Item 1A. Risk Factors
ITEM 1A. RISK FACTORS
While a major part of our business strategy
is to pursue strategic laboratory acquisitions, we may not be able to identify businesses for which we can acquire on acceptable terms,
face risks due to financing such acquisitions, and our acquisition strategy may result in significant costs or expose us to substantial
risks inherent in the acquired business’s operations.
Our strategy of pursuing strategic laboratory
acquisitions may be negatively impacted by several risks, including the following:
● We may not successfully identify companies that are complementary to our business or that can diversify
our revenue or enhance our ability to implement our business strategy;
● We may not successfully acquire companies if we fail to obtain financing, if we fail to negotiate the
acquisition on acceptable terms, or for other related reasons;
● We may incur additional expenses due to acquisition due diligence, including legal, accounting, consulting,
and other professional fees and disbursements. Such additional expenses may be material, will likely not be reimbursed, and would increase
the aggregate cost of any acquisition;
● Any acquired business will expose us to the acquired company’s liabilities and to risks inherent
to its industry, and we may not be able to ascertain or assess all of the significant risks;
● We may require additional financing in connection with any future acquisition, and such financing may
adversely impact, or be restricted by, our capital structure or increase our indebtedness; and
● Achieving the anticipated potential benefits of a strategic acquisition will depend in part on the successful
integration of the operations, administrative infrastructures, and personnel of the acquired company or companies in a timely and efficient
manner. Some of the challenges involved in such an integration include: (i) demonstrating to the customers of the acquired company that
the consolidation will not result in adverse changes in quality, customer service standards, or business focus; (ii) preserving important
relationships of the acquired company; (iii) coordinating sales and marketing efforts to effectively communicate the expanded capabilities
of the combined company; and (iv) coordinating the supply chains.
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Many of these factors will be outside of our control
and any one of them could result in increased costs and reduced profitability, increased losses, decreases in the amount of expected revenues
and diversion of our management’s time and attention. They may also delay, decrease or eliminate the realization of some or all
of the benefits we anticipate when we enter into the transaction.
Our management team has limited experience in,
and limited time to dedicate to, pursuing, negotiating or integrating acquisitions. If we do identify suitable candidates, we may not
be able to negotiate or consummate such acquisitions on favorable terms or at all. Any acquisitions we complete may not achieve their
initially intended results and benefits, and may be viewed negatively by investors and other stakeholders.
We may undertake acquisitions financed in part
through public offerings or private placements of debt or equity securities, including through the new issuance of our common stock or
debt securities as consideration in an acquisition transaction. Such acquisition financing could result in dilution to our current shareholders,
a decrease in our earnings and/or adversely affect our financial condition, liquidity or other leverage measures.
In addition to committing additional capital resources
to complete any acquisitions, substantial additional capital may be required to operate the acquired businesses following their acquisition.
Moreover, these acquisitions may result in significant financial losses if the intended objectives of the transactions are not achieved.
Some of the businesses we may acquire may have significant operating and financial challenges, requiring significant additional capital
commitments to overcome such challenges and adversely affecting our financial condition and liquidity.
Failure to implement our acquisition strategy,
including successfully integrating acquired businesses, could have a material adverse effect on our results of operations, financial condition
and cash flows.
Any future acquisitions could disrupt business
and harm our financial condition.
If we are successful in consummating acquisitions,
those acquisitions could subject us to a number of risks, including that:
● the purchase price we pay could significantly deplete our cash reserves or result in dilution to our existing
stockholders;
● we may find that the acquired company or assets do not improve our offerings or market position as planned;
● we may have difficulty integrating the operations and personnel of the acquired company;
● key personnel and customers of the acquired company may terminate their relationships with the acquired
company as a result of the acquisition;
● we may experience additional financial and accounting challenges and complexities in areas such as tax
planning and financial reporting;
● we may assume or be held liable for risks and liabilities as a result of our acquisitions, some of which
we may not discover during our due diligence or adequately adjust for in our acquisition arrangements;
● we may incur one-time write-offs or restructuring charges in connection with the acquisition;
● we may acquire goodwill and other intangible assets that are subject to amortization or impairment tests,
which could result in future charges to earnings; and
● we may not be able to realize the cost savings or other financial benefits we anticipated.
These factors could have a material adverse effect
on our business, financial condition, and operating results.
In
addition to the other information set forth in this report, you should carefully consider the factors discussed in Part I, “Item
1A. Risk Factors” in our Annual Report on Form 10-K for the year ended December 31, 2022, which could materially affect our business,
financial condition or future results. The risks described in our Annual Report on Form 10-K may not be the only risks facing us. Additional
risks and uncertainties not currently known to us or that we currently deem to be immaterial also may materially adversely affect our
business, financial condition and/or operating results.
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Text extracted from the filing as submitted to EDGAR. Formatting, tables and exhibits are simplified for reading; the original document is authoritative for anything you rely on.