enactment of more stringent laws or regulations or more strict interpretation of existing laws and regulations, may require us to make additional expenditures, and could decrease the amount of free cash flow available to us for other purposes, including capital expenditures, research and development and other investments and could have a material adverse impact on our business, financial condition and results of operations.

Our business, financial condition, and results of operations could be materially adversely affected by climate change regulations.

Climate change regulations at the federal, state, or local level or in international jurisdictions could require us to limit emissions, change our manufacturing processes, obtain substitute materials which may cost more or be less available, increase our investment in control technology for greenhouse gas emissions, fund offset projects, or undertake other costly activities. These regulations could significantly increase our costs and restrict our manufacturing operations by virtue of requirements for new equipment. New permits may be required for our current operations, or expansions thereof. Failure to timely receive permits could result in fines, suspension of production, or cessation of operations at one or more facilities. In addition, restrictions on carbon dioxide or other greenhouse gas emissions could result in significant costs such as higher energy costs and the passing down of carbon taxes, emission cap-and-trade programs, and renewable portfolio standards by utility companies. The cost of complying, or of failing to comply, with these and other climate change and emissions regulations could have an adverse impact on our business, financial condition and results of operations.

The outcome of litigation, arbitration, investigations, claims, disputes, enforcement actions and other legal proceedings in which we are involved from time to time is unpredictable, and an adverse decision in any such matter could have a material adverse impact on our business, financial condition and results of operations.

The size, nature and complexity of our business make us susceptible to investigations, claims, disputes, enforcement actions, litigation and other legal proceedings, particularly those involving governments. From time to time, we are and may become subject to investigations, claims, disputes, enforcement actions and administrative, civil or criminal litigation, arbitration or other legal proceedings globally and across a broad array of matters, including, but not limited to, government contracts, commercial transactions, false claims, false statements, mischarging, contract performance, fraud, procurement integrity, products liability, warranty liability, the use of hazardous materials, personal injury claims, environmental matters, shareholder-derivative actions, prior acquisitions and divestitures, intellectual property, tax, employees, export/import, anti-corruption, labor, health and safety, accidents, employee benefits and plans, including plan administration, and improper payments, as well as matters relating to our acquisition of assets or companies and other matters. These actions may divert financial and management resources that would otherwise be used to benefit our operations. No assurances can be given that the results of these or any other matters will be favorable to us. Although we maintain insurance policies, these policies may not be adequate to protect us from all material judgments and expenses related to current or future claims and may not cover the conduct that is the subject of the litigation or arbitration. Desired levels of insurance may not be available in the future at economical prices or at all. Although we believe that we have meritorious defenses to the claims made in the litigation matters in which we have been named a party and intend to contest each lawsuit vigorously, no assurances can be given that the results of these matters will be favorable to us. An adverse resolution or outcome of any of these investigations, claims, disputes, enforcement actions, litigation and other legal proceedings could have an adverse impact on our business, financial condition and results of operations.

We cannot predict the outcome of legal proceedings and other contingencies with certainty. As required by U.S. GAAP, we estimate material loss contingencies and establish liabilities based on our assessment of contingencies where liability is deemed probable and reasonably estimable in light of the facts and circumstances known to us at a particular point in time. Subsequent developments may affect our assessment and estimates of the loss contingency recorded as a liability or as a reserve against assets in our financial statements. It is possible that the ultimate resolution of these matters could result in a material adverse impact on our financial condition, results of operations and/or cash flows from operating activities in a particular reporting period.

Our international business exposes us to additional risks, including risks related to geopolitical and economic factors, laws and regulations.

For the years ended December 31, 2021, 2020, and 2019, approximately 5%, 8% and 4%, respectively, of our revenue was derived from sales to customers located in foreign countries and foreign governments. We expect this part of our business to expand as a result of the merger. We cannot assure you that we will maintain significant operations internationally or that any such operations will be successful. International business (including our participation in joint ventures and other joint business arrangements) is subject to numerous political and economic factors, legal requirements, cross-cultural considerations and other risks associated with doing business globally. These risks differ in some respects from those associated with our U.S. business and our exposure to such risks may increase if our international business continues to grow.

Our international business is subject to both U.S. and foreign laws and regulations, which may include, without limitation, laws and regulations relating to import-export controls, (such as the ITAR, EAR, and customs laws), tariffs, embargoes, technology transfer restrictions, government contracts and procurement, data privacy and protection, investment, exchange rates and controls, the FCPA and other anti-corruption laws, including the UK Bribery Act and the Canadian Corruption of Foreign Public Officials Act, the anti-boycott provisions under the EAR, U.S. economic sanctions administered by the Office of Foreign Assets Control and other federal agencies, labor and employment, works councils and other labor groups, anti-human trafficking, taxes, environment, immunity, security restrictions and intellectual property. If we or our employees, affiliates, partners or others with whom we work fail to comply with applicable laws and regulations we may be subject to administrative, civil, commercial or criminal penalties and liabilities, including suspension or debarment from government contracts or suspension of our export privileges. Our international business also exposes us to difficulties associated with

repatriating cash generated or held abroad in a tax-efficient manner and changes in tax laws. Our customers outside of the U.S. generally have the ability to terminate contracts for default based on performance. Suspension or debarment, or termination of a contract due to default, in particular, could have a material adverse effect on our reputation, our ability to compete for other contracts and our financial position, results of operations and/or cash flows. New regulations and requirements, or changes to existing ones in the various countries in which we operate can significantly increase our costs and risks of doing business internationally. Any such future violations could have a material adverse impact on our reputation, business, results of operations and financial condition.

Changes in laws, regulations, political leadership and environment, or security risks may significantly affect our ability to conduct or continue to conduct business in international markets. Our international business may be impacted by changes in U.S. and foreign national policies and priorities, and geopolitical relationships, any of which may be influenced by changes in the threat environment, political leadership, geopolitical uncertainties, world events, acts of terrorism, bilateral and multi-lateral relationships, government budgets, and economic and political factors more generally, and any of which could impact funding for programs, alter export authorizations, or delay purchasing decisions or customer payments. These changes may affect export control laws as products or markets that were not previously subject to stringent controls may become subject to greater restrictions and oversight. These changes may also affect the defense spending priorities and procurement policies of foreign governments which may affect our international military sales.

Global economic conditions and fluctuations in foreign currency exchange rates could further impact our business. For example, the tightening of credit in financial markets outside of the U.S. could adversely affect the ability of our customers and suppliers to obtain financing and could result in a decrease in or cancellation of orders for our products and services or impact the ability of our customers to make payments. In addition, the majority of our foreign costs are denominated in local currencies. Over time, an increasing portion of our contracts with paid customers outside of the United States may be denominated in local currencies. Therefore, fluctuations in the value of the U.S. dollar and foreign currencies may affect our results of operations when translated into U.S. dollars. We do not currently engage in currency-hedging activities to limit the risk of exchange rate fluctuations. However, in the future, we may use derivative instruments, such as foreign currency forward and option contracts, to hedge certain exposures to fluctuations in foreign currency exchange rates. The use of such hedging activities may not offset any or more than a portion of the adverse financial effects of unfavorable movements in foreign exchange rates over the limited time the hedges are in place. Moreover, the use of hedging instruments may introduce additional risks if we are unable to structure effective hedges with such instruments.

Our contracts with non-U.S. customers may also include terms and reflect legal requirements that create additional risks including the risk of non-payment or delayed payment by foreign customers and governments. They may include industrial cooperation agreements requiring specific in-country purchases, investments, manufacturing agreements or other operational or financial obligations, including offset obligations, and provide for significant penalties if we fail to meet such requirements. They may also require us to enter into letters of credit, performance or surety bonds, bank guarantees and/or other financial arrangements to secure our performance obligations. We also increasingly are dependent on in-country suppliers and we face risks related to their failure to perform in accordance with the contracts and applicable laws, particularly where we rely on a sole source supplier. Our ability to sell products outside the U.S. could be adversely affected if we are unable to design our products for export on a cost-effective basis or to obtain and retain all necessary export licenses and authorizations on a timely basis.

Conducting business outside of the U.S. also exposes us to the complexity and necessity of using, and disruptions involving our international dealers, distributors, sales representatives and consultants as well as the difficulties of managing a geographically dispersed organization and culturally diverse workforces, including compliance with applicable U.S. and local laws and practices, such as anti-corruption and anti-trust/competition laws. Contracts with international customers are significantly different than the contracts with our U.S. customers, and some are more complex and require different skills to manage. Our ability to conduct business outside of the U.S. also depends on our ability to attract and retain sufficient qualified personnel with the skills and/or security clearances in the markets in which we do business.

The products and services we provide internationally, including those provided by subcontractors and joint ventures in which we have an interest, are sometimes in countries with unstable governments, economic or fiscal

challenges, military or political conflicts and/or developing legal systems. This may increase the risk to our employees, subcontractors or other third parties, and/or increase the risk of a wide range of liabilities, as well as loss of property or damage to our products.

The occurrence and impact of these factors is difficult to predict, but one or more of them could negatively impact our business, financial condition and results of operations.

We may not be successful in obtaining government approval for the export licenses necessary to conduct certain operations abroad.

We must obtain export and other licenses and authorizations from various U.S. and foreign government agencies before we are permitted to undertake certain activities including selling certain products and technologies outside of the U.S. Those U.S. and foreign government agencies may or may not approve our request for such an export license. Additionally, depending on the dollar value and country of intended sale, the U.S. Department of State must notify the U.S. Congress at least 15 to 30 days in advance of such a proposed sale. During that time, Congress may take action to block the proposed sale. Although we have been successful in efforts to gain such approvals to date, we can give no assurance that we will continue to be successful in obtaining the necessary licenses or authorizations in the future. Additionally, in some cases our ability to source components and products in foreign jurisdictions may require licenses or approvals from foreign governments. Our ability to obtain these licenses and authorizations in a timely fashion or at all is subject to risks and uncertainties, including changing U.S. government policies or laws or delays in Congressional action due to a wide range of factors. If we are not successful in obtaining or maintaining the necessary licenses or authorizations in a timely manner, our sales relating to those approvals may be reversed, prevented or delayed, and any significant impairment of our ability to sell products or technologies outside of the U.S. could negatively impact our business, financial condition and results of operations.

Our business could be harmed if we suffer a prolonged work stoppage.

As of August 29, 2022, approximately 440 (or 7.3%) of our employees were represented by labor unions. If we encounter difficulties with renegotiations or renewals of collective bargaining arrangements or are unsuccessful in those efforts, we could incur additional costs and experience work stoppages. Union actions at our suppliers could also affect us. We cannot predict how stable our union relationships will be or whether we will be able to successfully negotiate successor collective bargaining agreements without impacting our financial condition. In addition, the presence of unions may limit our flexibility in dealing with our workforce. While a relatively small percentage of our employee base is unionized, work stoppages could negatively impact the specific business segments in which our unionized employees are employed including our ability to manufacture products or provide services on a timely basis, which could negatively impact our business, financial condition and results of operations.

Our insurance coverage, customer indemnifications or other liability protections may be unavailable or inadequate to cover all of our significant risks or our insurers may deny coverage of or be unable to pay for material losses we incur, which could adversely affect our business, financial condition and results of operations.

We provide products and services related to hazardous and high-risk operations. Among such operations, our products and services are used in nuclear-related activities (including providing components for nuclear-powered platforms and sensors used in nuclear applications) and used in support of nuclear-related operations of third parties. Our business also involves the handling, transportation, storage and disposal of potentially dangerous chemicals and unstable materials and is subject to hazards inherent in such activities including chemical spills, storage tank leaks, discharges or releases of toxic or hazardous substances or gases and other hazards incident to the handling, transportation, storage and disposal of dangerous chemicals. We endeavor to obtain insurance agreements from financially solid, responsible, highly rated counterparties in established markets to cover significant risks and liabilities (including, for example, natural disasters, hazardous operations and products liability). Not every risk or liability can be insured, and for risks that are insurable, the policy limits and terms of coverage reasonably obtainable in the market may not be sufficient to cover all actual losses or liabilities incurred. Even if insurance coverage is available, we may not be able to obtain it or renew existing coverage at a price or on terms acceptable to us. Disputes with insurance carriers, including over policy terms, reservation of rights, the applicability of coverage (including exclusions), compliance with provisions (including notice) and/or the insolvency of one or more of our

insurers may significantly affect the availability or timing of recovery, and may impact our ability to obtain insurance coverage at reasonable rates in the future.

In some circumstances we may be entitled to certain legal protections or indemnifications from our customers through contractual provisions, laws, regulations or otherwise. However, these protections are not always available, can be difficult to obtain, are typically subject to certain terms or limitations, including the availability of funds, and may not be sufficient to cover all losses or liabilities incurred.

If insurance coverage, customer indemnifications and/or other legal protections are not available or are not sufficient to cover our risks or losses, it could have a material adverse impact on our business, reputation, financial condition and results of operations.

We have unfunded obligations under our pension plans, and we use estimates in accounting for our pension plans and changes in our estimates could adversely affect our financial condition and results of operations.

We have unfunded obligations under our pension, postretirement and supplemental retirement plans, see “Note 11: Pension and Other Postretirement Benefits” to DRS’s Consolidated Financial Statements. The process of determining the funded status of these plans and our pension plan expense or income involves significant judgment, particularly with respect to our long-term return on pension assets and discount-rate assumptions. If our discount-rate assumption or long-term return on assets (“ROA”) (which is used to determine the funded status of our pension plans) is decreased due to changes in our assumptions or other reasons, our pension plan funded status and expense could increase which would negatively impact our results of operations. In addition, if our actual return on assets differs from our long-term ROA assumption, our pension plan funded status and pension expense would be impacted.

Changes to financial accounting standards may affect our results of operations and cause us to change our business practices.

We prepare our financial statements in accordance with U.S. GAAP. These accounting principles are subject to interpretation by the Financial Accounting Standards Board, the SEC and various bodies formed to interpret and create appropriate accounting policies. A change in these accounting standards or the questioning of current reporting practices may adversely affect our reported financial results or the way in which we conduct our business.

Changes in future business or other market conditions could cause business investments and/or recorded goodwill or other long-term assets to become impaired, resulting in substantial losses and write-downs that would adversely affect our business, financial condition and results of operations.

As of December 31, 2021 and 2020, we had goodwill and other intangible assets of $1,123 and $1,117 million, respectively, net of accumulated amortization, which represented 37% and 38%, respectively, of our total assets. Our goodwill is subject to an impairment test on an annual basis and is also tested whenever events and circumstances indicate that goodwill may be impaired. Any excess goodwill resulting from the impairment test must be written off in the period of determination. Intangible assets (other than goodwill) are generally amortized over the useful life of such assets. In addition, from time to time, we may acquire or make an investment in a business which will require us to record goodwill based on the purchase price and the value of the acquired assets. We may subsequently experience unforeseen issues with such business which adversely affect the anticipated returns of the business or value of the intangible assets and trigger an evaluation of the recoverability of the recorded goodwill and intangible assets for such business. Future determinations of significant write-offs of goodwill or intangible assets as a result of an impairment test or any accelerated amortization of other intangible assets could have a negative impact on our results of operations and financial condition.

Our ability to use our net operating losses to offset future taxable income may be subject to certain limitations.

In general, under Section 382 the Code, a corporation that undergoes an “ownership change” is subject to limitations on its ability to utilize its pre-change net operating losses (“NOLs”) to offset future taxable income. Future changes in our stock ownership, some of which are beyond our control, could result in an ownership change under Section 382 of the Code. Furthermore, our ability to utilize NOLs of any companies that we may acquire in

the future, including RADA, may be subject to limitations. For these reasons, we may not be able to utilize a material portion of the NOLs reflected on our balance sheet, even if we attain profitability.

Acquisitions could result in operating difficulties, dilution and other harmful consequences.

We have evaluated in the past, and expect to continue to evaluate in the future, potential strategic transactions. Any of these transactions could be material to our financial condition and results of operations. The acquisition and the integration of an acquired company, business or technology may create unforeseen operating difficulties and expenditures and involves risks, including:

•the need to implement or remediate controls, procedures, policies and compliance programs appropriate for a larger public company at companies that prior to the acquisition lacked these controls, procedures and policies;

•diversion of management time and focus from operating our business to acquisition integration challenges;

•cultural challenges associated with integrating employees from the acquired company into our organization;

•retaining employees and customers from the businesses we acquire;

•the need to integrate each company’s accounting, management information, human resource and other administrative systems to permit effective management; and

•litigation related to acquisitions.

Foreign acquisitions involve unique risks in addition to those mentioned above, including those related to integration of operations across different cultures and languages, currency risks and the particular economic, political and regulatory risks associated with specific countries and the defense industry.

In addition, the anticipated benefit of many of our acquisitions may not materialize. Future acquisitions or dispositions could result in potentially dilutive issuances of our equity securities, the incurrence of debt, contingent liabilities or amortization expenses, or write-offs of goodwill, any of which could harm our financial condition and results of operations. Future acquisitions may require us to obtain additional equity or debt financing, which may not be available on favorable terms or at all.

Finally, we may be required to obtain the consent of US Holding in order to pursue certain material transactions and there is no guarantee that their consent will be granted See “—Our ultimate majority stockholder, Leonardo S.p.A., may have interests that are different from, or conflict with, those of our other stockholders, and their significant ownership in us may discourage change of control transactions”.

We have significant operations in locations that could be materially and adversely impacted in the event of a natural disaster or other significant disruption.

Our operations and the operations of our suppliers and customers could be subject to natural disasters or other significant disruptions, including hurricanes, typhoons, tsunamis, floods, earthquakes, fires, water shortages, other extreme weather conditions, medical epidemics, pandemics (including COVID-19), acts of terrorism, power shortages and blackouts, telecommunications failures and other natural and manmade disasters or disruptions. We have significant business operations located in areas that are subject to these risks, for example our facilities in Florida and Texas. In the event of such a natural disaster or other disruption, we could experience disruptions or interruptions to our operations or the operations of our suppliers, subcontractors, distributors, resellers or customers, including inability of employees to work; destruction of facilities; and/or loss of life, all of which could materially increase our costs and expenses, delay or decrease orders and revenue from our customers and have a material adverse impact on our business, financial condition and results of operations.

Our leases may be terminated or we may be unable to renew our leases on acceptable terms and if we wish to relocate, we may incur additional costs if we terminate a lease.

We have made significant capital expenditures to improve several of our leased facilities in order to make them suitable for our purposes as well as to meet requirements that we are subject to as a U.S. government contractor and obtain facility security clearances. However, at the end of the lease term and during any renewal period for a facility, we may be unable to renew the lease without substantial additional cost, if at all. If we are unable to renew our facility leases, we may close or relocate a facility, which could subject us to construction and other costs and risks, which in turn could have a material adverse effect on our business, financial condition and results of operations, including significant capital expenses that may materially impact our results of operations and ability to meet certain contractual schedule commitments. Additionally, we may have to seek qualification of any new facilities in order to meet customer or contractual requirements. We would also have to obtain facility security clearances for the new facility in order to continue to perform on classified contracts. Further, we may not be able to secure a replacement facility in a location that is as commercially viable as that of the lease we are unable to renew, due to contracts that may require us to have facilities in certain locations. Having to close a facility, even briefly to relocate, would reduce the sales that such facility would be able to contribute to our revenues. Additionally, a relocated facility may generate less revenue and profit, if any, than the facility it was established to replace.

Additionally, many of our facilities are located on leased premises subject to non-cancellable leases. Typically, our leases have initial terms ranging from five to 20 years, with options to renew for specified periods of time. We believe that our future leases will likely also be long-term and non-cancellable and have similar renewal options. If we close or stop fully utilizing a facility, we will most likely remain obligated to perform under the applicable lease, which would include, among other things, making the base rent payments, and paying insurance, taxes and other expenses on the leased property for the remainder of the lease term. Our inability to terminate a lease when we stop fully utilizing a facility could negatively impact our business, financial condition and results of operations.

We cannot predict the consequences of future geo-political events, but they may adversely affect the markets in which we operate, our ability to insure against risks, our operations or our results of operations.

Ongoing instability and current conflicts in global markets, including in Eastern Europe, the Middle East and Asia, and the potential for other conflicts and future terrorist activities and other recent geo-political events throughout the world, including the conflict in Ukraine and related restrictions on transactions with and sourcing from counterparties in Russia, the U.S. military withdrawal from Afghanistan, new or increased tariffs or sanctions and potential trade wars have created and continue to create economic and political uncertainties and impacts that could have a material adverse impact on our business, financial condition and results of operations. These matters cause uncertainty in the world’s financial and insurance markets and may significantly increase the political, economic and social instability in the geographic areas in which we operate. Such instability and any resulting changes in laws, regulations or security risks may dramatically affect our ability to conduct or continue to conduct business in the impacted international markets. If credit in financial markets outside of the U.S. tightened, it could adversely affect the ability of our customers and suppliers to obtain financing and could result in a decrease in or cancellation of orders for our products, systems and services or impact the ability of our customers to make payments. These matters may cause us to incur increased costs or experience difficulty with future borrowings under our credit facilities or in the debt capital markets, future issuances of common stock or other equity securities or otherwise with financing our operating, investing (including any future acquisitions) or financing activities. These matters also may cause our insurance coverages to increase in cost, or in some cases, to be unavailable altogether.

We operate under a Commitment Letter with DCSA that regulates significant areas of our governance. If we fail to comply with the Commitment Letter our classified U.S. government contracts could be terminated, which could have a material adverse impact on our business, financial condition and results of operations.

Leonardo S.p.A., an Italian company listed on the Milan Stock Exchange, is the ultimate parent of our immediate parent US Holding which owns all of our outstanding common stock prior to the merger and will own a majority of our common stock immediately after the merger. As a result, we are deemed to be controlled by a foreign company and to be under FOCI, as defined in the NISPOM, which establishes procedures and requirements for government contractors, such as our Company, with regard to classified information. See “—Risks Relating to

DRS’s Business—We are subject to the U.S. government’s requirements, including the DoD’s National Industrial Security Program Operating Manual, for our facility security clearances, which are prerequisites to our ability to perform on classified contracts for the U.S. government”. Furthermore, the combination of the Italian state beneficially owning approximately 30.2% of Leonardo S.p.A.’s voting power (through its ownership of approximately 30.2% of the outstanding ordinary shares of Leonardo S.p.A.), and the governance of Leonardo S.p.A. itself, has led DRS to be deemed to be controlled by a foreign government by certain U.S. regulatory authorities. In order to be permitted to maintain our security clearances and our access to classified data and to perform or bid on classified programs, we are required to mitigate FOCI through a proxy agreement. We have therefore entered into the Commitment Letter with DCSA. Among other things, the Commitment Letter:

•provides that the shares of our common stock owned directly by US Holding and indirectly by Leonardo S.p.A. are voted through proxy holders, who, when appointed, must be independent from current and prior affiliation with Leonardo S.p.A. and its subsidiaries (including US Holding and us) (subject to limited exceptions) and who must maintain adequate security clearances;

•provides that the proxy holders are appointed by our immediate parent US Holding (in consultation with Leonardo S.p.A.)., but the appointment is subject to approval of DCSA, an agency of the DoD, and that the proxy holders must be members of our board of directors;

•restricts our ability to share facilities and personnel with and receive certain services from Leonardo S.p.A. or its other subsidiaries;

•requires us to maintain a government security committee of our board of directors; and

•regulates meetings, visits and communications that are not deemed to be routine business visits between us and Leonardo S.p.A. or its other subsidiaries (including US Holding).

Compliance with the Commitment Letter requires a significant commitment of resources and management and board oversight, and DCSA may impose additional security safeguards that it believes necessary to adequately safeguard classified information, which could make it more difficult for us to comply with the proxy agreement. Under the Commitment Letter, we are required to prepare and submit an annual implementation and compliance report to DCSA including detailed information with respect to the manner in which we comply with the Commitment Letter including with respect to classified information, any acts of noncompliance and other matters specified by DCSA. We are subject to regular reviews of our FOCI compliance and have at times been found to not have strictly complied with our prior proxy agreement or relevant security requirements but have not to date been sanctioned for any such noncompliance. Additionally, the restrictions imposed by the Commitment Letter on our communications and ability to share facilities, personnel and services with Leonardo S.p.A. or its other subsidiaries mean that we cannot benefit from the full range of synergies and cost savings typically enjoyed by a majority-owned subsidiary.

In the event of a material breach of the Commitment Letter, DCSA may revoke our facility security clearance, and such breach may also result in (i) novation of our classified contracts to a company not under FOCI at our expense, (ii) termination of our classified contracts and denial of new classified contracts, and/or (iii) suspension or debarment from participation in all U.S. government contracts. We depend on revenues from contracts and subcontracts with the U.S. government, including defense-related programs with the DoD and a broad range of programs with the U.S. Army and U.S. Navy. See “—Risks Relating to DRS’s Business—We depend on U.S. defense spending for the vast majority of our revenues. Disruptions or deteriorations in our relationships with the relevant agencies of the U.S. government could have a material adverse impact on our business, financial condition and results of operations”. Therefore, if we fail to comply with the terms of the proxy agreement and the DoD imposes any of the above remedies, this could have a material adverse impact on our business, financial condition and results of operations. For further information about the proxy agreement, see “Certain Relationships and Related Transactions, and Director Independence—Relationship with Leonardo S.p.A.—Proxy Agreement”.

CFIUS may modify, delay or prevent our future acquisition or investment activities.

We are considered a “foreign person” under the regulations administered by CFIUS and will continue to be considered as such in the future for so long as Leonardo S.p.A. has the ability to exercise control over us for purposes of CFIUS’s regulations. As such, acquisitions of or investments in U.S. businesses or foreign companies with U.S. businesses that we may wish to pursue may be subject to CFIUS review, the scope of which was recently expanded by the Foreign Investment Risk Review Modernization Act of 2018 (“FIRRMA”), to include certain non-passive, non-controlling investments in sensitive U.S. businesses and certain acquisitions of real estate even with no underlying U.S. business. FIRRMA, and subsequent implementing regulations that are now in force, also subjects certain categories of investments to mandatory filings. If a particular proposed acquisition or investment in a U.S. business falls within CFIUS’s jurisdiction, we may determine that we are required to make a mandatory filing or that we will submit a voluntary notice to CFIUS, or to proceed with the transaction without notifying CFIUS and risk CFIUS intervention, before or after closing the transaction. CFIUS may decide to block or delay an acquisition or investment by us, impose conditions to mitigate national security concerns with respect to such acquisition or investment or order us to divest all or a portion of a U.S. business that we acquired without first obtaining CFIUS clearance, which may limit the attractiveness of or prevent us from pursuing certain acquisitions or investments that we believe would otherwise be beneficial to us and our stockholders. We may therefore be adversely affected in terms of competing with other companies in our industry which do not have similar foreign ownership issues. Furthermore, because the Italian state beneficially owns approximately 30.2% of the voting power of the outstanding ordinary shares of, and exercises certain governance rights over, Leonardo S.p.A. (through its ownership of approximately 30.2% of Leonardo S.p.A.’s ordinary shares), which in turn has the ability to exercise control over us for purposes of CFIUS’s regulations, we are considered to be foreign-government-controlled under the regulations administered by CFIUS. Foreign-government-controlled investors may be subject to a higher level of CFIUS scrutiny than non-foreign-government-controlled investors. Additionally, future foreign investments in us could be within the jurisdiction of CFIUS and, given the nature of our business, may trigger a mandatory CFIUS notification requirement or warrant voluntary notification to CFIUS, impacting our ability to attract such investment. Further, CFIUS may decide to block, delay, or impose material conditions on any such future foreign investment in us that it reviews.

Because we are deemed to be controlled by a foreign company, we are required to mitigate FOCI through our proxy agreement.

Our ultimate majority stockholder, Leonardo S.p.A., may have interests that are different from, or conflict with, those of our other stockholders, and their significant ownership in us may discourage change of control transactions.

The Commitment Letter provides that the shares of our common stock owned directly by US Holding and indirectly by Leonardo S.p.A. are voted through proxy holders, who at the time of appointment, must be independent from current and prior affiliation with Leonardo S.p.A. and its subsidiaries (including US Holding and us) (subject to limited exceptions) and must maintain adequate security clearances. The proxy holders have the right to vote US Holding’s shares of our common stock in the same manner and to the same extent as if they were the absolute owners of such shares in their own right. In exercising their power as proxy holders, the proxy holders are directed to act to protect the legitimate economic interests of our shareholders and in a manner consistent with their fiduciary duties, but they are not generally required to follow instructions of Leonardo S.p.A., US Holding or us.

The Commitment Letter provides that the proxy holders may vote for or consent to, in their sole and absolute discretion, without consultation with US Holding or Leonardo S.p.A., the election of additional directors who are not proxy holders (and who are selected from candidates proposed by US Holding after reasonable consultation with our nominating and corporate governance committee, and subject to DCSA’s approval in certain circumstances), any changes or amendments to our certificate of incorporation or by‑laws, the sale or disposal of our property, assets or business, our incurrence of debt or any pledge, mortgage or encumbrance of any of our assets, or any other matter affecting us, other than as described below.

However, the proxy holders may only vote for or consent to the following matters with the express written approval of US Holding:

•other than in the ordinary course of business with vendors, customers and suppliers, the sale or disposition of any of our subsidiaries, property, assets or business or those of our subsidiaries or the purchase by us or our subsidiaries of any business, properties, assets or entities, other than in the ordinary course of business, in any individual transaction where our investment (based on our share of the enterprise value) exceeds two percent (2%) of our revenues for the immediately preceding year or where our investment, in the aggregate for all such sales or dispositions in a calendar year, exceeds an amount equal to five percent (5%) of our revenues for the immediately preceding year;

•the incurrence of debt or pledge, mortgage, lease or other encumbrance of our assets of those of our subsidiaries in connection with the incurrence of debt if such incurrence would cause the aggregate outstanding principal amount of all debt of us and our subsidiaries to exceed a target leverage ratio set forth in our then-current operating plan, excluding current debt incurred for purposes of funding day-to-day working capital requirements in the ordinary course of business;

•any merger, consolidation, reorganization or dissolution of us of any of our subsidiaries except as permitted above and excluding transactions solely among our wholly owned subsidiaries; and

•the filing or making of any petition by us or our subsidiaries under the federal bankruptcy laws or any similar law or statute of any state or any foreign country.

The proxy holders may also only vote to declare or suspend dividends after prior consultation with US Holding.

In addition, in connection with the merger, we intend to enter into a cooperation agreement (the “cooperation agreement”) with US Holding and Leonardo S.p.A. pursuant to which, among other things, (a) Leonardo S.p.A. would have certain consent, access and cooperation rights, (b) US Holding would have certain consent rights over DRS and its subsidiaries, including over the creation or issuance of any new classes or series of stock (subject to customary exceptions), listing or delisting from any securities exchange, and making material changes to DRS’s accounting policies and changing its auditor, and (c) neither US Holding nor Leonardo S.p.A. would have the ability to transfer any DRS voting securities for a period of six months following the closing of the merger, except in connection with a change in control of DRS or for transfers to affiliates.

For further information and a full description of the cooperation agreement see “Other Agreements Related to the Merger—Cooperation Agreement”.

Conflicts of interest may arise between our majority stockholder and us. Affiliates of our majority stockholder engage in transactions with us. Further, Leonardo S.p.A. and its affiliates may, from time to time, acquire and hold interests in businesses that compete directly or indirectly with us, and they may, either directly or through affiliates, also maintain business relationships with companies that may directly compete with us. In general, Leonardo S.p.A. or its affiliates could pursue business interests that are detrimental to us but beneficial to themselves or to other companies in which they invest or with whom they have a material relationship. Conflicts of interest could also arise with respect to business opportunities that could be advantageous to Leonardo S.p.A., and they may pursue acquisition opportunities that may be complementary to our business. As a result, those acquisition opportunities may not be available to us. Under the terms of our amended and restated certificate of incorporation, neither Leonardo S.p.A. nor US Holding have an obligation to offer us corporate opportunities.

As a result of these relationships the interests of our ultimate parent, Leonardo S.p.A., may not coincide with our interests or the interests of the other holders of our common stock. So long as Leonardo S.p.A. continues to indirectly control a significant amount of the outstanding shares of our common stock, Leonardo S.p.A. and the proxy holders will continue to be able to strongly influence or effectively control our decisions, including potential mergers or acquisitions, asset sales and other significant corporate transactions. This influence, including the requirement in our proxy agreement for approval by the proxy holders and our majority stockholder of mergers and consolidations, may also discourage change of control transactions.

Our amended and restated certificate of incorporation provides that we waive any interest or expectancy in corporate opportunities presented to Leonardo S.p.A.

Our amended and restated certificate of incorporation provides that we, on our behalf and on behalf of our subsidiaries, renounce and waive any interest or expectancy in, or in being offered an opportunity to participate in, corporate opportunities that are from time to time presented to Leonardo S.p.A., or its officers, directors, agents, stockholders, members, partners, affiliates or subsidiaries, with the exception of the proxy holders, even if the opportunity is one that we or our subsidiaries might reasonably have pursued or had the ability or desire to pursue if granted the opportunity to do so. None of Leonardo S.p.A. or its agents, stockholders, members, partners, affiliates or subsidiaries, with the exception of the proxy holders, will generally be liable to us or any of our subsidiaries for breach of any fiduciary or other duty by reason of the fact that such person pursues, acquires or participates in such corporate opportunity, directs such corporate opportunity to another person or fails to present such corporate opportunity, or information regarding such corporate opportunity, to us or our subsidiaries. To the fullest extent permitted by law, by becoming a stockholder in our Company, stockholders will be deemed to have notice of and consented to this provision of our amended and restated certificate of incorporation. This will allow Leonardo S.p.A. and its affiliates to compete with us. Strong competition for investment opportunities could result in fewer such opportunities for us. We likely will not always be able to compete successfully with our competitors and competitive pressures or other factors may also result in significant price competition, particularly during industry downturns, which could have a material adverse impact on our business, financial condition and results of operations.

We are obligated to provide certain services to Leonardo S.p.A., which may divert human and financial resources from our business, and to rely on provision of certain services from Leonardo S.p.A., which we may be unable to replicate should the need arise.

Although we operate largely independently from Leonardo S.p.A. and the Commitment Letter contains limitations on services that we may provide to and receive from Leonardo S.p.A. and its affiliates, we have historically provided, and expect to continue to provide, certain services to Leonardo S.p.A. and its affiliates to support its U.S. operations (aside from us) and have historically received and expect to continue to receive certain services from Leonardo S.p.A., including services related to group training support, subject in all cases to the Commitment Letter. We continue to provide or procure certain services to or from Leonardo S.p.A. and its affiliates and Leonardo S.p.A. and its affiliates continue to provide or procure certain services to or from us pursuant to the tax allocation agreement and existing Affiliated Operations Plan (“AOP”) services agreements which continue pursuant to the terms of such contracts. The tax allocation agreement will remain in effect until terminated upon the written agreement of the parties.

Under our existing AOP services agreements we continue to provide Leonardo S.p.A. and its affiliates with services in support of its U.S. operations (aside from us), including services related to tax, financial and accounting support, legal support, trade compliance, marketing, communications, media and advertising, and security, on an arm’s-length basis. Under the tax allocation agreement, we are responsible for administering certain U.S. federal and state tax matters on behalf of Leonardo S.p.A. and its subsidiaries (including US Holding). The provision of such services may divert human and financial resources from focus on our business, and may expose us to additional risks and liabilities. Under our existing AOP services agreements, Leonardo S.p.A. and its affiliates continue to provide us with services, including services related to group training support. If Leonardo S.p.A. or its affiliates cease providing these services to us, either as a result of the termination of the relevant agreements or individual services thereunder or a failure by Leonardo S.p.A. or its affiliates to perform their respective obligations under these agreements, our costs of procuring these services or comparable replacement services may increase. In such event, we will work to replicate or replace these services; however we cannot assure you that we will be able to obtain the services at the same or better levels or at the same or lower costs directly from third-party providers.

Some of our contracts with the U.S. government are classified, which may limit investor insight into portions of our business.

We derive a portion of our revenues from programs with the U.S. government that are subject to security restrictions that preclude the dissemination of information that is classified for national security purposes. We are limited in our ability to provide details about these classified programs, their risks or any disputes or claims relating

to such programs, and may not disclose such information pursuant to SEC rules permitting confidential treatment of certain information. As a result, investors and others might have less insight into our classified programs than our other businesses and, therefore, less ability to fully evaluate the risks related to our classified business.

Risks Related to RADA’s Business

In this section, unless context requires otherwise, references to “we”, “our” or “us” refer to RADA before the completion of the merger.

While we have met with initial success in the introduction of our advanced ground radars for tactical applications such as defense forces protection and border protection, there can be no assurance that we will succeed in obtaining general market acceptance.

We have developed a number of radar hardware platforms for use in combat vehicles and tactical protection applications for defense forces and border protection. In December 2014, we announced the first significant order for this product family and while we have been successful in marketing our ground radar products since then, we cannot assure you that our ground radars will achieve broad market acceptance.

We have a history of operating losses and may not be able to sustain profitable operations in the future. To the extent that we incur operating losses in the future, we may not have sufficient working capital to fund our operations.

We incurred operating losses in three of the six years ended December 31, 2021, and may not be able to achieve or sustain profitable operations in the future or generate positive cash flows from operations. As of March 31, 2022, our accumulated deficit was $49 million. To the extent that we incur significant operating losses in the future or are unable to generate free cash flows from our business, we may not have sufficient working capital to fund our operations and will be required to obtain additional financing. Such financing may not be available, or if available, may not be on terms satisfactory to us. If adequate funds are not available to us, our business, and results of operations and financial condition will be adversely affected.

Reductions in defense budgets worldwide may cause a reduction in our revenues, which would adversely affect our business, operating results and financial condition.

Substantially all of our revenues are derived from the sale of products with military applications.

We expect the U.S. government will continue to place a high priority on national security and will continue to invest in products such as ours. Further, the DoD budget remains the largest in the world and this offers substantial opportunity for growth.

In December 2021, Biden signed a $770 billion defense policy bill for fiscal year 2022, which reflects a 5% increase from the previous fiscal year’s defense policy measure and includes a 2.7% pay raise for service members and more naval ship and aircraft purchases. The FY 2022 National Defense Authorization Act authorizes the formation of a 16-member commission to look into the Afghanistan war and includes $4 billion for the European Defense Initiative, $300 million for the Ukraine Security Assistance Initiative and $150 million for Baltic security cooperation.

The U.S. government’s fiscal year (FY) begins on October 1 and ends on September 30. On March 28, 2022, the Biden-Harris Administration introduced the initial FY 2023 discretionary budget plan. The proposal requests $813.3 billion in discretionary funding for national defense and includes $773 billion for the DoD. The $773 billion DoD request compares to the FY 2022 enacted amount of $742 billion.

There are risks associated with the timing and amount of future appropriations. If annual appropriations bills are not enacted in the future, the U.S. government may operate under a continuing resolution (“CR”), restricting new contract or program starts and additional government shutdowns, which might involve all government agencies, including DoD, could arise. Future CRs and government shutdowns may lead to delays in procurement of products due to lack of funding, and those delays may adversely affect our revenue, results of operations and cash flow.

Finally, there remains uncertainty surrounding future discretionary defense funding levels and priorities of the Biden Administration and Congress, which could adversely impact demand for our products.

In addition, the defense budgets of a number of countries have declined and may be reduced in the future. Declines in defense budgets may result in reduced demand for our products. This would result in reduction in our core business revenues and adversely affect our business, results of operations and financial condition.

We may be required to obtain financing for strategic opportunities, which financing may not be available for us in a timely manner or on favorable terms, and which may dilute the holdings of our shareholders and/or require us to incur additional debt.

In order to invest in strategic opportunities in support of our growth plans and/or business development activities, we may be required to obtain funds from financing sources, including through debt vehicles or re-financing, sale of new securities or other financing alternatives. There is no assurance that we will be able to obtain sufficient funding, if at all, from the financing sources detailed above or other sources in a timely manner (or on commercially reasonable terms) in order to allow us to fund our growth plans and/or business development activities, which may adversely affect our financial position and operations, may dilute the holdings of our shareholders or require us to incur additional debt.

Competition in the market for defense electronics is intense. Our products may not achieve market acceptance, which could adversely affect our business, financial condition and results of operations.

The market for our products is highly competitive and we may not be able to compete effectively. Our principal competitors in the defense electronics market include Israel Aerospace Industries Ltd., or IAI, Raytheon Company, Northrop Grumman Corporation, Thales Group, and SRC Inc. We expect to continue to face competition from these and other competitors. Most of our competitors are larger and have substantially greater resources than we do, including financial, technological, marketing and distribution capabilities, and enjoy greater market recognition than we do. These competitors are able to achieve greater economies of scale and may be less vulnerable to price competition than we are. We may not be able to offer our products as part of integrated systems to the same extent as our competitors or successfully develop or introduce new products that are more cost effective or offer better performance than those of our competitors. Failure to do so could adversely affect our business, financial condition and results of operations.

Further, we derive a portion of our revenue from direct and indirect sales to governments and their agencies and our competitors are increasingly targeting such governmental agencies as potential clients. Such government contracts are subject to various procurement, competition and other laws and regulations, as well as contractual provisions, and violations could result in the imposition of various civil, administrative and criminal penalties, termination of contracts, forfeiture of profits, suspension of payments, or suspension of future government contracting. In addition, these entities may require license terms that we are unwilling to agree to (e.g., open data rights). As such, we may lose government clients to our competitors, our government contracts may be terminated or not be renewed or we may be suspended from government work or the ability to compete for new contracts.

We may not be able to implement our growth strategy which could adversely affect our business, financial condition and results of operations.

In line with our growth strategy, we entered into a number of strategic relationships with Lockheed Martin Corporation (“Lockheed Martin”), Boeing Defense, Space & Security (“Boeing”), Rafael Advanced Defense Systems Ltd. (“Rafael”), Elbit Systems Ltd. (“Elbit”), DRS, Anduril Industries (“Anduril”) and Ascent Vision Technologies (a CACI subsidiary) (“CACI”), to increase our penetration into the defense electronics market. We are currently investing and intend to continue to invest significant resources to develop these relationships and additional new relationships. Should our relationships fail to materialize into significant agreements or should we fail to work efficiently with these companies, we may lose sales and marketing opportunities and our business, results of operations and financial condition could be adversely affected.

Our growth is dependent in part on the development of new products, based on internal research and development, including the expansion of our radar offerings. We may not accurately identify market needs before

we invest in the development of a new product. We may also face difficulties or delays in the development process that will result in our inability to timely offer products that satisfy the market and competing products may emerge during the development and certification process.

Due to inaccurate forecasts, mistakes or business changes, we may be exposed to inventory-related losses on inventory we purchased in advance and part of our inventory may be written off, which would increase our cost of revenues.

We normally purchase more inventory than is immediately required in order to shorten our delivery time especially in the event of an increase in demand for our products. We have also increased our inventory level in order to accommodate possible consequences of COVID-19. If the actual orders from our customers are lower than projected or if we decide to change our product line or our product support strategy, we will have excess inventory of components or finished products. Our inventory levels may be too high, and inventory may become obsolete or over-stated on our balance sheet. Our inventory of finished products may accumulate. The rate of accumulation may increase in a period of economic downturn. This would require us to write off inventory, which could adversely affect our gross profit and results of operation.

Epidemics and pandemics, such as the COVID-19 pandemic, could materially disrupt our business and have a negative impact on our financial results and financial condition.

We are vulnerable to the general economic effects of epidemics, pandemics and other public health crises, such as the COVID-19 pandemic. Due to the recent outbreak of COVID-19, there has been a substantial curtailment of travel and business activities, which is causing significant disruptions to the global economy. The extent to which COVID-19 impacts our results will depend primarily on future developments, which are highly uncertain and cannot be predicted with confidence, including the severity and duration of the crisis, the speed and effectiveness of vaccine and treatment developments and deployment, potential mutations of COVID-19, and the impact of actions taken and that will be taken to contain COVID-19 or treat its impact, among others. For example, if COVID-19 continues to spread, we may need to limit operations or implement additional restrictions as a result of widespread government restrictions.

Our increased reliance on personnel working from home may negatively impact productivity or disrupt, delay or otherwise adversely impact its business. Israel and other countries have enforced quarantines and shutdowns to slow the spread of COVID-19, and restricted international travel during this pandemic.

We are continuing to closely monitor COVID-related impacts on all aspects of our business and geographies, including on our workforce, supply chain and customers. On September 9, 2021, President Biden announced a COVID-19 action plan, including an executive order, the Safer Workforce Task Force guidance issued on September 24, 2021 and the Force Health Protection guidance. This executive order and guidance (as amended) requires U.S. based federal contractors’ employees to have had their final vaccination dose by January 4, 2022, with exceptions including where an employee is legally entitled to an accommodation.

State and local governments are also continuing to take actions related to the pandemic, imposing additional and varying requirements on our industry. We are continuing to evaluate these evolving requirements. We cannot at this stage predict the various impacts they may have on our workforce, our suppliers, or our Company. These evolving government requirements, including regarding a vaccine mandate, along with broader impacts of the continuing pandemic, could impact our workforce and performance, as well as those of our suppliers.

Our future results of operations and liquidity could be adversely impacted by delays in payments of outstanding receivable amounts beyond normal payment terms, supply chain disruptions and operational challenges faced by our customers. Continued outbreaks of COVID-19 could result in a widespread health crisis that could adversely affect the economies and financial markets of many countries, resulting in an economic downturn or a global recession that could cause significant volatility or decline in the trading price of our securities, affect our ability to execute strategic business activities, affect demand for our products and likely impact our operating results. These may further limit or restrict our ability to access capital on favorable terms, or at all, lead to consolidation that negatively impacts our business, weaken demand, increase competition, cause us to reduce our capital spend further, or otherwise disrupt our business.

Other unfavorable national and global economic conditions could have a material adverse effect on our business, operating results and financial condition.

During periods of slowing economic activity, our customers may reduce their demand for our products, technology and professional services, which would reduce our sales, and our business, operating results and financial condition may be adversely affected. Significant portions of our operations are conducted outside the markets in which our products and solutions are manufactured or generally sold, and accordingly, we often export a substantial number of products into such markets. We may, therefore, be denied access to potential customers or suppliers or denied the ability to ship products from any of our subsidiaries into the countries in which we currently operate or wish to operate, as a result of economic, legislative, political and military conditions, including hostilities and acts of terrorism, in such countries.

We could also be exposed to credit risk and payment delinquencies on our accounts receivable. In particular, there is currently significant uncertainty about the future relationship between the U.S. and various other countries, with respect to trade policies, treaties, government regulations, and tariffs. Although we partially manufacture in the U.S., major developments in trade relations, including the imposition of new or increased tariffs by the U.S. and/or other countries, and any emerging nationalist trends in specific countries could alter the trade environment and consumer purchasing behavior which, in turn, could have a material effect on our financial condition and results of operations.

Any slowdown or instability in the global economy could impact income, purchasing power and consumption levels among other things, which could limit growth, increase delinquency rates and ultimately have a material adverse effect on us. In addition, any global economic slowdown or uncertainty may result in volatile conditions in the global financial markets, which could have a material adverse effect on us, including on our ability to access capital and liquidity on financial terms acceptable to us, if at all. Any such adverse effect on capital markets funding availability or costs or in deposit rates could have a material adverse effect on our interest margins and liquidity.

We may also be required in the future to increase our reserves for doubtful accounts. In addition, the fair value of some of our assets may decrease as a result of an uncertain economy and as a result, we may be required to record impairment charges in the future. If global economic and market conditions or economic conditions in key markets remain uncertain or weaken further, our financial condition and operating results may be materially adversely affected.

Sales of our products are subject to governmental procurement procedures and practices; termination, reduction or modification of contracts with our customers or a substantial decrease in our customers’ budgets may adversely affect our business, operating results and financial condition.

Our products are primarily sold to governmental agencies, governmental authorities and government-owned companies, many of which have complex and time-consuming procurement procedures. A substantial period of time often elapses from the time we begin marketing a product until we actually sell that product to a particular customer. In addition, our sales to governmental agencies, authorities and companies are directly affected by these customers’ budgetary constraints and the priority given in their budgets to the procurement of our products. A decrease in governmental funding for our customers’ budgets would adversely affect our results of operations. This risk is heightened during periods of global economic slowdown. Accordingly, governmental purchases of our systems, products and services may decline in the future as the governmental purchasing agencies may terminate, reduce or modify contracts or subcontracts if:

•their requirements or budgetary constraints change;

•they cancel multi-year contracts and related orders if funds become unavailable;

•they shift spending priorities into other areas or for other products; or

•they adjust contract costs and fees on the basis of audits.

Any such event may have a material adverse effect on us.

Further, our business with the State of Israel and other governmental entities is, in general, subject to delays in funding and performance of contracts and the termination for convenience (among other reasons) of contracts or subcontracts with governmental entities. The termination, reduction or modification of our contracts or subcontracts with the Government of Israel in the event of change in requirements, policies or budgetary constraints would have an adverse effect on our business, operating results and financial condition.

If we do not receive the governmental approvals necessary for the export of our products, our revenues may decrease. Similarly, if our suppliers and partners do not receive government approvals necessary to export their products or designs to us, our revenues may decrease, and we may fail to implement our growth strategy.

Israel’s defense export control laws regulate the sale of our systems and products. Current Israeli law permits export to approved customers of defense systems and products, such as ours, as long as the export is consistent with Israeli government policy and duly licensed. A license is required to initiate marketing activities. We are also required to obtain a specific export license for any controlled hardware, know-how and services exported from Israel. We may not be able to receive all the required permits and licenses for which we may apply in the future. If we do not receive the required permits for which we apply, our revenues may decrease.

We are subject to laws regulating export of “dual use” items (items that are typically sold in the commercial market, but that also may be used in the defense market) and defense export control legislation. Additionally, our participation in governmental procurement processes in Israel and other countries is subject to specific regulations governing the conduct of the process of procuring defense contracts. Furthermore, solicitations for procurements by governmental purchasing agencies in Israel and other countries are governed by laws, regulations and procedures relating to procurement integrity, including avoiding conflicts of interest and corruption in the procurement process. We may not be able to respond quickly and effectively to changing laws and regulations and any failure to comply with such laws and regulations may subject us to significant liability and penalties.

We could be adversely affected if we are unable to attract and retain key personnel.

Our success depends in part on key management, sales, marketing and development personnel and our continuing ability to attract and retain highly qualified personnel, including with respect to our recently formed subsidiaries. There is competition for the services of such personnel. The loss of the services of senior management and key personnel, or the failure to attract highly qualified personnel in the future, may have a negative impact on our business. Moreover, our competitors may hire and gain access to the expertise of our former employees or our former employees may compete with us. There is no assurance that we will be successful in attracting, integrating, motivating and retaining key personnel or that former employees will not compete with in the future. If we are unable to retain our key personnel and attract additional qualified personnel as and when needed, our business may be adversely affected.

We depend on sales to key customers and the loss of one or more of our key customers would result in a loss of a significant amount of our revenues, which would adversely affect our business, financial condition and results of operations.

A significant portion of our revenues is derived from a small number of customers. During the years ended December 31, 2021 and 2020, 49% and 51% of our revenues were attributable to five customers. We anticipate that a significant portion of our future revenues will continue to be derived from sales to a small number of customers. No assurances can be given that our customers will continue to purchase our products, that we will be successful in any bid for new contracts to provide such products, or that if we were granted subsequent orders, such orders would be of a scope comparable to the sales that we have experienced to date. If our principal customers do not continue to purchase products from us at current levels or if we do not retain such customers and we are not able to derive sufficient revenues from sales to new customers to compensate for their loss, our revenues would be reduced and adversely affect our business, cash flows, financial condition and results of operations.

We depend on suppliers of components for our products and if we are unable to obtain these components when needed, we could experience delays in the manufacturing of our products and our financial results could be adversely affected.

We acquire most of the components for the manufacturing of our products from suppliers and subcontractors, most of whom are located in Israel and the U.S. A number of these suppliers are currently the sole source of one or more components upon which we are dependent. Suppliers of some of the components for manufacturing require us to place orders with significant lead-time to assure supply in accordance with our manufacturing requirements. Delays in supply may significantly hurt our ability to fulfill our contractual obligations and may significantly hurt our business and results of operations. In addition, we may not be able to continue to obtain such components from these suppliers on satisfactory commercial terms. Temporary disruptions of our manufacturing operations would ensue if we were required to obtain components from alternative sources, which may have an adverse effect on our financial results.

Rapid technological changes may adversely affect the market acceptance of our products and could adversely affect our business, financial condition and results of operations.

The defense electronics market in which we compete is subject to technological changes, introduction of new products, change in customer demands and evolving industry standards. Our future success will depend upon our ability to keep pace with technological developments and to timely address the increasingly sophisticated needs of our customers by supporting existing and new technologies and by developing and introducing enhancements to our current products and new products. We may not be successful in developing and marketing enhancements to our products that will respond to technological change, evolving industry standards or customer requirements. In addition, we may experience difficulties that could delay or prevent the successful development, introduction and sale of such enhancements and such enhancements may not adequately meet the requirements of the market and may not achieve any significant degrees of market acceptance. If release dates of our new products or enhancements are delayed or, if when released, they fail to achieve market acceptance, our business, operating results and financial condition may be adversely affected.

We enter into fixed-price contracts that could expose us to losses in the event we fail to properly estimate our costs.

We enter into firm fixed-price contracts. If our initial cost estimates are incorrect, we can lose money on these contracts. To the extent we underestimate the costs to be incurred in any fixed-price contract, we could experience a loss on the contract, which could have a negative effect on our results of operations, financial position and cash flow.

Breaches of network or information technology security, natural disasters or terrorist attacks could have an adverse effect on our business.

Cyber-attacks or other breaches of network or IT security, natural disasters, terrorist acts or acts of war may cause equipment failures or disrupt our systems and operations. We may be subject to attempts to breach the security of our networks and IT infrastructure through cyber-attack, malware, computer viruses and other means of unauthorized access, which could also impact the operation of our products and services. The potential liabilities associated with these events could exceed the insurance coverage we maintain. Our inability to operate our facilities as a result of such events, even for a limited period of time, may result in significant expenses or loss of market share to other competitors in the defense electronics market. In addition, a failure to protect the privacy of customer and employee confidential data against breaches of network or IT security could result in damage to our reputation. We have experienced and defended against certain threats to our systems and security (such as phishing and ransomware attempts), and none have had a material adverse effect on our business or operations to date. However, we could incur significant costs in order to investigate and respond to future attacks, to respond to evolving regulatory oversight requirements, to upgrade our cybersecurity systems and controls, and to remediate security compromise or damage. In response to past threats and attacks, we have implemented further controls and planned for other preventative actions to further strengthen our systems against future attacks. However, we cannot assure you that such measures will provide absolute security, that we will be able to react in a timely manner, or that our

remediation efforts following past or future attacks will be successful. Consequently, our financial performance and results of operations would be materially adversely affected.

We are subject to risks associated with international operations; we generate a significant portion of our sales from customers located in countries that may be adversely affected by political or economic instability and corruption.

We are a defense company with worldwide operations. Although 87% of our sales are in Israel and North America, we expect to derive an increasing portion of our sales and future growth from other regions such as Latin America, India, the Middle East and Central and Eastern Europe, which may be more susceptible to political or economic instability and the economic impact of the spread of COVID-19. In addition, in many less-developed markets, we rely heavily on third-party representatives, consultants and other agents for business development, marketing and distribution of our products. Many of these third parties do not have internal compliance resources comparable to ours. Business activities in many of these markets have historically been more susceptible to corruption. If our efforts to screen third party agents and detect cases of potential misconduct fail, we could be held responsible for the noncompliance of these third parties under applicable laws and regulations, which may adversely affect our reputation and our business, financial condition or results of operations.

Exports (whether direct sales or revenues of our U.S. subsidiary - RTL) accounted for 85% of our revenues in 2021, 80% of our revenues in 2020 and 72% of our revenues in 2019. Our reliance on export sales subjects us to many risks inherent in engaging in international business, including:

•Limitations and disruptions resulting from the imposition of government controls;

•Changes in regulatory requirements;

•The global impact of the COVID-19 pandemic;

•Export license requirements;

•Economic or political instability;

•Trade restrictions;

•Changes in tariffs;

•Currency fluctuations;

•Longer receivable collection periods and greater difficulty in accounts receivable collection;

•Greater difficulty in safeguarding intellectual property;

•Difficulties in managing overseas subsidiaries and international operations; and

•Potential adverse tax consequences.

We may not be able to sustain or increase revenues from international operations and may encounter significant difficulties, in connection with the sale of our products in international markets. Any of those events may adversely affect our business, operating results and financial condition.

In response to the invasion of Ukraine by Russia in February 2022, the U.S. and other countries have imposed various sanctions against Russia, including restrictions on selling or importing goods, services or technology in or from affected regions and travel bans and asset freezes impacting connected individuals and political, military, business and financial organizations in Russia. The U.S. and other countries could impose wider sanctions and take other actions. It is not possible to predict the broader consequences of this conflict, which could include further sanctions, embargoes, regional instability, geopolitical shifts in the Middle East and worldwide and adverse effects on macroeconomic conditions, currency exchange rates and financial markets, all of which could impact our business, financial condition and results of operations.

As a company registered with the SEC, we are subject to the regulations imposed by the FCPA, which generally prohibits registrants and their intermediaries from making improper payments to foreign officials, for the purpose of obtaining or keeping business or obtaining an improper business benefit. We have adopted proactive procedures to promote compliance with the FCPA, but we may be held liable for actions taken by our strategic or local partners or agents even though these partners may not themselves be subject to the FCPA. Any determination that we have violated the FCPA could materially and adversely affect our business, results of operations, and cash flows.

Finally, our business also must be conducted in compliance with applicable economic and trade sanctions and export control laws and regulations, including those administered and enforced by the U.S. Department of the Treasury’s Office of Foreign Assets Control, the U.S. State Department of State, the U.S. Department of Commerce, the United Nations Security Council, and other relevant authorities. Our global operations expose us to the risk of violating, or being accused of violating, such laws and regulations. Our failure to comply with these trade-related laws and regulations may expose us to reputational harm as well as significant penalties, including criminal fines, imprisonment, civil fines, disgorgement of profits, injunctions and debarment from government contracts, as well as other remedial measures. Investigations of alleged violations can be expensive and disruptive. Despite our compliance efforts and activities, we cannot assure compliance by our employees or representatives for which we may be held responsible, and any such violation could materially adversely affect our reputation, business, financial condition and results of operations.

Many of our end users are U.S. government customers, which subject us to risks including early termination, audits, investigations, sanctions, or penalties.

We derive a substantial portion of our revenue from contracts with U.S. defense contractors and systems integrators that ultimately provide our products to the U.S. government, including the DoD. We also occasionally enter into contracts directly with the U.S. government.

We may enter into further contracts with U.S. defense contractors and systems integrators as well as directly with the U.S. government. These contracts subject us to statutes and regulations applicable to companies doing business with the U.S. government. These types of contracts customarily contain provisions that give the government substantial rights and remedies, many of which are not typically found in commercial contracts and which are unfavorable to contractors, including provisions that allow the government to unilaterally terminate or modify contracts, in whole or in part, at the government’s convenience or in the government’s best interest, including if funds become unavailable to the applicable government agency.

In addition, government contracts and subcontracts normally contain additional requirements that may increase our costs of doing business, reduce our profits, and expose us to liability for failure to comply with these terms and conditions. These requirements include, for example:

•compliance with complex regulations for procurement, formation, administration, and performance of government contracts and subcontracts under the Federal Acquisition Regulations (“FAR”) and agency-specific regulations supplemental to the FAR;

•specialized disclosure and accounting requirements unique to government contracts and subcontracts;

•mandatory financial and compliance audits that may result in potential liability for price or cost adjustments, recoupment of government funds after such funds have been spent, civil and criminal penalties, or administrative sanctions such as suspension or debarment from doing business with the U.S. government;

•public disclosures of certain contract and company information; and

•mandatory socioeconomic compliance requirements, including labor requirements, non-discrimination and affirmative action programs and environmental compliance requirements.

Government contracts and subcontracts are also generally subject to greater scrutiny by the government, which can unilaterally initiate reviews, audits and investigations regarding our compliance with government contract

requirements. In addition, if we fail to comply with government contract laws, regulations and contract requirements, our contracts and subcontracts may be subject to termination or suspension, and we may be subject to financial or other liability under our contracts or under the Federal Civil False Claims Act. The False Claims Act’s “whistleblower” provisions allow private individuals, including present and former employees, to sue on behalf of the U.S. government. The False Claims Act statute provides for treble damages and other penalties and, if our operations are found to be in violation of the False Claims Act, we could face other adverse action, including suspension or prohibition from doing business with the United States government. Any penalties, damages, fines, suspension, or damages could adversely affect our ability to operate our business and our financial results. Further, the negative publicity that could arise from any such penalties, sanctions or findings could have an adverse effect on our reputation and reduce our ability to compete for new contracts with both government and commercial clients. Moreover, government entities typically finance projects through appropriated funds. While these projects are often planned and executed as multi-year projects, government entities usually reserve the right to change the scope of or terminate these projects for lack of approved funding or at their convenience. Changes in government or political developments, including legislative or regulatory changes, budget deficits, shortfalls or uncertainties, government spending reductions or other debt or funding constraints, could result in lower governmental sales and our projects being reduced in price or scope or terminated altogether, which also could limit our recovery of incurred costs, reimbursable expenses and profits on work completed prior to the termination.

Some of our contracts with the Israeli and U.S. governments are classified, which may limit investor insight into portions of our business.

We derive a portion of our revenues from programs with each of the U.S. and the Israeli governments that are subject to security restrictions that preclude the dissemination of information that is classified for national security purposes. We are limited in our ability to provide details about these classified programs, their risks or any disputes or claims relating to such programs, and may not disclose such information pursuant to SEC rules permitting confidential treatment of certain information. As a result, investors and others might have less insight into our classified programs than our other businesses and, therefore, less ability to fully evaluate the risks related to our classified business.

We may acquire or invest in companies which may divert our management’s attention and result in debt or dilution to our shareholders. We may be unable to integrate acquired businesses and technologies successfully or achieve the expected benefits of such acquisitions.

We intend to evaluate and consider potential strategic transactions, including acquisitions of, or investments in, businesses, technologies, services, products and other assets in the future. For example, in March 2021, we signed a Shares Purchase Agreement to invest $3 million in consideration for a 12% interest in RadSee Technologies Ltd., an early-stage advanced radar technology company. We also may enter into relationships with other businesses to expand our products which could involve investments in or acquisitions of other companies.

Any acquisition, investment or business relationship may result in unforeseen operating difficulties and expenditures. In particular, we may encounter difficulties or delays in assimilating or integrating the businesses, technologies, products, employees or operations of the acquired companies, particularly if the key employees of the acquired company choose not to work for us, their products or services are not easily adapted to work with our products, or we have difficulty retaining the customers of any acquired business due to changes in ownership, management or otherwise. In addition, we may discover liabilities or deficiencies associated with the assets or companies we acquire or ineffective or inadequate controls, procedures or policies at an acquired business that were not identified in advance, any of which could result in significant unanticipated costs. Acquisitions also may disrupt our business, divert our resources or require significant management attention that would otherwise be available for development of our existing business. Moreover, the anticipated benefits of any acquisition, investment or business relationship may not be realized or we may be exposed to unknown risks or liabilities.

Negotiating these transactions can be time consuming, difficult and expensive, and our ability to complete these transactions may often be subject to approvals that are beyond our control. Consequently, these transactions, even if announced, may not be completed. For one or more of those transactions, we may:

•issue additional equity securities that would dilute our existing shareholders;

•use cash that we may need in the future to operate our business;

•incur large charges or substantial liabilities;

•incur debt on terms unfavorable to us or that we are unable to repay;

•encounter difficulties retaining key employees of the acquired company or integrating business cultures;

•encounter difficulties retaining the acquired company’s customers; or

•become subject to adverse tax consequences, substantial depreciation, or deferred compensation charges.

The occurrence of any of these foregoing could adversely affect our business, results of operations and financial condition.

Currency exchange rate fluctuations in the world markets in which we conduct business could have a material adverse effect on our business, results of operations and financial condition.

Most of our revenues are in dollars or are linked to the dollar, while a portion of our expenses, principally salaries and related personnel expenses, are incurred in other currencies, particularly in NIS. Therefore, our costs in such other currencies, as expressed in dollars, are influenced by the exchange rate between the dollar and the relevant currency. We are also exposed to the risk that the rate of inflation in Israel will exceed the rate of depreciation of the NIS in relation to the dollar or that the timing of this depreciation lags behind inflation in Israel. This would have the effect of increasing the dollar cost of our operations. In the past, the NIS exchange rate with the dollar and other foreign currencies has fluctuated, generally reflecting inflation rate differentials. We cannot predict any future trends in the rate of inflation in Israel or the rate of depreciation or appreciation of the NIS against the dollar. If the dollar cost of our operations in Israel increases, our dollar-measured results of operations will be adversely affected. We engage in currency hedging transactions intended to partly reduce the effect of fluctuations in foreign currency exchange rates on our results of operations. However, such transactions may not materially reduce the effect of fluctuations in foreign currency exchange rates on our results of operations.

Claims that our products infringe upon the intellectual property of third parties may require us to incur significant costs, enter into licensing agreements or license substitute technology.

Third parties may assert that we have infringed, misappropriated or otherwise violated a patent, copyright, trademark or other proprietary or intellectual property right belonging to them. Any infringement claim, even one without merit, could result in the expenditure of significant financial and managerial resources to defend against the claim. Moreover, a successful claim of product infringement against us or a settlement could require us to pay substantial amounts or obtain a license to continue to use the technology that is the subject of the claim, or otherwise restrict or prohibit our use of the technology. We might not be able to obtain a license from the third party asserting the claim on commercially reasonable terms, if at all. We also may not be able to obtain a license from another provider of suitable alternative technology to permit us to continue offering the product. Infringement claims asserted against us could have a material adverse effect on our business, operating results and financial condition.

If we are unable to protect our intellectual property rights from unauthorized use or infringement by third parties, our business could be adversely affected.

Our success depends, in part, upon our ability to protect our intellectual property. Although we take steps to protect our intellectual property such as requiring employees and consultants to execute confidentiality agreements, such individuals may breach the terms of such agreements. Further, competitors may develop products and services similar to or superior to ours. Further, we might not be able to detect unauthorized use of, or take appropriate and

timely steps to enforce, our intellectual property rights. Enforcing our rights might require considerable time, money and oversight, and we may not be successful in enforcing our rights.

Increasing scrutiny and changing expectations from investors, lenders, customers and other market participants with respect to our Environmental, Social and Governance, or ESG, policies may impose additional costs on us or expose us to additional risks.

Companies across all industries are facing increasing scrutiny relating to their ESG policies. Investors, lenders and other market participants are increasingly focused on Environmental, Social, and Governance (“ESG”) practices and in recent years have placed increasing importance on the implications and social cost of their investments. The increased focus and activism related to ESG may hinder our access to capital, as investors and lenders may reconsider their capital investment allocation as a result of their assessment of our ESG practices. If we do not adapt to or comply with investor, lender or other industry shareholder expectations and standards, which are evolving, or if we are perceived to have not responded appropriately to the growing concern for ESG issues, regardless of whether there is a legal requirement to do so, we may suffer from reputational damage and the business, financial condition and the price of our Company’s shares could be materially and adversely affected.

Regulations related to conflict minerals may cause us to incur additional expenses and could limit the supply and increase the costs of certain metals used in the manufacturing of our solutions.

The Dodd-Frank Wall Street Reform and Consumer Protection Act imposes disclosure requirements regarding the use in components of our products of “conflict minerals” mined from the Democratic Republic of Congo and adjoining countries, whether the components of our products are manufactured by us or third parties. These requirements could affect the pricing, sourcing and availability of minerals used in the manufacture of components we use in our products. Although the SEC has provided guidance with respect to a portion of the conflict mineral filing requirements that may somewhat reduce our reporting practices, there are costs associated with complying with the disclosure requirements and customer requests, such as costs related to our due diligence to determine the source of any conflict minerals used in our products. Because of the complexity of our supply chain, we may face reputational challenges if we are unable to sufficiently verify the origins of the subject minerals. Moreover, we are likely to encounter challenges to satisfy those customers who require that all of the components of our products are certified as “conflict free”. If we cannot satisfy these customers, they may choose a competitor’s products.

We may fail to maintain effective internal controls in accordance with Section 404 of the Sarbanes-Oxley Act of 2002, which could have an adverse effect on our financial results and the market price of our ordinary shares.

The Sarbanes-Oxley Act of 2002 imposes certain duties on us and our executives and directors. Our efforts to comply with the requirements of Section 404(a) of the Sarbanes-Oxley Act of 2002 governing internal controls and procedures for financial reporting, which started, in connection with our 2007 Annual Report on form 20-F, have resulted in increased general and administrative expense and a diversion of management time and attention, and we expect these efforts to require the continued commitment of significant resources. We may identify material weaknesses or significant deficiencies in our assessments of our internal controls over financial reporting. Failure to maintain effective internal controls over financial reporting could result in investigation or sanctions by regulatory authorities and could have a material adverse effect on our operating results, investor confidence in our reported financial information and the market price of our ordinary shares.

Our ordinary shares are traded on more than one market and this may result in price variations.

In 2021, our ordinary shares were admitted for trading on the TASE in addition to the NASDAQ Capital Market under the Israeli regulatory “dual listing” regime that provides companies whose securities are listed both on NASDAQ and the TASE certain reporting leniencies. Trading in our ordinary shares on these markets is made in different currencies (U.S. dollars on the NASDAQ Capital Market, and NIS on the TASE), and at different times (resulting from different time zones, different trading days and different public holidays in the U.S. and Israel). Consequently, the trading prices of our ordinary shares on these two markets often differ. Any decrease in the trading price of our ordinary shares on one of these markets could cause a decrease in the trading price of our ordinary shares on the other market.

While RADA shares are currently listed on the TASE, there is no guarantee as to how long such listing will be maintained.

RADA shares are listed on each of NASDAQ and the TASE under the symbol “RADA”. We plan to continuously examine the various considerations in respect of our dual listing and, in particular, the advisability of maintaining or terminating such dual listing. We may in the future voluntarily delist our securities from the TASE, provided we furnish notice thereof at least 90 days in advance of such delisting. If RADA shares are delisted, some holders of RADA shares that are traded on the TASE may be required or will choose to sell their shares, which could result in a decline in the market price of RADA shares.

Our share price has been volatile in the past and may decline in the future.

Our ordinary shares have experienced significant market price and volume fluctuations in the past and may experience significant market price and volume fluctuations in the future in response to factors such as the following, some of which are beyond our control:

•Quarterly variations in our operating results;

•Operating results that vary from the expectations of securities analysts and investors;

•Changes in expectations as to our future financial performance, including financial estimates by securities analysts and investors;

•Announcements of technological innovations or new products by us or our competitors;

•Announcements by us or our competitors of significant contracts, acquisitions, strategic partnerships, joint ventures or capital commitments;

•Changes in the status of our intellectual property rights;

•Announcements by third parties of significant claims or proceedings against us;

•Additions or departures of key personnel;

•Future sales of our ordinary shares;

•Delisting of our shares from the NASDAQ Capital Market or the TASE; and

•Stock market price and volume fluctuations.

Domestic and international stock markets often experience extreme price and volume fluctuations. Market fluctuations, as well as general political and economic conditions, such as a recessions, pandemics, interest and currency rate fluctuations, and political events or hostilities in or surrounding Israel, could adversely affect the market price of our ordinary shares.

In the past, securities class action litigation has often been brought against companies following periods of volatility in the market price of its securities. We may in the future be the target of similar litigation. Securities litigation could result in substantial costs and divert management’s attention and resources both of which could have a material adverse effect on our business and results of operations.

Political, economic and military instability in Israel may disrupt our operations and negatively affect our business condition, harm our results of operations and adversely affect our share price.

We are incorporated under the laws of, and our principal executive offices and manufacturing and research and development facilities are located in, the State of Israel. As a result, political, economic and military conditions affecting Israel directly influence us. Any major hostilities involving Israel, a full or partial mobilization of the reserve forces of the Israeli army, the interruption or curtailment of trade between Israel and its present trading

partners, or a significant downturn in the economic or financial condition of Israel could adversely affect our business, financial condition and results of operations.

Conflicts in North Africa and the Middle East, including in Lebanon and Syria, which border Israel, have resulted in continued political uncertainty and violence in the region. Efforts to improve Israel’s relationship with the Palestinian Authority have failed to result in a permanent solution, and there have been numerous periods of hostility in recent years. Some of these hostilities were accompanied by missiles being fired from the Gaza Strip, Lebanon and Syria against civilian targets in various parts of Israel, which negatively affected business conditions in Israel. In addition, relations between Israel and Iran continue to be seriously strained, especially with regard to Iran’s nuclear program. Such instability may affect the local and global economy, could negatively affect business conditions and, therefore, could adversely affect our operations. To date, these matters have not had any material effect on our business and results of operations; however, the regional security situation and worldwide perceptions of it are outside our control and there can be no assurance that these matters will not negatively affect our business, financial condition and results of operations in the future.

Furthermore, we could be adversely affected by the interruption or reduction of trade between Israel and its trading partners. Some countries, companies and organizations continue to participate in a boycott of Israeli companies and others doing business with Israel or with Israeli companies. As a result, we are precluded from marketing our products to these countries, companies and organizations. Foreign government defense export policies towards Israel could also make it more difficult for us to obtain the export authorizations necessary for our activities. Also, over the past several years there have been calls in Europe and elsewhere to reduce trade with Israel. Restrictive laws, policies or practices directed towards Israel or Israeli businesses may have an adverse impact on our operations, our financial results or the expansion of our business. Israel has also been aggressive in mandating quarantines and restricting local and international travel during the COVID-19 pandemic.

Our results of operations may be negatively affected by the obligation of our personnel to perform military service.

Some of our employees in Israel are obligated to perform annual military reserve duty and are subject to being called for active duty under emergency circumstances. If a military conflict or war arises, these individuals could be required to serve in the military for extended periods of time. Our operations could be disrupted by the absence for a significant period of one or more of our executive officers or key employees or a significant number of other employees due to military service. Any disruption in our operations could adversely affect our business.

We may not be able to enforce covenants not-to-compete under current Israeli law.

We have non-competition agreements with most of our employees, many of which are governed by Israeli law. These agreements generally prohibit our employees from competing with us or working for our competitors for a specified period following termination of their employment. However, Israeli courts are reluctant to enforce non-compete undertakings of former employees and tend, if at all, to enforce those provisions for relatively brief periods of time in restricted geographical areas and only when the employee has unique value specific to that employer’s business and not just regarding the professional development of the employee. Any such inability to enforce non-compete covenants may cause us to lose any competitive advantage resulting from advantages provided to us by such confidential information.

We may become subject to claims for remuneration or royalties for assigned service invention rights by our employees, which could result in litigation and adversely affect our business.

A significant portion of our intellectual property has been developed by our Israeli employees in the course of their employment for us. Under the Israeli Patent Law, 5727-1967, or Israeli Patent Law, inventions conceived by an employee during the term and as part of the scope of his or her employment with a company are regarded as “service inventions”, which belong to the employer, absent a specific agreement between the employee and employer giving the employee service invention rights. The Israeli Patent Law also provides that if there is no agreement between an employer and an employee as to whether, to what extent, and under what conditions the employee may be entitled to remuneration in respect of service inventions, the Israeli Compensation and Royalties Committee, or C&R Committee, a body constituted under the Israeli Patent Law, shall determine whether the employee is entitled to

remuneration for his inventions. We generally enter into intellectual property assignment agreements with our employees pursuant to which such employees assign to us all rights to any inventions created in the scope of their employment or engagement with us. Although our employees have agreed to assign to us service invention rights and have specifically waived their right to receive any special remuneration for such assignment beyond their regular salary and benefits, we may face claims demanding remuneration in consideration for assigned inventions. As a consequence of such claims, we could be required to pay additional remuneration or royalties to our current or former employees, or be forced to litigate such claims, which could negatively affect our business.

Service and enforcement of legal process on us and our directors and officers may be difficult to obtain.

Service of process upon our directors and officers and the Israeli experts named in this proxy statement/prospectus, most of whom reside outside the U.S., may be difficult to obtain within the U.S. Furthermore, since substantially most of our assets, our directors and officers and the Israeli experts named in this proxy statement/prospectus are located outside the U.S., any judgment obtained in the U.S. against us or these individuals or entities may not be collectible within the U.S.

There is doubt as to the enforceability of civil liabilities under the Securities Act and the Exchange Act in original actions instituted in Israel. However, subject to certain time limitations and other conditions, Israeli courts may enforce final judgments of U.S. courts for liquidated amounts in civil matters, including judgments based upon the civil liability provisions of those Acts.

The rights and responsibilities of our shareholders are governed by Israeli law and differ in some respects from those of a typical U.S. corporation.

We are incorporated under Israeli law and the rights and responsibilities of holders of our ordinary shares are governed by our articles of association and by Israeli law. These rights and responsibilities differ in some respects from the rights and responsibilities of shareholders in typical U.S. corporations. In particular, a shareholder of an Israeli company has a duty to act in good faith in exercising his or her rights and fulfilling his or her obligations toward the company and other shareholders and to refrain from abusing his power in the company, including, among other things, in voting at the general meeting of shareholders on certain matters. Israeli law provides that these duties are applicable to shareholder votes at the general meeting with respect to, among other things, amendments to a company’s articles of association, increases in a company’s authorized share capital, mergers and actions and transactions involving interests of officers, directors or other interested parties which require the shareholders’ approval. In addition, a controlling shareholder of an Israeli company or a shareholder who knows that he or she possesses the power to determine the outcome of a vote at a meeting of our shareholders, or who has, by virtue of the company’s articles of association, the power to appoint or prevent the appointment of an office holder in the company, or any other power with respect to the company, has a duty of fairness toward the company. However, Israeli law does not define the substance of this duty of fairness. There is little case law available to assist in understanding the implications of these provisions that govern shareholder behavior.

Israeli government programs and tax benefits may be terminated or reduced in the future, which could increase our tax expenses.

We participate from time to time in programs of the Israeli Innovation Authority (formerly the Office of the Chief Scientist) of the Israeli Ministry of Economy, or Innovation Authority, for which we receive funding for the development of technologies and products. We may benefit from certain Israeli government programs and tax benefits, particularly from tax exemptions and cash incentives, including “Approved Enterprise” status due to our manufacturing facilities in Israel. To be eligible for these programs and tax benefits or similar programs in the future, we must meet certain conditions, including making specified investments in fixed assets and equipment. For more information about these programs, see Item 5. “Operating and financial review and prospects – Research & Developments – Israeli Innovation Authority” of our Annual Report on Form 20-F for the fiscal year ended December 31, 2021 (filed with the SEC on March 24, 2022). If we fail to comply with these conditions, we may be required to pay additional penalties, make refunds and may be denied future benefits. From time to time, the Government of Israel has discussed reducing or eliminating the benefits available under these programs, and therefore these benefits may not be available to us in the future at their current levels or at all.

RADA shareholders may be subject to Israeli capital gains tax in connection with the merger and, absent receipt of a ruling or exemption, will generally be subject to Israeli tax withholding on the gross merger consideration.

As a consequence of the merger, holders of RADA shares will be treated as having sold their RADA shares in the merger. When an Israeli company is sold, regardless of whether the consideration in the sale is cash or shares, its shareholders are generally subject to Israeli taxation under the Israeli Income Tax Ordinance [New Version], 1961, unless a specific exemption is available or a tax treaty between Israel and the shareholder’s country of residence provides otherwise.

You are urged to consult with your own tax advisor for a full understanding of the tax consequences of the merger to you, including the consequences under any applicable, state, local, foreign or other tax laws or tax treaties.

For a more detailed description of the material Israeli tax consequences of the merger, see the section titled “Material Israeli Tax Consequences of the Merger”.

As a foreign private issuer whose shares are listed on the NASDAQ Capital Market, we may follow certain home country corporate governance practices instead of certain NASDAQ requirements.

As a foreign private issuer whose shares are listed on the NASDAQ Capital Market, we are permitted to follow certain home country corporate governance practices instead of certain requirements of The NASDAQ Stock Market Rules. Among other things, as a foreign private issuer we may follow home country practice with regard to the composition of the board of directors, director nomination procedure, and quorum at shareholders’ meetings. In addition, we may follow our home country law, instead of the NASDAQ Stock Market Rules, which require that we obtain shareholder approval for certain dilutive events such as for the establishment or amendment of certain equity based compensation plans, an issuance that will result in a change of control of the company, certain transactions other than a public offering involving issuances of a 20% or more interest in the company, and certain acquisitions of the stock or assets of another company. A foreign private issuer that elects to follow a home country practice instead of NASDAQ requirements must submit to NASDAQ in advance a written statement from an independent counsel in such issuer’s home country certifying that the issuer’s practices are not prohibited by the home country’s laws. In addition, a foreign private issuer must disclose in its annual reports filed with the SEC each such requirement that it does not follow and describe the home country practice followed by the issuer instead of any such requirement. Accordingly, our shareholders may not be afforded the same protection as provided under NASDAQ’s corporate governance rules.

Risks Relating to the Combined Company

The effects of COVID-19 pandemic could adversely affect the business, results of operations and financial condition of DRS, RADA and the combined company following the completion of the merger.

The transmission of COVID-19 and efforts to contain its spread continue to result in travel restrictions and disruptions, disruptions to business operations, supply chains and customer activity, event cancellations and restrictions, service cancellations, quarantines and related government actions and policies, as well as general concern and uncertainty that has negatively affected the U.S. and global economy and financial environments. The ultimate impact of the COVID-19 pandemic on the business, results of operations and financial condition of DRS, RADA or the combined company is uncertain and difficult to predict, but the COVID-19 pandemic could cause sudden, significant disruptions in their respective business operations, including the following:

•DRS and RADA have experienced, and the combined company may experience, disruptions in the supply chain from the actions of governments or businesses intended to contain or slow the spread of the virus, such as closing factories or other operations that produce components necessary for the products of DRS, RADA and the combined company, quarantining individuals around major commercial hubs, and/or restricting the transportation of goods and services;

•Each of DRS, RADA and the combined company may experience workforce disruptions as a result of employees in their respective production facilities becoming sick or being quarantined as a result of exposure to COVID-19;

•Delays in inspection, acceptance and payment by the customers of DRS, RADA or the combined company, or delays in governmental or international orders, could affect sales and cash flows of DRS, RADA or the combined company; or

•Deterioration of worldwide credit and financial markets could adversely affect the ability of DRS, RADA or the combined company to obtain financing on favorable terms and continue to meet their respective liquidity needs.

Additionally, across the globe, the response to the pandemic generally has involved a dramatic, rapid reduction in social and economic activity, which circumstances could be protracted. Accordingly, the global economic impacts caused by the pandemic could significantly reduce demand for certain products and services of DRS, RADA or the combined company, particularly those with industrial or consumer applications. DRS and RADA continue to monitor the rapidly evolving situation related to COVID-19. The effects described above, alone or taken together, could have a material adverse effect on the business, results of operations, legal exposure, or financial condition of DRS, RADA or the combined company.

Climate change, or legal, regulatory or market measures to address climate change, may materially adversely affect the combine company’s financial condition and business operations.

Climate change resulting from increased concentrations of carbon dioxide and other greenhouse gases in the atmosphere could present risks to the combined company’s future operations from natural disasters and extreme weather conditions, such as hurricanes, tornadoes, earthquakes, wildfires or floods. Such extreme weather conditions could pose physical risks to the combined company’s facilities and disrupt operation of the combined company’s supply chain and may impact operational costs. The impacts of climate change on global water resources may result in water scarcity, which could in the future impact the combined company’s ability to access sufficient quantities of water in certain locations and result in increased costs. Concern over climate change could result in new legal or regulatory requirements designed to mitigate the effects of climate change on the environment. If such laws or regulations are more stringent than current legal or regulatory requirements, the combined company may experience increased compliance burdens and costs to meet the regulatory obligations and may adversely affect raw material sourcing, manufacturing operations and the distribution of the combined company’s products.

The failure to successfully combine the businesses of DRS and RADA may adversely affect the combined company’s future results.

The success of the merger will depend, in part, on the ability of the combined company to realize anticipated benefits from combining certain elements of the businesses of DRS and RADA. To realize these anticipated benefits, such elements must be successfully combined. If the combined company is not able to achieve these objectives, the anticipated benefits of the merger may not be realized fully or at all or may take longer to realize than expected.

The combined company may not be able to retain customers or suppliers or customers or suppliers may seek to modify contractual obligations with the combined company, which could have an adverse effect on the combined company’s business and operations.

As a result of the merger, the combined company may experience strain in relationships with customers and suppliers that may harm the combined company’s business and results of operations. Certain customers or suppliers may seek to terminate or modify contractual obligations following the merger whether or not contractual rights are triggered as a result of the merger. There can be no guarantee that customers and suppliers will remain with or continue to have a relationship with the combined company or do so on the same or similar contractual terms following the merger. If any of the customers or suppliers seek to terminate or modify contractual obligations or discontinue the relationship with the combined company, then the combined company’s business and results of operations may be harmed. Furthermore, the combined company will not have long-term arrangements with many of its significant suppliers. If the combined company’s suppliers were to seek to terminate or modify an arrangement with the combined company, including as a result of bankruptcy of any such suppliers due to poor economic conditions, then the combined company may be unable to procure necessary supplies from other suppliers in a timely and efficient manner and on acceptable terms, or at all.

The combined company may be exposed to increased litigation, which could have an adverse effect on the combined company’s business and operations.

The combined company may be exposed to increased litigation from stockholders, customers, suppliers, consumers and other third parties due to the merger and its effects on the business of each of DRS and RADA. Such litigation may have an adverse impact on the combined company’s business and results of operations or may cause disruptions to the combined company’s operations.

Combining the businesses of DRS and RADA may be more difficult, costly or time-consuming than expected and the combined company may fail to realize the anticipated benefits of the merger, which may adversely affect the combined company’s business results and negatively affect the value of the common stock of the combined company following the merger.

The success of the merger will depend on, among other things, the ability of DRS and RADA to combine certain elements of their businesses in a manner that facilitates growth opportunities and realizes cost savings. DRS and RADA have entered into the merger agreement because each believes that the merger and the other transactions contemplated by the merger agreement are fair to and in the best interests of its respective stockholders and shareholders and that combining certain elements of the businesses of DRS and RADA will produce benefits and cost savings.

However, DRS and RADA must successfully combine their respective businesses in a manner that permits these benefits to be realized. In addition, the combined company must achieve the anticipated growth and cost savings without adversely affecting current revenues and investments in future growth. If the combined company is not able to successfully achieve these objectives, the anticipated benefits of the merger may not be realized fully, or at all, or may take longer to realize than expected.

An inability to realize the full extent of the anticipated benefits of the merger and the other transactions contemplated by the merger agreement, as well as any delays encountered in the integration process, could have an adverse effect upon the revenues, level of expenses and operating results of the combined company, which may adversely affect the value of the common stock of the combined company after the completion of the merger.

In addition, the actual integration may result in additional and unforeseen expenses, and the anticipated benefits of the integration plan may not be realized. Actual growth and cost savings, if achieved, may be lower than what DRS and RADA expect and may take longer to achieve than anticipated. If DRS and RADA are not able to adequately address integration challenges, they may be unable to successfully integrate their operations or realize the anticipated benefits of the integration of the two companies.

The failure to integrate successfully the businesses and operations of DRS and RADA in the expected time frame may adversely affect the combined company’s future results.

DRS and RADA have operated and, until the completion of the merger, will continue to operate independently. There can be no assurances that their businesses can be integrated successfully. It is possible that the integration process could result in the loss of key DRS employees or key RADA employees, the loss of customers, the disruption of either company’s or both companies’ ongoing businesses, inconsistencies in standards, controls, procedures and policies, unexpected integration issues, higher than expected integration costs and an overall post-completion integration process that takes longer than originally anticipated. Specifically, the following issues, among others, must be addressed in integrating the operations of DRS and RADA in order to realize the anticipated benefits of the merger so the combined company performs as expected:

•combining the companies’ operations and corporate functions;

•combining the businesses of DRS and RADA and meeting the capital requirements of the combined company, in a manner that permits the combined company to achieve the cost savings or revenue synergies anticipated to result from the merger, the failure of which would result in the anticipated benefits of the merger not being realized in the time frame currently anticipated or at all;

•integrating personnel from the two companies;

•integrating the companies’ technologies;

•integrating and unifying the offerings and services available to customers;

•identifying and eliminating redundant and underperforming functions and assets;

•harmonizing the companies’ operating practices, employee development and compensation programs, internal controls and other policies, procedures and processes;

•maintaining compliance with restrictions on operations due to work on classified programs for the U.S. and Israeli governments;

•maintaining existing agreements with customers, distributors, providers and vendors and avoiding delays in entering into new agreements with prospective customers, distributors, providers and vendors;

•addressing possible differences in business backgrounds, languages, corporate cultures and management philosophies;

•consolidating the companies’ administrative and information technology infrastructure;

•coordinating distribution and marketing efforts;

•managing the movement of certain positions to different locations;

•coordinating geographically dispersed organizations; and

•effecting actions that may be required in connection with obtaining regulatory approvals.

In addition, at times the attention of certain members of either company’s or both companies’ management and resources may be focused on completion of the merger and the integration of the businesses of the two companies and diverted from day-to-day business operations, which may disrupt each company’s ongoing business and the business of the combined company.

Furthermore, the board of directors of RADA will consist of directors appointed by DRS and which will include Mr. Dubi Sella, current chief executive officer of RADA, and certain other current directors of RADA and the board of directors of DRS will include one director mutually agreed upon and selected from among candidates proposed by RADA. Forming the new boards of RADA and DRS could require the reconciliation of differing priorities and philosophies.

The combined company’s industry is highly competitive, which may impact its results of operations.

The defense industry is subject to rapid and substantial changes in technology and is characterized by extensive research and development and intense competition. The combined company’s competitors and potential competitors may have greater financial, technical, manufacturing, marketing, research and development and management resources than the combined company does. These competitors could use their resources, reputations, and ability to leverage existing customers relationships to give them a competitive advantage over the combined company that could impact the combined company’s results of operations. The competitors might also succeed in developing products that are more reliable and effective than the combined company’s products, are less costly than the combined company’s products or provide alternatives to the combined company’s approach. If the products of a competitor are better able to meet the combined company’s customers’ requirements, then the operating results of the combined company could be adversely affected.

The combined company will operate in a global, competitive environment which gives rise to operating and market risk exposure.

The combined company will sell its broad range of products in a competitive, global environment, and will compete worldwide for sales on the basis of product quality, price, technology and customer service. Increased levels of competition could result in lower prices or lower sales volume, which could have a negative impact on the combined company’s business, results of operations and financial condition. Sales of the combined company's products and solutions will also be subject to extensive federal, state, local and foreign laws and regulations; trade agreements; import and export controls; taxes; and duties and tariffs. The imposition of additional regulations, controls, taxes and duties and tariffs or changes to bilateral and regional trade agreements could result in lower sales volume, which could negatively impact the combined company’s business, results of operations and financial condition.

Economic conditions around the world, and in certain industries in which the combined company will do business, also impact sales price and volume. As a result, market uncertainty or an economic downturn driven by inflationary pressures; political tensions; war, including the ongoing conflict between Russia and Ukraine and the related sanctions and export restrictions; terrorism; epidemics; pandemics; or political instability in the geographic regions or industries in which the combined company will sell its products could reduce demand for these products and result in decreased sales volume, which could have a negative impact on the combined company’s business, results of operations and financial condition.

In February 2022, Russia invaded Ukraine resulting in the United States, Canada, the European Union and other countries imposing economic sanctions on Russia. The fluidity and potentially prolonged nature of the conflict may result in additional economic sanctions and other impacts which could have a negative impact on the combined company’s business, results of operations and financial condition. These include decreased sales; supply chain and logistics disruptions; volatility in foreign exchange rates and interest rates; inflationary pressures on raw materials and energy; and heightened cybersecurity threats.

The DRS and RADA unaudited prospective financial information is inherently subject to uncertainties, the unaudited pro forma financial data included in this document is preliminary and the combined company’s actual financial position and results of operations after the merger may differ materially from these estimates and the unaudited pro forma financial data included in this proxy statement/prospectus.

The unaudited pro forma combined financial statements and unaudited pro forma per share data included in this proxy statement/prospectus are presented for illustrative purposes only, contain a variety of adjustments, assumptions and preliminary estimates and are not necessarily indicative of what the combined company’s actual financial position or results of operations would have been had the merger been completed on the dates indicated. The combined company’s actual results and financial position after the merger may differ materially and adversely from the unaudited pro forma financial data included in this proxy statement/prospectus. For more information, see the section entitled “Unaudited Pro Forma Condensed Combined Financial Statements” beginning on page 103.

While presented with numeric specificity, the DRS and RADA unaudited prospective financial information provided in this proxy statement/prospectus is based on numerous variables and assumptions (including, but not limited to, those related to industry performance and competition and general business, defense industry, economic, market and financial conditions and additional matters specific to DRS’s or RADA’s business, as applicable) that are inherently subjective and uncertain and are beyond the control of the respective management teams of DRS and RADA. The financial projections of DRS and RADA were not prepared with a view toward public disclosure and are subject to change. As a result, actual results may differ materially from the unaudited prospective financial information. Important factors that may affect actual results and cause these unaudited projected financial forecasts to not be achieved include, but are not limited to, risks and uncertainties relating to DRS’s or RADA’s business, as applicable (including each company’s ability to achieve strategic goals, objectives and targets over applicable periods), defense industry performance, general business and economic conditions. Neither DRS nor RADA undertakes to update or otherwise revise the financial projections to reflect circumstances existing or events that occurred after the date in which the projections were prepared or to reflect the occurrence of future events, even in the event that any or all of the assumptions underlying such financial projections are shown to be in error or the

financial projections otherwise would not be realized, except as may be required by law. For more information see the sections entitled “The Merger—DRS’s Unaudited Financial Projections” beginning on page 248 and “The Merger—RADA’s Unaudited Financial Projections” beginning on page 242.

DRS and RADA will incur significant transaction and merger-related costs in connection with the merger.

DRS and RADA have incurred and expect to incur a number of non-recurring costs associated with the merger. These costs and expenses include fees paid to financial, legal and accounting advisors, facilities and systems consolidation costs, severance and other potential employment-related costs, including payments that may be made to certain DRS executives and certain RADA executives, filing fees, printing expenses and other related charges. For example, the accounting for the merger, including for our contemplated stock split which will require retroactive adjustments to DRS’s previously issued financial statements and re-audit by its independent public accounting firm, may continue to increase costs and might place a strain on DRS’s systems and resources. Some of these costs are payable by DRS and RADA regardless of whether the merger is completed. There are also a large number of processes, policies, procedures, operations, technologies and systems, including accounting systems, that must be integrated in connection with the merger and the integration of the two companies’ businesses. While both DRS and RADA have assumed that a certain level of expenses would be incurred in connection with the merger and the other transactions contemplated by the merger agreement, there are many factors beyond their control that could affect the total amount or the timing of the integration and implementation expenses.

There may also be additional unanticipated significant costs in connection with the merger that the combined company may not recoup. These costs and expenses could reduce the realization of efficiencies, strategic benefits and additional income DRS and RADA expect to achieve from the merger. Although DRS and RADA expect that these benefits will offset the transaction expenses and implementation costs over time, this net benefit may not be achieved in the near term or at all.

The revenue of the combined company will depend on DRS’s and RADA’s ability to maintain certain levels of government business. The loss of contracts with U.S. and non-U.S. government agencies could adversely affect the combined company’s revenue.

Both DRS and RADA derive substantial revenues from contracts or subcontracts with various U.S. government agencies, including the U.S. Department of Defense, as well as agencies of non-U.S. governments, such as the State of Israel. A significant reduction in the purchase of DRS’s or RADA’s products or services by these agencies could have a material adverse effect on the businesses of the combined company following the merger. Therefore, the development of the combined company’s business in the future will depend upon the continued willingness of these governments and their prime contractors to commit substantial resources to government programs and, in particular, upon the continued purchase of the combined company’s products or services and other products or services which incorporate the combined company’s products or services, by these governments. In particular, the current funding demands on these governments may lead to lower levels of government defense spending.

The risk that governmental purchases of the combined company’s products or services may decline stems from the nature of the combined company’s business with these governments, in which these governments may:

•terminate contracts at their convenience;

•terminate, reduce or modify contracts or subcontracts if their requirements or budgetary constraints change;

•cancel multi-year contracts and related orders if funds become unavailable;

•shift their spending priorities;

•adjust contract costs and fees on the basis of audits done by their agencies; and

•inquire about and investigate business practices and audit compliance with applicable rules and regulations.

In addition, DRS and RADA are subject to the following risks in connection with government contracts:

•the frequent need to bid on programs prior to completing the necessary design, which may result in unforeseen technological difficulties and/or cost overruns;

•the difficulty in forecasting long-term costs and schedules and the potential obsolescence of products related to long-term fixed-price contracts;

•the risk of fluctuations or a decline in government expenditures due to any changes in the U.S. and non-U.S. defense budget or appropriation of funds;

•when DRS or RADA acts as a subcontractor, the failure or inability of the primary contractor to perform its prime contract may result in an inability to obtain payment of fees and contract costs;

•restriction or potential prohibition on the export of products based on licensing requirements; and

•government contract wins can be contested by other contractors.

Third parties may terminate or alter existing contracts or relationships with DRS or RADA.

RADA has contracts with customers, suppliers, vendors, landlords, licensors and other business partners which may require RADA to obtain consent from these other parties in connection with the merger. If these consents cannot be obtained, the combined company may suffer a loss of potential future revenue and may lose rights that are material to its business and the business of the combined company. In addition, third parties with whom DRS or RADA currently have relationships may terminate or otherwise reduce the scope of their relationship with either party in anticipation of the merger. Any such disruptions could limit the combined company’s ability to achieve the anticipated benefits of the merger. The adverse effect of such disruptions could also be exacerbated by a delay in the completion of the merger or the termination of the merger agreement.

The combined company may be unable to retain DRS and RADA personnel successfully after the merger is completed.

The success of the merger will depend in part on the combined company’s ability to retain the talents and dedication of the professionals currently employed by them. It is possible that these employees may decide not to remain with DRS or RADA, as applicable, while the merger is pending or with the combined company after the merger is consummated. If key employees terminate their employment, or if an insufficient number of employees are retained to maintain effective operations, the combined company’s business activities may be adversely affected and management’s attention may be diverted from successfully integrating DRS and RADA to hiring suitable replacements, all of which may cause the combined company’s business to suffer. In addition, DRS and RADA may not be able to locate suitable replacements for any key employees that leave either company or offer employment to potential replacements on reasonable terms.

The combined company’s debt may adversely affect its financial condition, limit its financial flexibility, or decrease its business flexibility.

To prepare for the merger and operation as a stand-alone public company, DRS has undertaken recapitalization initiatives to align its capital structure more closely with other U.S. public companies, and in connection with the consummation of the merger, DRS expects to repay intercompany debt and implement certain financing arrangements with third-party lenders, as further described in the section entitled “Recapitalization”. There can be no guarantee that DRS will be able to execute such refinancing on favorable terms or at all.

The combined company’s level of indebtedness or change in terms could have adverse effects on the combined company’s financial condition and results of operations, including:

•increasing its vulnerability to changing economic, regulatory and industry conditions;

•limiting its ability to compete and its flexibility in planning for, or reacting to, changes in its business and economic conditions and industry conditions;

•limiting its ability to pay dividends to its stockholders;

•limiting its ability to borrow additional funds; and

•requiring it to dedicate a substantial portion of its cash flow from operations to payments on its debt, thereby reducing funds available for working capital, capital expenditures, acquisitions, share repurchases, dividends, investments and other general corporate purposes.

The combined company’s ability to arrange any additional financing for the purposes described above or otherwise will depend on, among other factors, the company’s respective financial positions and performance, as well as prevailing market conditions and other factors beyond their control. The level and quality of the combined company’s earnings, operations, business and management, among other things, will impact the determination of the combined company’s credit ratings. A decrease in the ratings assigned to the combined company by the ratings agencies may negatively impact the combined company’s access to the debt capital markets and increase the combined company’s cost of borrowing. There can be no assurance that the combined company will be able to obtain financing on acceptable terms or at all. In addition, there can be no assurance that the combined company will be able to maintain the current credit worthiness or prospective credit ratings of DRS or RADA, and any actual or anticipated changes or downgrades in such credit ratings may have a negative impact on the liquidity, capital position or access to capital markets of the combined company.

Declaration, payment and amounts of dividends, if any, distributed to stockholders of the combined company will be uncertain.

Whether any dividends are declared or paid to stockholders of the combined company following the merger, and the amounts of any dividends that are declared or paid, are uncertain and depend on a number of factors. Prior to the merger, RADA has never paid dividends, and DRS dividends have been determined in consultation with its parent company. If dividends are paid to stockholders of the combined company, they may not be of the same amount as paid by DRS or RADA to their respective stockholders and shareholders prior to the merger. Subject to the cooperation agreement and proxy agreement, the board of directors of the combined company will have the discretion to determine the dividend policy of the combined company, which may be impacted by any of the following factors:

•the combined company may not have enough cash to pay such dividends or to repurchase shares due to its cash requirements, capital spending plans, cash flow or financial position;

•decisions on whether, when and in which amounts to make any future distributions will remain at all times entirely at the discretion of the combined company’s board, which could change its dividend practices at any time and for any reason;

•the combined company’s desire to maintain or improve the credit ratings on its debt;

•the amount of dividends that the combined company may distribute to its stockholders is subject to restrictions under Delaware law and is limited by restricted payment and leverage covenants in the combined company’s credit facilities and, potentially, the terms of any future indebtedness that the combined company may incur; and

•certain limitations on the amount of dividends subsidiaries of the combined company can distribute to the combined company, as imposed by law, regulators or agreements.

Stockholders should be aware that they have no contractual or other legal right to dividends that have not been declared.

While shares of the combined company are expected to be listed on the TASE, there is no guarantee as to how long such listing will be maintained.

Shares of the combined company are expected to be listed on each of NASDAQ and the TASE under the symbol “DRS”. We plan to continuously examine the various considerations in respect of our dual listing and, in

particular, the advisability of maintaining or terminating such dual listing. Subject to any additional limitation that may be applied to us by the ISA, we may in the future voluntarily delist our securities from the TASE, provided we furnish notice thereof at least 90 days in advance of such delisting. If shares of the combined company are delisted, some holders of shares of the combined company that are traded on the TASE may be required or will choose to sell their shares, which could result in a decline in the market price of the shares of the combined company.

SPECIAL NOTE REGARDING FORWARD-LOOKING STATEMENTS AND INFORMATION

The registration statement on Form S-4 of which this proxy statement/prospectus forms a part and the documents to which RADA and DRS refer you to in the registration statement, as well as oral statements made or to be made by RADA and DRS, include certain “forward-looking statements” within the meaning of, and subject to the safe harbor created by, Section 27A of the Securities Act, Section 21E of the Exchange Act and the Private Securities Litigation Reform Act of 1995 or the Israeli Securities Law, 1968 (as applicable), which are referred to as the safe harbor provisions, with respect to the businesses, strategies and plans of DRS and RADA, their expectations relating to the merger and their future financial condition and performance. Some of the forward-looking statements can be identified by the use of forward-looking terms such as “believes”, “expects”, “may”, “will”, “shall”, “should”, “would”, “could”, “seeks”, “aims”, “strives”, “targets”, “projects”, “intends”, “plans”, “estimates”, “anticipates” or other comparable terms. Forward-looking statements include, without limitation, all matters that are not historical facts. They appear in a number of places throughout this proxy statement/prospectus and include, without limitation, statements regarding the expected timing of the proposed merger, the ability of the parties to complete the proposed merger, the expected benefits, including future financial and operating results and strategic benefits, the tax consequences of the proposed merger, the combined company’s plans, objectives, expectations and intentions, statements regarding DRS’s and RADA’s intentions, beliefs, assumptions or current expectations concerning, among other things, financial goals, financial position, results of operations, cash flows, prospects, strategies or expectations, and the impact of prevailing economic conditions, and any assumptions underlying any of the foregoing.

Forward-looking statements are subject to known and unknown risks and uncertainties, many of which may be beyond the control of DRS or RADA. DRS and RADA caution you that forward-looking statements are not guarantees of future performance or outcomes and that actual performance and outcomes may differ materially from those made in or suggested by the forward-looking statements contained in this proxy statement/prospectus. In addition, even if future performance and outcomes are consistent with the forward-looking statements contained in this proxy statement/prospectus, those results or developments may not be indicative of results or developments in subsequent periods. New factors emerge from time to time that may cause the businesses of DRS or RADA not to develop as expected, and it is not possible to predict all of them. Factors that could cause actual results and outcomes to differ from those reflected in forward-looking statements include, without limitation:

•The occurrence of any change, event, series of events or circumstances that could give rise to the termination of the merger agreement, including a termination of the merger agreement under circumstances that could require RADA to pay a termination fee to DRS;

•Uncertainties related to the timing of the receipt of required regulatory approvals for the merger and the possibility that RADA and DRS may be required to accept conditions that could reduce or eliminate the anticipated benefits of the merger as a condition to obtaining regulatory approvals or that the required regulatory approvals might not be obtained at all;

•The stock price for DRS common stock and RADA shares could change, before the completion of the merger, including as a result of uncertainty as to the long-term value of the common stock of the combined company following the merger or as a result of broader stock market movements;

•The inability to complete the merger due to the failure, or unexpected delays, of RADA shareholders to adopt the merger agreement, or the failure to satisfy other conditions to the completion of the merger;

•Delays in closing, or the failure to close, the merger for any reason could negatively impact DRS or RADA;

•Risks that the merger and the other transactions contemplated by the merger agreement disrupt current plans and operations that may harm DRS’s or RADA’s businesses;

•Difficulties and delays in integrating the businesses of DRS and RADA following completion of the merger or fully realizing the anticipated cost synergies and other benefits expected from the merger;

•Certain restrictions during the pendency of the proposed merger that may impact the ability of DRS and RADA to pursue certain business opportunities or strategic transactions;

•The outcome of any legal proceedings that have been or may be instituted against DRS, RADA and/or others relating to the merger;

•Risks related to the diversion of the attention and time of DRS’s and RADA’s respective management teams from ongoing business concerns;

•The risk that the proposed merger and any announcement relating to the proposed merger could have an adverse effect on the ability of DRS and RADA to retain and hire key personnel or maintain relationships with customers, suppliers, vendors, other partners, standing with regulators, the U.S. government and other governments, or on DRS’s or RADA’s operating results and businesses generally;

•The amount of any costs, fees, expenses, impairments and charges related to the merger;

•The potential dilution of DRS stockholders’ and RADA shareholders’ ownership percentage of the combined company as a result of the merger;

•The business, economic and political conditions in the markets in which DRS and RADA operate;

•Events beyond DRS’s and RADA’s control, such as acts of terrorism or ongoing instability and current conflicts in global markets, including Eastern Europe, the Middle East and Asia;

•The potential dilution of the combined company’s earnings per share as a result of the merger;

•Any failure to comply with the Commitment Letter with the DoD;

•COVID-19 and related impacts on the business, financial condition and results of operations of DRS or RADA, including mandating U.S.-based employees to be vaccinated to comply with President Biden’s executive order;

•The effect of inflation on supply chain and/or labor costs of DRS or RADA;

•Any conflict of interest that may arise because US Holding, DRS’s sole shareholder, or Leonardo S.p.A., DRS’s ultimate parent, may have interests that are different from those of other shareholders of the combined company, including as a result of any ongoing business relationships Leonardo S.p.A. may have with the combined company; or

•Other risk factors detailed from time to time in DRS’s and RADA’s reports filed with the SEC, including DRS’s and RADA’s annual report on Form 10-K and 20-F, respectively, quarterly reports for DRS on Form 10-Q, current reports on Form 8-K and 6-K, respectively and other documents filed with the SEC.

You should read this proxy statement/prospectus completely and with the understanding that actual future results may be materially different from expectations. All forward-looking statements made in this proxy statement/prospectus are qualified by these cautionary statements. These forward-looking statements are made only as of the date of this filing, and neither DRS nor RADA undertake any obligation, other than as may be required by law, to update or revise any forward-looking or cautionary statements to reflect changes in assumptions, the occurrence of events, unanticipated or otherwise, and changes in future operating results over time or otherwise.

Other risks, uncertainties and factors, including those discussed below under “Risk Factors” could cause actual results to differ materially from those projected in any forward-looking statements made by DRS or RADA. Readers should read carefully the discussion of these factors to better understand the risks and uncertainties inherent in the businesses of DRS and RADA and underlying any forward-looking statements.

THE RADA EXTRAORDINARY GENERAL MEETING

This proxy statement/prospectus is being made available to the RADA shareholders as part of a solicitation of proxies by the RADA board of directors for use at the meeting to be held at the time and place specified below, and at any properly convened meeting following any adjournment or postponement thereof. This proxy statement/prospectus provides RADA shareholders with the information they need to know to be able to vote or instruct their vote to be cast at the meeting.

Date, Time, Place and Purpose

An extraordinary general meeting of RADA’s shareholders: (1) to approve and adopt the agreement and plan of merger date June 21, 2022, among DRS, Merger Sub, and RADA; and all other transactions contemplated by the merger agreement, all upon the terms and subject to the conditions set forth in the merger agreement (the “merger proposal”); (2) to approve the purchase a seven-year “tail” endorsement to RADA’s current directors’ and officers’ liability insurance policy; (3) to approve payment of a transaction bonus to RADA’s Chief Executive Officer; (4) to approve payment of a transaction bonus to the Executive Chairman of the RADA board of directors; (5) to approve payment of a transaction bonus to RADA’s Chief Financial Officer; and (6) to approve the grant of retention awards by DRS to certain office holders of RADA, will be held in person on October 19, 2022 at 10:00 a.m. (Israel time) at RADA’s principal executive offices at 7 Giborei Israel Street, Netanya, Israel.

Attendance at the meeting is limited to holders of record of RADA shares and holders of valid proxies. If you plan to attend the meeting, to gain access to the meeting we ask that you bring with you some form of personal identification and verification of your status as a RADA shareholder as of the close of trading on September 14, 2022, the record date for the meeting. If you are a representative of an institutional investor, please bring evidence demonstrating your representative capacity for such entity to be verified against the list of RADA shareholders as of the close of trading on the record date for the meeting. In addition, if your RADA shares are held in the name of a broker, bank or other nominee, you will need a valid legal proxy from such entity evidencing your authority to vote the RADA shares that the institution or other nominee held for your account as of the close of trading on the record date for the meeting. You must contact your broker, bank or other nominee directly in advance of the meeting to obtain a “legal” proxy.

Record Date and RADA Shareholders Entitled to Vote

Only RADA shareholders with RADA shares registered in his, her, its or their name or names as of the close of trading on September 14, 2022, the record date for the meeting (“RADA shareholders of record”), are entitled to vote the RADA shares they held on the record date at the meeting. As of the close of trading on September 7, 2022, 49,726,194 RADA shares were outstanding. Each RADA share outstanding as of the record date is entitled to one vote upon each of the matters presented at the meeting.

Quorum

No less than two RADA shareholders of record not in default in payment of any call on shares, present in person or by proxy, and holding or representing between them RADA shares conferring in the aggregate at least 25% of the voting power of RADA, shall constitute a quorum at the meeting. A proxy may be deemed to be one or more shareholders pursuant to the number of shareholders represented by the proxy holder. If within one-half hour from the time appointed for the meeting a quorum is not present, the meeting shall be adjourned to October 26, 2022 at the same time and place. At such adjourned meeting, any two shareholders present in person or by proxy, shall constitute a quorum.

Broker non-votes and abstentions will be counted as present at the extraordinary general meeting for the purpose of determining whether a quorum is present.

abstentions and broker non-votes will not be treated as voting shares and will not have any effect on whether the requisite vote is obtained for all matters placed before shareholders for their vote.

Vote Required at the Meeting

The approval of the merger proposal requires the affirmative vote of holders of a majority of the RADA shares present, in person or by proxy, and voting on the merger proposal (not taking into consideration abstentions or broker non-votes) excluding any RADA shares that are held by DRS, Merger Sub or (a) a person holding, directly or indirectly, either (i) 25% or more of the voting rights of DRS or Merger Sub, or (ii) the right to appoint 25% or more of the directors of DRS or Merger Sub, or (b) one of such person’s spouse, siblings, parents, grandparents, descendants, spouse’s descendants, siblings, or parents, or the spouse of any such person, or a corporation controlled by any one or more of such persons or by DRS or Merger Sub (any of (a) or (b), a “DRS Related Person”).

The approval of each of the other proposals requires the affirmative vote of a majority of the RADA shares present, in person or by proxy, and voting on such proposal (not taking into consideration abstentions or broker non-votes). In addition, in order to approve each of (i) Proposal 2 (the purchase of the “tail” endorsement to the directors’ and officers’ liability insurance policy); (ii) Proposal 3 (the payment of a transaction bonus to RADA’s Chief Executive Officer); (iii) Proposal 4 (the payment of a transaction bonus to the Executive Chairman of the RADA board of directors) (iv) Proposal 5 (the payment of transaction bonuses to RADA’s Chief Financial Officer); and (v) Proposal 6 (the grant of retention awards by DRS to certain office holders of RADA), the shareholders’ approval must either (i) include at least a majority of the RADA shares voted by shareholders who are not controlling shareholders (within the meaning of the ICL) and who are not shareholders who have a personal interest (within the meaning of the ICL) in the approval of such proposal, not taking into consideration abstentions or broker non-votes, or (ii) be obtained such that the total RADA shares of non-controlling shareholders and non-interested shareholders voted against such proposal do not represent more than two percent of the outstanding RADA shares.

Under the ICL, in general, a person will be deemed to be a “controlling shareholder” if the person has the power to direct the activities of RADA, other than solely as a result of serving as a director or officer of RADA. A person is presumed to be a controlling shareholder if it holds (i) 50% or more of any type of means of control (as defined under the ICL) in RADA, or (ii) 25% or more of the voting rights in RADA, if no other person holds more than 50% of the voting rights in RADA. As of the date hereof, RADA is not aware of a shareholder that meets the definition of a controlling shareholder.

Under the ICL, a person is deemed to have a “personal interest” in the merger proposal if this person, or any relative of this shareholder or a company that is affiliated with this person or with any such relative (namely, a company in which this person or any such relative serves as a director or chief executive officer, has the right to appoint a director or the chief executive officer, or owns 5% or more of the outstanding shares) has a personal interest in the adoption of such proposal. However, a person is not deemed to have a “personal interest” if this person’s interest arises solely from this person’s ownership of the RADA shares. The term “personal interest” also includes a personal interest of an individual voting via a power of attorney given by a third party (even if the empowering shareholder has no personal interest), and the vote of an attorney-in-fact shall be considered a personal interest vote if the empowering shareholder has a personal interest, in each case regardless of whether the attorney-in-fact has the discretion in the voting. The term “relative” means a spouse, sibling, parent, grandparent and child, and child, sibling or parent of a spouse or the spouse of any of the foregoing.

The enclosed form of proxy card requires you to indicate whether you are a controlling shareholder of RADA, and whether you have a personal interest in (i) Proposal 2 (the purchase of the “tail” endorsement to the directors’ and officers’ liability insurance policy); (ii) Proposal 3 (the payment of a transaction bonus to the Chief Executive Officer of RADA); (iii) Proposal 4 (the payment of a transaction bonus to the Executive Chairman of the RADA board of directors); (iv) Proposal 5 (the payment of a transaction bonus to the Chief Financial Officer of RADA); or (v) Proposal 6 (the grant of retention awards by DRS to certain office holders of RADA); and, with respect to Proposal 1, indicate whether or not you are a shareholder listed in Section 320(c) of the ICL (i.e., whether you are a

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DRS Related Person). To make this indication with respect to Proposals 1 through 6, check the box “YES” or “NO” in Items 1A, 2A, 3A, 4A, 5A and 6A, respectively, in the enclosed proxy card.

Abstentions and broker non-votes will not be treated as having been voted in respect of the merger proposal. Consequently, assuming a quorum is present at the meeting, broker non-votes and abstentions will have no effect on the voting with respect to the merger proposal.

RADA is unaware at this time of any other matters that will come before the meeting.

No Appraisal Rights

Under the ICL, holders of RADA shares are not entitled to statutory appraisal rights in connection with the Merger.

Recommendation of the RADA Board

On June 20, 2022, the RADA board of directors carefully considered the proposed merger and recommended that RADA shareholders vote to approve the merger agreement, the merger and the other transactions contemplated by the merger agreement.

How Proxies Are Voted; Revocation of Proxies

If you are a beneficial owner and your shares are held through the Tel Aviv Stock Exchange (the “TASE”) and you wish to participate in the extraordinary general meeting, you are also invited to attend the extraordinary general meeting ; however, to vote in person at the extraordinary general meeting as a beneficial owner, you must present an ownership certificate that you may obtain from the TASE Clearing House Ltd (the “TASE Clearing House”) member through which your shares are registered indicating that you were the beneficial owner of such shares on September 14, 2022, the record date for the voting. If the TASE member holding your shares is not a TASE Clearing House member, please make sure to present an ownership certificate from the TASE Clearing House member in which name your shares are registered.

If you are a beneficial owner and your shares are held through the TASE, in order to vote you must complete, sign and date the proxy card (in the form filed on MAGNA, the distribution site of the Israel Securities Authority, at www.magna.isa.gov.il and MAYA, the reporting site of the TASE at www.maya.tase.co.il ) and attach to it an ownership certificate from the TASE Clearing House member through which your shares are registered indicating that you were the beneficial owner of the shares on September 14, 2022, the record date for voting. The proxy card, together with the ownership certificate must be received at our registered office in Israel (in person, by mail or via fax to: +972-9885-5885 Attention: Dafna Sror, corporate controller), at least forty-eight (48) hours prior to the appointed time of the Meeting, to be validly included in the tally of RADA shares voted at the meeting If the TASE member holding your shares is not a TASE Clearing House member, please make sure to include an ownership certificate from the TASE Clearing House member in which name your shares are registered.

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Electronic Voting through MAGNA. If your shares are held via RADA’s broker for trading on the TASE, you may also vote your ordinary shares electronically via MAGNA, the electronic voting system of the ISA, up to 10:00 a.m. (Israel time) on October 17, 2022. You should receive instructions about electronic voting from your broker.

Solicitation of Proxies

Proxies for use at the meeting are being solicited by RADA's board of directors. Only RADA shareholders of record at the close of trading on September 14, 2022, the record date, will be entitled to vote at the meeting or at any adjournment or postponement thereof. Proxies are expected to be mailed to shareholders on or about September 16, 2022, and their return will be solicited chiefly by mail; however, certain officers, directors, employees and agents of RADA, none of whom will receive additional compensation therefor, may solicit proxies by telephone, facsimile transmission, electronic mail or other personal contact. In addition, RADA has retained Alliance Advisors, LLC to solicit RADA shareholder proxies at a total cost to RADA of approximately $30,000, plus reimbursement of reasonable out-of-pocket expenses and indemnification of losses in certain circumstances.

Adjournments and Postponements

If within one-half hour from the time appointed for the holding of the meeting a quorum is not present, the meeting shall be adjourned to October 26, 2022, at the same time and place. At such adjourned meeting, any two shareholders (not in default in payment of any call on shares) present in person or by proxy, shall constitute a quorum.

RADA Shares Held by RADA Directors and Executive Officers

As of the close of business on September 7, 2022, RADA’s directors and executive officers beneficially owned, in the aggregate, 3,393,312 RADA shares, or collectively approximately 6.64% of the outstanding RADA shares. Under SEC rules, a person is deemed to be a “beneficial owner” of a security if that person has or shares voting power or investment power, which includes the power to dispose of or to direct the disposition of such security. A person is also deemed to be a beneficial owner of any securities of which that person has a right to acquire beneficial ownership within 60 days. Securities that can be so acquired are deemed to be outstanding for purposes of computing such person’s ownership percentage, but not for purposes of computing any other person’s percentage. Under these rules, more than one person may be deemed to be a beneficial owner of the same securities, and a person may be deemed to be a beneficial owner of securities as to which such person has no economic interest. For more information, see the section entitled “Security Ownership of Certain Beneficial Owners and Management of RADA”. RADA’s directors and executive officers have interests in the merger that may be different from, or in addition to, the interests of the RADA shareholders generally. For more information, please see the section entitled “The Merger—Interests of RADA’s Directors and Executive Officers in the Merger”.

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UNAUDITED PRO FORMA CONDENSED COMBINED FINANCIAL STATEMENTS

The following unaudited pro forma condensed combined financial statements and notes thereto present the unaudited pro forma condensed combined balance sheet as of June 30, 2022 and the unaudited pro forma condensed combined statements of operations for the six months ended June 30, 2022 and for the year ended December 31, 2021. The unaudited pro forma condensed combined financial information was prepared in accordance with Article 11 of Regulation S-X as amended by the final rule, Release No. 33-10786 “Amendments to Financial Disclosures about Acquired and Disposed Businesses”, in order to give effect to the merger (inclusive of the Stock Split), Financing Transaction, and Divestitures (as defined and described below, and jointly referred to as the “Pro Forma Transactions”) and the assumptions and adjustments described in the accompanying notes to the unaudited pro forma condensed combined financial statements. As used herein, the term “DRS” and “Company” means Leonardo DRS, Inc. and its consolidated subsidiaries, and “RADA” means RADA Electronic Industries Ltd. and its consolidated subsidiaries, as the context requires.

On June 21, 2022, DRS entered into an Agreement and Plan of Merger with RADA, a company organized under the laws of Israel, and Blackstart Ltd, a wholly owned subsidiary of DRS organized under the laws of Israel (“Merger Sub”), pursuant to which Merger Sub will be merged with and into RADA (the “merger”), with RADA surviving the merger as a wholly owned subsidiary of the Company. Consummation of the merger is subject to the approval of RADA’s shareholders, the receipt of required regulatory approvals, and satisfaction of certain other closing conditions. The merger is expected to close in the fourth quarter of 2022.

At the effective time of the merger, each RADA share, par value Israeli New Shekel (“NIS”) 0.03 per share, issued and outstanding (other than: (i) shares held by the Company or Merger Sub and (ii) shares held by any direct or indirect subsidiary of the Company or RADA) (the “Eligible Shares”) will be converted into, and become exchangeable for one (the “Exchange Ratio”) share of common stock of the Company par value, $0.01 per share (the “Merger Consideration”). Immediately prior to the effective time, the shares of Company common stock held by Leonardo US Holding, Inc. (“US Holding”) will be split, as necessary (the “Stock Split”), such that, immediately following the effective time and the issuance of the shares of Company common stock to holders of RADA shares and the treatment of options to purchase RADA shares (“RADA Options”) as follows: (a) US Holding will hold 80.5% of the issued and outstanding shares of Company common stock on a fully diluted basis (which ownership percentage includes 50% of any awards or other equity interests that DRS may issue pursuant to entitlements under any grants of One-Time Awards, as calculated pursuant to the merger agreement); and (b) the holders of RADA shares, RADA Options and other RADA securities will hold or have entitlements to 19.5% of the issued and outstanding shares of Company common stock on a fully diluted basis (as calculated pursuant to the merger agreement). Contemporaneously with the merger, DRS will also issue One-Time Awards to certain members of the DRS’s leadership team, comprised of 400,000 RSUs and 600,000 PRSUs. For additional details regarding the One-Time Awards, see the section “The Merger—Interests of DRS’s Directors and Executive Officers in the Merger” of this proxy statement/prospectus.

In connection with the merger, the Company expects to enter into a credit agreement providing up to $500 million of borrowing capacity, consisting of (i) a $225 million Term Loan and (ii) a $275 million Revolving Credit Facility (“Financing Transaction”). The estimated initial borrowing under the Term Loan and Revolving Credit Facility will be $225 million and $106 million respectively, and the proceeds will be used to repay $327 million of the Company's related party borrowings outstanding as of June 30, 2022, as well as $2 million of accrued interest associated with related party borrowings.

The following unaudited pro forma condensed combined financial information also reflect adjustments to financial condition and results of operations of DRS, to give effect to the following planned divestitures (jointly referred to as “Divestitures”), currently classified as held for sale on Company’s consolidated balance sheet as of June 30, 2022:

•On March 21, 2022, the Company entered into a definitive agreement to sell its Global Enterprise Solutions (“GES”) business to SES Government Solutions, Inc., a wholly owned subsidiary of SES S.A., for $450 million in cash, subject to working capital and other customary adjustments. GES, which is part of the Advanced Sensing and Computing (“ASC”) segment, provides commercial satellite communications to the

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U.S. Government and delivers satellite communications and security solutions to customers worldwide. The sale was completed on August 1, 2022, and the closing adjustments were $23 million, resulting in GES sale cash proceeds of $427 million.

•In February 2022, the Company’s Board of Directors approved the strategic initiative to divest of the Company’s interest in Advanced Acoustic Concepts (“AAC”). On April 19, 2022 the Company entered into a definitive sales agreement to divest its share of current equity investment in AAC to Thales Defense & Security, Inc (“TDSI”), the minority partner in the joint venture for $56 million in cash. The sale closed on July 8, 2022.

Cash proceeds from the Divestitures will be remitted as a dividend to DRS’s parent, with the dividend amount equal to the cash proceeds from the Divestitures, reduced by the estimated tax obligation arising from the sale.

The unaudited pro forma condensed combined balance sheet as of June 30, 2022 gives effect to the Pro Forma Transactions as if they occurred on June 30, 2022. The unaudited pro forma condensed combined statements of operations for the six months ended June 30, 2022 and for the year ended December 31, 2021 give effect to the Pro Forma Transactions as if they occurred on January 1, 2021.

These unaudited pro forma condensed combined financial statements are prepared for informational purposes only and are based on assumptions and estimates considered appropriate by DRS’s management. The unaudited pro forma adjustments represent DRS’s management’s estimates based on information available as of the date of the unaudited pro forma condensed combined financial statements and are subject to change as additional information becomes available and additional analyses are performed. However, DRS’s management believes that the assumptions provide a reasonable basis for presenting the significant effects that are directly attributable to the Pro Forma Transactions, and that the pro forma adjustments give appropriate effect to those assumptions and are properly applied in the unaudited pro forma condensed combined financial statements. The unaudited pro forma condensed combined financial statements do not purport to be indicative of what DRS’s financial condition or results of operations actually would have been if the Pro Forma Transactions had been consummated as of the dates indicated, nor do they purport to represent DRS’s financial position or results of operations for future periods.

Additionally, these unaudited pro forma condensed combined financial statements do not include any adjustments not otherwise described herein, including such adjustments associated with: potential synergies that may be achieved following the merger, including potential overall savings in general and administrative expense, or any strategies that DRS’s management may consider in order to continue to efficiently manage DRS’s operations, and any integration costs (including one-time costs) that may be incurred following the consummation of the merger, which may be necessary to achieve the potential synergies, since the extent of such costs is not reasonably certain.

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LEONARDO DRS, INC.

UNAUDITED PRO FORMA CONDENSED COMBINED BALANCE SHEET

AS OF JUNE 30, 2022

(in millions)


	DRS Historical		RADA Historical, As Reclassified (Note 3)		Merger Adjustments (Note 4)		Item in Note 4	Divestiture Adjustments (Note 5)		Item in Note 5	Financing Adjustments (Note 6)		Item in Note 6	Pro Forma Combined
ASSETS
Current assets:
Cash and cash equivalents	$	69	$	56	$	—		$	—	A	$	—	A	$	125
Accounts receivable, net	125		28		(3)		A	—			—			150
Contract assets	874		1		—			—			—			875
Inventories	249		65		5		B	—			—			319
Prepaid expenses	17		2		—			—			—			19
Other current assets	29		1		—			—			—			30
Held for sale	174		—		—			(174)		A	—			—
Total current assets	1,537		153		2			(174)			—			1,518
Noncurrent assets:
Property, plant and equipment, net	363		21		—			—			—			384
Intangible assets, net	47		—		126		C	—			—			173
Goodwill	952		—		276		D	—			—			1,228
Deferred tax assets	46		5		(5)		E	—			—			46
Other noncurrent assets	98		18		—			—			1		B	117
Total noncurrent assets	1,506		44		397			—			1			1,948
Total assets	$	3,043	$	197	$	399		$	(174)		$	1		$	3,466
LIABILITIES AND STOCKHOLDER’S EQUITY
Current liabilities:
Short-term borrowings and current portion of long-term debt	$	140	$	—	$	—		$	—		$	(4)	C	$	136
Accounts payable	291		13		34		F	—			—			338
Contract liabilities	156		2		—			—			—			158
Other current liabilities	279		16		2		G	—			(2)		D	295
Held for sale	45		—		—			(45)		A	—			—
Total current liabilities	911		31		36			(45)			(6)			927
Noncurrent liabilities:
Long-term debt	350		—		—			—			7		E	357
Pension and other postretirement benefit plan liabilities	54		—		—			—			—			54
Deferred tax liabilities	—		1		13		E	—			—			14
Other noncurrent liabilities	70		12		5		G	—			—			87
Total noncurrent liabilities	$	474	$	13	$	18		$	—		$	7		$	512

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Stockholder’s equity:
Preferred stock	$	—	$	—	$	—		$	—		$	—	$	—
Common stock	1		—		2		H	—			—		3
Additional paid-in capital	4,633		206		310		H	(396)		B	—		4,753
Accumulated deficit	(2,922)		(53)		33		H	267		C	—		(2,675)
Accumulated other comprehensive loss	(54)		—		—			—			—		(54)
Total stockholder’s equity	1,658		153		345			(129)			—		2,027
Total liabilities and stockholder’s equity	$	3,043	$	197	$	399		$	(174)		$	1	$	3,466

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LEONARDO DRS, INC.

UNAUDITED PRO FORMA CONDENSED COMBINED STATEMENT OF OPERATIONS

FOR THE SIX MONTHS ENDED JUNE 30, 2022

(in millions, except share and per share data)


	DRS Historical		RADA Historical, As Reclassified (Note 3)		Merger Transaction Adjustments (Note 4)		Item in Note 4	Divestitures Transaction Adjustments (Note 5) D		Financing Transaction Adjustments (Note 6)		Item in Note 6	Pro Forma Combined
Revenues:
Products	$	1,090	$	46	$	(12)	I,J	$	—	$	—		$	1,124
Services	149		—		—			(123)		—			26
Total revenues	1,239		46		(12)			(123)		—			1,150
Cost of revenues:
Products	(867)		(30)		13		K	—		—			(884)
Services	(111)		—		—			101		—			(10)
Total cost of revenues	(978)		(30)		13			101		—			(894)
Gross profit	261		16		1			(22)		—			256
General and administrative expenses	(160)		(17)		(2)		L	8		—			(171)
Amortization of intangibles	(4)		—		(6)		N	—		—			(10)
Other operating expenses, net	1		(3)		—			—		—			(2)
Operating earnings	98		(4)		(7)			(14)		—			73
Interest expense	(18)		—		—			—		7		F	(11)
Other, net	—		—		—			(1)		—			(1)
Earnings before taxes	80		(4)		(7)			(15)		7			61
Income tax provision	19		1		(1)		O	(3)		2		G	18
Net earnings	$	61	$	(5)	$	(6)		$	(12)	$	5		$	43

Amounts available to common stockholders per common share:													(Note 7)
Basic	$	0.42	$	(0.10)									$	0.17
Diluted	$	0.42	$	(0.10)									$	0.16
Weighted average common shares outstanding:													(Note 7)
Basic	145,000,000		49,592,329										260,031,356
Diluted	145,000,000		51,120,644										261,623,855

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LEONARDO DRS, INC.

UNAUDITED PRO FORMA CONDENSED COMBINED STATEMENT OF OPERATIONS

FOR THE YEAR ENDED DECEMBER 31, 2021

(in millions, except share and per share data)


	DRS Historical		RADA Historical, As Reclassified (Note 3)		Merger Transaction Adjustments (Note 4)		Item in Note 4	Divestitures Transaction Adjustments (Note 5) D		Financing Transaction Adjustments (Note 6)		Item in Note 6	Pro Forma Combined
Revenues:
Products	$	2,505	$	117	$	(29)	I,J	$	—	$	—		$	2,593
Services	374		—		—			(232)		—			142
Total revenues	2,879		117		(29)			(232)		—			2,735
Cost of revenues:
Products	(2,067)		(70)		26		K	—		—			(2,111)
Services	(265)		—		—			189		—			(76)
Total cost of revenues	(2,332)		(70)		26			189		—			(2,187)
Gross profit	547		47		(3)			(43)		—			548
General and administrative expenses	(293)		(26)		(41)		L,M	14		—			(346)
Amortization of intangibles	(9)		—		(12)		N	—		—			(21)
Other operating expenses, net	(9)		—		—			—		—			(9)
Operating earnings	236		21		(56)			(29)		—			172
Interest expense	(35)		—		—			—		16		F	(19)
Other, net	(1)		—		—			337		—			336
Earnings before taxes	200		21		(56)			308		16			489
Income tax provision	46		(5)		(6)		O	88		4		G	127
Net earnings	$	154	$	26	$	(50)		$	220	$	12		$	362

Amounts available to common stockholders per common share:													(Note 7)
Basic	$	1.06	$	0.52									$	1.39
Diluted	$	1.06	$	0.50									$	1.38
Weighted average common shares outstanding:													(Note 7)
Basic	145,000,000		48,255,097										260,031,356
Diluted	145,000,000		50,077,416										261,386,156

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NOTES TO UNAUDITED PRO FORMA CONDENSED COMBINED FINANCIAL STATEMENTS

Note 1 – Basis of Presentation

The DRS and RADA historical financial information has been derived from, in the case of DRS, its consolidated financial statements in its Quarterly Report on Form 10-Q for the six months ended June 30, 2022, and Annual Report on Form 10-K for the year ended December 31, 2021, and, in the case of RADA, its consolidated financial information included as Exhibit 99.1 to RADA’s Current Report on Form 6-K filed with the Securities and Exchange Commission on August 17, 2022 for the six months ended June 30, 2022, and Annual Report on Form 20-F for the year ended December 31, 2021. Certain of RADA’s historical amounts have been reclassified to conform to DRS’s financial statement presentation, as discussed further in Note 3. The unaudited pro forma condensed combined financial statements should be read in conjunction with DRS’s and RADA’s historical consolidated financial statements and the notes thereto included in DRS’s Quarterly Report on Form 10-Q for the six months ended June 30, 2022 and Exhibit 99.1 to the August 17, 2022 Form 6-K, respectively, and Annual Reports for the year ended December 31, 2021 on Form 10-K and Form 20-F, respectively. The unaudited pro forma condensed combined balance sheet gives effect to the Pro Forma Transactions as if they had been completed on June 30, 2022. The unaudited pro forma condensed combined statements of operations give effect to the Pro Forma Transactions as if they had been completed on January 1, 2021.

The historical financial statements of DRS and RADA have been adjusted in the unaudited pro forma condensed combined financial statements to give pro forma effect to the accounting for the merger, Divestitures and Financing under U.S. GAAP. The unaudited pro forma condensed combined financial statements and related notes were prepared using the acquisition method of accounting in accordance with ASC 805, Business Combinations, with DRS as the acquiror of RADA. ASC 805 requires, among other things, that the assets acquired and liabilities assumed in a business combination be recognized at their fair values as of the acquisition date. For purposes of the unaudited pro forma condensed combined financial statements, the estimated preliminary purchase consideration in the merger has been allocated to the assets acquired and liabilities assumed of RADA based upon DRS management’s preliminary estimate of their fair values as of June 30, 2022.

The allocations of the estimated preliminary purchase price reflected in these unaudited pro forma condensed combined financial statements have not been finalized and are based upon the best available information at the current time. A final determination of the fair values of the assets and liabilities will be based on the actual valuations of the tangible and intangible assets and liabilities that exist as of the date of the merger. The completion of the final valuations, the allocations of the purchase price and the impact of ongoing integration activities could cause material differences in the information presented.

The Pro Forma Transactions and the related adjustments are described in these accompanying notes to the unaudited pro forma condensed combined financial statements. In the opinion of DRS’s management, all material adjustments have been made that are necessary to present fairly, in accordance with Article 11 of Regulation S-X of the SEC, the unaudited pro forma condensed combined financial statements. The unaudited pro forma condensed combined financial statements do not purport to be indicative of the combined company’s financial position or results of operations of the combined company that would have occurred if the Pro Forma Transactions had been completed on the dates indicated, nor are they indicative of the combined company’s financial position or results of operations that may be expected for any future period or date.

Note 2 – Significant Accounting Policies

The accounting policies used in the preparation of these unaudited pro forma condensed combined financial statements are those set out in DRS’s audited consolidated financial statements as of and for the year ended December 31, 2021 and DRS’s unaudited consolidated financial statements as of and for the six months ended June 30, 2022. DRS’s management has determined that there were no significant accounting policy differences between DRS and RADA and, therefore, no adjustments were made to conform RADA’s financial statements to the accounting policies used by DRS in the preparation of the unaudited pro forma condensed combined financial statements. This conclusion is subject to change as further assessment is performed and finalized for purchase accounting.

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Upon consummation of the merger, as part of the application of ASC 805, DRS will continue to conduct a more detailed review of RADA’s accounting policies in an effort to determine if differences in accounting policies require further reclassification or adjustment of RADA’s results of operations or reclassification or adjustment of assets or liabilities to conform to DRS’s accounting policies and classifications. Therefore, DRS may identify additional differences between the accounting policies of the two companies that, when conformed, could have a material impact on the unaudited pro forma condensed combined financial information.

Note 3 – Reclassification Adjustments

The RADA historical financial statement line items include the reclassification of certain historical balances to conform to the post-combination DRS presentation of these unaudited pro forma condensed combined financial statements, as described below. These reclassifications have no effect on previously reported total assets, total liabilities, stockholders’ equity or net income available to RADA shareholders.

Balance Sheet

RADA's balance for Trade receivables of $28 million, previously disclosed as a separate component of RADA’s consolidated balance sheet, has been reclassified to Accounts receivable, net.

RADA's balance for Prepaid expenses of $2 million, previously disclosed as a component of Other accounts receivables and prepaid expenses on RADA’s consolidated balance sheet, has been reclassified to Prepaid expenses. The remaining components of the Other accounts receivables and prepaid expenses and Restricted deposits of $1 million, previously disclosed as separate components of RADA’s consolidated balance sheet, have been reclassified to Other current assets.

RADA's balances for Equity investments in privately-held company of $3 million, Operating lease right-of-use assets of $14 million, and Long-term receivables and other deposits, previously disclosed as separate components of RADA’s consolidated balance sheet, have been reclassified to Other noncurrent assets.

RADA's balance for Trade payables of $13 million, previously disclosed as a separate component of RADA’s consolidated balance sheet, has been reclassified to Accounts payable.

RADA's balance for Advances from customers of $2 million, previously disclosed as a separate component of RADA’s consolidated balance sheet, has been reclassified to Contract liabilities.

RADA's balances for Operating lease short-term liabilities of $3 million and Other accounts payable and accrued expenses of $13 million, previously disclosed as separate components of RADA’s consolidated balance sheet, have been reclassified to Other current liabilities.

RADA's balances for Operating lease long-term liabilities of $12 million and Accrued severance-pay and other long-term liabilities of $1 million, previously disclosed as separate components of RADA’s consolidated balance sheet, have been reclassified to Other noncurrent liabilities.

RADA’s balance for Ordinary shares, previously disclosed as a separate component of RADA’s consolidated balance sheet, has been reclassified to Common stock.

Statements of Operations

RADA's Revenues of $46 million and $117 million for the six months ended June 30, 2022 and for the year ended December 31, 2021, respectively, previously disclosed as a separate component on RADA's consolidated statements of operations, were reclassified to Revenues - Products.

RADA's Cost of revenues of $30 million and $70 million for the six months ended June 30, 2022 and for the year ended December 31, 2021, respectively, previously disclosed as a separate component on RADA's consolidated statements of operations, were reclassified to Cost of revenues - Products.

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RADA's Research and development of $6 million and $10 million for the six months ended June 30, 2022 and for the year ended December 31, 2021, respectively, previously disclosed as a separate component of operating expenses on RADA's consolidated statements of operations, were reclassified to General and administrative expenses.

RADA's Marketing and selling of $4 million and $6 million for the six months ended June 30, 2022 and for the year ended December 31, 2021, respectively, previously disclosed as a separate component of operating expenses on RADA's consolidated statements of operations, were reclassified to General and administrative expenses.

RADA's Sales commissions of $1 million for the year ended December 31, 2021, previously disclosed as a component of Marketing and selling on RADA's consolidated statements of operations, were reclassified to Cost of revenues - Products.

RADA's Other expenses of $3 million for the six months ended June 30, 2022, previously disclosed as a separate component on RADA's consolidated statements of operations, was reclassified to Other operating expenses, net.

RADA's Tax expense of $1 million and Tax benefit of $5 million for the six months ended June 30, 2022 and for the year ended December 31, 2021, previously disclosed as a separate component on RADA's consolidated statements of operations, were reclassified to Income tax provision.

Note 4 – Merger Transaction Adjustments

Estimated Preliminary Purchase Price

The unaudited pro forma condensed combined financial statements reflect the preliminary allocation of the purchase consideration to RADA’s identifiable net assets acquired. The preliminary allocation of purchase consideration in these unaudited pro forma condensed combined financial statements is based upon an estimated preliminary purchase price of approximately $518 million. The purchase price will fluctuate based on movements in the RADA share price prior to closing and a 10% fluctuation would decrease or increase the purchase price by approximately $50 million. The calculation of the estimated preliminary purchase price related to the merger is as follows (in millions, except share and per share data):


	Amount
RADA shares outstanding at September 7, 2022	49,726,194
Exchange Ratio	1
Shares of DRS common stock issued	49,726,194
Fair value of a DRS common stock on September 7, 2022 (a)	$	9.98
Fair value of DRS common stock issued to RADA shareholders	$	496
Estimated fair value of RADA’s equity-based compensation awards attributable to pre-combination services (b)	22
Total estimated preliminary purchase price	$	518

__________________

a.The fair value of DRS common stock issued to former holders of RADA ordinary units is based on the per share opening price of RADA common stock of $9.98 on September 7, 2022. DRS is a private company with no publicly traded shares and therefore no public share price. Given that RADA is publicly traded and has a readily available share price, RADA’s share price is used as a proxy to compute the fair value of DRS common stock.

b.Amount represents the estimated fair value of the DRS replacement employee and executive stock options that were granted at the closing date of the merger and which are attributable to pre-combination services.

Preliminary Purchase Price Allocation

The preliminary purchase price allocation to assets acquired and liabilities assumed is provided throughout these notes to the unaudited pro forma condensed combined financial statements. The following table provides a summary

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of the preliminary purchase price allocation by major categories of assets acquired and liabilities assumed based on DRS management’s preliminary estimate of their respective fair values as of June 30, 2022 (in millions):



Total estimated preliminary purchase price	$	518

Assets:
Cash and cash equivalents	$	56
Accounts receivable, net	25
Contract assets	1
Inventories	70
Prepaid expenses	2
Other current assets	1
Property, plant and equipment, net	21
Intangible assets, net	126
Other noncurrent assets	18
Total assets acquired	$	320

Liabilities:
Accounts payable	27
Contract liabilities	2
Other current liabilities	18
Deferred tax liabilities	14
Other noncurrent liabilities	17
Total liabilities assumed	$	78
Estimated preliminary fair value of net assets acquired	$	242
Goodwill	$	276

The preliminary fair values of identifiable assets acquired and liabilities assumed are based on a valuation as of the effective time of the merger that was prepared by DRS with assistance of a third-party valuation advisor. For the preliminary estimate of fair values of assets acquired and liabilities assumed of RADA, DRS used publicly available benchmarking information as well as a variety of other assumptions, including market participant assumptions. The allocation is dependent upon certain valuation and other studies that have not yet been finalized. Accordingly, the pro forma preliminary purchase price allocation is subject to further adjustment as additional information becomes available and as additional analyses and final valuations are completed, and such differences could be material.

The purchase price allocation presented above has not been finalized as of the date of this filing. The final determination of the allocation of the purchase price will be completed no later than twelve months following the effective time of the merger. The final determination of these estimated fair values, the assets’ useful lives and the depreciation and amortization methods are dependent upon certain valuations and other analyses that have not yet been completed, and as previously stated could differ materially from the amounts presented in the unaudited pro forma condensed combined financial statements. Any increase or decrease in the fair value of the net assets acquired, as compared to the information shown herein, could change the portion of the purchase consideration allocable to goodwill and could impact the operating results of the combined company following the merger due to differences in the allocation of the purchase consideration, as well as changes in the depreciation and amortization related to some of the acquired assets.

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Balance Sheet

The pro forma adjustments reflect the effect of the merger on DRS’s and RADA’s historical consolidated balance sheets as if the merger occurred on June 30, 2022.

Assets

A.The pro forma adjustment to Accounts receivable, net, represents the settlement of the preexisting relationship between DRS and RADA.

B.The pro forma adjustment to Inventory reflects the preliminary fair value of Inventory acquired to estimate the value added in the manufacturing process prior to acquisition. The estimate is based on preliminary review of available data and subject to change once DRS has sufficient information as to the age, condition, and mix of RADA’s Inventory. The pro forma adjustment reflects an increase of $5 million in value for work in progress and finished goods as raw materials are presumed to be valued at the price a market participant could achieve in a current sale.

C.The pro forma adjustment to Intangible assets reflects the preliminary fair value of the following (in millions):


	As of June 30, 2022
Fair value of acquired Customer Relationships	$	53
Fair value of acquired Developed Technology	73
Pro forma adjustment	$	126

The fair value of the Customer Relationships intangible was determined using the multi-period excess earnings method of the income approach. The principle behind this method is that the value of the intangible asset is equal to the present value of the after-tax cash flows solely attributable to the intangible asset, following the application of post-tax contributory asset charges that reflect the return on other assets that contribute to the generation of the forecasted cash flows. The above calculated values are preliminary and subject to change and could vary materially from the final purchase price assignment.

The fair value of the Developed Technology intangible was determined using the relief-from-royalty method of the income approach. The principle behind this method is that the value of the intangible asset is equal to the present value of the after-tax royalty savings attributable to owning the intangible asset. In estimating ranges of calculated values, management utilized various assumptions in order to assess the reasonableness of the selection of a royalty rate and life of the intangible asset.

The fair value estimate for all identifiable Intangible assets is preliminary and is based on assumptions that market participants would use in pricing an asset, based on the most advantageous market for the asset (i.e., its highest and best use). The final fair value determination for identifiable intangibles may differ materially from this preliminary determination.

D.Represents an adjustment to Goodwill to reflect the balance that would have been recorded if the merger occurred on June 30, 2022. We have preliminarily assigned the purchase price to the net tangible and intangible assets based upon their estimated fair values at the closing date of the merger. The excess of the purchase price over the estimated fair values of the net tangible and intangible assets acquired has been recorded as Goodwill as of June 30, 2022. The calculated value is preliminary and subject to change and could vary materially from the final purchase price assignment.

E.The pro forma adjustment for Deferred tax assets and Deferred tax liabilities represents the impact of the pro forma fair value adjustments to assets to be acquired and liabilities to be assumed. The adjustment is based upon the estimated statutory tax rate of 10.2% of the jurisdiction in which the acquired business operates. The adjustment to Deferred tax assets also includes the removal of RADA’s June 30, 2022 Deferred tax asset balance of $5 million based on the preliminary estimate that it is not more likely than not

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that the deferred tax asset will be realized by the combined company. The estimates surrounding the deferred income tax assets and liabilities are preliminary and are subject to change after close of the Mergers and based upon management’s final determination of the fair value of assets and liabilities acquired or assumed by jurisdiction.

Liabilities

F.The pro forma adjustment for Accounts payable represents: (i) $20 million of estimated transaction-related and equity issuance costs to be incurred by DRS which have not yet been reflected in the historical consolidated financial statements of DRS, (ii) $17 million of estimated transaction-related costs to be incurred by RADA which have not yet been reflected in the historical consolidated financial statements of RADA, and (iii) a reduction of $3 million as a result of the settlement of the preexisting relationship between DRS and RADA.

G.The pro forma adjustment represents the recognition of a liability associated with unfavorable revenue contracts acquired in the merger.

Equity

H.The following table summarizes pro forma adjustments for Stockholders’ equity (in millions):


	Common stock		Additional paid-in capital		Accumulated Deficit
Issuance of DRS common stock and replacement RADA options (a)	$	2	$	516	$	—
Elimination of RADA’s historical equity balances	—		(206)		53
DRS Merger related costs (b)	—		—		(20)
Total pro forma adjustment	$	2	$	310	$	33

______________

a.The pro forma adjustment represents the issuance of DRS common stock as a result of the Stock Split and as consideration for the merger, as well as the portion of the estimated fair value of the fully vested DRS replacement employee and executive stock options that will be granted to RADA vested option holders at the closing date of the merger, and the fair value attributable to pre-combination services of unvested DRS replacement employee and executive stock options that will be granted to RADA unvested option holders at the closing date of the merger.

b.The adjustment to Accumulated Deficit represents the estimated transaction costs to be incurred by DRS. The balance excludes $17 million of estimated transaction costs to be incurred by RADA as a result of the merger, which have not yet been reflected in RADA’s historical consolidated financial statements. These costs will be recognized as an expense in RADA’s pre-combination statement of operations and therefore they are reflected as a liability assumed by DRS, nor do they impact the Stockholder’s equity of DRS.

Statements of Operations

The pro forma adjustments reflect the effect of the merger on DRS’s and RADA’s historical consolidated statements of operations as if the merger occurred on January 1, 2021.

Revenue

I.The pro forma adjustment represents the settlement of the preexisting relationship between DRS and RADA of $13 million and $31 million for the six months ended June 30, 2022 and for the year ended December 31, 2021, respectively.

J.The pro forma adjustment represents the amortization of unfavorable revenue contracts of $1 million and $2 million for the six months ended June 30, 2022 and for the year ended December 31, 2021, respectively.

Expense

K.For the six months ended June 30, 2022, the pro forma adjustment of $13 million represents a decrease to Cost of revenues – Products as a result of the settlement of the preexisting relationship between DRS and

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RADA. For the year ended December 31, 2021, the pro forma adjustment represents i) $31 million decrease to Cost of revenues – Products associated with the settlement of the preexisting relationship between DRS and RADA and ii) an increase of $5 million to Cost of revenues – Products by the same amount as the inventory fair value adjustment. The inventory is expected to be sold within one year of the acquisition date. As these costs will not affect the income statement beyond 12 months after the merger date no adjustment has been made for the six months ended June 30, 2022.

L.The pro forma adjustment represents the estimated equity-based compensation expense associated with the One-Time Awards issued to certain members of the DRS’s leadership team upon closing of the merger. The fair value of One-Time Awards, which are comprised of 400,000 RSUs and 600,000 PRSUs, will be recognized ratably over the service period of two years. The adjustment is based upon a straight-line vesting approach, as shown in the table below, (in millions):


	For the six months ended June 30, 2022	For the year ended December 31, 2021
One-Time Awards - General and administrative expenses	2	4

M.The pro forma adjustment to General and administrative expenses reflects the adjustment for Merger-related costs of $37 million for the year ended December 31, 2021 resulting from estimated transaction-related costs that are not currently reflected in the historical consolidated financial statements of DRS and RADA. The amounts of Merger-related costs recognized by DRS and RADA for the six months ended June 30, 2022 are $5 million and $3 million, respectively. These estimated transaction costs consist primarily of advisor fees, legal fees, other separation benefits, and accounting fees. It is assumed that these costs will not affect the combined statements of operations beyond twelve months after the closing date of the merger.

N.The pro forma adjustment to Amortization of intangibles reflects additional amortization expense for the estimated fair value adjustment of acquired Intangible assets of $6 million and $12 million for the six months ended June 30, 2022 and for the year ended December 31, 2021, respectively. These preliminary estimates of fair value and estimated useful lives will likely differ from final amounts that DRS will calculate after completing a detailed valuation analysis and difference could have a material effect on the accompanying unaudited pro forma condensed combined financial statements.

O.To record estimated income taxes based on the statutory tax rates of the jurisdictions in which the related pro forma adjustment is recorded.

Note 5 – Divestitures Transaction Adjustments

The pro forma adjustments reflect the effect of the Divestitures on i) DRS’s and RADA’s historical consolidated balance sheets as if the Divestitures occurred on June 30, 2022 and ii) DRS’s and RADA’s historical statement of operations as if the Divestitures occurred on January 1, 2021.

Balance Sheet

A.The pro forma adjustment reflects the removal of balances classified as Held for sale associated with GES operations and AAC equity method investment, and reflect the estimated cash proceeds from the divestitures. The Company is in the process of finalizing the accounting for the transaction and will report the gain on the transaction in the third quarter.

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	As of June 30, 2022
Cash proceeds from the sale	$	483
Divestitures cost to sell	(15)
Cash paid to settle the tax obligation	(95)
Cash proceeds net of tax and costs to sell	373
Cash contribution from GES to DRS prior to sale	23
Cash dividend to DRS's parent	(396)
Net cash impact	$	—

Held for sale - assets	$	174
Held for sale - liabilities	$	45

B.The adjustment of $396 million to Additional paid-in capital reflects the dividend to DRS's parent.

C.The adjustment to Accumulated deficit of $244 million, represents the impact of the estimated after tax gain on sale of the GES operations and AAC equity method investment.


	As of June 30, 2022
Cash proceeds from the sale	$	483
Divestitures cost to sell	(15)
Cash paid to settle the tax obligation	(95)
Cash proceeds net of tax and costs to sell	373

Held for sale - assets	174
Held for sale - liabilities	(45)
Net Assets held for sale	$	129

Adjustment to Accumulated deficit - after tax gain on sale	$	244

Statements of Operations

D.These pro forma adjustments reflect the elimination of the historical revenue and direct expenses of the GES business and the elimination of the share of net earnings related to the AAC equity method investment which is recorded in Other, net. These adjustments do not reflect the allocation of any general corporate overhead costs of DRS to GES or ACC, respectively. The Other, net line for the year ended December 31, 2021 also includes $339 million of the estimated gain on sale and $95 million of estimated income tax expense expected to be incurred upon completion of the Divestitures. The actual gain or loss on sale, and the associated income tax expense impacts could change significantly as the Company completes its accounting analysis of the Divestitures.


	For the six months ended June 30, 2022		For the year ended December 31, 2021
Revenues:
Products	$	—	$	—
Services	(123)		(232)
Total revenues	(123)		(232)
Cost of revenues:
Products	—		—

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Services	101		189
Total cost of revenues	101		189
Gross profit	(22)		(43)
General and administrative expenses	8		14
Amortization of intangibles	—		—
Other operating expenses, net	—		—
Operating earnings	(14)		(29)
Interest expense	—		—
Other, net	(1)		337
Earnings before taxes	(15)		308
Income tax provision	(3)		88
Net earnings	$	(12)	$	220

Note 6 – Financing Transaction Adjustment

In connection with the merger, the Company expects to enter into a credit agreement providing up to $500 million of borrowing capacity, consisting of (i) a $225 million Term Loan and (ii) a $275 million Revolving Credit Facility. Initial borrowings under the credit facilities are subject to satisfaction of certain closing conditions, including the consummation of the merger. Loans under the credit facilities will bear interest at an annual rate equal to, at our option, a base rate plus a margin ranging from 3.0% to 3.5%, or SOFR plus a margin ranging from 1.5% to 2.0%, in either case based on our total net leverage.

The estimated initial borrowing under the Term Loan and Revolving Credit Facility will be $225 million and $106 million, respectively, and will be used to repay $327 million of the Company's related party borrowings outstanding as of June 30, 2022, as well as $2 million of accrued interest associated with related party borrowings.

Balance Sheet

A.Adjustment to cash and cash equivalents consists of the following (in millions):


	As of June 30, 2022
Proceeds from the Term Loan borrowing	$	225
Proceeds from the new Revolving Credit Facility borrowing	106
Cash paid to repay the Term Loan due November 30, 2023	(139)
Cash paid to repay the Daylight Term Loan due October 15, 2024	(78)
Cash paid to repay the borrowings under the existing revolving credit facility	(110)
Cash paid for deferred financing costs associated with the Term Loan	(1)
Cash paid for deferred financing costs associated with the new Revolving Credit Facility	(1)
Cash paid for accrued interest	(2)
Net adjustment to cash	$	—

B.Adjustment to Other noncurrent assets represents the capitalization of financing costs associated with the new Revolving Credit Facility.

C.Adjustment to Short-term borrowings and current portion of long-term debt consists of the following (in millions):

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	As of June 30, 2022
Proceeds from the new Revolving Credit Facility borrowing	$	106
Cash paid to repay the borrowings under the existing revolving credit facility	(110)
Net adjustment to the Short-term borrowings	$	(4)

D.Adjustment to Other current liabilities represents the repayment of accrued interest associated with the Term Loan due November 30, 2023, Daylight Term Loan due October 15, 2024 and the existing revolving credit facility.

E.Adjustment to Long-term debt consists of the following (in millions):


	As of June 30, 2022
Term Loan borrowing	$	225
Carrying value of the Term Loan due November 30, 2023	(139)
Carrying value of the Daylight Term Loan due October 15, 2024	(78)
Capitalized deferred financing costs associated with the Term Loan	(1)
Net adjustment to Long-term debt	$	7

Statements of Operations

F.Adjustment to Interest expense represents the following:


	For the six months ended June 30, 2022		For the year ended December 31, 2021
Interest expense associated with the Term Loan	$	5	$	9
Interest expense associated with the new Revolving Credit Facility	2		5
Interest expense associated with the borrowings repaid	(14)		(30)
Net adjustment to interest expense	$	(7)	$	(16)

Interest on expected borrowings of the Term Loan and new Revolving Credit Facility, are based on the Secured Overnight Financing Rate (SOFR) of 2.28% on September 7, 2022 and a spread of 1.75% calculated as the mid-point of the expected spread on the new borrowings. A 1/8% change in interest rate would increase or decrease the pro forma interest expense by less than $1 million, for the six months ended June 30, 2022, and for the year ended December 31, 2021.

G.Adjustment to recognize the income tax impacts of the pro forma adjustments using a U.S. federal and state statutory tax rate of 24.6%. This rate may vary from the effective tax rates of the historical and combined businesses.

Note 7 – Pro Forma Net Income Available to Common Stockholders per Common Share

The following table summarizes the unaudited pro forma net earnings per common share for the six months ended June 30, 2022 and for the year ended December 31, 2021 as if the Pro Forma Transactions occurred on January 1, 2021 (in dollars, except for share and per share amounts):

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	For the six months ended June 30, 2022		For the year ended December 31, 2021
Numerator
Pro forma net income available to common stockholders	$	43,000,000	$	362,000,000
Denominator
DRS historical weighted average common shares outstanding (a)	210,305,162		210,305,162
RADA common stock converted into DRS common stock	49,726,194		49,726,194
Pro forma weighted average common shares outstanding - basic	260,031,356		260,031,356
DRS historical weighted average dilutive shares	-		-
Dilutive effect of equity-based awards	1,592,499		1,354,800
Pro forma weighted average share outstanding - dilutive	261,623,855		261,386,156

Earnings per share – Basic	$	0.17	$	1.39
Earnings per share – Diluted	$	0.16	$	1.38

__________________

a.The calculations of both basic and diluted pro forma earnings per share in respect to the number of common shares have been adjusted retrospectively as a result of the Company’s Stock Split as described in the introduction to the unaudited pro forma condensed combined financial statements.

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RECAPITALIZATION

In this section, unless context requires otherwise, references to “we”, “our” or “us” refer to DRS before the completion of the merger.

We have historically operated with a capital structure that reflected our status as a wholly owned indirect subsidiary of Leonardo S.p.A. Our debt with related parties currently consists of two term loans and a working capital credit facility with US Holding, as described in “Information About DRS—Certain Relationships and Related Transactions, and Director Independence—Transactions with Leonardo S.p.A. Affiliates—Financing Arrangements”. To prepare for the merger and operation as a stand-alone public company, we have undertaken recapitalization initiatives to align our capital structure more closely with other U.S. public companies (the “recapitalization”). In undertaking the recapitalization, we are focused on several goals:

•Maintaining and strengthening our credit ratings; and

•Providing increased financial flexibility at the DRS level.

In December 2020, US Holding contributed $300 million to us by converting an equal amount of borrowings outstanding under our 7.5% Term Loan (as defined in “Information About DRS—Certain Relationships and Related Transactions, and Director Independence—Transactions with Leonardo S.p.A. Affiliates—Financing Arrangements”) into additional paid in capital.

In connection with the consummation of the merger, we expect to implement the following additional financing arrangements as part of our efforts to align our capital structure more closely with other U.S. public companies and achieve the goals described above:

•the repayment of $327 million of related-party borrowings as well as $2 million of accrued interest associated with related-party borrowings; and

•the expected issuance of up to $500 million of third-party debt consisting of a combination of a $225 million Term Loan and a $275 million Revolving Credit Facility.

We believe these transactions are probable as there has been limited market fluctuation that would alter key material terms previously agreed, although there is no assurance as to the completion of these transactions. Such transactions will be conditioned on the consummation of the merger. See the section “Unaudited Pro Forma Condensed Combined Financial Statements” in this proxy statement/prospectus.

Repayment of Related-Party Borrowings

In connection with the merger, we expect to repay all outstanding related-party borrowings including those under the credit agreement dated January 20, 2009, as amended, by and among us, certain of our subsidiaries and US Holding, and amounts outstanding under an unsecured term loan with US Holding in the principal amount of $137.5 million, the proceeds of which were used to finance the acquisition of Daylight Solutions, Inc. (the “Daylight term loan”) as described in “Information About DRS—Certain Relationships and Related Transactions, and Director Independence—Transactions with Leonardo S.p.A. Affiliates—Financing Arrangements”.

Third-Party Indebtedness Following the Merger

Senior Facilities

In connection with the merger, we expect to enter into a credit agreement providing for up to $500 million of senior unsecured credit facilities, consisting of (i) a $225 million Term Loan and (ii) a $275 million Revolving Credit Facility. Initial borrowings under the credit facilities are subject to satisfaction of certain closing conditions, including the consummation of the merger.

Loans under the credit facilities are expected to bear interest at an annual rate equal to, at our option, a base rate plus a margin ranging from 3.0% to 3.5%, or SOFR plus a margin ranging from 1.5% to 2.0%, in either case based

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on our total net leverage. We also expect to pay a commitment fee on the undrawn balance under the Revolving Credit Facility at an annual rate ranging from 0.175% to 0.225% based on our credit ratings.

The principal of the term loan is expected to be repaid in quarterly installments and at final maturity on the 5th anniversary of the closing date. The Revolving Credit Facility will mature on the 5th anniversary of the closing date.

Loans under the credit facilities may be voluntarily prepaid and commitments reduced in whole or in part at any time and from time to time without premium or penalty. The loans are expected to be subject to mandatory prepayment upon a change of control.

The credit agreement is expected to contain a number of covenants, including but not limited to, a maximum total net leverage ratio of 3:75 to 1:00 as of the last day of any fiscal quarter and a minimum net interest coverage ratio of 3:00 to 1:00 as of the last day of any fiscal quarter, which would restrict our ability to incur additional debt; pay dividends or make other distributions; prepay, redeem or repurchase certain debt; make loans and investments; sell, transfer or otherwise dispose of assets; incur or permit to exist certain liens; enter into certain types of transactions with affiliates; enter into agreements restricting their respective subsidiaries’ ability to pay dividends; and consolidate, amalgamate, merge or sell all or substantially all of their respective assets.

Our obligations under the credit facilities would be guaranteed by all of our U.S. subsidiaries.

There can be no assurance as to the terms of such credit facilities, if entered into by us, as the remain subject to negotiation. For more information, see the sections “Unaudited Pro Forma Condensed Combined Financial Statements” and “Information About DRS—Certain Relationships and Related Transactions, and Director Independence—Transactions with Leonardo S.p.A. Affiliates—Financing Arrangements” in this proxy statement/prospectus.

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INFORMATION ABOUT DRS

Business Overview and Considerations

Overview

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Advanced Sensing and Computing

The Segment has been aligned to push towards a more autonomous future. Autonomy is predicated on the integration of our advanced sensing and computing systems, together sensing and making sense of the domain around the platform. With solutions on nearly every military platform, we have a large installed base, and a historic track record of providing world class solutions. This sensing footprint coupled with the computing infrastructure on both U.S. Army ground vehicles, U.S. Navy vessels, and the majority of US Air Force platforms, has the company positioned uniquely for success in leading the future of sensing. The Advanced Sensing and Computing segment consist of five business units (Airborne & Intelligence Systems, Daylight Solutions, Electro-Optical & Infrared Systems, Land Electronics, and Naval Electronics).

Integrated Mission Systems Segment

The Integrated Mission Systems (IMS) segment consists of both a ground vehicle integrator (Land Systems) and naval power and propulsion system provider (Naval Power Systems). These business units provide solutions using the best available technology to satisfy our customers’ needs. The best available technology consists of a combination of internally produced products and technologies, and externally sourced solutions. We continue to use the IMS segment as an avenue to accelerate the use of our Advanced Sensing and Computing equipment for our customers.

DRS Products and Services

Advanced Sensing

Our advanced sensor technologies provide the U.S. military with the capability for longer-range sensing and increased battlefield awareness. Our market-leading sensor products include third-generation infrared systems (two color infrared sensors), and sensors for threat detection and situational awareness. We also provide uncooled infrared systems and brownout solutions (which are sensors that can see through blowing sand). These core technologies are provided as ground vehicle sensors – commander, gunner, and driver’s systems, for aircraft, stabilized for long-range surveillance, as well as for individual soldiers for helmet mounted goggles, handheld targeting, and rifle mounted sensing.

We offer world-class technology in Electronic Warfare (EW) and Cyber to provide our customers integrated capabilities for multi-domain operations to supplement kinetic warfare. We provide airborne, ground vehicle mounted and dismounted soldier EW systems, EW software and training systems and intelligence solutions. We believe that our capabilities in EW, exploitation and cyber-based multi-domain operations position us well in this area of growing DoD priority.

We are unique in the defense market, providing Quantum Cascade Laser (QCL) technology which, along with our advanced two-color infrared sensors, have enabled us to support high-profile multi-service contracts for advanced systems to protect aircraft from ground-launch missiles. We are also a critical partner on the U.S. Army’s common infrared countermeasures program and the next generation missile warning program.

The addition of RADA allows the future of sensing to include integration of radar with EW and communications. The consolidation of radio frequency sensing is expected to be smaller, lighter, and lower cost, while providing increased capabilities. This vision of integrated sensing is enabled with the RADA merger with DRS.

Network Computing

Our network computing products and solutions provide networked computing infrastructure on military platforms. This is in support of the military’s need for greater situational understanding for our warfighters and

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commanders. These platforms provide trusted and assured computing capabilities ensuring that the equipment and data U.S. forces transfer is protected from enemies. This capability allows forces to be more mobile and geographically dispersed while operating with immediate access to trusted information.

We provide trusted computing systems for ground vehicles, ships and submarines, for Command, Control, Communications, Computers and Intelligence (“C4I”), network and data distribution applications, and sensor systems. Our Mounted Family of Computing Systems (“MFoCs”) and MFoCs-II, the second generation, have earned us a reputation as a leading provider of mounted battle management systems hardware in the U.S.

Force Protection

Our force protection systems, including solutions for counter-unmanned aerial systems (CUAV), short-range air defense (SHORAD) systems, and active protection systems (APS) used to defend ground combat vehicles help protect service members and military assets from these growing threats, highlighted by the recent rapid development and U.S. Army deployment of the Mission Equipment Package (“MEP”) for the Maneuver Short-Range Air Defense (“M-SHORAD”) program.

The addition of RADA allows DRS to address new and evolving needs in force protection with the inclusion of the unique RADA tactical radar line of products. RADA is a currently a partner of DRS on the M-SHORAD program and the merger is expected to enhance both RADA’s business base and DRS’s.

Power and Propulsion

We also provide power control, distribution, conversion and propulsion systems for the U.S. Navy’s top priority shipbuilding programs, including the Columbia Class ballistic missile submarine, the first modern U.S. electric drive submarine as well as other advanced equipment to the U.S. Navy, U.S. Coast Guard, and international navies including hybrid electric drive propulsion systems, energy storage, gas turbine packages, nuclear instrumentation and controls, and thermal management and refrigeration equipment.

Current and future platforms require more power than before as a result of the advancement of directed energy weapons, increased on-board computing, and increased sensing. As a result, these platforms must be able to adapt their propulsion to the situation around them, increase their stealth in a threatened environment, or speed to the objective if unthreatened. We provide technologies that fulfill these needs for power and have developed propulsion systems for various platform types. For example, as the U.S. Navy fleet grows, we expect that it will require new forms of integrated power systems. Our electrical drive technology provides the flexibility to direct energy to these evolving needs and adapt propulsion based on an evolving threat situation. These capabilities can also be used on unmanned platforms. As a leading provider of next-generation electrical propulsion components and systems for the U.S. Navy, we believe DRS has the technology to provide electrical power capabilities to service the future fleet’s needs.

Customers

The U.S. government is by far our largest customer with revenues derived directly, or indirectly from the U.S. government representing 86%, 84% and 89% of our total revenue for the years ended December 31, 2021, 2020, and 2019 respectively. Our U.S. government sales are highly concentrated with the DoD which make up the overwhelming majority of our U.S. government revenue for any given year, including 86% of our business for the year ended December 31, 2021. Our sales to the DoD are principally derived directly or indirectly from contracts with the U.S. Army and U.S. Navy representing 38% and 31%, respectively, of our total revenues for the year ended December 31, 2021.

As a mid-tier defense technology company with a diverse portfolio of solutions that includes offerings at the component, sub-system and system level, we are able to approach each market opportunity with flexibility as to provide the most value to our customers and other stakeholders. This market flexibility allows us to serve as either prime contractor or a subcontractor on key contracts based on the competitive dynamics of each opportunity. For the year ended December 31, 2021 our revenue consisted of 48% as a prime contractor direct with the government and 52% as a subcontractor.

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The remaining 14% of our revenues for the year ended December 31, 2021, were derived from sales to foreign governments as well as commercial type sales within the U.S. and abroad. Our international sales consist primarily of transactions with foreign governments for military applications. In total we have generated sales to international customers of $158 million, $223 million, and $120 million for the years ended December 31, 2021, 2020 and 2019 respectively.

Defense Market Competition

We operate in a highly competitive environment. In the military sector, we compete with large, mid-tier and smaller defense companies as well as some non-traditional companies on the basis of product performance, cost, overall value, delivery schedule, embedded positions, innovation, and reputation. Our products are sold in markets in which several of our competitors are substantially larger than we are, enabling them to devote greater resources to research and development. These larger competitors generally have more financial resources, allowing them to better withstand challenging operating conditions. We also face a variety of competitors which vary across our segments and specific products. To gain new business, we also often team with, are supplier to, or find other ways to work with these competitors. Although we compete with different companies in each of our segments, our key competitors include Raytheon Technologies, L3Harris, BAE Systems, Teledyne/FLIR, Cubic and Elbit Systems, among others. We generally compete on the basis of:

•Our product breadth, performance, adaptability and price:

•Our reputation for prompt, flexible, and responsive contract performance;

•Our installed base of existing products and track record as a trusted partner;

•Our ability to react to customer and market trends;

•Our strong core technology capabilities and accumulated technical knowledge and expertise;

•Our highly experienced management team and talented workforce; and

•The capabilities of our facilities, equipment and personnel to undertake the programs for which we compete.

Our future success will depend in large part upon our ability to improve existing product lines and to develop new products and technologies in the same or related fields.

U.S. Defense Market Trends

The DoD budget, the largest defense budget in the world, has grown at a CAGR of 3.8% from Fiscal Year (“FY”) 2017 to 2021, reflecting an increasing shift in priorities from a focus on global terrorism to emerging threats from more sophisticated and technologically advanced adversaries requiring enhanced capabilities across the DoD. The DoD is our largest customer and, for the year ended December 31, 2021, accounted for approximately 86% of our business as an end-user, with revenues principally derived directly or indirectly from contracts with the U.S. Army and U.S. Navy, which represented 38% and 31%, respectively, of our total revenues for the year. We believe that this strong recent growth and future expectations in our core areas of high technology provide a solid path for continued growth of our business.

President Biden’s administration has identified the key threats America faces, which emanate from great powers and regional adversaries, and also from non-state actors and extremists. The DoD FY 2023 budget request for $773 billion prioritizes China and its military modernization as America’s key pacing challenge, while simultaneously addressing the continued threat from global terrorism. The request represents 4.2% nominal growth or 1.5% real growth after accounting for inflation, compared with the $742 billion final appropriation for FY2022, and totals $813 billion when all national security spending is included beyond DoD. Congressional defense committees have begun consideration of the budget request, and like FY22, have in some cases proposed increases in funding that could add $37 billion to the budget authority.

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We believe DoD priorities, which will likely be further shaped by the recent Russian invasion of Ukraine, combined with the FY2023 budget request, align with DRS’s product offerings and our ability to innovate our core technology and investment focus. Supplemental funding to provide military aid to Ukraine has already exceeded $20 billion and is expected to continue in the form of foreign military sales and funding.

In addition to the U.S. market, DRS has important positions internationally in the Middle East, U.K., Australia, Korea and Taiwan in areas such as Tactical Battlefield Management Systems, Thermal Weapons Sites, Combat Aircraft Training and Power and Propulsion programs, among others.

Manufacturing and Supplies

Our manufacturing processes for our products include the assembly of purchased components and subsystems and testing of products at various stages in the assembly process. Purchased components include integrated circuits, circuit boards, metal fabricated into cabinets, resistors, capacitors, semiconductors, silicon wafers and other materials, wire and cables and subsystems including, but not limited to, off-the-shelf components such as servers, computers and peripherals. In addition, many of our products use castings and machined housings.

The manufacturing process for certain of our optic products includes the grinding, polishing and coating of various optical materials and the machining of metal components. Although materials and purchased components generally are available from a number of different suppliers, several suppliers are our sole source of certain components. If a supplier should cease to deliver such components, we expect that other sources would be available; however, added cost and manufacturing delays might result. We occasionally experience delays attributable to supply shortages and quality and other related problems with respect to certain components, such as semiconductors and connectors. In addition, for our optical products, certain materials, such as rare earth materials, germanium, and zinc sulfide may not always be readily available.

Effective management and oversight of suppliers and subcontractors is an important element of our successful performance. If our sources of supply are disrupted, particularly in instances where we rely on only one or two sources of supply, our ability to meet our customer commitments could be adversely impacted. We attempt to mitigate risks with our suppliers by entering into long-term agreements and leveraging company-wide agreements to achieve economies of scale and by negotiating flexible pricing terms in our customer contracts. To date, despite the market challenges, we have not experienced significant disruptions in our financial results or customer delivery commitments stemming from our ability to obtain the materials and components necessary for our business operations. We expect that the micro-electronics will continue to present a challenge to our business although we anticipate the ability to mitigate the majority of the potential risk.

Intellectual Property

We have patents on certain of our technologies and methods, semiconductor devices, rugged computer-related items and electro-optical and infrared focal plane array products, in addition to other technologies and methods. We and our subsidiaries have certain registered trademarks, none of which are considered material to our current operations. We also hold certain trade secrets without formal patent filings in order to protect them from disclosure. We believe our patent position and intellectual property portfolio in the aggregate are valuable to our operations. We do not believe that the conduct of our business as a whole is materially dependent on any single patent, trade secret, trademark or copyright.

When we work on U.S. government contracts or use funding of the U.S. government, the U.S. government may have contractual license rights to data for our technologies, source code and other developments associated with such government contracts. Records of our data rights are typically maintained in order to claim these rights as our proprietary technology, but it may not always be possible to delineate our proprietary developments from those developed under U.S. government contracts. The protection of our data from use by other U.S. government contractors is subject to negotiation from time to time between us and the U.S. government and subject to certain governmental regulations. The extent of the U.S. government’s license rights to any particular data generally depends upon whether the data was developed under a government contract and the degree of government funding for the development of such data. While we may retain ownership rights over certain technology, product or

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intellectual property that we develop under U.S. government contracts or by using funding of the U.S. government, this requires us to take timely affirmative measures to preserve our right.

Contracts

We derive a significant portion of our revenue from long-term programs and programs for which we are the incumbent supplier or have been the sole or dual supplier for many years. A significant percentage of our revenue is derived from programs that are in the production phase. We also derive revenue from contracts on which we serve as either prime contractor or subcontractor. For the years ended December 31, 2021, 2020, and 2019, revenues were approximately even between contracts on which we served as prime contractor and subcontractor in our ASC segment, with prime contracts generating approximately 63%, 55%, and 57%, of segment revenue respectively. Conversely at our IMS segment majority of our revenues are generated from subcontractor positions which account for 82%, 66% and 52% for the years ended December 31, 2021, 2020 and 2019 respectively. We determine our prime versus subcontract position based on our competitive position, likelihood of contract win and overall profit contribution.

While the majority of our revenue is derived from the U.S. government and DoD, within this we have a diverse business mix with limited dependence on any single contract. No single contract represented more than 10% of revenues for the years ended December 31, 2021, 2020 and 2019.

The amount of our revenues attributable to our contracts by contract type during the years ended December 31, 2021, 2020 and 2019 were as follows:


	December 31,
($ in millions)	2021		2020		2019
Firm fixed price	$	2,498	$	2,408	$	2,333
Flexibly priced(a)	$	381	$	370	$	381

__________________

a.Includes revenue derived from time and materials contracts.

Typically we enter into three types of contracts: fixed price contracts, cost-plus contracts and time and material (“T&M”) contracts (cost-plus contracts and T&M contracts are aggregated above as flexibly priced contracts). and our contracts are normally for production, services or development. Production contracts are typically the fixed-price type, development contracts are sometimes of the cost-plus-type, and service contracts are sometimes of the time and materials type. We believe continued predominance of fixed-price contracts is reflective of the significant portion of production contracts in our U.S. government contract portfolio. Fixed-price contracts may provide for a fixed price or they may be fixed-price-incentive-fee contracts. Under fixed-price contracts, we agree to perform for an agreed-upon price. Accordingly, we derive benefits from cost savings, but bear the risk of cost overruns. Under fixed-price-incentive-fee contracts, if actual costs incurred in the performance of the contracts are less than estimated costs for the contracts the savings are apportioned between the customer and us. If actual costs under such a contract exceed estimated costs, however, excess costs are apportioned between the customer and us, up to a ceiling. We bear all costs that exceed the ceiling, if any.

Cost-plus type contracts typically provide for reimbursement of allowable costs incurred plus a fee (profit). Under cost-plus-fixed-fee contracts, we are reimbursed for allowable costs and receive a fixed fee, which is negotiated and specified in the contract. Such fees have statutory limits. Unlike fixed-price contracts in which we are committed to deliver without regard to cost, cost-plus contracts normally obligate us to use our best efforts to accomplish the scope of work within a specified time and a stated contract dollar limitation. In addition, U.S. government procurement regulations typically result in lower profits for cost type contracts because of our reduced risk. Under cost-plus-incentive-fee contracts, an additional incentive fee awarded may be based on cost or performance. When the incentive is based on cost, the contract specifies that we are reimbursed for allowable incurred costs plus a fee adjusted by a formula based on the ratio of total allowable costs to target cost. Target cost, target fee, minimum and maximum fee, and adjustment formulae are agreed upon when the contract is negotiated. In the case of performance-based incentives, we are reimbursed for allowable incurred costs plus an incentive, contingent upon meeting or surpassing stated performance targets. The contract provides for increases in the fee to the extent that such targets are surpassed and for decreases to the extent that such targets are not met. In some

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instances, cost-plus-incentive-fee contracts also may include a combination of both cost and performance incentives. Under cost-plus-fixed-fee contracts, we are reimbursed for costs and receive a fixed fee, which is negotiated and specified in the contract. Time-and-material type contracts provide for reimbursement of labor hours expended at a contractual fixed labor rate per hour, plus the actual costs of material and other direct non-labor costs. The fixed labor rates on time-and-material type contracts include amounts for the cost of direct labor, indirect contract costs and profit.

For the majority of our contracts, revenues are recognized using an over time, cost-to-cost accounting method, with revenue recognized based on the ratio of cumulative costs incurred to date to estimated total contract costs at completion. For contracts accounted for in this way, our reported revenues may contain amounts which we have not billed to customers if we have incurred costs, and recognized related profits, in excess of billed progress payments.

Under U.S. GAAP, contract costs, including allowable general and administrative expenses on certain government contracts, are charged to work-in-progress inventory and are written off to costs and expenses as revenues are recognized. The Federal Acquisition Regulations (“FAR”) and the defense supplement (“DFARS”), incorporated by reference in U.S. government contracts, provide that internal research and development costs are allowable general and administrative expenses. Unallowable costs, pursuant to the FAR, are excluded from costs accumulated on U.S. government contracts.

Our defense contracts and subcontracts that require the submission of cost or pricing data are subject to audit, various profit and cost controls, and standard provisions for termination at the convenience of the customer. The DCAA performs these audits on behalf of the U.S. government. The DCAA has the right to perform audits on our incurred costs on cost-type or price redeterminable-type contracts on a yearly basis. Approval of an incurred cost submission can take from one to three years from the date of the submission of the contract cost.

U.S. government contracts are, by their terms, subject to termination by the U.S. government for either convenience or default by the contractor. Fixed-price contracts provide for payment upon termination for items delivered to and accepted by the U.S. government and, if the termination is for convenience, for payment of fair compensation of work performed plus the costs of settling and paying claims by terminated subcontractors, other settlement expenses and a reasonable profit on the costs incurred. Cost-plus contracts provide that, upon termination, the contractor is entitled to reimbursement of its allowable costs and, if the termination is for convenience, a total fee proportionate to the percentage of the work completed under the contract. If a contract termination is for default, however, the contractor is paid an amount agreed upon for completed and partially completed products and services accepted by the U.S. government. In these circumstances, the U.S. government is not liable for excess costs incurred by us in procuring undelivered items from another source.

In addition to the right of the U.S. government to terminate U.S. government contracts, such contracts are conditioned upon the continuing availability of Congressional appropriations. Congress usually appropriates funds for a given program on a September 30 fiscal year basis, even though contract performance may take many years. Consequently, at the outset of a major program, the contract is typically only partially funded, and additional funds normally are committed to the contract by the procuring agency only as appropriations are made by Congress for future fiscal years.

Product Warranties

Product warranty costs generally are accrued in proportion to product revenue realized in conjunction with our over-time revenue recognition policy. Product warranty expense is recognized based on the term of the product warranty, generally one to three years, and the related estimated costs, considering historical claims expense. Accrued warranty costs are reduced as these costs are incurred and as the warranty period expires, and otherwise may be modified as specific product performance issues are identified and resolved.

Joint Ventures, Strategic Investments and Mergers and Acquisitions

From time to time we enter into strategic joint ventures, investments and mergers and acquisitions.

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In June 2017, we acquired Daylight Solutions for a purchase price of $150 million in cash. Daylight Solutions designs and manufactures infrared Quantum Cascade Laser solutions that supplement the infrared sensors already in DRS’s portfolio. Together these two capabilities address the growing force protection needs for aircraft and ground vehicles by allowing them to sense threats and then enact countermeasures for certain classes of enemy missiles, thus saving lives. The acquisition of Daylight also allowed DRS to address markets unrelated to force protection, again by combining the infrared lasers with infrared sensors. To address the growing demands to sense further, and to increase situational understanding, these two capabilities allow for longer-range threat detection.

We also hold an approximately 10% interest in Hoverfly Technologies, Inc. (“Hoverfly”), which designs, develops and manufactures power-tethered unmanned aerial systems and related products. Pursuant to the terms of our agreement with Hoverfly, we increased our investment in Hoverfly from 7% to 10% in Q2 2021 and may increase our investment beyond 10%, at our option. We have also entered into an exclusive manufacturing and teaming agreement with Hoverfly.

We previously held a 51% ownership interest in Advanced Acoustic Concepts (“AAC”), a joint venture with a subsidiary of Thales S.A., which provides sonar systems and components, acoustic training systems, and other underwater systems. In February 2022, DRS’s board of directors approved the strategic initiative to divest DRS’s interest in AAC. On April 19, 2022, DRS entered into a definitive sales agreement to divest its share of current equity investment in AAC to Thales Defense & Security, Inc., the minority partner in the joint venture for $56 million in cash. The sale closed on July 8, 2022.

On March 21, 2022, the Company entered into a definitive agreement to sell its Global Enterprise Solutions (GES) business to SES Government Solutions, Inc., a wholly owned subsidiary of SES S.A., for $450 million in cash. GES, which was part of the ASC segment for all periods reported, provides commercial satellite communications to the U.S. Government and delivers satellite communications and security solutions to customers worldwide. SES S.A. has guaranteed the payment of the purchase price and performance of all other obligations of SES Government Solutions, Inc. under the agreement. The transaction was completed on August 1, 2022.

On June 21, 2022, the Company entered into a definitive agreement with RADA Electronic Industries Ltd., a leading provider of advanced software-defined military tactical radars, to merge and become a combined public company. Upon closing of the transaction, which is expected in the fourth quarter of 2022, RADA will become a wholly-owned subsidiary of Leonardo DRS.

Seasonality

We do not consider any material portion of our business to be seasonal. However, our cash flows lack linearity with a majority of cash receipts generally occurring in the fourth quarter of our fiscal year. Various factors can affect the distribution of our revenues and cash flows between accounting periods, including the federal government’s budget cycle based on its October-to-September fiscal year, the timing of government awards, the availability of government funding, the timing of costs incurred (including when materials are received), product deliveries and customer acceptance.

Research and Development

We conduct research and development (“R&D”) activities using our own funds (referred to as company-funded R&D or independent research and development (“IR&D”)) and under contractual arrangements with our customers (referred to as customer-funded R&D) to enhance existing products and services and to develop future technologies. R&D costs include basic research, applied research, concept formulation studies, design, development, and related test activities. IR&D costs are allocated to customer contracts as part of the general and administrative overhead costs and generally recoverable on our customer contracts with the U.S. Government. Customer-funded R&D costs are charged directly to the related customer contract. Substantially all R&D costs are charged to cost of revenues as incurred. Company-funded R&D costs charged to cost of revenues totaled $48 million, $41 million and $31 million in 2021, 2020 and 2019, respectively.

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Legislation and Regulation

As a U.S. government contractor, we (and our subcontractors and others with whom we do business) must comply with many significant procurement regulations and other specific legal requirements. These regulations and other requirements increase our performance and compliance costs and risks and regularly evolve. New laws, regulations or procurement requirements or changes to current ones (including, for example, regulations related to cybersecurity, privacy, recovery of employee compensation costs, counterfeit parts, anti-human trafficking, specialty metals and conflict minerals) can significantly increase our costs and risks and reduce our profitability. If we fail to comply with procurement regulations or other requirements we may be subject to civil and/or criminal penalties and/or administrative sanctions, which may include termination or modification of contracts, forfeiture of profits, suspension of payments, fines and suspension or prohibition from doing business with the U.S. government, any of which could have a material adverse effect on our business, financial condition and results of operations. See “Risk Factors—Risks Relating to DRS’s Business—We are subject to a number of procurement, international trade, and other rules regulations and requirements related to our industry, our products, and the businesses we operate. If we fail to comply with such rules, regulations or other requirements we may be subject to civil and/or criminal penalties and/or administrative sanctions” in this proxy statement/prospectus.

We (again, including our subcontractors and others with whom we do business) also are subject to, and expected to perform in compliance with, a vast array of federal laws, regulations and requirements related to our industry, our products and the businesses we operate. These laws and regulations include, but are not limited to the Anti-Kickback Act, the Arms Export Control Act, including the ITAR, the Communications Act, the Defense Federal Acquisition Regulations, the Export Control Reform Act, including the EAR (which includes anti-boycott provisions), the False Claims Act, the Federal Acquisition Regulation, the FCPA, the Lobbying Disclosure Act, the Procurement Integrity Act, the Truthful Cost or Pricing Data Act, the Foreign Trade Regulations, the Foreign Investment Risk Review Modernization Act, the International Emergency Economic Powers Act, the Trading with the Enemy Act, and Executive Orders and regulations, administered by the U.S. Department of the Treasury, Office of Foreign Assets Control, as well as rules and regulations administered by the U.S. Customs and Border Protection and the Bureau of Alcohol, Tobacco, Firearms and Explosives. If we are found to have violated such requirements, we may be subject to reductions of the value of contracts; contract modifications or termination; the withholding of payments from our customer; the loss of export privileges; administrative or civil judgments and liabilities; criminal judgments or convictions, liabilities and consent or other voluntary decrees or agreements; other sanctions; the assessment of penalties, fines, or compensatory, treble or other damages or non-monetary relief or actions; or suspension or debarment.

Our operations include the use, generation and disposal of hazardous materials. We are subject to various U.S. federal, state, local and foreign laws and regulations relating to the protection of the environment, including those governing the discharge of pollutants into the air and water, the management and disposal of hazardous substances and wastes, the cleanup of contaminated sites and the maintenance of a safe workplace. See “Risk Factors—Risks Relating to Our Business—We are subject to environmental laws and regulations, and our ongoing operations may expose us to environmental liabilities affecting our reputation, business, financial condition and results of operations” in this proxy statement/prospectus. Except as described in Note 15 “Commitments and Contingencies” to the Consolidated Financial Statements, we believe that we have been and are in material compliance with environmental laws and regulations and that we have no liabilities under environmental requirements that would be expected to have a material adverse effect on our business, results of operations, financial condition or liquidity. It is possible, however, that the ultimate resolution of the matters discussed under Note 15 “Commitments and Contingencies” to the Consolidated Financial Statements could result in a material adverse effect on our results of operations for a particular reporting period, any of which could have a material adverse effect on our business.

Backlog

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	December 31,
(Dollars in millions)	2021		2020		2019
Backlog:
Funded(1)	$	2,510	$	2,847	$	2,547
Unfunded(1)	351		444		297
Total backlog(1)	$	2,861	$	3,291	$	2,844

__________________

(1)See “Risk Factors—Risks Relating to DRS’s Business—We may not realize the full value of our total estimated contract value or bookings, including as a result of reduction of funding or cancellation of our U.S. government contracts, which could have a material adverse impact on our business, financial condition and results of operations” in this proxy statement/prospectus.

Human Capital Management

Our Company consists of approximately 6,045 people, all committed to upholding the core values of the company including integrity, quality, customer focus, diversity and inclusion and innovation. Our commitment to ethical business practices is outlined in our Code of Ethics & Business conduct (the “Code of Ethics”). The Code of Ethics applies to all employees and establishes our expectations for appropriate business conduct is a variety of scenarios. Once a year, all employees must confirm their commitment to our ethics program by providing confirmation they will adhere to the Code of Ethics.

Due to the highly specialized nature of our business, our workforce is highly innovative and we maintain a culture that fosters and rewards growth, problem-solving, technology development and process improvements. We have approximately 1,300 engineers who work on programs in sensing, electro-optical infrared systems, laser systems, network computing, communications systems, integration and power propulsion. Our employees maintain over 2,000 security clearances to allow engineers and management to carry on business activities for our customers’ classified programs. We recognize that our success as a company depends on our ability to attract, develop and retain a qualified workforce with an emphasis on a strong commitment to diversity and inclusion. As such, we promote the health, welfare and safety of our employees. Part of our responsibility includes treating all employees with dignity and respect and providing them with fair, market-based, competitive and equitable compensation. We recognize and reward the performance of our employees and provide a comprehensive suite of benefit options that enables our employees and their dependents to live healthy and productive lives.

Safety in our workplaces is paramount. Across our businesses, we take measures to prevent workplace hazards, encourage safe behaviors and enforce a culture of continuous improvement to ensure our processes help reduce incidents and illnesses and comply with governing health and safety laws. These efforts continue to be of the utmost importance as we address the ongoing challenges presented by the COVID-19 pandemic.

Our strong commitment to diversity, inclusion, succession planning and training has fostered a highly collaborative and motivated work force. Our commitment to diversity includes our Diversity Advisory Group geared at improving diversity and inclusiveness so that we look like the communities in which we operate. We have targeted increases in minority hiring and expanding women in the workforce.

Our values motivate us to promote strong workplace practices with opportunities for development and training. Our training and development efforts focus on ensuring that the workforce is appropriately trained on critical job skills as well as leadership behaviors that are consistent with our core values. We conduct rigorous succession planning exercises to ensure that key positions have the appropriate level of bench strength to provide for future key positions and leadership transitions. We listen to our workforce to assess areas of concern and levels of engagement.

Governance Structure

As a U.S. defense contractor with high level personal and facility security clearances, DRS, Leonardo US Holding and Leonardo S.p.A. have entered into an agreement with the DoD to mitigate against the potential for undue foreign ownership control and influence (“FOCI”) on the performance of classified programs by implementing various limitations on US Holding’s and Leonardo S.p.A.’s rights as the direct stockholder and ultimate foreign parent company of DRS, respectively. Specifically, US Holding has authorized certain cleared U.S.

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persons to operate as its proxies and exercise the key prerogatives of stock ownership. The Commitment Letter requires that DRS have the financial and operational ability to operate as an independent entity under an independent board of directors, subject to certain limited, enumerated consent rights of the majority stockholder (including material mergers and acquisitions and incurrence of debt). For additional information, see “Certain Relationships and Related Transactions, Director Independence—Relationship with Leonardo S.p.A.—Commitment Letter” in this proxy statement/prospectus.

Our Ultimate Parent

Leonardo S.p.A., a global high-technology company, is among the top ten world players in Aerospace, Defense and Security and Italy’s main industrial company. Organized into five business divisions, Leonardo S.p.A. has a significant industrial presence in Italy, the United Kingdom, Poland and the USA, where it also operates through subsidiaries such as DRS (defense electronics), and joint ventures and partnerships such as: ATR, MBDA, Telespazio, Thales Alenia Space and other minor entities. Leonardo S.p.A. competes in the most important international markets by leveraging its areas of technological and product leadership (Helicopters, Aircraft, Aerostructures, Electronics, Cyber Security and Space). Listed on the Milan Stock Exchange (under the trading symbol “LDO”), in 2021 Leonardo S.p.A. recorded consolidated revenues of €14.1 billion and invested €1.8 billion in Research and Development. The group has been part of the Dow Jones Sustainability Index (“DJSI”) since 2010 and was named as sustainability global leader in the Aerospace & Defense sector of DJSI for the third year in a row in 2021.

Available Information

We file reports and other information with the Securities and Exchange Commission (“SEC”) pursuant to Section 15(d) of the Securities Exchange Act of 1934, as amended. The SEC maintains a website (www.sec.gov) that contains reports, proxy and information statements, and other information. Our website is https://www.leonardodrs.com.

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Properties

We are headquartered in Arlington, Virginia. Our principal executive offices are leased under a lease agreement expiring in March 31, 2027 with an option to extend for five years thereafter. We also lease space in 17 other states and the District of Columbia in the United States and in one city in Canada and we own properties in three states in the United States and in one city in Canada. We believe that our facilities are adequate for our intended use and sufficient for our immediate needs, including to meet any security certification requirements or requirements for locating facilities in certain locations. It is not certain whether we will negotiate new leases as existing leases expire or whether we will be able to negotiate new leases without substantial cost or at all. Such determinations will be made as existing leases approach expiration and will be based on an assessment of our requirements at that time. Further, we believe that we can obtain additional space, if necessary, based on prior experience and current real estate market conditions. The table below provides additional information about our significant leased and owned facilities and properties.

Location

Activities

Operating Segment

Approximate Square Footage

Owned / Leased

4265 North 30th Street, Milwaukee, WI

Manufacturing, Engineering, Warehouse,
Office

Integrated Mission Systems

610,800

Leased

1 McDaniel Street, West Plains, MO

Manufacturing, Engineering, Warehouse,
Office

Integrated Mission Systems

447,067

Owned

Good Hope Rd., Menomonee Falls, WI

Manufacturing, Engineering, Warehouse

Integrated Mission Systems

372,856

Leased

100 North Babcock Street, Melbourne, FL

Manufacturing, Engineering, Warehouse,
Office

Advanced Sensing and Computing

311,287

Leased

6060 Highway, High Ridge, MO

Manufacturing, Engineering,
Office

Integrated Mission Systems

183,600

Owned

4545 N. Lindbergh Blvd, Bridgeton, MO

Manufacturing, Engineering, Warehouse,
Office

Integrated Mission Systems

171,500

Leased

One Milestone Center Court, Germantown, MD

Engineering,
Office

Advanced Sensing and Computing

133,140

Leased

7200 Redstone Gateway, Huntsville, AL

Manufacturing, Engineering,
Office

Advanced Sensing and Computing

131,498

Leased

246 Airport Road, Johnstown, PA

Manufacturing, Engineering, Warehouse,
Office

Advanced Sensing and Computing

129,716

Leased

500 Palladium Drive, Ottawa, ON, Canada

Manufacturing, Engineering, Warehouse,
Office

Advanced Sensing and Computing

127,334

Leased

401 Flint Drive, Menomonee Falls, WI

Engineering,
Office

Integrated Mission Systems

118,620

Leased

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166 Boulder Drive, Building #2, Fitchburg, MA

Manufacturing, Warehouse

Integrated Mission Systems

114,454

Leased

6200 118th Avenue North, Largo, FL

Manufacturing, Engineering,
Office

Advanced Sensing and Computing

113,329

Owned

10600 Valley View Street, Cypress, CA

Engineering,
Office

Advanced Sensing and Computing

91,506

Leased

13532 N Central Expressway, Dallas, TX

Manufacturing, Engineering,
Office

Advanced Sensing and Computing

89,982

Leased

645 Anchors Street, Ft. Walton Beach, FL

Manufacturing, Engineering,
Office

Advanced Sensing and Computing

74,304

Owned

21 South Street, Danbury, CT

Manufacturing, Engineering, Warehouse,
Office

Integrated Mission Systems

74,300

Owned

1200 Sherman Street, Dallas, TX

Engineering,
Office

Advanced Sensing and Computing

73,646

Leased

16465 Via Esprillo, San Diego, CA

Manufacturing, Engineering,
Office

Advanced Sensing and Computing

67,762

Leased

650 Lovejoy, Ft. Walton Beach, FL

Engineering,
Office

Advanced Sensing and Computing

53,045

Owned

2345 Crystal Drive, Arlington, VA

Office

Corporate

49,048

Leased

13544 N Central Expressway, Dallas, TX

Manufacturing, Engineering,
Office

Advanced Sensing and Computing

48,374

Leased

2601 Mission Point Blvd, Beavercreek, OH

Engineering,
Office

Advanced Sensing and Computing

46,637

Leased

150 Bluewater Road, Bedford, NS, Canada

Manufacturing, Engineering,
Office

Advanced Sensing and Computing

41,750

Owned

21345 Ridgetop Circle, Dulles, VA

Engineering,
Office

Advanced Sensing and Computing

40,412

Leased

825 Greenbrier Circle, Chesapeake, VA

Manufacturing, Engineering,
Office

Advanced Sensing and Computing

34,299

Leased

651 Anchors Street, Ft. Walton Beach, FL

Manufacturing, Engineering,
Office

Advanced Sensing and Computing

32,107

Owned

1057 South Sherman, Richardson, TX

Engineering,
Office

Advanced Sensing and Computing

26,696

Leased

590 Territorial Drive, Bolingbrook, IL

Manufacturing, Engineering,
Office

Advanced Sensing and Computing

26,460

Leased

166 Boulder Drive, Fitchburg, MA

Engineering,
Office

Integrated Mission Systems

22,000

Leased

640 Lovejoy West, Ft. Walton Beach, FL

Engineering,
Office

Advanced Sensing and Computing

11,226

Owned

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Legal Proceedings

From time to time, we are subject to certain legal proceedings and claims in the ordinary course of business. These matters are subject to many uncertainties and it is possible that some of these matters ultimately could be decided, resolved or settled in a manner adverse to us. Although the precise amount of liability that may result from these matters is not ascertainable, we believe that any amounts exceeding our recorded accruals should not materially adversely affect our financial condition or liquidity. It is possible, however, that the ultimate resolution of those matters could result in a material adverse effect on our results of operations and/or cash flows from operating activities for a particular reporting period. We establish reserves for specific legal matters when we determine that the likelihood of an unfavorable outcome is probable and the loss is reasonably estimable.

Some environmental laws, such as the Comprehensive Environmental Response, Compensation and Liability Act of 1980 (also known as “CERCLA” or the “Superfund law”) and similar state statutes, can impose liability upon former owners or operators for the entire cost of investigating and remediating contaminated sites regardless of the lawfulness of the original activities that led to the contamination. In July 2000, an entity which later became a subsidiary of the Company received a Section 104(e) Request for Information (“RFI”) from the National Park Service (“NPS”), pursuant to CERCLA, regarding the presence of radioactive material at a site within a national park, which site was operated by an alleged predecessor to our subsidiary over 50 years ago. Following our subsidiary’s response to the RFI, the NPS directed it and another alleged former operator to perform an Engineering Evaluation and Cost Analysis (“EE/CA”) of a portion of the site. Our subsidiary made a good faith offer to conduct an alternative EE/CA work plan, but the NPS rejected this offer and opted to perform the EE/CA itself. The NPS previously posted its intention to open a formal public comment period regarding the EE/CA at the end of 2019. To our knowledge, the EE/CA has not been released and a public comment period has yet to be opened.

Following completion of the EE/CA, the NPS may seek reimbursement for its investigative and remedial efforts to date, or direct one or more of the potentially responsible parties to perform any remediation that may be required by CERCLA or may enter an alternative dispute resolution proceeding to attempt to resolve each party’s share. In addition, the NPS may seek to recover damages for loss of use of certain natural resources. We believe that we have legitimate defenses to our subsidiary’s potential liability and that there are other potentially responsible parties for the environmental conditions at the site, including the U.S. government as owner, operator and arranger at the site. The potential liability associated with this matter could change substantially due to such factors as additional information on the nature or extent of contamination, methods of remediation that might be recommended or required, changes in the apportionment of costs among the responsible parties, whether the NPS seeks to recover additional damages, whether the NPS’s plans to investigate additional areas to identify a need for further remedial action for which the Company may be identified as a potentially responsible party and other actions by governmental agencies or private parties.

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Management’s Discussion and Analysis of Financial Condition and Results of Operations

You should read this discussion together with our consolidated financial statements and related notes thereto included elsewhere in this proxy statement/prospectus.

This discussion and other parts of this proxy statement/prospectus include forward-looking statements such as those relating to our plans, objectives, expectations and beliefs, which involve risks, uncertainties and assumptions. These forward-looking statements are subject to numerous risks and uncertainties, including, but not limited to, the risks and uncertainties discussed under “Special Note Regarding Forward-Looking Statements” and “Risk Factors” in this proxy statement/prospectus. Actual results may differ materially from those contained in any forward-looking statements.

Business Overview and Considerations

General

DRS is a leading provider of defense products and technologies that provide battlefield superiority today while shaping the battlefield of tomorrow for the U.S. military and our allies abroad. We offer a broad portfolio of products and services in our core technologies including advanced sensing, network computing, force protection, and electric power conversion and propulsion. Our leadership positions in these markets have created a foundational base of programs within the DoD that has yielded five straight years of organic revenue growth. We believe these technologies will not only support our Armed Services in today’s mission but will also underpin the DoD’s strategy to migrate towards more autonomous, dynamic, interconnected, and multi-domain capabilities needed to win in tomorrow’s battlefield We expect that the DoD’s focus on effectively countering growing peer threats from China and Russia while simultaneously pursuing a counter-terrorism strategy against asymmetrical organizations and actors will increase its reliance on the core technologies that DRS provides, reinforcing our position in our high growth markets.

Our overall strategy is to be a balanced and diversified company, less vulnerable to any one budgetary platform or service decision with a specific focus on establishing strong technical and market positions in areas of priority for the U.S. Department of Defense (“DoD”). The DoD is our largest customer. For the second quarter and first six months of 2022, the DoD accounted for approximately 78% and 82%, respectively, of our business as an end-user. The revenues for the three- and six-month periods ended June 30, 2022 are principally derived directly or indirectly from contracts with the U.S. Army, which represented 33% and 33%, respectively, and the U.S. Navy, which represented 29% and 32%, respectively, of our consolidated revenue, in each case consistent with historic trends.

Our operations and reporting are structured into the following two technology driven segments based on the capabilities and solutions offered to our customers:

Advanced Sensing and Computing (“ASC”): Our Advanced Sensing and Computing segment is organized to provide equipment that enables the capture and communication of value battlefield information necessary to ensure our armed forces are equipped with real-time intelligence required to deliver enhanced decision making and execution in theater. From leading long-range sensing capabilities, expanding our reach, to rugged, trusted, and cyber resilient computing, our ASC products provide our customers with the ability to be successful in their mission.

Our ASC segment provides ground vehicle systems including third generation infrared, long-range threat detection, situational awareness, targeting and vehicle protection. Additionally, we offer a full complement of soldier systems, including next generation sensors, targeting systems and optics to improve infantry combat effectiveness. Our sensing technologies also support aircraft survivability through advanced two-color infrared sensors and our quantum cascade lasers which detect and protect aircraft from missile attacks.

In addition to our optical sensing systems, we utilize state of the art technology in EW and cyber systems to provide our customers integrated capabilities for multi-domain operations to supplement kinetic warfare. Our mounted and dismounted EW systems and intelligence solutions across a broad range of platforms bring world-class capability to our customers.

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Our sensing capabilities are complemented by our network computing and communications products. We are the leading global supplier of battle management systems and mounted computing hardware for ground forces worldwide. For the U.S. and allied naval customers, we provide naval computing systems and networks, shipboard communications, radar, surface ship and submarine combat and command and control systems.

Integrated Mission Systems (“IMS”): Our Integrated Mission Systems segment consists of both land and naval system integration capabilities. The IMS segment provides critical force protection, vehicle integration, transportation and logistics and electrical control, distribution and conversion, and ship propulsion systems to the U.S. military and allied forces.

Our force protection systems provide protection for our service members and military assets from evolving threats and include advanced solutions for counter-unmanned aerial systems, short-range air defense systems and active protection systems on ground vehicles. We have military transportation and logistics offerings and ground vehicle integration capabilities to support U.S. forces in a wide range of operational environments.

Additionally, we provide power conversion and propulsion systems for the U.S. Navy’s top priority shipbuilding programs, building on our legacy of providing power components and systems for nearly all naval combat vessels for three decades, positioning us to continue as a leading provider of electrical ship propulsion systems and components for the U.S. Navy.

Focus on Customer and Execution

DRS and its employees focus on our end-customers – the men and women of the armed forces in the U.S. and its allies. We seek to provide high-quality equipment and services to support their mission success. We strive for excellence in everything we do, in every job in our Company, in order to satisfy our customers’ needs embedded in our contractual commitments. We seek to ensure that we learn from every lesson experienced in our Company and insist that these lessons affect all elements of our businesses. This approach permeates through the Company with a focus on continuous improvement at every level.

Part of this learning has resulted in institutionalizing our continuous improvement process through our Operational Excellence initiative called “Always Performing For Excellence,” or “APEX,” program. The APEX program’s goal is to strive for continuous improvement through unification of our business practices, tools and metrics, ongoing employee training and innovation. We believe that excellence is not a destination, but by constantly challenging ourselves to be better, we will improve, and ultimately approach excellence. We challenge ourselves to exceed our customers’ expectations and we partner with them to work to ensure that our execution meets their needs.

Continuous improvement, through the APEX program also allows us to improve our efficiency, which contributes to increased margins, helps us to remain competitive and allows us to make strategic investments, all while maintaining our focus on customer satisfaction. In these elements, our goals are aligned with those of our customers. We are humbled by the dedication and sacrifice that our ultimate customers have made to serve and we work to perform for them with excellence in everything we do.

Impacts of COVID-19 On Our Business

The coronavirus (“COVID-19”) pandemic has caused significant disruptions to national and global economies and government activities since March 2020. We continue to closely monitor COVID-related impacts on all aspects of our business and geographies, including on our workforce, supply chain and customers.

The United States has taken several steps to respond to the pandemic. On September 9, 2021, President Biden announced a COVID-19 action plan, including an executive order, the Safer Workforce Task Force guidance issued on September 24, 2021 and the DoD’s Force Health Protection guidance. This executive order and guidance (as amended) contained a clause that required covered federal contractors and subcontractors to implement federally required vaccine mandates. This clause was implemented into several of our applicable federal contracts. In light of certain of certain court orders, however, the Office of Management and Budget has stated that the U.S Government will not take action to enforce this clause until further notice. If ultimately upheld, this federal contract requirement

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may impact several of our contracts. We are continuing to evaluate these evolving requirements, especially as our customers determine when and how to implement the potential contractual requirements. We cannot at this stage predict the various impacts they may have on our workforce, our suppliers, or our company. These evolving government requirements, along with broader impacts of the continuing pandemic, could impact our workforce and performance, as well as those of our suppliers

We continue to follow the practice started in the first quarter of 2022 that any remaining additional costs to operate our business in response to the COVID-19 environment should be reported as part of our normal business operations and not separately identified as an adjustment to EBITDA. In addition to the challenges that COVID-19 is presenting to the industry and our Company, significant adverse supply chain disruptions continue throughout the industry and for the Company, including delays in the receipt and delivery of materials,

Business Environment

Revenues derived directly, as a prime contractor, or indirectly, as a subcontractor, from contracts with the U.S. government represented 78% and 82% of our consolidated revenue for the second quarter and first six months of 2022, respectively, and 85% and 86% of our consolidated revenue for the second quarter and first six months of 2021. Of these sales directly to the U.S. government, the Army and Navy are our largest customers. For the three- and six-month periods ended June 30, 2022, U.S. government sales with the U.S. Army represented 33% and 33% and U.S. government sales with the U.S. Navy represented 29% and 32%, respectively, of our consolidated revenue. For the three- and six-month periods ended June 30, 2021, U.S. government sales with the U.S. Army represented 31% and 38% and U.S. government sales with the U.S. Navy represented 32% and 31%, respectively, of our consolidated revenue.

The Second Quarter was highlighted by congressional defense committee work on Fiscal Year 2023 (“FY 23”) authorization and appropriations legislation following the President’s FY23 budget release in the first quarter of the calendar year. The first committee to act was the Senate Armed Services Committee making up their version in closed session of the FY23 National Defense Authorization Act. Next, the House Defense Appropriations Committee completed work on their version of FY23 appropriations legislation. Finally, the House Armed Services Committee considered their authorization legislation passing it in full committee. This bill likely be brought to the full House in the third quarter.

In February 2022, Russian forces invaded Ukraine. In response, the United States and several other countries imposed economic and trade sanctions, export controls and other restrictions targeting Russia and Belarus. The conflict and these sanctions have caused disruptions to global economies and some global businesses, including heightened cybersecurity risks, supply chain challenges, increased energy costs, foreign currency exchange rate fluctuations, as well as an exacerbation of existing inflationary pressures. In addition, the Russia-Ukraine conflict has created some potential supply chain challenges for our Company and our suppliers, which we will continue to monitor and manage.

The Russia-Ukraine conflict may also impact the FY23 U.S. government defense budget due to the heightened national security threat. Internationally, many countries in the region have expressed a renewed commitment to defense-related spending. As a result, we may see additional demand for our products and services.

Key Financial and Operating Measures

Overview

We measure our business using both key financial and operating data including key performance indicators (“KPIs”) and non-GAAP financial measures and use the following metrics to manage our business, monitor results of operations and ensure proper allocation of capital: (i) Revenue, (ii) Bookings, (iii) Backlog, (iv) Adjusted EBITDA, (v) Adjusted EBITDA Margin, (vi) Adjusted Earnings Per Share (“EPS”) and (vii) Free Cash Flow. We believe that these financial performance metrics represent the primary drivers of value enhancement, balancing both

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short and long-term indicators of increased shareholder value. These are the metrics we use to measure our results and evaluate our business and related contract performance. See “—Results from Operations” for further detail.

Financial and Operating Data


	Three Months Ended June 30,				Six Months Ended June 30,
(Dollars in millions, except per share amounts)	2022		2021		2022		2021
Total revenues	$	627	$	658	$	1,239	$	1,339

RADA ELECTRONIC INDUSTRIES LTD 6-K