WIDEPOINT CORP
For the period ended Dec 31, 2025. Filed Mar 25, 2026.
View on SEC.govAbout this filing
A company's yearly report to the SEC, with audited financial statements. It is the fullest account a company gives of its business, its finances and the risks it sees.
FY2025 · Filed Mar 25, 2026
WYY$6.24-0.8%Stored close · as of Nov 9, 2026
What changed in Risk Factors?
Read the current filingPrevious report: 10-K
Period ended 2024-12-31; filed 2025-04-15.
0001654954-25-004306
Item 1A. RISK FACTORSCurrent report: 10-K
Period ended 2025-12-31; filed 2026-03-25.
0001654954-26-002749
Item 1A. RISK FACTORSThe baseline is this issuer’s latest earlier reporting period of the same form that was filed before the current report. A previous 10-Q is a different quarter, not a year-over-year comparison. Amendments are excluded.
Compared 107 previous paragraphs and 109 current paragraphs.
79 unchanged; 19 reworded; 11 added; 8 removed; 1 previous and 0 current paragraphs rearranged.
Tables are not compared: 8 previous and 10 current tables excluded. Dates, whitespace, punctuation and numbering changes are ignored; changes to financial figures remain significant.
A changed paragraph is not evidence that risk increased or decreased. An unchanged paragraph does not establish that risk stayed the same.
Added paragraphs (11)
Current report
We have access to a credit facility consisting of a variable line of credit used primarily to meet short-term working capital requirements. The availability of borrowings under this facility is subject to certain conditions, including compliance with financial covenants measured annually as of December 31 and a borrowing base calculation based on eligible billed accounts receivable pledged as collateral. Although we have adequate collateral and were in compliance with our covenants as of December 31, 2025, we may not be able to maintain compliance or sufficient eligible collateral in future periods. If we fail to satisfy these requirements, our lender could restrict or terminate our ability to borrow under the facility, accelerate repayment of outstanding amounts, impose unfavorable renewal terms, or decline to renew the agreement. Any such actions could materially and adversely affect our liquidity. If sufficient borrowing capacity is not available, we may need to obtain additional financing, which may not be available on favorable terms or at all.
Current report
Our contracting environment is becoming increasingly complex and subject to heightened regulatory requirements and enforcement, which increases our operational and compliance risk.
Current report
We operate in a regulatory and contractual environment that continues to evolve and become more complex. Many of our contracts, particularly those with government and regulated commercial customers, are subject to extensive statutory, regulatory, and contractual requirements. These requirements may relate to procurement rules, cybersecurity standards, data protection, labor compliance, cost accounting, reporting obligations, supply chain integrity, and other compliance mandates. Non-compliance with applicable laws, regulations, or contractual provisions can result in substantial penalties, including fines, contract termination, suspension or debarment, repayment obligations, reputational damage, or exclusion from future bidding opportunities.
Current report
In addition, we are increasingly pursuing contracts with broader scope, greater technical complexity, and more sophisticated performance and compliance obligations. These contracts often contain detailed pricing structures, performance metrics, indemnification provisions, audit rights, flow-down requirements, and other risk-shifting mechanisms that may expose us to financial or operational risk if not properly negotiated or managed.
Current report
Our ability to effectively mitigate these risks depends in part on maintaining adequate internal resources, including personnel with appropriate legal, regulatory, contracting, pricing, and compliance expertise. If we fail to devote sufficient resources to contract review and negotiation, or if we are unable to attract and retain qualified personnel capable of managing increasingly complex contractual and regulatory obligations, we may enter into agreements on unfavorable terms, underestimate compliance costs, or fail to maintain effective internal controls. Any such failure could result in increased costs, disputes, penalties, diminished profitability, or other material adverse effects on our business, financial condition, and results of operations.
Current report
As regulatory scrutiny increases and contractual complexity grows, the consequences of errors in contract negotiation, compliance oversight, or performance management may become more significant
Current report
The long-term and fixed-price nature of these contracts increases the importance of accurately defining the scope of work, appropriately pricing our services, and effectively managing performance obligations over the contract term. Our ability to do so depends in part on maintaining adequate personnel resources, including employees with sufficient experience and expertise in contract scoping, pricing, operational planning, and contract administration. If we do not maintain adequate staffing levels or do not have personnel with the appropriate level of experience to assess contractual terms, evaluate pricing assumptions, and manage performance risks, we may misprice contracts, underestimate costs, or fail to anticipate operational complexities.
Current report
In addition, because many of our contracts are firm fixed-price, we bear the risk of cost increases, including those resulting from inflation, labor shortages, supply chain disruptions, tariffs, or other economic conditions, and we may be unable to pass such increases on to customers. Any failure to accurately scope, price, or manage our contracts, or to complete our performance obligations in accordance with contractual requirements, could negatively affect our profitability over multiple years and could have a material adverse effect on our business, financial condition, and results of operations.
Current report
Federal government efficiency initiatives and restructuring efforts could adversely affect our government revenues.
Current report
From time to time, the federal government undertakes initiatives intended to improve efficiency, reduce costs, streamline procurement, or restructure agencies and programs. These efforts, whether implemented through specific agencies, task forces, or broader policy directives, may result in reductions in government spending, changes in procurement priorities, workforce reductions, agency consolidations, or the elimination or modification of programs.
Current report
As a government contractor, our business operations, contract awards, and revenue streams may be adversely affected by such initiatives, including through reduced demand for our services, delays or cancellations of contracts, changes in customer requirements, or the loss of key government personnel with whom we maintain working relationships. Although our solutions are designed to help government customers operate more efficiently and reduce costs, there can be no assurance that these initiatives will not result in decreased funding, contract terminations, or other actions that could materially and adversely impact our financial condition, results of operations, or growth prospects.
Removed paragraphs (8)
Previous report
The loss of significant customer contracts, including our IDIQ with the Department of Homeland Security, could also have an adverse impact on our financial results.
Previous report
**A global pandemic similar to the COVID 19 pandemic, or an epidemic, could have a material adverse impact on our business and operations. **
Previous report
Pandemics have in the past adversely affected certain elements of our business and our operations due to quarantines, government orders and guidance, facility closures, illness, travel restrictions, implementation of precautionary measures and other restrictions applicable to us and our business partners. The COVID-19 pandemic or another future pandemic or epidemic could lead to an extended disruption of economic activity and high unemployment levels, and disruption of the global supply chain, and as such, cause a material negative impact on our consolidated results of operations, financial position and cash flows.
Previous report
The newly formed Department of Government Efficiency (DOGE) could negatively impact our revenues from the government customers.
Previous report
The newly formed Department of Government Efficiency (DOGE) has implemented new policies and oversight mechanisms aimed at reducing federal expenditures, streamlining procurement, and increasing operational efficiency. DOGE has reduced the number of federal employees and agencies and continues to do so. As a government contractor, we believe we have saved, and continue to help save, our government customers money; however, our business operations, contract awards, and revenue streams are subject to DOGE actions, which may introduce material risks to our financial performance and strategic growth. In addition, DOGE could eliminate an agency that we work with, terminate persons with whom we have business relations with or cancel a contract with us. Any failure to comply with DOGE actions, shifts in federal procurement strategies, or budgetary reductions imposed by the agency could materially and adversely impact our financial results, competitive positioning, and overall business operations.
Previous report
We have identified material weaknesses in our internal control over financial reporting. If our remediation of these material weaknesses is not effective, or if we identify additional material weaknesses in the future or otherwise fail to maintain an effective system of internal controls, we may not be able to accurately or timely report our financial condition or results of operations, which may adversely affect investor confidence in us and, as a result, the value of our common stock.
Previous report
During our 2024 year-end closing process, we identified deficiencies related to the revenue recognition process for government contracts, specifically in the estimation of unbilled amounts related to a large government agency. During the assessment process, we identified additional deficiencies in the design of controls over the monitoring of evolving circumstances that require specific, customer level analysis relating to revenue recognition. This deficiency led to errors in the timing of revenue that required adjustment during the year-end close. As a result of these deficiencies, we identified material weaknesses in our internal control over financial reporting, which have not been remediated to date.
Previous report
If we fail to effectively remediate the material weaknesses in our internal control over financial reporting, or if we identify additional material weaknesses in the future or otherwise fail to maintain an effective system of internal controls when required to do so in the future, we may be unable to accurately or timely report our financial condition or results of operations. In addition, if we are unable to assert that our internal control over financial reporting is effective, or if our independent registered public accounting firm is unable to express an opinion as to the effectiveness of our internal control over financial reporting, when required, investors may lose confidence in the accuracy and completeness of our financial reports, we may face restricted access to the capital markets and our stock price could be adversely affected.
Reworded paragraphs (19)
Previous wording
We may be unable to renew the DHS CWMS 2.0 IDIQ upon its expiration in November 2025.
Current wording
We may be unable to renew the DHS CWMS 2.0 IDIQ.
Previous wording
While we believe that our business relationships with key decision makers are strong and represent a strong competitive advantage for us; however, it is possible that the strength of our relationship could diminish if our primary customer contacts leave their firm or the customer is acquired by another firm that uses a competitor to deliver the same services. We estimate that the loss of any large contract, such as the DHS CWMS 2.0 IDIQ, without any offsetting aggregate contract wins, would have a significant adverse impact on our operating cash flow and financial results; and we would likely be faced with a decision to initiate cost reduction actions that would largely include reductions in force for personnel and assets affected by the contract loss. Further, the availability of our line of credit is dependent on having sufficient billed accounts receivable as collateral. If DHS CWMS 2.0 IDIQ were terminated or we did not re-win the contract upon re-bidding or another large customer contract was terminated, it would have a material adverse impact on our future revenue, profitability and cash flows.
Current wording
During 2025 and 2024 approximately 77% and 79%, respectively, of our revenues were from the Department of Homeland Security for Cellular Wireless Managed Services (CWMS) 2.0 ID/IQ Contract (DHS CWMS 2.0 IDIQ). Our DHS CWMS 2.0 IDIQ contract is currently subject to re-competition, in a competitive process, and we are awaiting the government’s award decision; there can be no assurance that we will be awarded the successor contract, or that the terms, scope, or timing of any extension, bridge arrangement, or successor award will not materially differ from the current contract. This contract represents a significant portion of our revenue. We estimate that the loss of the DHS CWMS 2.0 IDIQ, without any offsetting aggregate contract wins, would have a significant adverse impact on our operating cash flow and financial results; and we would likely be faced with a decision to initiate cost reduction actions that would largely include reductions in force for personnel and assets affected by the contract loss. Further, the availability of our line of credit is dependent on having sufficient billed accounts receivable as collateral.
Previous wording
During 2024 and 2023 approximately 79% and 75%, respectively, of our revenues were from the Department of Homeland Security for Cellular Wireless Managed Services (CWMS) 2.0 ID/IQ Contract (DHS CWMS 2.0 IDIQ), which is up for renewal in a competitive process in November 2025. The DHS CWMS 2.0 IDIQ, like other government contracts, is awarded through a competitive procurement process. The costs we incur in the competitive procurement process may be substantial and we may not be successful in our bid to win such a contract or may be required to make significant concessions (or partner with another company) in order to rewin the contract. Many of the competitors involved in the procurement process will likely have greater financial and other resources than us. Additionally, there can be no assurance that the DHS will seek another similar contract. If we are unable to rewin the DHS CWMS 2.0 IDIQ contract on substantially similar terms or at all, our financial condition and results of operations will be materially adversely impacted.
Current wording
If we are unable to rewin the DHS CWMS 2.0 IDIQ contract on substantially similar terms or at all, our financial condition and results of operations will be materially adversely impacted.
Previous wording
Inflationary or other pressures on costs, such as inputs for devices, labor and distribution costs may impact our financial condition or results of operations.
Current wording
Inflationary or other pressures on costs, such as inputs for devices, labor, tariffs, and distribution costs may impact our financial condition or results of operations.
Previous wording
As a provider of TMaaS services, we sell equipment manufactured by various suppliers and depend on suppliers to provide us, directly or through other suppliers, with items such as network equipment, customer premises equipment, and wireless-related equipment and other connected devices. In the past few years, the costs of these inputs and the costs of labor necessary to develop and maintain our networks and our products and services rapidly increased. In addition, many of these inputs are subject to price fluctuations and supply issues from a number of factors, including, but not limited to, market conditions, demand for raw materials used in the production of these devices and network components, weather, climate change, energy costs, currency fluctuations, supplier capacities, governmental actions, wars or other low-intensity conflicts, acts of terror, import and export requirements (including tariffs), and other factors beyond our control. Although we are unable to predict the impact on our ability to source materials in the future, we expect these supply and inflationary pressures to continue into 2025. In addition, we may face additional cost pressure via new tariffs imposed on the items we import.
Current wording
We sell equipment manufactured by various suppliers and depend on suppliers to provide us, directly or through other suppliers, with items such as network equipment, customer premises equipment, and wireless-related equipment and other connected devices. In the past few years, the costs of these inputs and the costs of labor necessary to develop and maintain our networks and our products and services rapidly increased. In addition, many of these inputs are subject to price fluctuations and supply issues from a number of factors, including, but not limited to, market conditions, demand for raw materials used in the production of these devices and network components, weather, climate change, energy costs, currency fluctuations, supplier capacities, governmental actions, wars or other low-intensity conflicts, acts of terror, import and export requirements, and other factors beyond our control. Although we are unable to predict the impact on our ability to source materials in the future, these supply and inflationary pressures are likely to continue for the foreseeable future. In addition, we face additional cost pressure via tariffs imposed on the items we import.
Previous wording
We have access to a credit facility, which consists of a variable line of credit primarily to meet short-term working capital requirements. Our credit facility agreement requires us to maintain certain financial covenants measured annually on December 31. We are currently in compliance with our covenants at December 31, 2024; however, if we are unable to meet future covenants, our lender could take adverse actions that might include accelerating in part or in full payment of all unpaid principal and interest, reducing the amount of our credit facility, or offering renewal terms that are unfavorable, or refusing to renew our credit agreement, all of which could have a material adverse impact on our ability to meet periodic short term operational cash flow requirements and manage through prolonged government shutdowns. If we are unable to achieve and maintain our covenants under our credit facility, our business and operating results could suffer and we may need to obtain additional funding or raise capital, which may not be available on favorable terms or at all. The availability of our line of credit is dependent on having sufficient billed accounts receivable as collateral. If we do not have sufficient collateral, that could have a material adverse impact on our ability to meet periodic short term operational cash flow requirements.
Previous wording
We have a history of operating losses. A significant contributing factor driving such prior net operating losses were investments in sales and marketing and product development projects that did not produce the expected return on investment; and as a result placed a significant cumulative strain on our networking capital and overall financial position. There is no guarantee that we will be able to leverage our recent improvements in financial performance and meet our financial goals of growing top line revenue and positive net income without closing significant new business and incremental contract expansions and maintain control over operating costs. An inability to successfully grow our sales pipeline and close on new business that is profitable, adequately control costs, could affect our long-term viability, profitability and ultimately limit the financial resources we have available to grow our business and achieve our desired financial results. Further, our lack of profitability and limits on access to capital may cause us to be disqualified from winning new contracts or recompeted contracts, or require us to team, and thus share in revenues, with another larger prime contractor to be successful in winning.
Current wording
We have a history of operating losses. A significant contributing factor driving such prior net operating losses were investments in product development projects, sales and marketing that did not produce the expected return on investment; and as a result placed a significant cumulative strain on our networking capital and overall financial position. There is no guarantee that we will be able to meet our financial goals of growing top line revenue and positive net income without closing significant new business and incremental contract expansions and maintain control over operating costs. An inability to successfully grow our sales pipeline and close on new business that is profitable, adequately control costs, could affect our long-term viability, profitability and ultimately limit the financial resources we have available to grow our business and achieve our desired financial results. Further, our lack of profitability and limits on access to capital may cause us to be disqualified from winning new contracts or recompeted contracts, or require us to team, and thus share in revenues, with another larger prime contractor to be successful in winning.
Previous wording
A high percentage of our operating cash outlays, particularly personnel, rent and communications costs, are fixed in advance of any particular quarter. As a result, an unanticipated or prolonged decrease in the number or average size of, or an unanticipated delay in the scheduling for our projects may cause significant variations in operating results in any particular quarter and could have a material adverse effect on operations and cash flow for that quarter. An unanticipated termination, decrease or delay in the implementation of a significant anticipated customer contract could require us to maintain underutilized employees and that could have a material adverse effect on our cash flow, financial condition and results of operations. Other factors that may negatively affect our earnings from quarter to quarter include changes in:
Current wording
A high percentage of our operating cash outlays, particularly personnel, rent and communications costs, are fixed in advance of any particular quarter. As a result, an unanticipated or prolonged decrease in the number or average size of, or an unanticipated delay in the scheduling for our projects may cause significant variations in operating results in any particular quarter and could have a material adverse effect on operations and cash flow for that quarter. An unanticipated termination, decrease or delay in the implementation of a significant anticipated customer contract could require us to maintain underutilized employees and that could have a material adverse effect on our cash flow, financial condition and results of operations. Other factors that may negatively affect our earnings and free cashflow from quarter to quarter include changes in:
Previous wording
Most of our contracts with customers have terms of three (3) to five (5) years, with optional additional renewal periods. Our government contracts generally consist of a base period award with 4 option periods depending on the needs of the agency issuing the contract award. Our commercial contracts have contractual terms of 3 or more years with automatic annual renewals in most cases. Most of our contracts are offered at firm fixed price per performance obligation such as price per unit managed. Due to the long-term nature of our firm fixed price contracts, any failure on our part to accurately define the scope of work and properly manage scope creep, properly price our products to match the customer’s operating environment to properly factor in inflation and labor costs, or to effectively manage our costs to deliver against these performance obligations could have an adverse negative impact to our financial position and results of operations over a number of years. Accordingly, we may be unable to pass on the recent increases in costs for labor and supplies as a result of general inflationary conditions or tariffs to such customers. Additionally, our failure to complete our contractual performance obligations in a manner consistent with the contract could adversely affect our overall profitability and could have a material adverse effect on our business, financial condition and results of operations.
Current wording
Most of our contracts with customers have terms of three to five years, often with optional renewal periods. Our government contracts generally consist of a base period with multiple option periods, while our commercial contracts typically have initial terms of three or more years with automatic annual renewals in many cases. Substantially all of these contracts are structured on a firm fixed-price basis per performance obligation.
Previous wording
Our TMaaS solution derives its value in significant part from our communications management software’s ability to interface with and support the interoperation of diverse communications devices, billing systems and operational support systems. The emergence of a single or a small number of widely used communications devices, billing systems or operational support systems using consolidated, consistent sets of standardized interfaces for the interaction between communications service providers and their enterprise customers could significantly reduce the value of our solution to our customers and potential customers. Furthermore, any such communications device, billing system or operational support system could make use of proprietary software or technology standards that our software might not be able to support. In addition, the manufacturer of such device, or the carrier using such billing system or operational support system, might actively seek to limit the interoperability of such device, billing system or operational support system with our software products for competitive or other reasons. The resulting lack of compatibility of our software products would put us at a significant competitive disadvantage, or entirely prevent us from competing, in that segment of the potential market if such manufacturer or carrier, or its authorized licensees, were to develop one or more communications management solutions competitive with our solution.
Current wording
Our TMaaS solution derives its value in significant part from our communications management software’s ability to interface with and support the interoperation of diverse communications devices, billing systems and operational support systems. The emergence of a single or a small number of widely used communications devices, billing systems or operational support systems using consolidated, consistent sets of standardized interfaces for the interaction between communications service providers and their enterprise customers could significantly reduce the value of our solution to our customers and potential customers. Furthermore, any such communications device, billing system or operational support system could make use of proprietary software or technology standards that our software might not be able to support. In addition, the manufacturer of such device, or the carrier using such billing system or operational support system, might actively seek to limit the interoperability of such device, billing system or operational support system with our software products for competitive or other reasons. This could be accelerated through the use of artificial intelligence. The resulting lack of compatibility of our software products would put us at a significant competitive disadvantage, or entirely prevent us from competing, in that segment of the potential market if such manufacturer or carrier, or its authorized licensees, were to develop one or more communications management solutions competitive with our solution.
Previous wording
A government shutdown or changes in the spending policies or budget priorities of the federal government could cause us to lose revenues.
Current wording
A government shutdown, agency specific shut downs, or changes in the spending policies or budget priorities of the federal government could cause us to lose revenues.
Previous wording
We currently derive a majority of our annual revenues from contracts funded by federal government agencies. We believe that contracts with federal government agencies will continue to be a significant source of our revenues for the foreseeable future. Accordingly, shutdowns or changes in federal government fiscal or spending policies or changes in U.S. federal budget could directly affect our financial performance. Currently, it is uncertain whether the federal government spending cuts being implemented with the new U.S. Presidential administration and the newly formed Department of Government Efficiency (DOGE) will have a negative impact on our revenues from the federal government. Among the factors that could harm our business are:
Current wording
We currently derive a majority of our annual revenues from contracts funded by federal government agencies. We believe that contracts with federal government agencies will continue to be a significant source of our revenues for the foreseeable future. Accordingly, shutdowns or changes in federal government fiscal or spending policies or changes in U.S. federal budget could directly affect our financial performance. The newly formed Department of Government Efficiency (DOGE) could have a negative impact on our revenues from the federal government. Among the factors that could harm our business are:
Previous wording
Most if not all federal, state and local governments, as well as commercial contracts are awarded through a competitive procurement process that could be a year or more from the initial solicitation to final contract award. We expect that much of the business we seek in the foreseeable future will be awarded through competitive procedures and similar lengthy sales cycle. Competitive procurements impose substantial upfront costs and present a number of risks, including:
Current wording
Most if not all federal, state and local governments, as well as commercial contracts are awarded through a competitive procurement process that could be a year or more from the initial solicitation to final contract award. We expect that much of the business we seek in the foreseeable future will be awarded through competitive procedures and similar lengthy sales cycle. Competitive procurements can incur substantial upfront costs and present a number of potential risks, including:
Previous wording
The costs we incur in the competitive procurement process may be substantial and, to the extent we participate in competitive procurements and are unable to win particular contracts, these costs could negatively affect our operating results. For example, our DHS contract is up for renewal in November 2025 and we may be unable to rewin such contract or may be required to make significant concessions in order to renew it. In addition, the General Services Administration multiple award schedule contracts, government-wide acquisitions contracts, blanket purchase agreements, and other indefinite delivery/indefinite quantity contracts do not guarantee more than a minimal amount of work for us, but instead provide us access to work generally through further competitive procedures. This competitive process may result in increased competition and pricing pressure, requiring that we make sustained post-award efforts to realize revenues under the relevant contract.
Current wording
The costs we incur in the competitive procurement process may be substantial and, to the extent we participate in competitive procurements and are unable to win particular contracts, these costs could negatively affect our operating results. For example, our DHS contract was up for renewal in November 2025 and our proposal is currently under evaluation. There can be no guarantees we rewin the contract, or may be required to make significant concessions in order to rewin it. DHS has issued a modification that extends the current CWMS 2.0 IDIQ contract through April 24, 2026 and provides for one more additional 1-month extension, which if exercised, would provide for performance through May 24, 2026. Task orders issued while CWMS 2.0 is under extension can be executed upon up to 1 year after award. In addition, the General Services Administration multiple award schedule contracts, government-wide acquisitions contracts, blanket purchase agreements, and other indefinite delivery/indefinite quantity contracts do not guarantee more than a minimal amount of work for us, but instead provide us access to work generally through further competitive procedures. This competitive process may result in increased competition and pricing pressure, requiring that we make sustained post-award efforts to realize revenues under the relevant contract.
Previous wording
If a federal government customer terminates one of our contracts for convenience, we may recover only our incurred or committed costs, settlement expenses, and profit on work completed prior to the termination. If a federal government customer were to unexpectedly terminate, cancel, or decline to exercise an option to renew with respect to one or more of our significant contracts, such as the DHS IDIQ, or suspend or debar us from doing business with the federal government, our revenues and operating results would be materially harmed.
Current wording
If a federal government customer terminates one of our contracts for convenience, we may recover only our incurred or committed costs, settlement expenses, and profit on work completed prior to the termination. If a federal government customer were to unexpectedly terminate, cancel, or decline to exercise an option to renew with respect to one or more of our significant contracts or suspend or debar us from doing business with the federal government, our revenues and operating results would be materially harmed.
Previous wording
Many of the services we provide involve managing and protecting information involved in sensitive or classified government functions. A security breach or cybersecurity event in one of these systems could cause serious harm to our business, damage our reputation, and prevent us from being eligible for further work on sensitive or classified systems for federal government customers. In addition, sensitive personal data could be illegally accessed and/or stolen through a cybersecurity event. We could incur losses from such a security breach that could exceed the policy limits under our insurance. Damage to our reputation or limitations on our eligibility for additional work resulting from a security breach in one of the systems we develop, install, and maintain could materially reduce our revenues.
Current wording
Many of the services we provide involve managing and protecting information involved in sensitive or classified government functions as well as sensitive commercial information. A security breach or cybersecurity event in one of these systems could cause serious harm to our business, damage our reputation, and prevent us from being eligible for further work on sensitive or classified systems for federal government customers. In addition, sensitive personal data could be illegally accessed and/or stolen through a cybersecurity event. We could incur losses from such a security breach that could exceed the policy limits under our insurance. Damage to our reputation or limitations on our eligibility for additional work resulting from a security breach in one of the systems we develop, install, and maintain could materially reduce our revenues.
Previous wording
Although we attempt to limit the amount and type of our contractual liability for defects in the applications or systems we provide and carry insurance coverage that mitigates this liability in certain instances, we cannot be assured that these limitations and insurance coverages will be applicable and enforceable in all cases. Even if these limitations and insurance coverages are found to be applicable and enforceable, our liability to our customers for these types of claims could still exceed our insurance coverage and be material in amount and affect our business, financial condition and results of operations.
Current wording
Although we attempt to limit the amount and type of our contractual liability for defects in the applications or systems we provide and carry insurance coverage that may mitigate this liability in certain instances, we cannot be assured that these limitations and insurance coverages will be applicable and enforceable in all cases. Even if these limitations and insurance coverages are found to be applicable and enforceable, our liability to our customers for these types of claims could still exceed our insurance coverage and be material in amount and affect our business, financial condition and results of operations.
Previous wording
If we or our stockholders sell substantial amounts of our common stock, the market price of our common stock could fall. Such stock issuances may be made at a price that reflects a discount from the then-current trading price of our common stock. These issuances would dilute our stockholders percentage ownership interest, which would have the effect of reducing our stockholders’ influence on matters on which our stockholders vote, and might dilute the book value of our common stock. There is no assurance that we will not seek to sell additional shares of our common stock in order to meet our working capital or other needs in a transaction that would be dilutive to current stockholders.
Current wording
If we sell substantial amounts of our common stock, the market price of our common stock could fall. Such stock issuances may be made at a price that reflects a discount from the then-current trading price of our common stock. These issuances would dilute our stockholders percentage ownership interest, which would have the effect of reducing our stockholders’ influence on matters on which our stockholders vote, and might dilute the book value of our common stock. There is no assurance that we will not seek to sell additional shares of our common stock in order to meet our working capital or other needs in a transaction that would be dilutive to current stockholders.
Previous wording
Various provisions of our certificate of incorporation, by-laws and Delaware law could make it more difficult for a third party to acquire us, even if doing so might be beneficial to WidePoint and our stockholders. We are subject to the provisions of Section 203 of the General Corporation Law of Delaware. Section 203 prohibits a publicly held Delaware corporation from engaging in a “business combination” with any interested stockholder for a period of three years after the date of the transaction in which the person became an interested stockholder, unless the business combination is approved in a prescribed manner. A “business combination” includes mergers, asset sales and other transactions resulting in a financial benefit to the interested stockholder. Subject to certain exceptions, an “interested stockholder” is (i) a person who, together with affiliates and associates, owns 15% or more of our voting stock or (ii) an affiliate or associate of ours who was the owner, together with affiliates and associates, of 15% or more of our outstanding voting stock at any time within the 3-year period prior to the date for determining whether such person is “interested.”
Current wording
Various provisions of our certificate of incorporation, by-laws and Delaware law could make it more difficult for a third party to acquire us, even if doing so might be beneficial to us and our stockholders. We are subject to the provisions of Section 203 of the General Corporation Law of Delaware. Section 203 prohibits a publicly held Delaware corporation from engaging in a “business combination” with any interested stockholder for a period of three years after the date of the transaction in which the person became an interested stockholder, unless the business combination is approved in a prescribed manner. A “business combination” includes mergers, asset sales and other transactions resulting in a financial benefit to the interested stockholder. Subject to certain exceptions, an “interested stockholder” is (i) a person who, together with affiliates and associates, owns 15% or more of our voting stock or (ii) an affiliate or associate of ours who was the owner, together with affiliates and associates, of 15% or more of our outstanding voting stock at any time within the 3-year period prior to the date for determining whether such person is “interested.”
Rearranged previous paragraphs (1)
Previous report — wording carried elsewhere
We may be unable to maintain profitability.