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Item 1A. Risk Factors

2025-03-03 compared with 2024-02-29 · 108 added, 63 removed, 420 unchanged (29% of the section changed)

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

• Adverse global economic conditions, and geopolitical tensions, including in the Middle East, China and other regions, 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.

• 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, and geopolitical tensions, including in Ukraine, the Middle East, China and other regions, 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;

Tariffs Imposed or Threatened Could Result in Increased Costs;

• A meaningful portion of our revenue is derived from U.S.

academic institutions, research organizations and other entities that rely in part on U.S.

academic and government funding, including NIH grants, and any reduction in, modification of the terms and allowable overhead rates of, or delay in such research funding, could adversely affect our U.S.

academic and governmental customers, and our revenues and financial performance;

• We derive a significant portion of our revenue from international sales and are subject to the operational risks of doing business in foreign countries due to potential macroeconomic effects, including financial market volatility and disruption, inflationary concerns, changes in tax laws and regulations, interest and currency exchange rates, uncertain economic conditions in the United States and abroad, and additional tariffs, including those imposed or that may be imposed by the new presidential administration in the U.S.;

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

• Any reduction in the capital resources or government funding of our customers could reduce our sales and impede our ability to generate revenue;

• Any reduction or shift in the capital resources, including as a result of changes to governmental policies and programs, or government funding of our customers could reduce our sales and impede our ability to generate revenue;

• Disruptions at any of our manufacturing facilities could adversely affect our business;

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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.

If any of the risks described above actually occur, our business, revenues, profitability, results of operations, financial condition, cash flows, reputation and stock price could be materially adversely affected.

Additional risks and uncertainties not currently known to us or that we currently do not view as material may also become materially adverse to our business in future periods or if circumstances change.

Risks Related to Our Business and Industry

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 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.

We have experienced supply chain interruptions or increased costs as a result of general global economic conditions, including economic instability, changes to governmental policies and programs, changes in tax laws and regulations, export controls, economic sanctions and trade restrictions, including those related to the ongoing conflict between Russia and Ukraine or conflict in the Middle East and surrounding areas, changes to trade policies, including higher tariff rates and customs duties imposed or that may be imposed by the new presidential administration in the U.S., continued threat of terrorism and heightened security and military action in response thereto, or any other current or future acts of terrorism, war (such as the ongoing geopolitical tensions and military conflicts in China and other regions between the U.S.

and China ), 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.

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Our businesses and results of operations are affected by international, national and regional economic and political conditions.

Our businesses or financial results may be adversely impacted by unfavorable changes in economic or political conditions in the countries and markets in which we operate, including, among others, adverse changes in interest rates or tax rates, volatility in financial and commodity markets, contraction in the availability of credit in the marketplace, higher tariffs, including those that have been or may be imposed by the new presidential administration in the U.S., armed hostilities, such as the ongoing conflict between Russia and Ukraine or conflict in the Middle East and surrounding areas, and other events related thereto, such as economic sanctions and trade restrictions, geopolitical tensions, including tensions in China and other regions, changes in capital spending patterns, and renegotiation of existing trade agreements in the United States or countries that could adversely affect our supply chain and our business.

Our revenue from U.S.

operations represented approximately 28% and 26% of total consolidated revenue for fiscal 2024 and 2023, respectively.

Our revenue from operations in Europe represented approximately 33% of total consolidated revenue for fiscal years 2023 and 2022 respectively.

Our revenue from operations in the Asia Pacific region represented approximately 33% and 32% 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.

Our revenue from operations in Europe represented approximately 35% and 33% of total consolidated revenue for fiscal years 2024 and 2023 respectively.

Our revenue from operations in the Asia Pacific region represented approximately 29% and 33% of total consolidated revenue for fiscal years 2024 and 2023 respectively.

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.

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.

We cannot predict how changes in economic conditions or political instability will affect our customers and suppliers or how any negative impact on our customers and suppliers might adversely impact our business results or financial condition.

Adverse global economic conditions, and geopolitical tensions, including in the Middle East, China and other regions, 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.

Adverse global economic conditions, and geopolitical tensions, including in Ukraine, the Middle East, China and other regions, 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.

As a global company, our performance is affected by global economic conditions as well as geopolitical tensions and other conditions with global reach.

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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, including the conflict between Russia and Ukraine and related economic sanctions, the conflict in Israel, Palestine and surrounding areas, the possible expansion of such conflicts and potential geopolitical consequences, the ongoing tensions between the United States and China, tariff and trade policy changes, and increasing potential of conflict involving countries in Asia that are significant to the Company's supply chain operations, such as Taiwan and China, have resulted in increasing global tensions and create uncertainty for global commerce.

Geopolitical tensions, including the conflict between Russia and Ukraine and related economic sanctions, the conflict in the Middle East and surrounding areas, the possible expansion of such conflicts and potential geopolitical consequences, the ongoing tensions between the United States and China, tariff and trade policy changes, and increasing potential of conflict involving countries in Asia that are significant to the Company’s supply chain operations, such as Taiwan and China, have resulted in increasing global tensions and create uncertainty for global commerce.

As a result of the adverse economic impacts resulting from the conflict between Russia and Ukraine, such as increased prices for and a reduced supply of key metals used in our products, the Company has ceased its Russian operations.

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

In 2023, however, our price increases did not fully offset the effects of inflation costs and may not offset any effects experienced during 2024.

However, we may not be fully able to pass additional costs on to our customers, which could have a negative impact on our results of operations and financial condition.

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

Tariffs Imposed or Threatened Could Result in Increased Costs.

presidential administration has imposed or threatened to impose tariffs ranging from 10-25% on a variety of countries, including China, Mexico, Canada and the EU, and products, including steel, aluminum, copper, automobiles, and digital services, and is likely to continue to do so in the future.

In addition, the U.S.

has threatened the imposition of reciprocal tariffs on those countries who impose unequal tariffs or taxes on U.S.

While to date, the only tariff increase in effect is the additional 10% tariff on U.S.

imports from China, which is potentially increasing to 20% on March 4, 2025, there is no guarantee that other threatened tariff increases will not become effective in the future.

Given the current uncertainty around the threat of tariff increases, it is not possible to estimate the potential effect or to determine the level of materiality to the Company.

Such tariff increases, if adopted and applicable to U.S.

imports by the Company or its suppliers, could result in increased costs, including potential costs related to shifting more production to the U.S.

or other countries, that might be material to the Company.

A meaningful portion of our revenue is derived from U.S.

academic institutions, research organizations and other entities that rely in part on U.S.

academic and governmental customers, and our revenues and financial performance.

A substantial portion of our revenue in the United States is derived from academic and governmental institutions, research organizations and other entities that may rely in part on academic and government funding, including grants from the U.S.

National Institutes of Health (NIH) and other U.S.

government agencies.

Government funding may fluctuate and is subject to annual appropriations and budgetary constraints, and there is no assurance that such funding will continue at current levels.

If U.S, academic and governmental researchers experience reductions or delays in government funding, or modifications of the terms or conditions of funding, including allowable overhead rates, they may reduce or delay their purchases of our products and services, which could have a material effect on our revenues and financial performance.

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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Our revenue from non-U.S.

operations represented approximately 74% and 72% of our total consolidated revenue for fiscal 2023 and 2022, respectively.

operations represented approximately 72% and 74%, respectively, of our total consolidated revenue for fiscal 2024 and 2023, respectively.

Our international operations are, and will continue to be, subject to a variety of risks associated with conducting business internationally, many of which are beyond our control.

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• changes in regulatory requirements;

• legislation and regulation, including tariffs, relating to the import or export of high technology products, which legislation and regulation may conflict with U.S.

• legislation and regulation, including tariffs imposed or that may be imposed by the new presidential administration in the U.S., relating to the import or export of high technology products, which legislation and regulation may conflict with U.S.

law and may have an adverse impact on our business results;

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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.

The United States has implemented tariffs on certain imported goods and the new presidential administration in the US has imposed or threatened to impose additional tariffs on certain imported products, including reciprocal tariffs.

These additional tariffs could include items imported by us from China or other countries.

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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, 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.

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.

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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 decreased our 2023 revenue by approximately $11.2 million, or 0.4%, decreased our 2022 revenue by approximately $168.0 million, or 6.9%, and increased our 2021 revenue by approximately $43.3 million, or 2.2%.

The effects of changes in currency exchange rates decreased our 2024 revenue by approximately $13.1 million, or 0.4%, increased our 2023 revenue by approximately $11.2 million, or 0.4%, and decreased our 2022 revenue by approximately $168.0 million, or 6.9%.

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

We recorded net gains from currency translation adjustments of $15.1 million in the year ended December 31, 2023, and net losses of $22.0 million in the year ended December 31, 2022.

We recorded net losses from currency translation adjustments of $79.6 million during the year ended December 31, 2024, and net gains of $76.2 million during the year ended December 31, 2023.

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.

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In connection with certain restructuring activities during fiscal 2024, the Company performed impairment assessments of its long-lived assets comparing the carrying values to the sum of their undiscounted future cash flows.

Based on the results of these analyses, the Company determined there were no impairments to intangibles assets and goodwill for the years ended December 31, 2023, 2022, and 2021.

However, the Company recorded an impairment loss for certain right of use assets as disclosed in Note 16 to our consolidated financial statements included in Item 8 of this Annual Report on Form 10-K.

Based on the results of these analyses, the Company determined there were no impairments to goodwill for the years ended December 31, 2024, 2023, and 2022.

However, the Company recorded an impairment loss for intangible assets and certain right of use assets as disclosed in Note 12, Restructuring and asset impairments to our consolidated financial statements included in Item 8 of this Annual Report on Form 10-K.

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, spatial biology technologies, 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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Any such failure could decrease our sales and revenue.

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.

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.

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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, spatial biology technologies, 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.

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Currently, our principal competition comes from established companies providing products using existing technologies that perform many of the same functions for which we market our products.

A number of our competitors have expanded their market share in

recent years through business combinations.

A number of our competitors have expanded their market share in recent years through business combinations.

Other companies also may choose to enter our fields in the future.

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We are dependent, both directly and indirectly, upon general investment in life science research, particularly in the research and development budgets of the pharmaceutical and biotechnology industries, and in material science research as well as upon the financial condition and funding priorities of various governments and government agencies.

Since our inception, both we and our academic collaborators and customers have benefited from various governmental contracts and research grants.

Whether we or our academic collaborators will continue to be able to attract these grants depends not only on the quality of our products, but also on general spending patterns of public institutions.

Any reduction in the capital resources or government funding of our customers could reduce our sales and impede our ability to generate revenue.

Since our inception, both we and our academic collaborators and customers have benefited from various government contracts and grants, such as funding from the U.S.

National Institutes of Health (NIH) and similar government agencies.

Whether we or our academic collaborators will continue to be able to attract these grants and funding from these sources depends not only on the quality of our products, but also on general spending patterns of public institutions, changes to governmental policies and programs, including loans, grants, guarantees and other subsidies, and disruptions or changes in government funding of other government agencies.

Any reduction or shift in the capital resources or government funding of our customers, including as a result of changes to governmental policies and programs , could reduce our sales and impede our ability to generate revenue.

A significant portion of our sales are capital purchases by our customers.

The spending policies of our customers could have a significant effect on the demand for our products.

These policies are based on a wide variety of factors, including the resources available to make purchases, the spending priorities among various types of equipment, policies regarding spending during recessionary periods and changes in the political climate.

changes to governmental policies and programs, including loans, grants, guarantees and other subsidies, and changes to government spending policies, including shifts in funding priorities.

Any changes in capital spending or changes in the capital budgets of our customers could significantly reduce demand for our products.

The capital resources of our life science and other corporate customers may be limited by the availability of equity or debt financing.

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

Any significant decline in research and development expenditures by our life science and material science customers as a result of shifting governmental support for capital projects or disruptions or changes to funding of other government agencies 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.

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Disruptions at any of our manufacturing facilities could adversely affect our business.

We have manufacturing facilities located in the United States, Europe, Israel and Malaysia.

We have manufacturing facilities located in Austria, Belgium, Canada, France, Germany, Israel, Italy, Switzerland, United States, and United Kingdom.

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

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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.

In addition, our CBRNE detection products 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.

As a result, we may incur substantial costs

before we recognize revenue from these products.

As a result, we may incur substantial costs before we recognize revenue from these products.

Moreover, in return for larger, longer-term contracts, our customers for these products often demand more stringent acceptance criteria.

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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.

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 the Company and our employees, customers suppliers and other business partners.

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

As of December 31, 2023, we had outstanding an aggregate principal amount of debt totaling approximately $1,282.8 million.

As of December 31, 2024, we had an outstanding aggregate principal amount of debt totaling approximately $2.1 billion.

We also had the ability to borrow an additional $872.2 million available under our existing credit facility.

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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 $398.4 million, or 81.6% held by foreign subsidiaries as of December 31, 2023.

Furthermore, a majority of our cash, cash equivalents and short-term investments is generated from foreign operations, with $419.3 million held by foreign subsidiaries as of December 31, 2024.

We may incur certain 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.

Additionally, changes to governmental policies and programs, and disruptions or changes to funding of other government agencies could increase our cash and financing needs and adversely affect our customers, business, or results of operation.

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

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This guidance lays out a common approach for adopting the global minimum tax and enacting local legislation codifying the provisions that all 142 countries in the Inclusive Framework agreed to by consensus.

The EU member states have agreed to adopt these rules in two stages with the first component effective on January 1, 2024, while the second component will be effective January 1, 2025.

Non-EU countries have enacted or are expected to enact legislation on a similar timeline.

The EU member states have agreed to adopt these rules in two stages with the first component effective on January 1, 2024, while the second

component will be effective January 1, 2025.

Non-EU countries have enacted or are expected to enact legislation on various timelines.

Certain countries in which we operate have already enacted legislation to adopt the Pillar Two framework, while several other countries are expected to also implement similar legislation with varying effective dates in the future.

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• the timing of governmental stimulus programs and academic research budgets;

• changes to governmental policies and programs, including loans, grants, guarantees and other subsidies;

• the time it takes between the date customer orders and deposits are received, systems are shipped and accepted by our customers and full payment is received;

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In this event, the price of our common stock may fall.

Our ability to manage and grow our business successfully can be impeded by systems and other technological limitations.

Our continued success in effectively managing and growing our business depends on our ability to integrate our varied accounting, financial, information, and operational systems on a global basis.

Moreover, adapting or developing the existing technology systems we use to meet our internal needs, as well as client needs, industry demands and new regulatory requirements, is also critical for our business.

The introduction of new technologies presents new challenges to us.

We must be proactive and prepared to implement new technology when growth opportunities present themselves, whether as a result of a business acquisition or rapidly increasing business activities in particular markets or regions.

These needs could present operational issues or require significant capital spending, and may require us to reevaluate the current value and/or expected useful lives of the technology we use, which could negatively impact our results of operations.

In addition, technology is subject to rapid advancements and changes and our competitors may, from time to time, implement newer technologies or more advanced platforms for their services and products, including platforms based on artificial intelligence.

If we do not effectively anticipate and avail ourselves of new technologies, our competitive position may suffer, and these impacts would adversely affect our business, financial condition and results of operations.

In addition, our efforts to utilize technological advancements such as artificial intelligence may result in substantial integration and maintenance costs, and may expose us to additional risks.

In particular, personal information within any data set collected from our business is vulnerable to unauthorized acquisition or access, compromise or loss, which could lead to heightened business and security costs, reputational damage, administrative penalties, significant legal and financial exposure.

The content, analyses, or recommendations generated by artificial intelligence programs, if deficient, inaccurate, or biased, could adversely impact our business, financial condition, and operational results, as well as our reputation.

Moreover, ethical concerns associated with artificial intelligence could lead to brand damage, competitive disadvantages, or legal repercussions.

Any problems with our implementation or use of artificial intelligence or other technological advancements could also negatively impact our business or results of our operations.

Climate change and natural disasters, or legal, regulatory or market measures to address climate change, could adversely affect our business, financial condition or results of operations.

Climate change, allegedly resulting from increased concentrations of carbon dioxide and other greenhouse gases (“GHG”) in the atmosphere, may present risks to our business and operations.

Extreme weather events and natural disasters, such as tornadoes, tsunamis, tropical storms (including hurricanes), earthquakes, volcanic eruptions, windstorms, hailstorms, heat waves, floods, droughts, severe thunderstorms, wildfires, and other fires, which may or may not result from climate change or natural disasters, could adversely impact our operations and supply chain, including the availability and cost of raw materials and components required for the operation of our business.

There has been increased focus by federal, international, state and local regulatory and legislative bodies to combat and/or limit the effects of climate change through a variety of means, including regulating GHG emissions (and requirements to disclose climate-related risks and metrics, including GHG emissions), policies mandating or promoting the use of renewable or zero-carbon energy and sustainability initiatives, and additional taxes on fuel and energy.

These regulations, and changes to them, could increase our cost of compliance, and our failure to comply could result in the imposition of significant fines, suspension of production, alteration of product processes, cessation of operations or other actions which could materially and adversely affect our business, financial condition and results of operation.

Additionally, the impacts of climate change may further influence customer and other stockholder preferences and requirements.

This includes increased demand for more sustainable products, including products with lower environmental footprints, and for companies to produce and demonstrate progress against sustainability goals and GHG reduction targets, including product-level GHG emissions data.

Failure to meet stockholder expectations or our own goals or commitments relating to sustainability or GHG emissions reductions, provide sustainable products or demonstrate GHG reductions could potentially result in loss of market share, reputational impacts, or an inability to attract and retain customers.

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.

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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.

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

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.

As an example, BSI CALID purchases detectors and power supplies from sole or limited source suppliers and it purchases focal plane array detectors from a single supplier, Teledyne Scientific & Imaging.

Additionally, our superconducting magnets or our electronics are partially dependent on cooperation from larger manufacturers like Electronic Manufacturing Services or High Temperature Superconductors suppliers.

The existence of shortages of these components or the failure of delivery with regard to these components could have a material adverse effect upon our revenues and margins.

In addition, price increases from these suppliers or contract manufacturers could have a material adverse effect upon our gross margins.

Because of the scarcity of some components, we may be unable to obtain an adequate supply of components, or we may be required to pay higher prices or to purchase components of lesser quality.

Because of the scarcity of some components and raw material, we may be unable to obtain an adequate supply of components, or we may be required to pay higher prices or to purchase components of lesser quality.

Any delay or interruption in the supply of these or other components could impair our ability to manufacture and deliver our products, harm our reputation and cause a reduction in our revenues.

In addition, any increase in the cost of the components that we use in our products could make our products less competitive

and decrease our gross profits.

In addition, any increase in the cost of the components that we use in our products could make our products less competitive and decrease our gross profits.

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

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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 war between Russia and Ukraine, on-going conflicts between the United States and China and other geopolitical tensions.

The last few years have seen periodic supply shortages and strong fluctuations in the prices for various raw materials, in part due to high demand from developing countries, the war between Russia and Ukraine, on-going conflicts between the United States and China and other geopolitical tensions.

Supply shortages may also be impacted by demand increases from green transition, military or space/aerospace industry.

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 other metallic raw materials as well as niobium titanium for the production of traditional low-temperature superconducting magnets, wires and devices.

For example, in our superconducting magnet production, both for the horizontal and vertical magnet series, we rely on the availability of copper, 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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In order to operate superconducting magnets, we and our customers rely on liquid helium.

Helium is controlled by the Federal Helium Reserve and is subject to price changes.

Shortages of liquid helium associated with federal price controls or depleted natural reserves could drive increases in helium pricing and have an adverse impact on producing and operating our superconducting magnets, which may negatively impact the profit margins of those products.

Helium is subject to price changes and shortages of liquid helium associated with federal price controls or depleted natural reserves could drive increases in helium pricing and have an adverse impact on producing and operating our superconducting magnets, which may negatively impact the profit margins of those products.

Risks Related to Our Intellectual Property Rights

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If a third-party holding rights under a patent successfully asserts an infringement claim with respect to any of our current or future products, we may be prevented from manufacturing or marketing our infringing product in the country or countries covered by the patent we infringe, unless we can obtain a license from the patent holder.

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.

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.

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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.

In September 2019, Luxendo GmbH (“Luxendo”), a subsidiary of Bruker Corporation, was sued in Germany by Carl Zeiss Microscopy GmbH, a subsidiary of Carl Zeiss AG (“Zeiss”), for infringement of a registered German utility model.

After the utility model was canceled by the German Patent and Trademark Office in 2021, Zeiss withdrew its infringement action at the end of 2022 and the proceedings were terminated.

However, a parallel European patent application, a family member of the utility model, is still pending in the European Patent Office (“EPO”).

The Company is closely monitoring progress in the granting procedure and does not believe that a grant is imminent.

The Company is presently unable to predict the EPO's final decision on the patent application.

Refer to Note 26, Commitment and Contingencies for further information on our Litigation and Related Contingencies.

Risks Related to Legal, Regulatory and Compliance

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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.

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.

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.

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

Given the evolving nature of this industry, legislative bodies or regulatory authorities may adopt additional regulation that adversely affects our market opportunities.

Given the evolving nature of this industry, legislative bodies or regulatory authorities may adopt additional regulation or governmental policies that adversely affects our market opportunities.

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.

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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.

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.

In addition, key business group resources and our corporate functions 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.

General Risks Factors

General Risk Factors

If we are not able to successfully integrate the businesses we acquire through mergers, acquisitions or strategic alliances, we may not be able to realize all of the cost savings and other benefits that we expect to result from the transactions and our financial results may be different than expected.

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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