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Item 1A. Risk Factors

2023-03-01 compared with 2022-02-28 · 171 added, 204 removed, 358 unchanged (51% of the section changed)

ITEM 1A RISK FACTORS

The following risk factors should be considered in conjunction with the other information included in this Annual Report on Form 10-K.

This report may include forward-looking

statements that involve risks and uncertainties.

In addition to those risk factors discussed elsewhere in this report, we identify the following risk factors, which could affect our actual results and cause actual results to differ materially from those in the forward-looking

This report may include forward-looking statements that involve risks and uncertainties.

Risk Factor Summary

Our business is subject to numerous risks and uncertainties, including those described in Item 1A “

Risk Factors .”

Our business is subject to numerous risks and uncertainties, including those described in Item 1A “

Risk Factors .”

These risks include, but are not limited to, the following:

Our financial condition and results of operations for fiscal 2022 may continue to be adversely affected by the COVID-19

Supply chain issues, including increasing demand for certain components used in our products and production delays, has and could continue to result in significant additional costs and manufacturing inefficiencies, which could adversely impact our revenue, increase our manufacturing costs and have a material adverse effect on our operating results.

Unfavorable economic or political conditions in the countries in which we operate may have an adverse impact on our business results or financial condition;

We derive a significant portion of our revenue from international sales and are subject to the operational risks of doing business in foreign countries;

Adverse global economic conditions, geopolitical tensions and other conditions that impact our increasingly global operations could have a negative effect on our business, results of operations and financial condition and liquidity.

Our financial condition and results of operations for fiscal 2023 may continue to be adversely affected by the COVID-19 pandemic;

We derive a significant portion of our revenue from international sales and are subject to the operational risks of doing business in foreign countries;

If our products fail to achieve and sustain sufficient market acceptance across their broad intended range of applications, we will not generate expected revenue;

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Our debt may adversely affect our cash flow and may restrict our investment opportunities or limit our activities;

The transition away from LIBOR may adversely affect our cost to obtain financing;

If we lose our strategic partners, our marketing and sales efforts could be impaired;

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Our operations are dependent upon a limited number of suppliers and contract manufacturers;

Supply shortages and increasing prices of raw materials could adversely affect the gross profit of the Bruker BioSpin Group and the BEST Segment;

Supply shortages and increasing prices of raw materials could adversely affect the gross profit;

If we are unable to effectively protect our intellectual property, third parties may use our technology, which would impair our ability to compete in our markets;

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Risks Related to Our Business and Industry

Our financial condition and results of operations for fiscal 2022 may continue to be adversely affected by the COVID-19

The impact of the worldwide COVID-19

pandemic has been and will likely continue to be extensive in many geographies and aspects of society.

The pandemic has resulted in and will likely continue to result in disruptions to the global economy, as well as businesses, supply chains and capital markets around the world.

Impacts to our business have included temporary closures of many of our government and university customers and our suppliers, disruptions or restrictions on our employees’ and customers’ ability to travel, and delays in product installations or shipments to and from affected countries.

In an effort to halt the outbreak of COVID-19,

a number of countries, including the United States, implemented and some continue to implement significant restrictions on travel, shelter in place or stay at home orders, and business closures.

While some of these restrictions were loosened in certain jurisdictions, some markets have returned to restrictions in the face of increases in new COVID-19

cases, particularly as more contagious strains of the virus emerge.

Many of our employees in jurisdictions in which we have significant operations continue to work remotely.

In addition, certain Asia Pacific geographies where we operate are continuing to experience significant disruptions relating to COVID-19.

Much of the commercial activity in sales and marketing, and customer demonstrations and applications training, is still either being conducted remotely or postponed.

Even where customers have re-opened

their sites, some still operate at productivity levels that are below pre-pandemic

levels in an effort to accommodate safety protocols and as a result of pandemic-related supply chain disruptions.

Any resurgence of the virus or the emergence of new strains of the virus, particularly any new strains which are more easily transmitted or which are resistant to existing vaccines, may require us or our customers to close or partially close operations once again.

These travel restrictions, business closures and operating reductions at Bruker, our customers, our distributors, and/or our suppliers have in the past adversely impacted and may continue to adversely impact our operations worldwide, including our ability to manufacture, sell or distribute our products, as well as cause temporary closures of our foreign distributors, or the facilities of suppliers or customers.

Further, global supply chains, including for semiconductor chips, components and raw materials such as copper, continue to be disrupted, causing shortages, which has impacted our ability to manufacture and supply our products.

We could also experience increased compensation expenses associated with employee recruiting and employee retention to the extent employment opportunities continue to multiply post-pandemic, causing the search for and retention of talent to become more competitive.

This disruption of our employees, distributors, suppliers and customers has historically impacted and may continue to impact our global sales and future operating results.

In September 2021, President Biden issued an Executive Order requiring certain COVID-19

precautions for government contractors and their subcontractors, including mandatory employee vaccination (subject to medical and religious exemptions).

In November 2021, the Department of Labor’s Occupational Safety and Health Administration, or OSHA, issued an Emergency Temporary Standard, or ETS, requiring that all employers with at least 100 employees ensure that their employees are fully vaccinated for COVID-19

or obtain a negative COVID-19

test at least once a week.

The Executive Order was preliminarily enjoined by several U.S.

federal district courts, the U.S.

Supreme Court preliminarily stayed the OSHA ETS in January 2022, and OSHA subsequently withdrew the ETS.

While we are not currently subject to any vaccine mandate, any requirement to mandate COVID-19

vaccination of our workforce or require our unvaccinated employees to be tested weekly could result in employee attrition and difficulty securing future labor needs and may have an adverse effect on future profit margins.

In addition, any requirement to impose such obligations on our suppliers who are deemed government contractors and their subcontractors could impact the price and continuity of supply of raw materials and our results of operations and financial condition could be adversely affected.

It continues to be our policy to encourage each of our employees to be fully vaccinated against COVID-19.

We are continuing to monitor and assess the ongoing effects of the COVID-19

pandemic on our commercial operations in 2022.

However, we cannot at this time accurately predict what effects these conditions will ultimately have on our operations due to uncertainties relating to the severity of the disease, including the impact of any resurgence of the virus, the continued emergence of new strains of the virus, the effectiveness and availability of vaccines, the willingness of individuals to receive vaccines, (including to protect against any new strains of the virus), and the length or severity of travel restrictions, business closures, and other safety and precautionary measures imposed by the governments of impacted countries.

The pandemic has also adversely affected the economies and financial markets of many countries, which has affected and may continue to affect demand for our products and our operating results.

The preparation of the consolidated financial statements requires us to make estimates, judgments and assumptions that may affect the reported amounts of assets, liabilities, equity, revenues and expenses and related disclosure of contingent assets and liabilities.

We evaluate estimates, judgments and methodologies on an ongoing basis.

Changes in estimates are recorded in the period in which they become known.

We base estimates on historical experience and on various other assumptions that we believe are reasonable, the results of which form the basis for making judgments about the carrying values of assets, liabilities and equity and the amount of revenues and expenses.

The full extent to which the COVID-19

pandemic will directly or indirectly impact future business, results of operations and financial condition, including sales, expenses, reserves and allowances, manufacturing, research and development costs and employee-related amounts, will depend on future developments that are highly uncertain, including as a result of new information that may emerge concerning COVID-19,

the continued emergence of new strains of the virus, the effectiveness and availability of vaccines, the willingness of individuals to receive vaccines (including to protect against any new strains of the virus), and the actions taken to contain or treat the virus, as well as the economic impact on local, regional, national and international customers and markets.

We have made estimates of the impact of COVID-19

within the consolidated financial statements and there may be changes to those estimates in future periods.

Actual results may differ from management’s estimates if these results differ from historical experience.

Supply chain issues, including increasing demand for certain components used in our products and production delays, has and could continue result in significant additional costs and manufacturing inefficiencies, which could adversely impact our revenue, increase our manufacturing costs and have a material adverse effect on our operating results.

We have experienced supply chain interruptions as a result of the COVID-19 pandemic, general global economic conditions, a tight labor market and other factors, including natural events and disasters.

Various factors, including increased demand for certain components and production delays, are contributing to shortages of certain components used in our products and increased difficulties in our ability to obtain a consistent supply of materials at stable pricing levels.

Supply shortages and longer lead times for components used in our products,

including limited source components, can result in significant additional costs and inefficiencies in manufacturing.

A shortage of key components may cause a significant disruption to our production activities, which could have a substantial adverse effect on our financial condition or results of operations.

We have experienced supply chain interruptions as a result of the COVID-19 pandemic, general global economic conditions, the war in Ukraine, ongoing conflicts between the United States and China, geopolitical tensions, a tight labor market and other factors, including natural events and disasters.

Various factors, including increased demand for certain components and production delays, are contributing to shortages of certain components used in our products including microelectronic components and increased difficulties in our ability to obtain a consistent supply of materials at stable pricing levels.

Supply shortages and longer lead times for components used in our products, including limited source components, have and can result in significant additional costs and inefficiencies in manufacturing.

A shortage of key components has in the past and may in the future cause a significant disruption to our production activities, which could have a substantial adverse effect on our financial condition or results of operations.

If we are unsuccessful in resolving any such component shortages in a timely manner, we could experience a significant adverse impact on the timing of our revenue, a possible loss of revenue, or an increase in manufacturing costs, any of which could have a material adverse impact on our operating results.

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operations represented approximately 28% and 25% of total consolidated revenue for fiscal 2022 and 2021, respectively.

Our revenue from operations in Europe represented approximately 38% of total consolidated revenue for both fiscal years 2021 and 2020.

Our revenue from operations in Europe represented approximately 33% and 38% of total consolidated revenue for both fiscal years 2022 and 2021.

Our revenue from operations in the Asia Pacific region represented approximately 32% and 30% of total consolidated revenue in each of the corresponding periods.

Economic factors that could adversely influence demand for our products include the impact of geopolitical tensions and any related sanctions implemented, continued uncertainty about global economic conditions, including as a result of the pandemic, leading to ongoing reductions in investment, changes in government spending levels and/or priorities, the size and availability of government budgets, customers’ and suppliers’ access to credit and other macroeconomic factors affecting government, academic or industrial spending behavior.

and suppliers’

access to credit and other macroeconomic factors affecting government, academic or industrial spending behavior.

Slower economic growth or a deterioration in economic conditions could result in a decrease in government funding for scientific research, a delay in orders from current or potential customers or a reduction in purchases of our products.

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Macroeconomic weakness and uncertainty make it more difficult for us to manage our operations and accurately forecast revenue, gross margin and expenses.

Geopolitical tensions, such as Russia’s recent incursion into Ukraine, ongoing conflicts between the United States and China, tariff and trade policy changes, economic sanctions, increasing potential of conflict involving countries in Asia that are critical to our supply chain operations, such as Taiwan and China, have resulted in increasing global tensions and create uncertainty for global commerce.

As a result of economic sanctions on Russia we may face disruptions to our operations within Russia, among other challenges.

Sustained or worsening of global economic conditions and increasing geopolitical tensions may increase our cost of doing business, materially disrupt our supply chain operations, cause our customers to reduce or delay spending and intensify pricing pressures.

Geopolitical tensions, such as Russia’s incursion into Ukraine, ongoing conflicts between the United States and China, tariff and trade policy changes, economic sanctions, increasing potential of conflict involving countries in Asia that are critical to our supply chain operations, such as Taiwan and China, have resulted in increasing global tensions and create uncertainty for global commerce.

As a result of economic sanctions on Russia we have faced disruptions to our operations within Russia, among other challenges.

spending and intensify pricing pressures.

We have recently experienced an increase in inflationary pressures in many of the jurisdictions in which we operate.

We have and may continue to offset the effect of these inflationary pressures by increasing the prices of our products to customers.

In 2022, however, our price increases did not fully offset the effects of inflation costs and may not offset any effects experienced during 2023.

Any or all of these factors could negatively affect demand for our products and our business, financial condition and result of operations.

Our financial condition and results of operations for fiscal 2023 may continue to be adversely affected by the COVID-19 pandemic.

The impact of the worldwide COVID-19 pandemic has been and in certain geographies may continue to be extensive.

The pandemic has resulted in and will likely continue to result to varying degrees in disruptions to the global economy, as well as businesses, supply chains and capital markets around the world.

We are continuing to monitor and assess the ongoing effects of the COVID-19 pandemic on our operations in 2023.

Impacts to our business have included disruptions or restrictions on our employees’

and customers’

ability to travel, in particular to and from parts of Asia, and delays in product installations or shipments to and from affected countries.

Certain Asia Pacific geographies where we operate are continuing to experience significant disruptions relating to COVID-19.

Much of the commercial activity in sales and marketing, and customer demonstrations and applications training, is still either being conducted remotely or, to a more limited extent, postponed.

Even where customers in these and other geographies have re-opened their sites, some still operate at productivity levels that are below pre-pandemic levels in an effort to accommodate safety protocols and as a result of pandemic-related business disruptions.

Any resurgence of the virus or the emergence of new strains of the virus, particularly any new strains which are more easily transmitted, or which are resistant to existing vaccines, may require us or our customers to close or partially close operations once again.

This disruption of our employees, distributors, suppliers and customers has historically impacted and may continue to impact our global sales and future operating results.

However, we cannot at this time predict the full extent to which the COVID-19 pandemic will directly or indirectly impact future business, results of operations and financial condition, including sales, expenses, reserves and allowances, manufacturing, research and development costs and employee-related amounts, depends on future developments that continue to be uncertain, including as a result of new information that may emerge concerning new strains of the virus, the need for updated vaccines, the willingness of individuals to receive vaccines (including to protect against any new strains of the virus), and the actions taken to contain or treat the virus, including certain travel restrictions, as well as the economic impact on local, regional, national and international customers and markets.

We have made estimates of the impact of COVID-19 within the consolidated financial statements and there may be changes to those estimates in future periods.

Actual results may differ from management’s estimates if these results differ from historical experience.

We derive a significant portion of our revenue from international sales and are subject to the operational risks of doing business in foreign countries.

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the imposition of government controls;

political and economic instability, including the impact of COVID-19,

the possibility of an economic recession in certain key markets such as Germany, international hostilities and resulting sanctions, acts of terrorism and governmental restrictions, inflation, trade relationships and military and political alliances;

political and economic instability, including the impact of COVID-19, the possibility of an economic recession in certain key markets such as Germany, international hostilities and resulting sanctions, acts of terrorism and governmental restrictions, inflation, trade relationships and military and political alliances;

costs and risks of deploying systems in foreign countries;

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and local laws affecting the activities of U.S.

companies abroad, including the United States Foreign Corrupt Practices Act, or FCPA, and local anti-bribery

companies abroad, including the United States Foreign Corrupt Practices Act, or FCPA, and local anti-bribery laws.

The United States has implemented tariffs on certain imported goods.

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The imposition of tariffs on items imported by us from China or other countries could increase our costs and could result in lowering our gross margin on products sold.

Conversely, China imposing tariffs on items that we export to China could adversely impact our customers’ ability to purchase our products and our competitive position in China or increase our costs, which could have a material adverse effect on our business and results of operations.

We must also comply with the European Union General Data Protection Regulation (GDPR) and other similar regulations in other countries.

Conversely, any imposition by China of tariffs on items that we export to China could adversely impact our customers’

ability to purchase our products and our competitive position in China or increase our costs, which could have a material adverse effect on our business and results of operations.

We must also comply with the European Union General Data Protection Regulation (GDPR) and other similar regulations in other countries, including the UK Data Protection Act 2018.

The goal of the regulation is to increase individual rights and protections for personal data located in or originating from the European Union.

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There are significant fines associated with non-compliance.

In 2020, the Court of Justice of the European Union invalidated the EU-US

Privacy Shield Framework, removed a key mechanism for transfers of personal data from the European Union to the United States and altered the international data transfer under GDPR.

The decision has caused uncertainty for multinational companies about how they can properly transfer personal data from the EU to the US and the cost and effort to comply with such decision could cause disruption of data transfers and have a material adverse effect on our business.

In 2020, the Court of Justice of the European Union invalidated the EU-US Privacy Shield Framework, a key mechanism for transfers of personal data from the European Union to the United States and altered the international data transfer under GDPR.

Even though Bruker did not rely on the EU-US Privacy Shield for its transfers to the United States, Bruker performed a transfer impact assessment to understand the risks of its EU-US persona data transfers and implemented the new EU Standard Contractual Clauses (including the UK addendum).

The Executive Order 14086 of October 7, 2022 of the President of the United States has implemented the US-side of the EU-US Transatlantic Data Privacy Framework that will stabilize the lawfulness of the transfers of personal data from the EU to the US.

Nevertheless, Until the European Commission adopts its adequacy decision on the new data transfer mechanism, the uncertainty for multinational companies on the matter remains, and the cost and effort to comply with such requirements could cause disruption of data transfers and have a material adverse effect on our business.

While the impact of these factors is difficult to predict, any one or more of these factors could adversely affect our operations in the future.

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As a result, currency fluctuations among the U.S.

Dollar and the currencies in which we do business could cause the price of our products to be more or less competitive than our principal competitors’ products.

Dollar and the currencies in which we do business could cause the price of our products to be more or less competitive than our principal competitors’

Currency fluctuations will increase or decrease our cost structure relative to those of our competitors, which could lessen the demand for our products and affect our competitive position.

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We cannot predict the effectiveness of these transactions or their impact upon our future operating results, and from time to time they may negatively affect our quarterly earnings.

In addition to the foreign currency exposure associated with differences between where our products are manufactured and sold by us and our competitors, our exposure to currency exchange rate fluctuations results from the currency translation exposure associated with the preparation of our consolidated financial statements, as well as from the exposure associated with transactions of our subsidiaries that are denominated in a currency other than the respective subsidiary’s functional currency.

While our financial results are reported in U.S.

Dollars, the financial statements of many of our subsidiaries outside the U.S.

are prepared using the local currency as the functional currency.

are prepared using the local

currency as the functional currency.

During consolidation, these results are translated into U.S.

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Moreover, as exchange rates vary, revenue and other operating results may differ materially from our expectations.

The effects of changes in currency exchange rates increased our 2021 revenue by approximately $43.3 million, or 2.2%, increased our 2020 revenue by approximately $29.4 million, or 1.4%, and decreased our 2019 revenue by approximately $50.3 million, or 2.7%.

The effects of changes in currency exchange rates decreased our 2022 revenue by approximately $168.0 million, or 6.9%, increased our 2021 revenue by approximately $43.3 million, or 2.2%, and increased our 2020 revenue by approximately $29.4 million, or 1.4%.

Adjustments resulting from financial statement translations are included as a separate component of shareholders' equity.

In the years ended December 31, 2021 and 2020, we recorded net losses from currency translation adjustments of ($26.4) million and net gains of $22.0 million, respectively.

Additionally, to the extent monetary assets and liabilities, including cash and debt, are held in a different currency than the reporting subsidiary’s functional currency, fluctuations in currency exchange rates may have a significant impact on our reported financial results, and may lead to increased earnings volatility.

We may record significant gains or losses related to both the translation of assets and liabilities held by our subsidiaries into local currencies and the remeasurement of inter-company receivables and loan balances.

Goodwill, intangible assets and other long-lived

assets are subject to impairment which could negatively impact our operating results.

In the years ended December 31, 2022 and 2021, we recorded net losses from currency translation adjustments of $22.0 million and net losses of $26.4 million, respectively.

We may record significant gains or losses related to both the translation of assets and liabilities held by our subsidiaries into local currencies and the re-measurement of inter-company receivables and loan balances.

Goodwill, intangible assets and other long-lived assets are subject to impairment which could negatively impact our operating results.

We have recorded goodwill, intangible assets and other long-lived assets that must be periodically evaluated for potential impairment.

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Our ability to realize the value of these assets will depend on the future cash flows of the reporting unit in addition to how well we integrate the businesses we acquire.

We did not record any impairment losses for the years ended December 31, 2021 and December 31, 2020.

We recorded impairment losses of $1.7 million for the year ended December 31, 2019.

We did not record any impairment losses for the years ended December 31, 2022 and 2021.

If our products fail to achieve and sustain sufficient market acceptance across their broad intended range of applications, we will not generate expected revenue.

Our business strategy depends on our ability to successfully commercialize a broad range of products based on our technology platforms, including magnetic resonance technology, pre-clinical

imaging technology, mass spectrometry technology, X-ray

technology, atomic force microscopy technology, ChipCytometry technology, stylus and optical metrology technology, fluorescence microscopy technology, infrared technology and superconducting magnet technologies for use in a variety of life science, chemistry and materials analysis applications.

Our business strategy depends on our ability to successfully commercialize a broad range of products based on our technology platforms, including magnetic resonance technology, pre-clinical imaging technology, mass spectrometry technology, X-ray technology, atomic force microscopy technology, ChipCytometry technology, stylus and optical metrology technology, fluorescence microscopy technology, infrared technology and superconducting magnet technologies for use in a variety of life science, chemistry and materials analysis applications.

Some of our products have only recently been commercially launched and have achieved only limited sales to date.

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To succeed, we must convince substantial numbers of potential customers to invest in new systems or replace their existing techniques with techniques employing our systems.

Limited funding available for capital acquisitions by our customers, as well as our customers’ own internal purchasing approval policies, could hinder market acceptance of our products.

Limited funding available for capital acquisitions by our customers, as well as our customers’

own internal purchasing approval policies, could hinder market acceptance of our products.

Our intended customers may be reluctant to make the substantial capital investment generally needed to acquire our products or to incur the training and other costs involved with replacing their existing systems with our products.

We also may not be able to convince our intended customers that our systems are an attractive and cost-effective

alternative to other technologies and systems for the acquisition, analysis and management of molecular, cellular and microscopic information.

We also may not be able to convince our intended customers that our systems are an attractive and cost-effective alternative to other technologies and systems for the acquisition, analysis and management of molecular, cellular and microscopic information.

Because of these and other factors, our products may fail to gain or sustain market acceptance.

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Rapidly changing technology could make some or all of our product lines obsolete unless we are able to continually improve our existing products and develop new products.

Because substantially all of our products are based on our technology platforms, including magnetic resonance technology, mass spectrometry technology, X-ray

technology, atomic force microscopy technology, fluorescence microscopy technology, ChipCytometry technology, stylus and optical metrology technology and infrared technology, we are particularly vulnerable to any technological advances that would make these techniques obsolete as the basis for analytical systems in any of our markets.

Because substantially all of our products are based on our technology platforms, including magnetic resonance technology, mass spectrometry technology, X-ray technology, atomic force microscopy technology, fluorescence microscopy technology, ChipCytometry technology, stylus and optical metrology technology and infrared technology, we are particularly vulnerable to any technological advances that would make these techniques obsolete as the basis for analytical systems in any of our markets.

To meet the evolving needs of our customers, we must rapidly and continually enhance our current and planned products and services and develop and introduce new products and services.

In addition, our product lines are based on complex technologies that are subject to rapid change as new technologies are developed and introduced in the marketplace.

In addition, our product lines are

based on complex technologies that are subject to rapid change as new technologies are developed and introduced in the marketplace.

We may have difficulty in keeping abreast of the rapid changes affecting each of the different markets we serve or intend to serve.

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Competition has in the past subjected, and is likely in the future to subject, our products to pricing pressure.

Many of our competitors have more experience in the market and substantially greater financial,

operational, marketing and technical resources than we do, which could give them a competitive advantage in areas such as research and development, production, marketing and distribution.

Our ability to compete successfully will depend, in part, on our ability to develop proprietary products that reach the market in a timely manner and are technologically superior to, less expensive than, or more cost-effective

than, other currently marketed products.

Many of our competitors have more experience in the market and substantially greater financial, operational, marketing and technical resources than we do, which could give them a competitive advantage in areas such as research and development, production, marketing and distribution.

If investment in life and material science research spending declines, our ability to generate revenue may suffer.

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Any significant decline in research and development expenditures by our life science and material science customers could significantly decrease our sales.

In addition, a substantial portion of our sales are to non-profit

and government entities, which are dependent on government support for scientific research.

In addition, a substantial portion of our sales are to non-profit and government entities, which are dependent on government support for scientific research.

Any decline in this support could decrease the ability of these customers to purchase our products.

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Many of our products are developed and manufactured at single locations, with limited alternate facilities.

If we experience any significant disruption of those facilities for any reason, such as strikes or other labor unrest, power interruptions, fire, earthquakes, or other events beyond our control, we may be unable to manufacture the relevant products at previous levels or at all.

If we experience any significant disruption of those facilities for any reason, such as war or other geopolitical conflicts, strikes or other labor unrest, power interruptions, fire, earthquakes, or other events beyond our control, we may be unable to manufacture the relevant products at previous levels or at all.

A reduction or interruption in manufacturing could harm our customer relationships, impede our ability to generate revenues from our backlog or obtain new orders and could have a material adverse effect on our business, results of operations, financial condition and cash flows.

If employees were to engage in a strike or other work stoppage or interruption, our business, results of operations, financial condition and liquidity could be materially adversely affected.

Many of our employees are represented by workers’ councils and labor unions in certain jurisdictions, primarily in Germany and France.

If disputes with these employees arise, or if our workers engage in a strike or other work stoppage or interruption, we could experience a significant disruption of, or inefficiencies in, our operations or incur higher labor costs, which could have a material adverse effect on our business, results of operations, financial condition and liquidity.

Many of our employees are represented by workers’

councils and labor unions in certain jurisdictions, primarily in Germany and France.

If disputes with these employees arise, or if our workers engage in a strike or other work stoppage or interruption, we could

experience a significant disruption of, or inefficiencies in, our operations or incur higher labor costs, which could have a material adverse effect on our business, results of operations, financial condition and liquidity.

In addition to the risks applicable to our life science and materials analysis products, our CBRNE detection products are subject to a number of additional risks, including lengthy product development and contract negotiation periods and certain risks inherent in long-term government contracts.

Our CBRNE detection products are subject to many of the same risks associated with our life science products, including vulnerability to rapid technological change, dependence on mass spectrometry and other technologies and substantial competition.

In addition, our CBRNE detection products and certain FT-IR

products are generally sold to government agencies under long-term contracts.

These contracts generally involve lengthy pre-contract

negotiations and product development.

In addition, our CBRNE detection products and certain FT-IR products are generally sold to government agencies under long-term contracts.

These contracts generally involve lengthy pre-contract negotiations and product development.

We may be required to devote substantial working capital and other resources prior to obtaining product orders.

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In the ordinary course of business, we collect and store sensitive data, including intellectual property, other proprietary information and personally identifiable information.

access to systems for the purpose of demanding ransom payments, or breached due to employee error, malfeasance, or other disruptions.

If this data is compromised, destroyed or inappropriately disclosed, it could have a material adverse effect, including damage to our reputation, loss of customers, significant expenses to address and resolve the issues, fines or litigation or other proceedings by affected individuals, business partners or regulatory authorities.

Our debt may adversely affect our cash flow and may restrict our investment opportunities or limit our activities.

Despite our security measures, our information technology and infrastructure may be vulnerable to cyber-attacks by hackers, including intrusions designed to access and exfiltrate information and to disrupt and lock-up access to systems for the purpose of demanding ransom payments, or breached due to employee error, malfeasance, or other disruptions.

Further, a breach of our security systems or infrastructure, or those of our customers, suppliers and other business partners, could result in the disclosure, misuse, corruption or loss of confidential information, including intellectual property, personally identifiable information and other critical data of ours and our employees, customers suppliers and other business partners.

If this data is compromised, destroyed or inappropriately disclosed, it could have a material adverse effect, including damage to our reputation, damage to our relationships with our employees, customers, suppliers and other business partners, decrease the value of our investments in research, development and engineering, disrupt our manufacturing processes, result in significant expenses to address and resolve the issues, fines or litigation or other proceedings by affected individuals, customers, suppliers, business partners or regulatory authorities.

Our debt may adversely affect our cash flows and may restrict our investment opportunities or limit our activities.

As of December 31, 2022, we had outstanding an aggregate principal amount of debt totaling approximately $1,220.9 million.

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We may not be able to obtain additional financing on terms acceptable to us or at all.

Furthermore, a majority of our cash, cash

equivalents and short-term investments is generated from foreign operations, with $646.9 million, or 55.4% held by foreign subsidiaries as of December 31, 2021.

Furthermore, a majority of our cash, cash equivalents and short-term investments is generated from foreign operations, with $593.8 million, or 92.0% held by foreign subsidiaries as of December 31, 2022.

We may incur significant tax consequences relocating cash from our foreign operations to the United States.

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Our failure to comply with any of these restrictions or covenants may result in an event of default under the applicable debt instrument, which could permit acceleration of the debt under the facility and require us to prepay the debt before its scheduled due date.

The transition away from LIBOR may adversely affect our cost to obtain financing.

On July 27, 2017, the U.K.

Financial Conduct Authority announced that it intends to stop persuading or compelling banks to submit London Interbank Offered Rate, or LIBOR, rates.

As a result of this change, certain LIBOR tenors and currencies were eliminated by the end of December 2021 with all other tenors and currencies of LIBOR to be eliminated by the end of June 2023.

The Alternative Reference Rates Committee, a steering committee comprised of U.S.

financial market participants, selected and the Federal Reserve Bank of New York started in May 2018 to publish the Secured Overnight Finance Rate, or SOFR, as an alternative to LIBOR.

SOFR is a broad measure of the cost of borrowing cash in the overnight U.S.

treasury repo market.

At this time, it is impossible to predict whether the SOFR or another reference rate will become an accepted alternative to LIBOR.

The manner and impact of this transition may materially adversely affect the trading market for LIBOR-based securities, which may result in an increase in borrowing costs under our credit agreements and term loan agreement.

Any replacement for LIBOR may result in an effective increase in the applicable interest rate on our current or future debt obligations, including our credit agreements and term loan agreement.

Changes in our effective income tax rate could adversely affect our results of operations.

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These factors include interpretations of existing tax laws, the accounting for stock options and other share-based compensation, changes in tax laws and rates, future levels of research and development spending, changes in accounting standards, changes in the mix of earnings in the various tax jurisdictions in which we operate, the outcome of examinations by the U.S.

Internal Revenue Service and other tax authorities, the accuracy of our estimates for unrecognized tax benefits and realization of deferred tax assets and changes in overall levels of pre-tax

Internal Revenue Service and other tax authorities, the accuracy of our estimates for unrecognized tax benefits and realization of deferred tax assets and changes in overall levels of pre-tax earnings.

A change in tax laws, treaties or regulations, or their interpretation, of any country in which we operate could result in a higher tax rate on our earnings, which could result in a significant negative impact on our earnings and cash flow from operations.

For example, the Biden administration has proposed significant changes to the tax laws of the United States, including proposals that would have the combined effect of increasing the U.S.

taxation on profits earned outside the U.S.

In addition to proposed tax law reforms in the United States, there are currently multiple initiatives for comprehensive tax reform underway in other key jurisdictions where we have operations.

We assess the impact of various international tax reform proposals and modifications to existing tax treaties in all jurisdictions where we have operations that could result in a material impact on our income taxes.

Beginning in 2022, the Tax Cuts and Jobs Act of 2017 (“TCJA”) eliminates the option to deduct research and development expenditures currently and requires taxpayers to amortize them over five years pursuant to the Internal Revenue Code.

We cannot predict whether any other specific legislation that

would have an adverse impact on our income taxes will be enacted or the terms of any such legislation.

However, if such proposals were enacted, or if modifications were to be made to certain existing treaties, the consequences could have a materially adverse impact on us, including increasing our tax burden, increasing costs of our tax compliance or otherwise adversely affecting our financial condition, results of operations and cash flows.

For example, the Biden administration has proposed significant changes to the tax laws of the United States, including an increase to the federal corporate tax rate, limiting deductions where certain conditions exist, and several proposals that would have the combined effect of increasing the U.S.

taxation on profits earned outside the United States.

In July and August 2022, the CHIPS and Science Act, or CHIPS, and the Inflation Reduction Act, or IRA were signed into law.

The IRA introduced tax provisions primarily focused on implementing a 15% corporate alternative minimum tax on the global adjusted financial statement income of certain large corporations and a 1% excise tax on share repurchases, which are both effective January 1, 2023.

While we are still evaluating the impact of the provisions of the IRA, we do not believe this legislation will have a material impact on our consolidated financial statements.

We will continue to monitor the potential impact of this new legislation as new information and guidance becomes available.

Beginning in 2022, the Tax Cuts and Jobs Act of 2017 ("TCJA") eliminated the option to deduct research and development expenditures immediately in the year incurred and requires taxpayers to capitalize and amortize such expenditures over five years for research conducted within the United States or 15 years for research conducted abroad pursuant to the Internal Revenue Code.

There are currently multiple initiatives for comprehensive tax reform underway in other key jurisdictions where we have operations.

The Organization for Economic Cooperation and Development, or the OECD/G20, has proposed the introduction of a global minimum tax rate at 15% and continues to advance proposals for modernizing international tax rules.

We continue to monitor countries’

progress toward enactment of the OECD’s model rules.

During December 2022, the European Union reached agreement on the introduction of a minimum tax directive requiring each member state to enact local legislation.

Additionally, South Korea became the first country to enact minimum tax rules, which will be effective for fiscal years beginning on or after January 1, 2024.

These specific actions did not impact our consolidated financial statements in 2022 but future enacted legislation in this area could have a material effect on us, if enacted.

We also assess the impact of various international tax reform proposals and modifications to existing tax treaties in all jurisdictions where we have operations that could result in a material impact on our income taxes.

However, if such proposals were enacted, or if modifications were made to certain existing treaties, the consequences could have a materially adverse impact on us, including increasing our tax burden, increasing costs of our tax compliance or otherwise adversely affecting our financial condition, results of operations and cash flows.

Various international tax risks could adversely affect our earnings and cash flows.

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costs related to acquisitions of technology or businesses.

We can experience quarter-to-quarter

fluctuations in our operating results as a result of various factors, some of which are outside our control, such as:

We can experience quarter-to-quarter fluctuations in our operating results as a result of various factors, some of which are outside our control, such as:

the timing of governmental stimulus programs and academic research budgets;

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the time it takes for us to receive critical materials to manufacture our products;

general economic conditions;

general economic conditions, geopolitical tensions and other conditions that impact our global operations;

the time it takes to satisfy local customs requirements and other export/import requirements;

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These factors have in the past affected the amount and timing of revenue recognized on sales of our products and receipt of related payments and will likely continue to do so in the future.

Accordingly, our operating results in any particular quarter may not necessarily be an indication of any future quarter’s operating performance.

Historically we have higher levels of revenue in the fourth quarter of the year compared to the first, second and third quarters, which we believe is primarily the result of our customers’ budgeting cycles.

Quarter-to-quarter

comparisons of our results of operations should not be relied upon as an indication of our future performance.

Accordingly, our operating results in any particular quarter may not necessarily be an indication of any future quarter’s operating performance.

Historically we have higher levels of revenue in the fourth quarter of the year compared to the first, second and third quarters, which we believe is primarily the result of our customers’

budgeting cycles.

Quarter-to-quarter comparisons of our results of operations should not be relied upon as an indication of our future performance.

It is likely that in some future quarters, our results of operations may be below the expectations of public market analysts and investors.

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The ownership of our shares is highly concentrated, which could cause or exacerbate volatility in our share price as well as have significant influence over us.

As of February 15, 2022, Laukien family members, including our Chairman, President and Chief Executive Officer (“CEO”) Frank Laukien and his brother, Joerg Laukien, owned, in the aggregate, approximately 32% of our outstanding common stock.

As of February 15, 2023, Laukien family members, including our Chairman, President and Chief Executive Officer (“CEO”) Frank Laukien and his brother, Joerg Laukien, owned, in the aggregate, approximately 33% of our outstanding common stock.

We may also repurchase shares in the future, which could further increase the concentration of our share ownership.

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The price for our shares could, for example, decline precipitously if a large number of our shares were sold on the market without commensurate demand, as compared to a company with greater trading liquidity that could better absorb those sales without adverse impact on its share price.

These stockholders may also exercise substantial influence over all matters requiring stockholder approval, including the election of directors and approval of significant corporate transactions.

This could have the effect of delaying or preventing a change in control of our company and will make some transactions difficult to accomplish without the support of these stockholders.

These shareholders may also exercise substantial influence over all matters requiring shareholder approval, including the election of directors and approval of significant corporate transactions.

could have the effect of delaying or preventing a change in control of our company and will make some transactions difficult to accomplish without the support of these shareholders.

The loss of key personnel or an inability to attract and retain additional personnel could affect our ability to successfully grow our business.

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In recent years, we have paid dividends on our common stock.

In February 2022, we announced that our Board of Directors (“Board”) had declared a quarterly dividend of $0.05 per share that, will be payable in March 2022.

In February 2023, we announced that our Board of Directors (“Board”) had declared a quarterly dividend of $0.05 per share that will be payable in March 2023.

There is no guarantee that such dividends will continue indefinitely.

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In addition, if we are unable to maintain our relationships with strategic partners, our businesses may suffer.

Failures by our present or future strategic partners, or our inability to maintain

existing or enter into new arrangements with strategic partners for product distribution, could materially impede the growth of our businesses and our ability to generate sufficient revenue and profits.

Failures by our present or future strategic partners, or our inability to maintain existing or enter into new arrangements with strategic partners for product distribution, could materially impede the growth of our businesses and our ability to generate sufficient revenue and profits.

We face risks related to sales through distributors and other third parties that we do not control, which could harm our business.

We sell some products through third party agents, including distributors and value-added

We sell some products through third party agents, including distributors and value-added resellers.

This exposes us to various risks, including competitive pressure, concentration of sales volumes, credit risks, and compliance risks.

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Risks related to our use of distributors may reduce sales, increase expenses, and weaken our competitive position.

Moreover, violations of the FCPA or similar anti-bribery

laws by distributors or other third-party agents could materially and adversely impact our business, reputation and results of operations.

Moreover, violations of the FCPA or similar anti-bribery laws by distributors or other third-party agents could materially and adversely impact our business, reputation and results of operations.

Dependence on contract manufacturing may adversely affect our ability to bring products to market and damage our reputation.

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If our contract manufacturers fail to perform their obligations in a timely manner or at satisfactory quality levels, our ability to bring products to market and our reputation could suffer.

For example, during a market upturn, our contract manufacturers may be unable to meet our demand requirements, which may preclude us from fulfilling our customers’ orders on a timely basis.

For example, during a market upturn, our contract manufacturers may be unable to meet our demand requirements, which may preclude us from fulfilling our customers’

orders on a timely basis.

The ability of these manufacturers to perform is largely outside our control.

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Any of these factors could adversely affect our revenues and profitability.

In particular, our X-ray

microanalysis business, which manufactures and sells accessories for electron microscopes, is partially dependent on cooperation from larger manufacturers of electron microscopes.

In particular, our X-ray microanalysis business, which manufactures and sells accessories for electron

microscopes, is partially dependent on cooperation from larger manufacturers of electron microscopes.

Additionally, our elemental analysis business purchases certain optical detectors from a single supplier, PerkinElmer, Inc., the sole supplier of these detector components.

Bruker CALID purchases detectors and power supplies from sole or limited source suppliers and its focal plane array detectors from a single supplier, Lockheed Martin Corporation.

Similarly, Bruker BioSpin obtains various components from sole or limited source suppliers and BEST obtains various raw materials and uses key production equipment from sole or limited source suppliers or contract manufacturers.

BSI CALID purchases detectors and power supplies from sole or limited source suppliers and its focal plane array detectors from a single supplier, Lockheed Martin Corporation.

Similarly, BSI BioSpin obtains various components from sole or limited source suppliers and BEST obtains various raw materials and uses key production equipment from sole or limited source suppliers or contract manufacturers.

There are limited, if any, available alternatives to these suppliers.

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We may not be able to obtain sufficient quantities of required components on the same or substantially the same terms.

Additionally, consolidation among our suppliers could result in other sole source suppliers for us in the

Other events that could affect our ability to source materials, manufacture or distribute our products include fire, natural disaster or extreme weather or a pandemic and the impact of those events on our and our suppliers’ and contract manufacturers’ operations.

Additionally, consolidation among our suppliers could result in other sole source suppliers for us in the future.

and contract manufacturers’

Supply shortages and increasing prices of raw materials could adversely affect our gross profit.

The last few years have seen periodic supply shortages and sharp increases in the prices for various raw materials, in part due to high demand from developing countries, which have been exacerbated by the COVID-19 pandemic, the war in Ukraine and on-going conflicts between the United States and China and other geopolitical tensions.

We rely on some of these materials for the production of our products.

For example, in our superconducting magnet production, both for the horizontal and vertical magnet series, we rely on the availability of copper, steel and the metallic raw materials for traditional low-temperature

superconducting wires.

Similarly, our BEST Segment relies on the availability of niobium titanium for its production of low-temperature

superconducting materials and devices.

For example, in our superconducting magnet production, both for the horizontal and vertical magnet series, we rely on the availability of copper, steel and other metallic raw materials as well as niobium titanium for the production of traditional low-temperature superconducting magnets, wires and devices.

Higher prices for these commodities will increase the production cost of superconducting wires and superconducting magnets and may adversely affect gross profits.

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Our success depends on our ability to operate without infringing or misappropriating the proprietary rights of others.

Our commercial success depends on avoiding the infringement of other parties’ patents and proprietary rights as well as avoiding the breach of any licenses relating to our technologies and products.

Our commercial success depends on avoiding the infringement of other parties’

patents and proprietary rights as well as avoiding the breach of any licenses relating to our technologies and products.

Given that there may be patents of which we are unaware, particularly in the United States where patent applications are confidential, avoidance of patent infringement may be difficult.

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We may not be able to obtain such a license on commercially reasonable terms, if at all, especially if the patent holder is a competitor.

In addition, even if we can obtain a license, it may be non-exclusive,

which will permit others to practice the same technology licensed to us.

In addition, even if we can obtain a license, it may be non-exclusive, which will permit others to practice the same technology licensed to us.

We also may be required to pay substantial damages to the patent holder in the event of infringement.

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If we have supplied infringing products to third parties for marketing by them or licensed third parties to manufacture, use or market infringing products, we may be obligated to indemnify these third parties for any damages they may be required to pay to the patent holder and for any losses the third parties may sustain themselves as the result of lost sales or license payments they are required to make to the patent holder.

Any successful infringement action brought against us may also adversely affect marketing of the infringing product

in other markets not covered by the infringement action, as well as our marketing of other products based on similar technology.

Furthermore, we will suffer adverse consequences from a successful infringement action against us even if the action is subsequently reversed on appeal, nullified through another action or resolved by settlement with the patent holder.

Any successful infringement action brought against us may also adversely affect marketing of the infringing product in other markets not covered by the infringement action, as well as our marketing of other products based on similar technology.

Furthermore, we will suffer adverse consequences from a successful infringement action against us even if the action is subsequently reversed on appeal,

nullified through another action or resolved by settlement with the patent holder.

The damages or other remedies awarded, if any, may be significant.

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Failure to obtain adequate patent protection for our proprietary technology could materially impair our ability to be commercially competitive.

In addition to patent protection, we also rely on the protection of trade secrets, know-how

and confidential and proprietary information.

In addition to patent protection, we also rely on the protection of trade secrets, know-how and confidential and proprietary information.

To maintain the confidentiality of trade secrets and proprietary information, we generally seek to enter into confidentiality agreements with our employees, consultants and strategic partners upon the commencement of a relationship with us.

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The loss or exposure of our trade secrets and other proprietary information would impair our competitive advantages and could have a material adverse effect on our operating results, financial condition and future growth prospects.

Furthermore, others may have, or may in the future independently develop, substantially similar or superior know-how

and technology.

Furthermore, others may have, or may in the future independently develop, substantially similar or superior know-how and technology.

We may be involved in lawsuits to protect or enforce our patents that are brought by us which could be expensive and time consuming and, if determined adversely, could adversely affect our patent position.

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If securities analysts or investors perceive these results to be negative, it could have a substantial negative effect on the trading price of our common stock.

On September 25, 2019, in a complaint filed in the Düsseldorf, Germany, District Court, Carl Zeiss Microscopy GmbH, a subsidiary of Carl Zeiss AG (Zeiss), sued Luxendo GmbH (Luxendo), a subsidiary of Bruker Corporation, for infringement of a recently registered German utility model patent licensed to Zeiss pertaining to one specific Luxendo product category.

We are vigorously defending against these claims.

On September 25, 2019, in a complaint filed in the District Court of Düsseldorf, Germany, Carl Zeiss Microscopy GmbH, a subsidiary of Carl Zeiss AG (Zeiss), sued Luxendo GmbH (Luxendo), a subsidiary of Bruker Corporation, for infringement of a registered German utility model patent licensed to Zeiss pertaining to one specific Luxendo product category.

Luxendo defended against these claims and on December 14, 2021, obtained a decision by the German Patent and Trademark Office canceling the utility model.

Zeiss' appeal against the cancellation was unsuccessful and on December 19, 2022, Zeiss withdrew its complaint.

Luxendo is entitled to reimbursement of its statutory fees in the infringement case as well as in the cancellation notice.

A parallel European patent application, from which the utility model was derived, is pending in the European Patent Office (EPO).

Luxendo filed third-party observations in the proceedings concerning the grant of the patent application.

On March 25, 2022, the EPO communicated to the applicant that Luxendo’s observations had merit and confirmed its position on October 14, 2022.

A hearing regarding the EPO’s concerns about patentability is scheduled for the second quarter of 2023.

Luxendo is presently unable to predict the outcome of the EPO’s evaluation of the patent application.

Risks Related to Legal, Regulatory and Compliance

Our manufacture and sale of products could lead to product liability claims for which we could have substantial liability.

The manufacture and sale of our products expose us to product liability claims if any of our products cause injury or are found otherwise unsuitable during manufacturing, marketing, sale or customer use.

In particular, if one of our CBRNE detection products malfunctions, this could lead to civilian or military casualties in a time of unrest, exposing us to increased potential for high-profile liability.

The manufacture and sale of our products expose us to product liability claims if any of our products cause injury or are found otherwise unsuitable or defective as a consequence of product design, manufacturing, marketing, sale or customer use.

In particular, if one of our CBRNE detection products malfunctions, this could lead to civilian or military casualties in a time of unrest, exposing us to

increased potential for high-profile liability.

If our CBRNE detection products malfunction by generating a false-positive to a potential threat, we could be exposed to liabilities associated with actions taken that otherwise would not have been required.

Additionally, the nuclear magnetic resonance, research magnetic resonance imaging, Fourier transform mass spectrometry and certain electron paramagnetic resonance magnets of Bruker BioSpin utilize high magnet fields and cryogenics to operate at approximately 4 Kelvin, the temperature of liquid helium.

Additionally, the nuclear magnetic resonance, research magnetic resonance imaging, Fourier transform mass spectrometry and certain electron paramagnetic resonance magnets of BSI BioSpin utilize high magnet fields and cryogenics to operate at approximately 4 Kelvin, the temperature of liquid helium.

There is an inherent risk of potential product liability due to the existence of these high magnetic fields, associated stray fields outside the magnet, and the handling of the cryogens associated with superconducting magnets.

In addition, our MALDI Biotyper product has an IVD-CE

mark and U.S.

In addition, our MALDI Biotyper product has an IVD-CE mark and U.S.

FDA approval and is used for the identification of microorganisms.

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The risk of accidental contamination or injury from these materials cannot be completely eliminated.

If an accident with these substances occurs, we could be held liable for any damages that result, in addition to incurring clean-up

costs and liabilities, which can be substantial.

If an accident with these substances occurs, we could be held liable for any damages that result, in addition to incurring clean-up costs and liabilities, which can be substantial.

Additionally, an accident could damage our research and manufacturing facilities resulting in delays and increased costs.

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export control, sanctions, customs, import and anti-boycott laws and regulations, including, as applicable, the International Traffic in Arms Regulations, the Export Administration Regulations and the sanctions laws, regulations and executive orders administered and enforced by the U.S.

Department of the Treasury’s Office of Foreign Assets Control, and other laws and regulations adopted by the governments or agencies of other countries relating to the same subject matter as the U.S.

laws and regulations described above.

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The FCPA also requires proper record keeping and characterization of such payments in our reports filed with the SEC.

Despite maintaining policies and procedures that require our employees to comply with these laws and our standards of ethical conduct, we cannot ensure that these policies and procedures will always protect us from intentional, reckless or negligent acts committed by our employees or third-party agents.

Despite maintaining policies and procedures that require our

employees to comply with these laws and our standards of ethical conduct, we cannot ensure that these policies and procedures will always protect us from intentional, reckless or negligent acts committed by our employees or third-party agents.

Moreover, the life sciences industry, which is the market for our principal products, has historically been heavily regulated.

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Our business is also directly affected by a wide variety of government regulations applicable to business enterprises generally and to companies operating in the life sciences industry in particular.

Our products are subject to the FDA’s requirements for electronic radiation emitting products, which include requirements related to record-keeping and reporting;

notification;

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and performance standards.

In addition, our clinical products are subject to regulation as medical devices by the FDA in the United States and by similar regulatory bodies in other countries where such products are sold.

In addition, our clinical products are subject to regulation as medical devices in the United States by the FDA and by similar regulatory bodies in other countries where such products are sold.

These regulations govern a wide variety of product related activities, from quality management, design, development, and testing to labeling, manufacturing, complaint handling, reporting, promotion, sales and distribution.

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adverse publicity affecting both us and our customers;

investigations or notices of non-compliance,

fines, injunctions, and civil penalties;

investigations or notices of non-compliance, fines, injunctions, and civil penalties;

import or export restrictions;

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In addition, negative publicity and product liability claims resulting from any adverse regulatory action could have a material, adverse effect on our financial condition and results of operations.

Further, the adoption of the European Union Directive by the IVD Regulation (EU) 2017/746, which will take effect in May 2022, imposes a stricter regime on manufacturers of IVDs and our products currently approved under the Directive must be recertified under the Regulation by May 2024.

Further, the replacement of the European Union IVD Directive by the IVD Regulation (EU) 2017/746 in May 2022 has resulted in a stricter regime on manufacturers of IVDs and under transitional arrangements our products currently approved under the Directive must be recertified under the Regulation by May 2024.

We have been, are, and expect to be in the future, subject to inquiries from the government agencies that enforce these regulations, including the U.S.

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Failure to maintain effective internal controls may cause a loss of investor confidence in the reliability of our financial statements or cause us to delay filing our periodic reports with the SEC and adversely affect our stock price.

The SEC, as directed by Section 404 of the Sarbanes-Oxley Act of 2002, adopted rules requiring public

companies to include a report of management on internal control over financial reporting in their annual reports on Form 10-K

that contain an assessment by management of the effectiveness of our internal control over financial reporting.

In addition, our independent registered public accounting firm must attest to and report on the

effectiveness of our internal control over financial reporting.

Although we test our internal control over financial

reporting in order to ensure compliance with the Section 404 requirements, our failure to maintain adequate internal controls over financial reporting could result in an adverse reaction in the financial marketplace due to a loss of investor confidence in the reliability of our financial statements or a delay in our ability to timely file our periodic reports with the SEC, which ultimately could negatively impact our stock price.

The SEC, as directed by Section 404 of the Sarbanes-Oxley Act of 2002, adopted rules requiring public companies to include a report of management on internal control over financial reporting in their annual reports on Form 10-K that contain an assessment by management of the effectiveness of our internal control over financial reporting.

In addition, our independent registered public accounting firm must attest to and report on the effectiveness of our internal control over financial reporting.

Although we test our internal control over financial reporting in order to ensure compliance with the Section 404 requirements, our failure to maintain adequate internal controls over financial reporting could result in an adverse reaction in the financial marketplace due to a loss of investor confidence in the reliability of our financial statements or a delay in our ability to timely file our periodic reports with the SEC, which ultimately could negatively impact our stock price.

We operate as an entrepreneurial, decentralized company, which presents both benefits and certain risks.

In particular, significant growth in a decentralized operating model may put strain on certain business group resources and our corporate functions, which could materially and adversely affect our business, financial condition and results of operations.

Decentralization necessarily places significant control and decision-making powers in the hands of local management, which presents certain risks, including the risk that we may be slower to detect or react to compliance-related matters and that “company-wide” business initiatives may be more challenging or costly to implement, and the risk of noncompliance or failures higher than they may be in a more centralized operating environment.

business initiatives may be more challenging or costly to implement, and the risk of noncompliance or failures higher than they may be in a more centralized operating environment.

In addition, key business group resources and our corporate functions, which are leanly staffed but responsible for supporting our decentralized operations, may also not be able to detect or resolve financial, operational, and compliance matters on a timely basis.

Our failure to adapt our financial, operational and compliance controls and systems to effectively manage our decentralized business and comply with our obligations as a public company could materially and adversely affect our business, financial condition or results of operations.

Our failure to adapt our financial, operational and compliance controls and

systems to effectively manage our decentralized business and comply with our obligations as a public company could materially and adversely affect our business, financial condition or results of operations.

General Risks Factors

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Acquisitions have resulted, and may in the future result, in unexpected significant costs and expenses, including disputes over contingent consideration and complicated accounting for complex transaction structures.

In the future, we may be required to record charges to earnings during the period if we determine there is an impairment of goodwill or intangible assets, up to the full amount of the value of the assets.

We generally assume the liabilities of businesses we acquire, which could include liability for an acquired business’ violation of law that occurred before we acquired it.

We generally assume the liabilities of businesses we acquire, which could include liability for an acquired business’

violation of law that occurred before we acquired it.

In addition, we have historically acquired smaller, privately held companies that may not have strong cultures of legal compliance or the robust financial controls of a larger, publicly traded company, and if we fail to implement adequate training, controls, and monitoring of the acquired companies, we could also be liable for post-acquisition legal or accounting violations.

Other companies may have difficulty acquiring us, even if doing so would benefit our stockholders, due to provisions under our corporate charter and bylaws, as well as Delaware law.

Provisions in our restated certificate of incorporation, and our amended and restated bylaws, as well as Delaware law could make it more difficult for other companies to acquire us, even if doing so would benefit our stockholders.

Other companies may have difficulty acquiring us, even if doing so would benefit our shareholders, due to provisions under our corporate charter and bylaws, as well as Delaware law.

Our restated certificate of incorporation, and amended and restated bylaws contain the following provisions, among others, which may inhibit an acquisition of our company by a third party:

a staggered Board of Directors, where stockholders elect only a minority of the board each year;

advance notification procedures for matters to be brought before stockholder meetings;

a limitation on who may call stockholder meetings;

the ability of our Board of Directors to issue up to 5,000,000 shares of preferred stock without a stockholder vote.

UNRESOLVED STAFF COMMENTS

a staggered Board of Directors, where shareholders elect only a minority of the board each year;

advance notification procedures for matters to be brought before shareholder meetings;

a limitation on who may call shareholder meetings;

the ability of our Board of Directors to issue up to 5,000,000 shares of preferred stock without a shareholder vote.

ITEM 1B UNRESOLVED STAFF COMMENTS

Not applicable.

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-K

Item 1A. Risk Factors