Babcock & Wilcox Company (UBW1) Risk Analysis

Future sales or issuances of common stock or other equity related securities may adversely affect the market price of our common stock, including any shares of our common stock issued to finance capital expenditures, finance acquisitions or repay debt. In April 2024, we entered into a Sales Agreement, establishing an at-the-market program, which permits us to issue and sell shares of our common stock having an aggregate offering price of up to $50.0 million. As of December 31, 2025, an aggregate of 20.0 million shares of common stock have been sold pursuant to the Sales Agreement, for net proceeds of $40.4 million. In November 2025, we entered into the 2025 Sales Agreement, another at-the-market program, which permits us to issue and sell shares of our common stock having an aggregate offering price of up to $200.0 million. As of December 31, 2025, 18.7 million shares have been sold pursuant to the 2025 Sales Agreement for net proceeds of $95.7 million. On November 4, 2025, in connection with the entry into a limited notice to proceed ("LNTP") with Applied Digital, we issued to Applied Digital, in a private placement, (i) 0.5 million shares of common stock, par value $0.01 per share for a purchase price of $2 million, (ii) a warrant exercisable to purchase 2.6 million shares of our common stock at an exercise price of $4.11, subject to registration rights and (iii) an additional warrant to purchase up to 7.86 million shares of our common stock. Additionally, we are party to a Registration Rights Agreement with B. Riley, pursuant to which we filed a resale shelf registration statement permitting the resale of approximately 25.6 million shares of our common stock. We may also be required to register for resale any additional shares of our common stock that B. Riley may acquire in the future. We have refreshed our at-the-market offerings in the past and expect to refresh our at-the-market programs periodically, which could lead to additional dilution for our stockholders in the future. Any sales of substantial amounts of our common stock, or the perception that these sales might occur, could lower the market price of our common stock and limit our ability to raise capital through the issuance of equity securities. Any sales, or perception of sales, by our existing shareholders could also impact the perception of shareholder support for us, which could in turn negatively affect our customer and supplier relationships. Further, if we were to issue additional equity securities (or securities convertible into or exchangeable or exercisable for equity securities) to raise additional capital, including in connection with any financing, or if our oustanding warrants are converted to common stock, our shareholders' ownership interests in us will be diluted and the value of our common stock may be reduced.

As of December 31, 2025, B. Riley controls approximately 22.1% of the voting power represented by our common stock. B. Riley currently has the right to nominate one member of our board of directors pursuant to the investor rights agreement we entered into with them on April 30, 2019. The investor rights agreement also provides pre-emptive rights to B. Riley with respect to certain future issuances of our equity securities. As a result of these arrangements, B. Riley has significant influence over our management and policies and over all matters requiring shareholder approval, including the election of directors, amendment of our certificate of incorporation and approval of significant corporate transactions. If B. Riley were to act together with other shareholders on any matter presented for shareholder approval, they could have the ability to control the outcome of that matter. B. Riley can take actions that have the effect of delaying or preventing a change of control of us or discouraging others from making tender offers for our shares, which could prevent shareholders from receiving a premium for their shares. These actions may be taken even if other shareholders oppose them. In addition, the concentration of voting power with B. Riley may have an adverse effect on the price of our common stock, and the interests of B. Riley may not be consistent with the interests of our other shareholders.

Our certificate of incorporation authorizes us to issue, without the approval of our shareholders, one or more classes or series of preferred stock having such designation, powers, preferences and relative, participating, optional and other special rights, including preferences over our common stock respecting dividends and distributions, as our board of directors generally may determine. In 2021, we issued 7.7 million shares of our 7.75% Series A Cumulative Perpetual Preferred Stock. The terms of one or more additional classes or series of preferred stock could dilute the voting power or reduce the value of our common stock. For example, we could grant holders of preferred stock the right to elect some number of our directors in all events or on the happening of specified events or the right to veto specified transactions. Similarly, the repurchase or redemption rights or liquidation preferences we could assign to holders of preferred stock could affect the residual value of the common stock.