What changed in this filing

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Item 1A. Risk Factors

2023-02-28 compared with 2022-03-01 · 219 added, 238 removed, 856 unchanged (35% of the section changed)

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The list below is not exhaustive, and investors should read this “Risk Factors” section in full.

• The extent and duration of our revenue associated with COVID-19-related products and services are uncertain and are dependent, in important respects, on factors outside our control.

• Changes in economic conditions could negatively impact our revenue and earnings.

• Certain of our products are used by customers in the production of vaccines and therapies, some of which represent relatively new and still-developing modes of treatment.

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• Our products are highly complex and are subject to quality control requirements.

• Our success depends on the market acceptance of our life science reagents.

• Our commercial success depends on the market acceptance of our life science reagents.

Our reagents may not achieve or maintain significant commercial market acceptance.

• Until the 2020 fiscal year, we had incurred losses for each fiscal year since inception, we may incur losses in the future and we may not be able to generate sufficient revenue to maintain profitability.

• Our operating results may fluctuate significantly in the future, which makes our future operating results difficult to predict and could cause our operating results to fall below expectations or any guidance we may provide.

• Ongoing geopolitical instability and the resulting economic disruption may negatively impact our business, operations and financial condition.

• Product liability lawsuits against us could cause us to incur substantial liabilities, limit sales of our existing products and limit commercialization of any products that we may develop.

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Risks Related to Our Business and Strategy

The extent and duration of our revenue associated with COVID-19 related products and services are uncertain and are dependent, in important respects, on factors outside our control.

Certain of our products, including our proprietary CleanCap® analogs, are used by our customers in the production of COVID-19 vaccines.

While our results of operations and cash flows have been positively impacted by a strong demand for our proprietary CleanCap analogs and ongoing demand for highly modified RNA products, particularly mRNA, the evolving nature of the COVID-19 pandemic and the resulting global public health response will affect the continued demand for our COVID-19 related products and services, which have comprised the majority of our revenue for the past three years.

For the years ended December 31, 2022, 2021 and 2020, we estimate that revenue from COVID-19 related products and services represented approximately 67.9%, 69.7% and 35.4%, respectively, of our total revenues.

The ongoing manufacture and supply of COVID-19 vaccines (including bivalent booster doses) by our customers is uncertain and subject to various political, social, economic, and regulatory factors that are outside of our control, including the duration of the pandemic;

emerging information concerning the severity and incidence of the virus and its variants;

the emergence of additional virus variants;

regional resurgences of the virus globally;

the rate at which the population globally becomes vaccinated against COVID-19;

the development and availability of antiviral therapeutic alternatives;

the lapsing of the public health emergency declaration made pursuant to Section 319 of the Public Health Service Act in January 2020 with respect to the COVID-19 pandemic;

and political and social debate relating to the need for, efficacy of, or side effects related to one or more specific COVID-19 vaccines.

As the supply and manufacture of COVID-19 vaccines by our customers slows, or becomes no longer necessary, including if COVID-19 vaccines by our customers’ competitors are determined or perceived to be more effective, we expect that demand for our COVID-19 related products and services will significantly decrease, which would have a material adverse effect on our revenue, results of operations and financial condition.

Changes in economic conditions could negatively impact our revenue and earnings.

Our reagents are sold primarily to biopharmaceutical and academic organizations developing novel vaccines and therapies and performing basic research.

Research and development spending by our customers and the availability of government research funding can fluctuate due to changes in available resources, mergers of pharmaceutical and biotechnology companies, spending priorities, general economic conditions and institutional and governmental budgetary policies.

Our biologics safety testing customers are biopharmaceutical companies, contract research organizations (“CROs”), contract development and manufacturing organizations (“CDMOs”) and life science companies, which largely serve the biopharmaceutical industry.

Our nucleic acid production customers are largely vaccine and therapeutic drug makers or diagnostics manufacturers, which rely in

part on government healthcare-related policies and funding.

As a result, changes in government funding for certain research, decreases in or the imposition of limits on government spending more generally (including as a result of the U.S.

federal debt ceiling), or reductions in overall healthcare spending could negatively impact us or our customers and, correspondingly, our sales to them.

In particular, if the U.S.

Congress fails to increase the U.S.

federal debt ceiling, reimbursements we are eligible to receive under the Cooperative Agreement we entered into with the U.S.

Department of Defense may be jeopardized, which would negatively affect our business, operations and financial condition

Currently, the U.S.

and global economies are experiencing ongoing macroeconomic challenges, including labor shortages, supply chain disruptions and historic rates of inflation, which have led to increasing interest rates, volatility in the capital and credit markets, and fiscal and monetary policy uncertainty.

Our business operations, as well as our customers’ and suppliers’ business operations, have been impacted, and are expected to continue to be impacted, by these negative conditions.

In particular, labor shortages and wage inflation have affected our ability to hire, develop and retain our talented and diverse workforce, to maintain performance levels (especially cost and schedule), and to maintain our corporate culture.

Further, if our raw material and other laboratory material suppliers experience operational challenges as a result of labor shortages, limited material availability, logistics delays and transportation capacity constraints, or are unable to access adequate capital to support their working capital requirements, they may be unable to provide raw materials or other laboratory materials to us in a timely manner or at a reasonable cost, which could adversely affect our profit margins and results of operations.

Additionally, demand for our products and services could be adversely impacted if these ongoing macroeconomic challenges cause customers to reduce their operating budgets, adversely impact our customers’ ability to commit funds to purchase our products, or otherwise cause customers to delay, cancel, decrease or forego purchases of our products and services.

Further, since the majority of our customers’ contracts can be terminated, delayed or reduced in scope upon short notice or no notice, this may require us to carry excess inventory to manage through unevenness in order activity and lead to unanticipated fluctuations in our quarterly revenue and earnings.

If we are not able to forecast and adequately manage through changes in our customers’ order requirements, our productivity, profitability, results of operations, cash flows and financial position could be negatively impacted.

Further deterioration or a protracted extension of these negative macroeconomic conditions, a potential economic downturn or recession, or a significant reduction or delay in governmental funding as a result of U.S.

federal budget issues, or the perception that any of these events may occur, could cause a decline in demand for our products and services and adversely affect our performance and result in declines in our revenue and earnings.

Certain of our products are used by customers in the production of vaccines and therapies, some of which represent relatively new and still-developing modes of treatment.

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In addition, ethical, social, legal and financial concerns about gene therapy and nucleic acid vaccines, including COVID-19 vaccines, could result in additional regulations or limitations or even prohibitions on certain gene therapies or vaccine-related products.

More restrictive regulations or negative public perception could reduce certain of our customers’ use of our products and services, which could negatively affect our revenue and performance.

A pandemic, epidemic, or outbreak of an infectious disease, such as COVID-19, has affected, and may continue to affect our business, financial condition, results of operations, cash flows and prospects.

The COVID-19 pandemic led to the implementation of various responses, including government imposed shelter-in-place orders, quarantines, travel restrictions and other public health safety measures, as well as reported adverse impacts on healthcare resources, facilities and providers across the United States and in other countries.

In response to the spread of COVID-19, we restricted access to our facilities mostly to personnel and third parties required to perform critical activities that must be completed on-site, limited the number of such personnel that can be present at our facilities at any one time, and requested that many of our personnel work remotely.

In the event that government authorities were to further modify current restrictions, our employees conducting research and development or manufacturing activities may not be able to access our laboratory or manufacturing facilities and our core activities may be significantly limited or curtailed, possibly for an extended period of time.

As a result of the COVID-19 pandemic, or similar pandemics and outbreaks that may occur in the future, we have experienced and may in the future experience severe disruptions, including:

• interruption of or delays in receiving products and supplies from the third parties we rely on to, among other things, manufacture components to our products, due to staffing shortages, production slowdowns or stoppages and disruptions in delivery systems, which may impair our ability to manufacture and sell our products and services;

• limitations on our business operations by the local, state or federal government that could impact our ability to manufacture, sell or deliver our products and services;

• on-site visit limitations and prohibitions imposed by customers that could impact our ability to engage in pre-sales activities, and to provide post-sale activities, such as training, service and support;

• delays in customers’ purchasing decisions and negotiations with customers and potential customers;

• business disruptions caused by workplace, laboratory and office closures and an increased reliance on employees working from home, travel limitations, cyber security and data accessibility limits, or communication or mass transit disruptions;

• limitations on employee resources that would otherwise be focused on the conduct of our activities, including because of sickness of employees or their families or the desire of employees to avoid contact with large groups of people.

Any of these factors could severely impact our research and development activities, manufacturing business operations and sales or delay necessary interactions with local regulators, third-party vendors and other important contractors and customers.

While our results of operations and cash flows have been positively impacted by the continued strong demand for our proprietary CleanCap analogs and ongoing demand for highly modified RNA products, particularly mRNA, continued demand for COVID-19 vaccine related products and services, which currently comprise a significant portion of our revenue, may decrease as populations are vaccinated, the COVID-19 pandemic subsides or antiviral therapeutic alternatives are developed successfully .

In addition, other effects of the COVID-19 pandemic may impact our financial results.

For example, our former protein detection segment experienced a decrease in sales for the second quarter of 2020 relative to the same period in 2019 due to stay-at-home orders in the San Francisco Bay Area and the closure of many academic laboratories.

The extent to which the pandemic may negatively impact our consolidated operations and results of operations or those of our third-party manufacturers, suppliers, partners or customers continues depend on future developments.

The factors that could cause such adverse impact include:

the severity and duration of the pandemic;

the emergence of new virus variants;

lack of demand for COVID-19 vaccines;

competition faced by our customers from other COVID-19 vaccine manufacturers;

economy and global economy, including impacts resulting from supply chain constraints and inflationary pressures;

and the timing, scope and effectiveness of U.S.

and international governmental, regulatory, fiscal, monetary and public health responses to the COVID-19 pandemic and associated economic disruptions.

Changes in economic conditions could negatively impact our revenue and earnings.

Our reagents are sold primarily to biopharmaceutical and academic organizations developing novel vaccines and therapies and performing basic research.

Our nucleic acid production customers are largely vaccine and therapeutic drug makers or diagnostics manufacturers, which rely in part on government healthcare-related policies and funding.

Changes in government funding for certain research or reductions in overall healthcare spending could negatively impact us or our customers and, correspondingly, our sales to them.

As a result of COVID-19, the U.S.

and global economies experienced an economic downturn.

Further economic downturns or reductions or delays in governmental funding could cause customers to delay or forego purchases of our products and services.

In addition, the majority of our customers’ contracts can be terminated, delayed or reduced in scope upon short notice or no notice.

Changes in the level of orders received and filled can cause fluctuations in our quarterly revenue and earnings.

We are dependent on our customers’ spending on and demand for outsourced nucleic acid production amd biologics safety testing products and services.

Our customers’ use of our products and services in therapeutic and vaccine development programs for other (non-COVID-19-related) indications could be impacted by more restrictive regulations or negative public perception, which could negatively affect our business prospects, revenue and results of operation.

We are dependent on our customers’ spending on and demand for outsourced nucleic acid production and biologics safety testing products and services.

A reduction in spending or demand could have a material adverse effect on our business, financial condition, results of operations, cash flows and prospects.

The success of our business depends primarily on the number and size of contracts with our customers, primarily pharmaceutical and biotechnology companies, for our products and services.

Over the past several years, we have benefited from an increased demand for our products and services as a result of the continued growth of the global biologics market, increasing research and development budgets of our customers and greater degree of outsourcing by our customers.

A slowing or reversal of any of these trends could have a significant adverse effect on the demand for our products and services.

biological products, which, in turn, are dependent upon a number of factors, including their competitors’ discoveries, developments and commercial manufacturing initiatives and the anticipated market, clinical and reimbursement scenarios for specific products and therapeutic areas.

As discussed above, during the COVID-19 pandemic we benefited from a significant increase in demand for our products and service, including our proprietary CleanCap® analogs that are used by our customers in the production of COVID-19 vaccines, and more generally, as a result of the continued growth of the global biologics market, increasing research and development budgets of our customers and a greater degree of outsourcing by our customers.

A slowing or reversal of any of these trends, including a decrease in the amount of COVID-19 vaccines manufactured or supplied by our customers, could have a significant adverse effect on the demand for our products and services.

In addition to these industry trends, our customers’ willingness and ability to utilize our products and services are also subject to, among other things, their own financial performance, changes in their available resources, their decisions to acquire in-house manufacturing capacity, their spending priorities, their budgetary policies and practices and their need to develop new biological products, which, in turn, are dependent upon a number of factors, including their competitors’ discoveries, developments and commercial manufacturing initiatives and the anticipated market, clinical and reimbursement scenarios for specific products and therapeutic areas.

In addition, consolidation in the industries in which our customers operate may have an impact on our customers’ spending as they integrate acquired operations, including research and development departments and associated budgets.

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Although our products are tested prior to shipment, defects or errors could nonetheless occur.

Our operating results depend on our ability to execute and, when necessary, improve our quality management strategy and systems and our ability to effectively train and maintain our employee base with respect to quality management.

Our operating results depend on our ability to execute and, when necessary, improve our quality management strategy and systems and our ability to effectively

train and maintain our employee base with respect to quality management.

A failure of our quality control systems could result in problems with facility operations or preparation or provision of products.

In each case, such problems could arise for a variety of reasons, including equipment malfunction, failure to follow specific protocols and procedures, problems with raw

materials or environmental factors and damage to, or loss of, manufacturing operations.

In each case, such problems could arise for a variety of reasons, including equipment malfunction, failure to follow specific protocols and procedures, problems with raw materials or environmental factors and damage to, or loss of, manufacturing operations.

Such problems could affect production of a particular batch or series of batches of products, requiring the destruction of such products or a halt of facility production altogether.

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In the event we, or our suppliers, produce products that fail to comply with required quality standards, we may incur delays in fulfilling orders, write-downs, damages resulting from product liability claims and harm to our reputation.

Until the 2020 fiscal year, we had incurred losses for each fiscal year since inception, we may incur losses in the future and we may not be able to generate sufficient revenue to maintain profitability.

Until the 2020 fiscal year, we had incurred losses for each fiscal year since our inception.

For the years ended December 31, 2018 and 2019, we incurred net losses of $16.9 million and $5.2 million, respectively.

As of December 31, 2019, we had an accumulated deficit of $42.4 million.

Although we generated net income of $469.3 million for the year ended December 31, 2021 and had retained earnings of $184.6 million as of December 31, 2021, we expect that our operating expenses will continue to increase as we grow our business and as a result of our becoming a public company, and we may be unable to maintain

profitability for any future period.

Since our inception, we have financed our operations primarily through the incurrence of indebtedness, revenue from our products and services and the sale of our equity securities, including our November 2020 initial public offering.

We will need to generate significant additional revenue to maintain profitability and we cannot be sure that we will remain profitable for any substantial period of time.

We may never be able to generate sufficient revenue to maintain profitability and our recent and historical growth should not be considered indicative of our future performance.

Our operating results may fluctuate significantly in the future, which makes our future operating results difficult to predict and could cause our operating results to fall below expectations or any guidance we may provide.

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These fluctuations may be driven by a variety of factors, many of which are outside of our control, including, but not limited to:

• demand from our largest customers, which account for a significant percentage of our sales and orders, may not meet our expectations regarding volume and price in any given time period;

• the level of continued demand for COVID-19 vaccine related products and services which currently comprise a significant portion of our revenue, which may decrease as populations are vaccinated and the COVID-19 pandemic subsides;

• the level of demand for our other products and services, and which may vary significantly, and our ability to increase penetration in our existing markets and expand into new markets;

• customers accelerating, canceling, reducing or delaying orders as a result of developments related to their pre-clinical studies and clinical trials;

• impacts on us, our suppliers and our customers as a result of the COVID-19 pandemic;

• demand from our largest customers for COVID-19-related products and services (which currently comprise a significant percentage of our revenue and orders) may not meet our expectations regarding volume and price in any given time period;

• the level of demand for our other (non-COVID-19-relate) products and services, which may vary significantly;

• our ability to increase penetration in our existing markets and expand into new markets;

• our customers accelerating, canceling, reducing or delaying orders as a result of developments related to their pre-clinical studies and clinical trials;

• the relative reliability and robustness of our products and services;

• changes in governmental regulations or the regulatory posture toward our business;

• the volume and mix of the products and services we sell or changes in the production or sales costs related to our products and services;

• the success of our newer products, such as our CleanCap and mRNA products, and the introduction of other new products or product enhancements by us or others in our industry;

• the volume and mix of the products and services we sell;

• changes in the production or sales costs related to our products and services;

• the ongoing success of our newer products, such as our CleanCap® and mRNA products;

• the rate of introduction of other new products or product enhancements by us or others in our industry;

• the timing and amount of expenditures that we may incur to acquire, develop or commercialize additional products, services and technologies or for other purposes, such as the expansion of our facilities;

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• future accounting pronouncements or changes in our accounting policies;

• difficulties encountered by our commercial carriers in delivering our products, whether as a result of external factors such as weather or internal issues such as labor disputes;

• general market conditions and other factors, including factors unrelated to our operating performance or the operating performance of our competitors;

• difficulties encountered by our commercial carriers in delivering our products, whether as a result of external factors such as weather or negative macroeconomic conditions or internal issues such as labor disputes;

• general market conditions and other factors outside of our control, such as natural disasters, geopolitical unrest, war, terrorism, public health issues (including the ongoing COVID-19 pandemic) or other catastrophic events;

• the other factors described in this “Risk Factors” section.

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In addition, we must maintain sufficient production capacity in order to meet anticipated customer demand, and we may be unable to offset the associated fixed costs if orders slow, which would adversely affect our operating margins.

If we are unable to manufacture and ship our products consistently, in sufficient quantities and on a timely basis, our revenue, cash flow, gross margins and our other results of operations will be materially and adversely affected.

If we are unable

to manufacture and ship our products consistently, in sufficient quantities and on a timely basis, our revenue, cash flow, gross margins and our other results of operations will be materially and adversely affected.

In the event that government authorities are willing to reimplement restrictions in response to a new variant of concern or increased infection rates, our employees conducting research and development or manufacturing activities may not be able to access our laboratory or manufacturing facilities and our core activities may be significantly limited or curtailed, possibly for an extended period of time.

As a result of the COVID-19 pandemic, or similar pandemics and outbreaks that may occur in the future, we have experienced and may in the future experience severe disruptions, including:

• limitations on our business operations by the local, state or federal government that could impact our ability to manufacture, sell or deliver our products and services;

• delays in customers’ purchasing decisions and negotiations with customers and potential customers;

• reductions in productivity of our customers in certain countries or regions due to government-mandated shutdowns and quarantines, such as China’s Zero Covid Policy;

• increased competition as quarantines and shelter-in-place orders are lifted by governments in regions where our competitors, particularly international competitors, are located.

The extent to which the current or any future pandemic may negatively impact our consolidated operations and results of operations or those of our third-party manufacturers, suppliers, partners or customers continues depend on future developments.

The factors that could cause such adverse impact include:

the severity and duration of the pandemic;

the emergence of new virus variants;

lack of demand for vaccines;

economy and global economy, including impacts resulting from supply chain constraints and inflationary pressures;

and the timing, scope and effectiveness of U.S.

and international governmental, regulatory, fiscal, monetary and public health responses to such pandemic and associated economic disruptions.

Ongoing geopolitical instability has resulted in economic disruption and uncertainty, which may negatively impact our business, operations, and financial condition.

Russia’s military invasion of Ukraine in late February 2022 further exacerbated ongoing inflationary pressures, supply chain issues, and volatility in credit and capital markets, and caused other market disruptions.

Additionally, the United States, the European Union and other countries have levied sanctions against Russia and certain other countries, regions, and individuals as a result of Russia’s military actions in Ukraine, and Russian has imposed its own sanctions and threatened further retaliatory actions.

The aforementioned factors have caused damage and disruption to international commerce and the global economy, and a protracted conflict between Russian and Ukraine, any escalation of said conflict (including the spread of the conflict to

other countries in Europe), or additional geopolitical turmoil (such as a further degradation of China-Taiwan relations or trade relations between China and the United States), could worsen economic and financial markets and international relations.

Such geopolitical instability could create supply disruptions and logistics restrictions that increase our costs, have a detrimental effect on our ability to manufacture, sell and ship our products, and impede our ability to collect payments and support customers in certain regions.

Furthermore, the global economy and financial and capital markets could also be further adversely affected, resulting in instability and lack of liquidity in capital markets, which could also negatively impact the value of our stock or our ability to obtain equity or debt funding.

In addition, there are other challenges, difficulties, and risks with respect to the way we conduct our business and operations, generally, that we may experience as a result of continued or increased geopolitical turmoil.

For example, the ongoing Russia-Ukraine military conflict may create an increased risk of cybersecurity attacks, including by or at the direction of the Russian government, in response to financial and economic sanctions and import and/or export controls imposed on Russia by the United States and others.

While at this time, to the best of our knowledge, we do not believe we have experienced any such cyberattacks, we may not be able to address any such cybersecurity threats proactively or implement adequate preventative measures, and prompt detection and remediation of any such disruption or security breach may be difficult, if not impossible.

The foregoing factors could negatively affect our business, operations and financial condition, though we are unable to predict the extent or nature of any such impacts at this time.

Any such disruptions may also increase the impact of other risks described herein, both with respect to their severity and frequency.

Natural disasters, geopolitical unrest, war, terrorism, public health issues or other catastrophic events could disrupt the supply, delivery or demand of products and services, as well as our sites, which could negatively affect our operations and performance.

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We rely upon our internal manufacturing, packaging and distribution operations to produce many of the products we sell and our warehouse facilities to store products pending sale.

Any significant disruption of those operations for any reason, such as labor unrest, power interruptions, fire, hurricanes, the COVID-19 pandemic, earthquakes or other events beyond our control, could adversely affect our sales and customer relationships and therefore adversely affect our business.

Any significant disruption of those operations for any reason, such as labor disputes or social unrest, power interruptions, fire, hurricanes, a pandemic (including the ongoing COVID-19 pandemic), earthquakes or other events beyond our control, could adversely affect our sales and customer relationships and therefore adversely affect our business and results of operations.

We have significant operations in California, near major earthquake faults, which make us susceptible to earthquake risk.

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In order to complete such strategic transactions, we may need to seek additional financing to fund these investments and acquisitions.

Should we need to do so, we may not be able to secure such financing, or obtain such financing on favorable terms because of the volatile nature of the biotechnology marketplace.

Should we need to do so, we may not be able to secure such financing, or obtain such financing on favorable terms, for reasons including rising interest rates and continued volatility and uncertainty in the U.S.

and global capital and credit markets.

Our credit agreement also contains a number of restrictive covenants that impose significant restrictions on our ability to make acquisitions or certain other investments, as well as to incur additional indebtedness to finance such acquisitions or other investments.

In addition, future acquisitions may require the issuance or sale of additional equity, or equity-linked securities, which may result in additional dilution to our shareholders.

Further, on October 19, 2020, we entered into a credit agreement (the “Credit Agreement”), which contains a number of restrictive covenants that impose significant restrictions on our ability to make acquisitions or certain other investments.

If we are unable to continue to hire and retain skilled personnel, we will have trouble developing and marketing our products and services.

Our success depends largely upon the continued service of our management and scientific staff and our ability to attract, retain and motivate highly skilled technical, scientific, management and marketing personnel, who deliver high-quality and timely services to our customers and keep pace with cutting-edge technologies and developments in biologics.

We face significant competition in the hiring and retention of such personnel from other companies, other providers of outsourced biologics services, research and academic institutions, government and other organizations who have superior funding and resources.

The loss of key personnel or our inability to hire and retain skilled personnel could materially

adversely affect the development of our products and services and our business, financial condition, results of operations, cash flows and prospects.

Our success depends on the market acceptance of our life science reagents.

Additionally, certain highly skilled personnel that we seek to employ may be subject to non-competition or other restrictive covenants restricting their ability to work for us or within certain aspects of our business for a period of time.

Although some jurisdictions (including the State of California) prohibit non-competition agreements as a matter of law, and the U.S.

Federal Trade Commission has issued a notice of proposed rulemaking that would prohibit employers in the U.S.

from using non-compete agreements, if we hire certain employees from competitors or other companies, those former employers may attempt to assert that these employees and/or we have breached certain legal obligations, resulting in a diversion of our time and resources.

We have, from time to time, experienced, and we expect to continue to experience, difficulty in hiring and retaining employees with appropriate qualifications.

In recent years, recruiting, hiring and retaining employees with expertise in our industry and in the geographies where we operate has become increasingly difficult as the demand for skilled professionals has increased and as a result of labor shortages believed to have resulted from actions taken during the onset of the COVID-19 pandemic, but which are expected to continue beyond the near-term.

The loss of key personnel or our inability to hire and retain skilled personnel could materially adversely affect the development of our products and services and our business, financial condition, results of operations, cash flows and prospects.

Our commercial success depends on the market acceptance of our life science reagents.

Our reagents may not achieve or maintain significant commercial market acceptance.

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The commercial success of all of our products and services will depend upon their acceptance by the life science and biopharmaceutical industries.

Some of the products and services that we are developing are based upon new technologies or approaches.

Some of the products and services that we are developing are based upon new technologies or

As a result, there can be no assurance that these new products and services, even if successfully developed and introduced, will be accepted by customers.

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Our estimates and forecasts relating to the size and expected growth of our markets may prove to be inaccurate.

Even if the markets in which we compete meet the size estimates and growth forecasted in this prospectus, our business could fail to grow at the rate we anticipate, if at all.

Even if the markets in which we compete meet our size estimates and growth forecasts, our business could fail to grow at the rate we anticipate, if at all.

Product liability lawsuits against us could cause us to incur substantial liabilities, limit sales of our existing products and limit commercialization of any products that we may develop.

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We have made in the past, and may make in the future, selected opportunistic acquisitions of complementary businesses, products, services or technologies.

In September 2016, we acquired TriLink BioTechnologies, LLC (“TriLink BioTechnologies”), in December 2016 we acquired the assets of Solulink Incorporated (“Solulink”) and in December 2017 we acquired Glen Research Corporation (“Glen Research”), which together have formed our nucleic acid business and production capabilities.

In October 2016, we acquired Cygnus Technologies and in March 2020 we acquired MockV Solutions, Inc.

which together constitute our biologics safety testing business.

More recently, in January 2022, we acquired MyChem LLC, a provider of proprietary, ultra-pure nucleotides to customers in the diagnostics, pharma, genomics and research markets to complement our nucleic acid business.

However, we may be unable to continue to identify or complete promising acquisitions for many reasons, including competition among buyers, the high valuations of businesses in our industry, the need for regulatory and other approvals and the availability of capital.

Even if we do engage in acquisitions, any acquisition involves numerous risks, uncertainties and operational, financial, and managerial challenges, including the following, any of which could adversely affect our business, financial condition, results of operations, cash flows and prospects:

• difficulties in integrating new operations, systems, technologies, products, services and personnel of acquired businesses effectively;

• problems maintaining uniform procedures, controls and policies with respect to our financial accounting systems;

In January 2022, we acquired MyChem LLC, a provider of proprietary, ultra-pure

nucleotides to customers in the diagnostics, pharma, genomics and research markets to complement our nucleic acid business and in January 2023, we completed the acquisition of Alphazyme, LLC, an original equipment manufacturer provider of custom molecular biology enzymes, servicing customers in the genetic analysis and nucleic acid synthesis markets to complement our nucleic acid production business.

Any acquisition involves numerous risks, uncertainties and operational, financial, and managerial challenges, including the following, any of which could adversely affect our business, financial condition, results of operations, cash flows and prospects:

• difficulties in integrating new operations, systems, technologies, products, services and personnel of acquired businesses effectively and in a timely manner;

• difficulties in implementing and maintaining controls, procedures and policies with respect to our financial accounting systems, including disclosure controls and procedures and internal control over financial reporting, at acquired businesses that, prior to the acquisition, had lacked such controls, procedures and policies;

• lack of synergies or the inability to realize expected synergies and cost-savings, including enhanced revenue, technology, human resources, cost savings, operating efficiencies and other synergies;

• difficulties in managing geographically dispersed operations, including risks associated with entering foreign markets in which we have no or limited prior experience;

• difficulties in obtaining and verifying the financial statements and other business information of acquired businesses;

• difficulties in managing geographically dispersed operations, including risks associated with entering new or foreign markets in which we have no or limited prior experience;

• underperformance of any acquired technology, product, or business relative to our expectations and the price we paid;

• negative near-term impacts on financial results after an acquisition, including acquisition-related earnings charges;

• the potential loss of key employees, customers, and strategic partners of acquired companies;

• the potential loss of key employees, customers, contractual relationships, and strategic partners of acquired companies;

• declining employee morale and retention issues affecting employees of businesses that we acquire, which may result from changes in compensation, or changes in management, reporting relationships, future prospects or the direction of the acquired business;

• claims by terminated employees and shareholders of acquired companies or other third parties related to the transaction;

• the assumption or incurrence of historical liabilities, obligations and expenses of the acquired business, including unforeseen and contingent or similar liabilities that are difficult to identify or accurately quantify, or other litigation-related liabilities and regulatory actions;

• the assumption or incurrence of additional debt obligations or expenses, or use of substantial portions of our cash;

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• the issuance of equity securities to finance or as consideration for any acquisitions may not be an option if the price of our Class A common stock is low or volatile which could preclude us from completing any such acquisitions;

• any collaboration, strategic alliance and licensing arrangement may require us to relinquish valuable rights to our technologies or products, or grant licenses on terms that are not favorable to us;

• disruption of our ongoing operations and diversion of management’s attention and company resources from existing operations of the business;

• inconsistencies in standards, controls, procedures, and policies;

• the assumption of certain collaboration, strategic alliance and licensing arrangement may require us to relinquish valuable rights to our technologies or products, or grant licenses on terms that are not favorable to us;

• disruption of our ongoing operations, diversion of management’s attention and company resources from existing operations of the business, and the dedication of significant efforts and expense across all operational areas, including sales and marketing, research and development, manufacturing, finance, legal and information technologies;

• the impairment of intangible assets as a result of technological advancements, or worse-than-expected performance of acquired companies;

• assumption of, or exposure to, historical liabilities of the acquired business, including unknown contingent or similar liabilities that are difficult to identify or accurately quantify, litigation-related liabilities and regulatory compliance or accounting issues, and potential litigation or regulatory action arising from a proposed or completed acquisition;

• the need to later divest acquired assets at a loss if an acquisition does not meet our expectations;

• risks associated with acquiring intellectual property, including potential disputes regarding acquired companies’ intellectual property;

In addition, the successful integration of acquired businesses requires significant efforts and expense across all operational areas, including sales and marketing, research and development, manufacturing, finance, legal, and information technologies;

• increased leverage and interest expense from financing acquisitions, which could make us more vulnerable to downturns.

• difficulties relating to operating with increased leverage and incurring additional interest expense as a result of financing acquisitions with additional indebtedness, which could make us more vulnerable to downturns.

There can be no assurance we will identify promising acquisition opportunities.

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Our failure to successfully address the foregoing risks may prevent us from achieving the anticipated benefits from any past or future acquisition in a reasonable time frame, or at all.

Our ability to use net operating loss and tax credit carryforwards and certain built-in losses to reduce future tax payments is limited by provisions of the Internal Revenue Code, and it is possible that certain transactions or a combination of certain transactions may result in material additional limitations on our ability to use our net operating loss and tax credit carryforwards.

Our ability to use net operating loss and tax credit carryforwards and certain built-in losses to reduce future tax payments is limited by provisions of the Internal Revenue Code, and it is possible that changes in laws or certain transactions or a combination of certain transactions may result in material additional limitations on our ability to use our net operating loss and tax credit carryforwards.

Sections 382 and 383 of the Internal Revenue Code of 1986, as amended, contain rules that limit the ability of a company that undergoes an ownership change, which is generally any change in ownership of more than 50% of its stock over a three-year period, to utilize its net operating loss and tax credit carryforwards and certain built-in losses recognized in years after the ownership change.

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Generally, if an ownership change occurs, the yearly taxable income limitation on the use of net operating loss and tax credit carryforwards and certain built-in losses is equal to the product of the applicable long-term, tax-exempt rate and the value of the company’s stock immediately before the ownership change.

As a result, following any such ownership change, we might be unable to offset our taxable income with losses, or our tax liability with credits, before such losses and credits expire,

in which event we could incur larger federal and state income tax liabilities than we would have had we not experienced an ownership change.

As a result, following any such ownership change, we might be unable to offset our taxable income with losses, or our tax liability with credits, before such losses and credits expire, in which event we could incur larger federal and state income tax liabilities than we would have had we not experienced an ownership change.

In addition, under the 2017 Tax Cuts and Jobs Act (“TCJA”), tax losses generated in taxable years beginning after December 31, 2017 may be utilized to offset no more than 80% of taxable income annually.

On March 27, 2020, the Coronavirus Aid Relief, and Economic Security Act (“CARES Act”) was signed into law and changed certain provisions of the TCJA.

Under the CARES Act, NOLs arising in taxable years beginning after December 31, 2017 and before January 1, 2021 may be carried back to each of the five taxable years preceding the tax year of such loss, but NOLs arising in taxable years beginning after December 31, 2020 may not be carried back.

In addition, the CARES Act eliminates the limitation on the deduction of NOLs to 80% of current year taxable income for taxable years beginning before January 1, 2021, but the 80% limitation applies to tax years beginning after December 31, 2020.

As such, we may not be able to realize a tax benefit from the use of our NOLs .

We may be required to record a significant charge to earnings if our goodwill and other amortizable intangible assets, or other investments become impaired.

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We also recognize revenue from other contracts that may include a combination of products and services, the provision of solely services, or from license fee arrangements which may be associated with the delivery of product.

Our application of the revenue recognition accounting guidance with respect to the nature of future contractual arrangements could impact the forecasting of our revenue for future periods, as both the mix of products and services we will sell in a given period, as well as the size of contracts, is difficult to predict.

Our application of the revenue recognition accounting

guidance with respect to the nature of future contractual arrangements could impact the forecasting of our revenue for future periods, as both the mix of products and services we will sell in a given period, as well as the size of contracts, is difficult to predict.

Furthermore, the presentation of our financial results requires us to make estimates and assumptions that may affect revenue recognition.

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If we cannot maintain our current relationships with customers, fail to sustain recurring sources of revenue with our existing customers, or if we fail to enter into new relationships, our future operating results will be adversely affected.

See the “Concentration of Credit Risk” paragraph in the Note 1 to the Consolidated Financial Statements in Item 8 of this Annual Report on Form 10-K for a tabular presentation of revenues from our largest customers as a percentage of total revenue for the years ended December 31, 2021, 2020 and 2019 and accounts receivable for our largest customers as a percentage of total accounts receivable for the years ended December 31, 2021 and 2020.

Revenue from our largest customers were 63.7%, 68.1% and 34.3% of total revenue for the years ended December 31, 2022, 2021 and 2020, respectively.

The revenue attributable to our top customers has fluctuated in the past and may fluctuate in the future, which could have a material adverse effect on our business, financial condition, results of operations, cash flows and prospects.

In addition, the termination of these relationships, including following any failure to renew a long-term contract, could result in a temporary or permanent loss of revenue.

See also “— The extent and duration of our revenue associated with COVID-19 related products and services are uncertain and are dependent, in important respects, on factors outside our control.”

Our future success depends on our ability to maintain these relationships, to increase our penetration among these existing customers and to establish new relationships.

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We may enter into additional distribution arrangements and marketing alliances for certain products and services and any failure to successfully identify and implement these arrangements on favorable terms, if at all, may impair our ability to effectively distribute and market our products.

We may pursue additional arrangements regarding the sales and marketing and distribution of one or more of our products and services and our future revenue may depend, in part, on our ability to enter into and maintain arrangements with other companies having sales, marketing and distribution capabilities and the ability of such companies to successfully market and sell any such products and services.

sell any such products and services.

Any failure to enter into such arrangements and marketing alliances on favorable terms, if at all, could delay or impair our ability to distribute or market our products and services and could increase our costs of distribution and marketing.

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Delays or difficulties in securing these raw materials or other laboratory materials could result in an interruption in our production operations if we cannot obtain an acceptable substitute.

As a consequence of the COVID-19 pandemic, global supply chains are facing challenges, including material availability, global logistics delays and constraints arising from, among other things, the transportation capacity of ocean shipping containers.

Since the onset of the COVID-19 pandemic, global supply chains have faced challenges, including material availability, global logistics delays and constraints arising from, among other things, the transportation capacity of ocean shipping containers, and these challenges have been exacerbated by the ongoing macroeconomic conditions as discussed above.

Any interruption of our supply chain could significantly affect our business, financial condition, results of operations, cash flows and prospects.

While we may identify other suppliers, raw materials furnished by such replacement suppliers may require us to alter our production operations or perform extensive

validations, which may be time consuming and expensive.

While we may identify other suppliers, raw materials furnished by such replacement suppliers may require us to alter our production operations or perform extensive validations, which may be time consuming and expensive.

There can be no assurance that we will be able to secure alternative materials and revalidate them without experiencing interruptions in our workflow.

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Our operations depend upon our ability to obtain raw materials at reasonable prices.

If we are unable to obtain the materials we need at a reasonable price, we may not be able to produce certain of our products at marketable prices or at all, which could have a material adverse effect on our results of operations.

Cost and wage inflation, ongoing supply disruptions and logistics capacity constraints have increased, or may increase, our costs to manufacture and distribute our products and services.

If we are unable to obtain the materials we need at a reasonable price due to inflationary pressures or other factors, we may not be able to produce certain of our products at marketable prices or at all, which could have a material adverse effect on our results of operations.

Although we believe that we have stable relationships with our existing suppliers, we cannot assure you that we will be able to secure a stable supply of raw materials going forward.

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Some of our suppliers are based overseas and therefore may need to maintain export or import licenses.

If the supply of raw materials is interrupted, our business, financial condition, results of operations, cash flows and prospects may be adversely affected.

If the supply of raw materials is interrupted, due to ongoing supply chain disruptions or other factors, our business, financial condition, results of operations, cash flows and prospects may be adversely affected.

Because we rely heavily on third-party package-delivery services, a significant disruption in these services, damages or losses sustained during shipping or significant increases in prices could adversely affect our business, financial condition, results of operations, cash flows and prospects.

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In addition, if one or more of these third-party package-delivery providers were to increase prices, and we were not able to find comparable alternatives or make adjustments in our delivery network, our profitability could be adversely affected.

Furthermore, if one or more of these third-party package-delivery providers were to experience performance problems or other difficulties, it could negatively impact our operating results and our customers’ experience.

Furthermore, if one or more of these third-party package-delivery providers were to experience performance problems

or other difficulties, it could negatively impact our operating results and our customers’ experience.

In the past, some of our products have sustained serious damage in transit such that they were no longer usable.

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The FDA has indicated that when determining the intended use of a product labeled RUO, the FDA will consider the totality of the circumstances surrounding distribution and use of the product, including how the product is marketed and to whom.

The FDA could disagree with our assessment that our products are properly marketed as RUO, or could conclude that products labeled as RUO are actually intended for clinical diagnostic use, and could take enforcement action against us, including requiring us to stop distribution of our products until we are in compliance with applicable regulations, which would reduce our revenue,

increase our costs and adversely affect our business, prospects, results of operations and financial condition.

In the event that the FDA requires us to obtain marketing authorization of our RUO products in the future, there can be no assurance that the FDA will grant any clearance or approval requested by us in a timely manner, or at all.

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We are subject to stringent privacy laws, information security laws, regulations, policies and contractual obligations related to data privacy and security and changes in such laws, regulations, policies and contractual obligations could adversely affect our business, financial condition, results of operations, cash flows and prospects.

We are subject to data privacy and protection laws and regulations that apply to the collection, transmission, storage and use of proprietary information and personally-identifying information, which among other things, imposes certain requirements relating to the privacy, security and transmission of certain individually identifiable information.

We are subject to data privacy and protection laws and regulations that apply to the collection, transmission, storage and use of proprietary information and personally identifiable information (“PII”), which among other things, imposes certain requirements relating to the privacy, security and transmission of certain individually identifiable information.

Numerous other federal and state laws, including state security breach notification laws, state health information privacy laws and federal and state consumer protection laws, govern the collection, use, disclosure and security of personal information.

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The CCPA provides for civil penalties for violations, as well as a private right of action for certain data breaches that result in the loss of personal information.

Further, the California Privacy Rights Act (the “CPRA”), which was approved by California voters as a ballot initiative in November 2020, creates additional obligations with respect to processing and storing personal information that are scheduled to take effect on January 1, 2023 (with certain provisions having retroactive effect to January 1, 2022).

These laws and others like it are as yet untested and may subject us to increased regulatory scrutiny, litigation, and overall risk.

State laws are changing rapidly, Virginia and Colorado have passed comprehensive data privacy laws that take effect in January 1, 2023, and there is discussion in Congress of a new federal data protection and privacy law to which we would become subject, if it is enacted.

Further, the California Privacy Rights Act (the “CPRA”), which took effect on January 1, 2023 (with certain provisions having retroactive effect to January 1, 2022), amended the CCPA.

Amongst other things, the CPRA and eliminated the “employee exemption” under the CCPA, makes a distinction between “personal information” and “sensitive personal information,” imposing heightened protections for “sensitive personal information,” and brings business-to-business transactions under its purview.

These laws and others like it are yet to be tested and may subject us to increased regulatory scrutiny, litigation, and overall risk.

Further, there is discussion in Congress of a new federal data protection and privacy law to which we would become subject, if it is enacted.

Various foreign countries in which we operate also have, or are developing, laws that govern the collection, use, disclosure, security and cross-border transmission of personal information.

The legislative and regulatory landscape for privacy and data

protection continues to evolve, and there has been an increasing focus on privacy and data protection issues that have the potential to affect our business.

For example, privacy requirements in the European Union (the “EU”) govern the transfer of personal information from the European Economic Area to the United States.

In the EU and the United Kingdom, the collection and use of personal data is governed by the provisions of the General Data Protection Regulation (“GDPR”), in addition to other applicable laws and regulations.

The GDPR came into effect in May 2018, repealing and replacing the European Union Data Protection Directive, and imposing revised data privacy and security requirements on companies in relation to the processing of personal data of EU and United Kingdom data subjects.

The GDPR, together with national legislation, regulations and guidelines of EU member states and the United Kingdom governing the processing of personal data, impose strict obligations with respect to, and restrictions on, the collection, use, retention, protection, disclosure, transfer and processing of personal data.

The GDPR authorizes fines for certain violations of up to 4% of a company’s total global annual turnover for the preceding financial year or €20 million, whichever is greater.

Such fines are in addition to any civil litigation claims by data subjects.

For example, in the European Union (the “EU”) and the United Kingdom, the collection and use of personal data is governed by the provisions of the General Data Protection Regulation (“GDPR”), in addition to other applicable laws and regulations.

The GDPR came into effect in May 2018,and has resulted in, and will continue to result in, significantly greater compliance burdens and costs for companies like us.

Any data security breach could require notifications to the data subject and/or owners under U.S.

federal, U.S.

state, and/or international data breach notification laws and regulations.

Other jurisdictions outside the EU are similarly introducing or enhancing privacy and data security laws, rules and regulations, which could increase our compliance costs and the risks associated with noncompliance.

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We may also be adversely affected through other penalties, reputational harm, loss of access to certain markets, or otherwise.

Complying with export control and sanctions regulations may be time consuming and may result in the delay or loss of sales opportunities or impose other costs.

Complying with export control and sanctions

regulations may be time consuming and may result in the delay or loss of sales opportunities or impose other costs.

Any change in export or import regulations, economic sanctions or related legislation, or change in the countries, governments, persons or technologies targeted by such regulations, could result in our decreased ability to export or sell certain products and services to existing or potential customers in affected jurisdictions.

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We develop, configure and market our products and services to meet customer needs created by those regulations.

and international healthcare industry is subject to changing political, economic and regulatory influences that could significantly affect the drug development process, research and development costs and the pricing and reimbursement for pharmaceutical products, and also may increase the likelihood of legislative or regulatory changes that could impact us or our business operations.

Any significant change in regulations could have an adverse effect on both our customers’ business and our business, which could result in reduced demand for our products and services or increases in our expenses.

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and abroad such as anti-corruption and anti-competition laws.

noncompliance by us with applicable laws and regulations or the failure to maintain, renew or obtain necessary permits and licenses could result in criminal, civil and administrative penalties and could have an adverse effect on our results of operations.

Any noncompliance by us with applicable laws and regulations or the failure to maintain, renew or obtain necessary permits and licenses could result in criminal, civil and administrative penalties and could have an adverse effect on our results of operations.

Increasing scrutiny and changing expectations from investors, lenders, customers, government regulators and other market participants with respect to our Environmental, Social and Governance (“ESG”) policies and activities may impose additional costs on us or expose us to additional risks.

Companies across all industries and around the globe are facing increasing scrutiny relating to their ESG policies, initiatives and activities by investors, lenders, customers, government regulators and other market participants.

Regulatory requirements related to ESG have been issued in the E.U., its Member States and other countries, particularly with respect to climate change, emission reduction and environmental stewardship.

In the U.S., amongst other regulatory efforts, in February 2021, the Acting Chair of the SEC issued a statement directing the Division of Corporation Finance to enhance its focus on climate-related disclosure in public company filings, and in March 2021, the SEC announced the creation of a Climate and ESG Task Force in the Division of Enforcement.

We expect regulatory requirements related to ESG matters to continue to expand globally and increase our costs of compliance.

We risk damage to our brand and reputation, impacts to our ability to secure government contracts, or limited access to capital markets and loans if we fail to adapt to, or comply with, investor, lender, customer or other stakeholder expectations and standards and potential government regulation with respect to ESG matters, including in areas such as diversity and inclusion, environmental stewardship, support for local communities and corporate governance and transparency.

In particular, these constituencies are increasingly focusing on environmental stewardship, including climate change, water use, deforestation, waste, and other sustainability concerns, as well as diversity and inclusion, workplace conduct, support for local communities, and other human capital and social issues.

There is no guarantee that any ESG or sustainability goals set forth in our ESG initiatives will be achieved on the desired timeframe or at all, and the achievement of any such goals may require the incurrence of additional costs or the implementation of operational changes, any of which could adversely affect the Company’s results of operations.

Additionally, changes in legal and regulatory requirements related to ESG have been issued in the E.U., its Member States and other countries, particularly with respect to climate change, emission reduction and environmental stewardship in the U.S., amongst other regulatory efforts, the SEC has proposed rules to enhance and standardize climate-related disclosures in public company filings.

We expect legal, regulatory and reporting requirements related to ESG matters to continue to expand globally and increase our costs of compliance.

If we are unable to meet our ESG initiatives or evolving investor, industry, or customer expectations and standards, or we are perceived to have not responded adequately on any number of ESG matters, we risk damage to our brand and reputation, adverse impacts to our ability to secure government contracts, decreased desirability of our common stock to investors, or limited access to capital markets and other sources of financing.

Risks Related to Our Intellectual Property and Technology

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In any of these types of proceedings, a court or agency of competent jurisdiction may find our patents invalid or unenforceable.

Our competitors and other third parties may also be able to circumvent our patents by developing similar or alternative products in a non-infringing manner.

Our competitors and other third parties may also be able to

circumvent our patents by developing similar or alternative products in a non-infringing manner.

Any of the foregoing could have a material adverse effect on our business, financial condition, results of operations, cash flows and prospects.

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The government can exercise its march-in rights if it determines that action is necessary because we fail to achieve practical application of the government-funded technology, or because action is necessary to alleviate health or safety needs, to meet requirements of federal regulations, or to give preference to U.S.

In addition, our rights in such inventions may be subject to certain requirements to manufacture products embodying such

inventions in the United States.

In addition, our rights in such inventions may be subject to certain requirements to manufacture products embodying such inventions in the United States.

If we fail to comply with those requirements, we could lose our ownership of or other rights to any patents subject to such regulations.

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Furthermore, patents have a limited lifespan.

In the United States, the natural expiration of a patent is generally 20 years after its effective filing date.

In the United States, the unextended expiration of a patent is 20 years after its non-provisional filing date.

Various extensions may be available, however, the life of a patent and the protection it affords is limited.

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Proposed actions to waive intellectual property protections for COVID-19 vaccines and associated technology, such as those under discussion at the World Trade Organization, which are supported by the U.S.

government, may impact our ability to fully assert our intellectual property rights related to our CleanCap product in connection with the production of COVID-19 vaccines.

government, may impact our ability to fully assert our intellectual property rights related to our CleanCap product in

connection with the production of COVID-19 vaccines.

Further, these policy actions may complicate our analysis and decision-making with respect to both research and development and capital investment, given the potential for lower returns on those investments that could result from our inability to fully protect our intellectual property.

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However, trade secrets are difficult to protect.

Although we use reasonable efforts to protect our trade secrets, our employees, consultants, contractors, collaborators, CDMOs, CROs and others may unintentionally or willfully disclose our information to competitors.

use reasonable efforts to protect our trade secrets, our employees, consultants, contractors, collaborators, CDMOs, CROs and others may unintentionally or willfully disclose our information to competitors.

We also face the risk that present or former employees could continue to hold rights to intellectual property used by us, demand the registration of intellectual property rights in their name, and seek payment of damages for our use of such intellectual property.

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Such proceedings could result in the revocation or cancellation of or amendment to our patents in such a way that they no longer cover our current or future products or provide any competitive advantage.

The outcome following legal assertions of invalidity and unenforceability is

unpredictable.

The outcome following legal assertions of invalidity and unenforceability is unpredictable.

If a third party were to prevail on a legal assertion of invalidity or unenforceability, we could lose part or all of the patent protection on one or more of our current or future products, which could result in our competitors and other third parties using our technology to compete with us.

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The coverage of patents is subject to interpretation by the courts, and the interpretation is not always uniform.

If we are sued for patent infringement, we would need to demonstrate that

our products or methods of use either do not infringe the patent claims of the relevant patent and/or that the patent claims are invalid or unenforceable, and we may not be able to do this.

If we are sued for patent infringement, we would need to demonstrate that our products or methods of use either do not infringe the patent claims of the relevant patent and/or that the patent claims are invalid or unenforceable, and we may not be able to do this.

Proving invalidity, in particular, is difficult since it requires a showing of clear and convincing evidence to overcome the presumption of validity enjoyed by issued patents.

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In addition, we could be found liable for monetary damages, including treble damages and attorneys’ fees if we are found to have willfully infringed a patent.

Further, if a patent infringement suit is brought against us or our third-party service providers and if we are unable to successfully obtain rights to required third-party intellectual property, we may be required to expend significant time and resources to redesign our current or future products, or to develop or license replacement technology, all of which may not be feasible on a technical or commercial basis, and may delay or require us to abandon our development, manufacturing or sales activities relating to our current or future products.

Further, if a patent infringement suit is brought against us or

our third-party service providers and if we are unable to successfully obtain rights to required third-party intellectual property, we may be required to expend significant time and resources to redesign our current or future products, or to develop or license replacement technology, all of which may not be feasible on a technical or commercial basis, and may delay or require us to abandon our development, manufacturing or sales activities relating to our current or future products.

A finding of infringement could prevent us from commercializing our future products or force us to cease some of our business operations, which could harm our business.

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We may also need to obtain additional licenses in the future to advance our research or allow commercialization of our future products and it is possible that we may be unable to do so at a reasonable cost or on reasonable terms, if at all.

Moreover, such licenses may not provide exclusive

rights to use such intellectual property and technology in all relevant fields of use and in all territories in which we may wish to develop or commercialize our future products.

Moreover, such licenses may not provide exclusive rights to use such intellectual property and technology in all relevant fields of use and in all territories in which we may wish to develop or commercialize our future products.

In addition, our existing license agreements impose, and any future license agreements we enter into may impose, various development, commercialization, funding, milestone, royalty, diligence, sublicensing, insurance, patent prosecution and enforcement or other obligations on us.

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patents in lawsuits in U.S.

federal courts, and use a lower burden of proof than used in litigation in U.S.

federal courts, and use a lower burden of proof

than used in litigation in U.S.

federal courts.

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We may not be able to protect our intellectual property and proprietary rights throughout the world.

Filing, prosecuting, and defending patents on current or future products in all countries throughout the world would be prohibitively expensive, and the laws of foreign countries may not protect our rights to the same extent as the laws of the United States.

United States.

Consequently, we may not be able to prevent third parties from practicing our inventions in all countries outside the United States, or from selling or importing products made using our inventions in and into the United States or other jurisdictions.

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Opposition or cancellation proceedings may be filed against our trademarks, and our trademarks may not survive such proceedings.

If we are unable to establish name recognition based on our trademarks and trade names, we may not be able to compete effectively and our business, financial condition, results of operations, cash flows and prospects may be adversely affected.

If we are unable to establish name recognition based on our trademarks and trade names, we may not

be able to compete effectively and our business, financial condition, results of operations, cash flows and prospects may be adversely affected.

Intellectual property rights do not necessarily address all potential threats.

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Risks Related to Our Indebtedness

Our existing indebtedness could adversely affect our business and growth prospects.

Our existing level of indebtedness may increase and adversely affect our business and growth prospects, growth prospects, and financial condition, as well as our ability to raise additional capital on favorable terms, which could, in turn, limit our ability to develop or acquire new products, services, technologies and methodologies.

As of December 31, 2022, we had total current and long-term indebtedness outstanding of approximately $527.4 million, including term loans of $538.6 million, and unamortized debt issuance costs of $11.1 million.

We may incur significant additional indebtedness in the future.

If we increase our current indebtedness levels, the risks related to our indebtedness as set forth herein could intensify.

Our indebtedness, or any additional indebtedness we may incur, could require us to divert funds identified for other purposes for debt service and impair our liquidity position.

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Further, our Credit Agreement contains customary affirmative and negative covenants and certain restrictions on operations that could impose operating and financial limitations and restrictions on us, including restrictions on our ability to enter into particular transactions and to engage in other actions that we may believe are advisable or necessary for our business.

We expect to use cash flow from operations to meet current and future financial obligations, including funding our operations, debt service requirements and capital expenditures.

The ability to make these payments depends on our financial and operating performance, which is subject to prevailing economic, industry and competitive conditions and to certain financial, business, economic and other factors beyond our control.

Despite current indebtedness levels, we may incur substantially more indebtedness, which could further exacerbate the risks associated with our substantial indebtedness.

We may incur significant additional indebtedness in the future.

We may also consider investments in joint ventures or acquisitions, which may increase our indebtedness.

If new debt is added to our current indebtedness levels, the related risks that we face could intensify.

Variable rate indebtedness that we have incurred or may in the future incur will subject us to interest rate risk, which could cause our debt service obligations to increase significantly.

Certain of our borrowings, including certain borrowings under our Credit Agreement, bear variable rates of interest.

An increase in interest rates would increase our debt service obligations, which would have a negative impact on our net income and cash flows, including cash available for servicing our indebtedness.

We may not be able to generate sufficient cash flow to service all of our indebtedness and may be forced to take other actions to satisfy our obligations under such indebtedness, which may not be successful.

Our ability to make scheduled payments or to refinance outstanding debt obligations depends on our financial and operating performance, which will be affected by prevailing economic, industry and competitive conditions and by financial, business and other factors beyond our control.

Certain borrowings under our Credit Agreement bear variable rates of interest.

Increase in interest rates directly increase the amount of interest we are required to pay, and negatively impacts our net income and cash flows, including cash available for servicing our indebtedness more generally.

We may not be able to generate sufficient cash flow to service all of our indebtedness and may be forced to take other actions to satisfy our debt service obligations, which actions may not be adequate or may impose additional restrictions on us.

Our ability to make scheduled debt service payments or to refinance outstanding debt obligations depends on our financial and operating performance, which is subject to prevailing economic, industry and competitive conditions and certain financial, business, economic and other factors beyond our control, including those discussed under “Risk Related to Our Business and Strategy” above.

We may not be able to maintain a sufficient level of cash flow from operating activities to permit us to pay the principal, premium, if any, and interest on our indebtedness.

Any failure to make payments of interest and principal on our outstanding indebtedness on a timely basis would likely result in a reduction of our creditworthiness, which would also harm our ability to incur additional indebtedness.

If our cash flows and capital resources are insufficient to fund our debt service obligations, we may be forced to reduce or delay capital expenditures and acquisitions, sell assets, seek additional capital or seek to restructure or refinance our indebtedness.

Any refinancing of our indebtedness could be at higher interest rates and may require us to comply with more onerous covenants.

Refinancing may not be successful and may not permit us to meet our scheduled debt service obligations.

In the absence of such cash flows and resources, we could face substantial liquidity problems and might be required to sell material assets or operations to attempt to meet our debt service obligations.

The financing documents governing our Credit Agreement include certain restrictions on our ability to conduct asset sales and/or use the proceeds from asset sales for certain purposes.

We may not be able to consummate these asset sales to raise capital or sell assets at prices and on terms that we believe are fair and any proceeds that we do receive may not be adequate to meet any debt service obligations then due.

If we cannot meet our debt service obligations, the holders of our indebtedness may accelerate such indebtedness and, to the extent such indebtedness is secured, foreclose on our assets.

In such an event, we may not have sufficient assets to repay all of our indebtedness.

If we cannot meet our debt service obligations, the holders of our indebtedness would have the right to accelerate such indebtedness and, to the extent such indebtedness is secured, foreclose on our assets.

This could have serious consequences to our business, financial condition and results of operations and could cause us to become bankrupt or insolvent.

Even if this does not occur, any failure to make payments of interest and principal on our outstanding indebtedness on a timely basis would likely result in a reduction of our creditworthiness, which would also harm our ability to incur additional indebtedness.

If our cash flows and other capital resources are insufficient to fund our debt service obligations, we may be forced to reduce or delay capital expenditures and acquisitions, sell assets, raise additional capital or seek to restructure or refinance our indebtedness.

If we issue additional equity to repay all or a portion of our indebtedness, our shareholders may experience significant dilution of their equity interests.

Any refinancing of our indebtedness could be at higher interest rates and may require us to comply with more onerous covenants, including the requirement to maintain specified liquidity or other ratios or restrictions on our ability to pay dividends or make acquisitions.

If these alternative measures are not successful, we may be required to sell material assets or operations to attempt to meet our debt service obligations.

Further, we may not be able to consummate these asset sales (including as a result of restrictions imposed on us under the Credit Agreement) or sell assets at prices and on terms that we believe are fair, and any proceeds that we do receive may not be adequate to meet any debt service obligations then due.

The terms of the financing documents governing our Credit Agreement restrict our current and future operations, particularly our ability to respond to changes or to take certain actions.

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These restrictions could limit, potentially significantly, our operational flexibility and affect our ability to finance our future operations or capital needs or to execute our business strategy.

We may be unable to refinance our indebtedness.

We may need to refinance all or a portion of our indebtedness before maturity.

We cannot assure you that we will be able to refinance any of our indebtedness on commercially reasonable terms or at all.

There can be no assurance that we will be able to obtain sufficient funds to enable us to repay or refinance our debt obligations on commercially reasonable terms, or at all.

Our failure to raise additional capital or generate cash flows necessary to expand our operations and invest in new technologies in the future could reduce our ability to compete successfully and harm our competitive position and results of operations.

We may need to raise additional funds, and we may not be able to obtain additional debt or equity financing on favorable terms or at all.

If we raise additional equity financing, our security holders may experience significant dilution of their ownership

If we engage in additional debt financing, we may be required to accept terms that restrict our ability to incur additional indebtedness, force us to maintain specified liquidity or other ratios or restrict our ability to pay dividends or make acquisitions.

If we need additional capital and cannot raise it on acceptable terms, or at all, we may not be able to, among other things:

• develop and enhance our product offerings;

• continue to expand our organization;

• hire, train and retain employees;

• respond to competitive pressures or unanticipated working capital requirements;

• pursue acquisition opportunities.

In addition, if we issue additional equity to raise capital, your interest in us will be diluted.

Risks Related to Our Organizational Structure

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Under the LLC Operating Agreement, tax distributions shall be made on a pro rata basis among the LLC Unitholders, and will be calculated without regard to any applicable basis adjustment under Section 743(b) of The Internal Revenue Code (“the Code”).

We intend to cause Topco LLC to make cash distributions to the owners of LLC Units in amounts sufficient to (1) fund all or part of their tax obligations in respect of taxable income allocated to them and (2) cover our operating expenses, including payments under the Tax Receivable Agreement.

We expect Topco LLC will continue to make cash distributions to the owners of LLC Units in amounts sufficient to (1) fund all or part of their tax obligations in respect of taxable income allocated to them and (2) cover our operating expenses, including payments under the Tax Receivable Agreement.

However, Topco LLC’s ability to make such distributions may be subject to various limitations and restrictions, such as restrictions on distributions that would violate either any contract or agreement to which Topco LLC or its subsidiaries is then a party, including debt agreements, or any applicable law, or that would have the effect of rendering Topco LLC or its subsidiaries insolvent.

In addition, recently enacted legislation that is effective for taxable years beginning after December 31, 2017 may impute liability for adjustments to a partnership’s tax return on the partnership itself in certain circumstances, absent an election to the contrary.

In addition, effective for taxable years beginning after December 31, 2017, liability for adjustments to a partnership’s tax return may be imputed on the partnership itself in certain circumstances, absent an election to the contrary.

Topco LLC may be subject to material liabilities pursuant to this legislation and related guidance if, for example, its calculations of taxable income are incorrect.

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Payments under the Tax Receivable Agreement will be based on the tax reporting positions we determine.

Although we are not aware of any issue that would cause the IRS to challenge existing tax basis, a tax basis increase or other tax attributes subject to

the Tax Receivable Agreement, if any subsequent disallowance of tax basis or other benefits were so determined by the IRS, we would not be reimbursed for any payments previously made under the applicable Tax Receivable Agreement (although we would reduce future amounts otherwise payable under such Tax Receivable Agreement).

Although we are not aware of any issue that would cause the IRS to challenge existing tax basis, a tax basis increase or other tax attributes subject to the Tax Receivable Agreement, if any subsequent disallowance of tax basis or other benefits were so determined by the IRS, we would not be reimbursed for any payments previously made under the applicable Tax Receivable Agreement (although we would reduce future amounts otherwise payable under such Tax Receivable Agreement).

In addition, the actual state or local tax savings we realize may be different than the amount of such tax savings we are deemed to realize under the Tax Receivable Agreement, which will be based on an assumed combined state and local tax rate applied to our reduction in taxable income as determined for U.S.

federal income tax purposes as a result of the tax attributes subject to the Tax Receivable Agreement.

As a result, payments could be made under the Tax Receivable Agreement in excess of the tax savings we realize in respect of the attributes to which the Tax Receivable Agreement relate.

result, payments could be made under the Tax Receivable Agreement in excess of the tax savings we realize in respect of the attributes to which the Tax Receivable Agreement relate.

Conflicts of interest could arise between our shareholders and Maravai Life Sciences Holdings, LLC (“MLSH 1”), which may impede business decisions that could benefit our shareholders.

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Assuming no material changes in the relevant tax law, and that we earn sufficient taxable income to realize all tax benefits that are subject to the Tax Receivable Agreement, we expect that future payments under the Tax Receivable Agreement relating to the purchase by Maravai LifeSciences Holdings, Inc.

of LLC Units from MLSH 1 to be approximately $748.3 million and to range over the next 15 years from approximately $34.8 million to $63.0 million per year and decline thereafter.

of LLC Units from MLSH 1 to be approximately $718.2 million and to range from approximately $42.3 million to $63.3 million per year over the next 14 years and decline thereafter.

As a result, we expect that aggregate payments under the Tax Receivable Agreement over this 14-year period will be approximately $681.7 million.

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Payments under the Tax Receivable Agreement will be based on the tax reporting positions that we determine.

any, we will not be reimbursed for any cash payments previously made to MLSH 1 and MLSH 2 pursuant to the Tax Receivable Agreement if any tax benefits initially claimed by us are subsequently disallowed, in whole or in part, by the IRS or other applicable taxing authority.

For example, if the IRS later asserts that we did not obtain a tax basis increase or disallows (in whole or in part) the availability of Net Operating Losses (“NOLs”) due to a potential ownership change under Section 382 of the Internal Revenue Code (“IRC” or “the Code”), among other potential challenges, then we would not be reimbursed for any cash payments previously made to MLSH 1 and MLSH 2 pursuant to the Tax Receivable Agreement with respect to such tax benefits that we had initially claimed.

Although we are not aware of any issue that would cause the Internal Revenue Service (“IRS”) to challenge a tax basis increase or the availability of tax attributes of the corporations merged into our corporate structure as part of the Organizational Transactions, if any, we will not be reimbursed for any cash payments previously made to MLSH 1 and MLSH 2 pursuant to the Tax Receivable Agreement if any tax benefits initially claimed by us are subsequently disallowed, in whole or in part, by the IRS or other applicable taxing authority.

benefits that we had initially claimed.

Instead, any excess cash payments made by us pursuant to the Tax Receivable Agreement will be netted against any future cash payments that we might otherwise be required to make under the terms of the Tax Receivable Agreement.

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The calculation will become final thirty (30) days after it is provided assuming that no objections are made.

Any late payments that may be made under the Tax Receivable Agreement will continue to accrue interest at LIBOR plus 500 basis points until such payments are made, generally including any late payments that we may subsequently make because we did not have enough available cash to satisfy our payment obligations at the time at which they originally arose.

Payments under the Tax Receivable Agreement will generally be made within five (5) business days after this schedule becomes final pursuant to the procedures set forth in the Tax Receivable Agreement, although interest on such payments will begin to accrue at a rate of Intercontinental Exchange London Interbank Offer Rate (“LIBOR”) for a period of one month (or, if LIBOR ceases to be published, at a rate selected by us in good faith, with characteristics similar to LIBOR or consistent with market practices generally, any such rate, a “Replacement Rate”) plus 100 basis points from the due date (without extensions) of such tax return.

Generally, any late payments that may be made under the Tax Receivable Agreement will continue to accrue interest at LIBOR (or a Replacement Rate, as applicable) plus 500 basis points until such payments are made, including any late payments that we may subsequently make because we did not have enough available cash to satisfy our payment obligations at the time at which they originally arose.

The amounts that we may be required to pay to MLSH 1 and MLSH 2 under the Tax Receivable Agreement may be accelerated in certain circumstances and may also significantly exceed the actual tax benefits that we ultimately realize.

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Our organizational structure, including the Tax Receivable Agreement, confers certain benefits upon MLSH 1, as the only other LLC Unitholder in Topco LLC, and MLSH 2 that will not benefit the other holders of our Class A common stock to the same extent.

“Blocker Entities) through which GTCR and other existing members of MLSH 1 and MLSH 2 held their ownership interests in MLSH 1, Topco LLC and subsidiaries of Topco LLC that existed prior to our initial public offering and (iii) certain other tax benefits related to our entering into the Tax Receivable Agreement, including tax benefits attributable to payments that we make under the Tax Receivable Agreement.

Due to the uncertainty of various factors, we cannot estimate the likely tax benefits we will realize as a result of purchases of LLC Units and LLC Unit exchanges, and the resulting amounts we are likely to pay out to MLSH 1 and MLSH 2 pursuant to the Tax Receivable Agreement;

We have entered into a Tax Receivable Agreement with MLSH 1 and MLSH 2, which will provide for the payment by us to MLSH 1 and MLSH 2, collectively, of 85% of the amount of tax benefits, if any, that we actually realize, or in some circumstances are deemed to realize, as a result of (i) certain increases in the tax basis of assets of Topco LLC and its subsidiaries resulting from purchases or exchanges of LLC Units, (ii) certain tax attributes of certain of the entities (the “Blocker Entities”) through which GTCR and other existing members of MLSH 1 and MLSH 2 held their ownership interests in MLSH 1, Topco LLC and subsidiaries of Topco LLC that existed prior to our initial public offering and (iii) certain other tax benefits related to our entering into the Tax Receivable Agreement, including tax benefits attributable to payments that we make under the Tax Receivable Agreement.

Due to the uncertainty of various factors, we cannot estimate the likely tax benefits

we will realize as a result of purchases of LLC Units and LLC Unit exchanges, and the resulting amounts we are likely to pay out to MLSH 1 and MLSH 2 pursuant to the Tax Receivable Agreement;

however, we estimate that such payments may be substantial.

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Instead, taxable income is allocated to its members, including us.

We intend to cause Topco LLC to make tax distributions quarterly to the LLC Unitholders in Topco LLC (including us), in each case on a pro rata basis based on Topco LLC’s net taxable income and without regard to any applicable basis adjustment under Section 743(b) of the Code.

We expect Topco LLC will continue to make tax distributions quarterly to the LLC Unitholders in Topco LLC (including us), in each case on a pro rata basis based on Topco LLC’s net taxable income and without regard to any applicable basis adjustment under Section 743(b) of the Code.

Funds used by Topco LLC to satisfy its tax distribution obligations will not be available for reinvestment in our business.

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As a result, it is possible that we will receive distributions significantly in excess of our tax liabilities and obligations to make payments under the Tax Receivable Agreement.

While our Board may choose to distribute such cash balances as dividends on our Class A common stock, they will not be required to do so, and may in their sole discretion choose to use such excess cash for any purpose depending upon the facts and circumstances at the time of determination.

While our Board may choose to distribute such cash balances as dividends on our Class A common stock, they will not be required to do so, and may in their sole discretion choose to use such excess cash for any purpose (including an investment of such cash into Topco LLC) depending upon the facts and circumstances at the time of determination.

See “Dividend Policy.”

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Under Sections 3(a)(1)(A) and (C) of the 1940 Act, a company generally will be deemed to be an “investment company” for purposes of the 1940 Act if it (1) is, or holds itself out as being, engaged primarily, or proposes to engage primarily, in the business of investing, reinvesting or trading in securities or (2) is engaged, or proposes to engage, in the business of investing, reinvesting, owning, holding or trading in securities and it owns or proposes to acquire investment securities having a value exceeding 40% of the value of its total assets (exclusive of U.S.

government securities and cash items) on an unconsolidated

government securities and cash items) on an unconsolidated basis.

We do not believe that we are an “investment company,” as such term is defined in either of those sections of the 1940 Act.

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On that basis, we believe that our interest in Topco LLC is not an “investment security” under the 1940 Act.

Therefore, we have less than 40% of the value of our total assets (exclusive of U.S.

Therefore, we have less than 40% of the value of our

total assets (exclusive of U.S.

government securities and cash items) in “investment securities.” However, if we were to lose the right to manage and control Topco LLC, interests in Topco LLC could be deemed to be “investment securities” under the 1940 Act.

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The existence of any material weakness in our internal control over financial reporting could also result in errors in our financial statements that could require us to restate our financial statements, cause us to fail to meet our reporting obligations and cause shareholders to lose confidence in our reported financial information, all of which could materially and adversely affect our business and stock price.

Compliance with these requirements is costly, and we may need to undertake various costly and time-consuming actions, such as implementing new internal controls and procedures and hiring accounting or internal audit staff, which may adversely affect our business, financial condition, results of operations, cash flows and prospects.

The requirements of being a public company may strain our resources and distract our management, which could make it difficult to manage our business, particularly now that we are no longer an “emerging growth company.”

We are subject to the reporting requirements of the Securities Exchange Act of 1934, as amended (the “Exchange Act”) and the Sarbanes-Oxley Act, the listing requirements of NASDAQ and other applicable securities rules and regulations.

Compliance with these rules and regulations has increased our legal and financial compliance costs and are expected to continue to increase in the future, making some activities more difficult, time-consuming or costly and increasing demand on our systems and resources, particularly now that we are no longer an “emerging growth company.” The Exchange Act requires that we file annual, quarterly and current reports with respect to our business, financial condition, results of operations, cash flows and prospects.

The Sarbanes-Oxley Act requires, among other things, that we establish and maintain effective internal controls and procedures for financial reporting.

Furthermore, the need to continue to establish the corporate infrastructure demanded of a

public company may divert our management’s attention from implementing our growth strategy, which could prevent us from improving our business, financial condition, results of operations, cash flows and prospects.

We have made, and will continue to make, changes to our internal controls and procedures for financial reporting and accounting systems to meet our reporting obligations as a public company.

However, the measures we take may not be sufficient to satisfy our obligations as a public company.

In addition, these rules and regulations have increased our legal and financial compliance costs and have made, and will continue to make, some activities more time-consuming and costly.

For example, these rules and regulations make it more difficult and more expensive for us to obtain director and officer liability insurance, and we may be required to incur substantial costs to maintain the same or similar coverage.

These additional obligations could have a material adverse effect on our business, financial condition, results of operations, cash flows and prospects.

As of December 31, 2021, we have ceased to qualify as an “emerging growth company,” and are required to comply with the auditor attestation requirements of Section 404 of the Sarbanes-Oxley Act.

Consequently, our independent registered public accounting firm is required to provide the attestation report on our system of internal control over financial reporting in our Annual Reports on an ongoing basis.

If we are ever unable to assert that our internal control over financial reporting is effective or if our independent registered public accounting firm is unable to express an opinion as to the effectiveness of our internal control over financial reporting, or expresses an adverse opinion, investors may lose confidence in the accuracy and completeness of our financial reports, we may face restricted access to capital markets or other sources of funds and our stock price may be adversely affected.

In addition, changing laws, regulations and standards relating to corporate governance and public disclosure are creating uncertainty for public companies, increasing legal and financial compliance costs and making some activities more time consuming.

These laws, regulations and standards are subject to varying interpretations, in many cases due to their lack of specificity, and, as a result, their application in practice may evolve over time as new guidance is provided by regulatory and governing bodies.

This could result in continuing uncertainty regarding compliance matters and higher costs necessitated by ongoing revisions to disclosure and governance practices.

We intend to invest resources to comply with evolving laws, regulations and standards, and this investment may result in increased general and administrative expenses and a diversion of our management’s time and attention from revenue-generating activities to compliance activities.

If our efforts to comply with new laws, regulations and standards differ from the activities intended by regulatory or governing bodies due to ambiguities related to their application and practice, regulatory authorities may initiate legal proceedings against us and there could be a material adverse effect on our business, financial condition, results of operations, cash flows and prospects.

Risks Related to Our Class A Common Stock

GTCR controls us, and its interests may conflict with ours or yours in the future.

As of December 31, 2021, investment entities affiliated with GTCR controlled approximately 57% of the voting power of our outstanding common stock and therefore GTCR controls the vote of all matters submitted to a vote of our shareholders.

As of December 31, 2022, investment entities affiliated with GTCR collectively controlled approximately 57% of the voting power of our outstanding common stock and therefore GTCR controls the vote of all matters submitted to a vote of our shareholders.

This control enables GTCR to control the election of the members of the Board and all other corporate decisions.

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We entered into a Director Nomination Agreement with GTCR that provides GTCR the right to nominate to the Board a number of designees equal to at least:

(i) 100% of the total number of directors comprising the Board, so long as GTCR beneficially owns shares of Class A common stock and Class B common stock representing at least 40% of the total amount of shares of Class A common stock and Class B common stock it beneficially owned as of November 19, 2020, (ii) 40% of the total number of directors, in the event that GTCR beneficially owns shares of Class A common stock and Class B common stock representing at least 30% but less than 40% of the total amount of shares of Class A common stock and Class B common stock it owned as of November 19, 2020, (iii) 30% of the total number of directors, in the event that GTCR beneficially owns shares of Class A common stock and Class B common stock representing at least 20% but less than 30% of the total amount of shares of Class A common stock and Class B common stock it owned as of November 19, 2020, (iv) 20% of the total number of directors, in the event that GTCR beneficially owns shares of Class A common stock and Class B common stock representing at least 10% but less than 20% of the total amount of shares of Class A common stock and Class B common stock it owns as of November 19, 2020 and (v) one director, in the event that GTCR beneficially owns shares of Class A common stock and Class

B common stock representing at least 5% of the total amount of shares of Class A common stock and Class B common stock it owned as of November 19, 2020.

The Director Nomination Agreement provides that GTCR may assign such right to a GTCR affiliate.

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Our certificate of incorporation designates the Court of Chancery of the State of Delaware as the exclusive forum for certain litigation that may be initiated by our shareholders and the federal district courts of the United States as the exclusive forum for litigation arising under the Securities Act, which could limit our shareholders’ ability to obtain a favorable judicial forum for disputes with us.

Pursuant to our certificate of incorporation, unless we consent in writing to the selection of an alternative forum, the Court of Chancery of the State of Delaware is the sole and exclusive forum for any claims in state court for (1) any derivative action or proceeding brought on our behalf, (2) any action asserting a claim of breach of a fiduciary duty owed by any of our directors, officers or other employees to us or our shareholders, (3) any action asserting a claim against us arising pursuant to any provision of the DGCL, our certificate of incorporation or our bylaws or (4) any other action asserting a claim against us that is governed by the internal affairs doctrine;

governed by the internal affairs doctrine;

provided that for the avoidance of doubt, the forum selection provision that identifies the Court of Chancery of the State of Delaware as the exclusive forum for certain litigation, including any “derivative action,” will not apply to suits to enforce a duty or liability created by the Securities Act, the Exchange Act or any other claim for which the federal courts have exclusive jurisdiction.

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Our quarterly operating results are likely to fluctuate in the future.

In addition, securities markets worldwide have experienced, and are likely to continue to experience, significant price and volume fluctuations, including as a result of the COVID-19 pandemic.

This market volatility, as well as general economic, market or political conditions, could subject the market price of our Class A common stock to wide price fluctuations regardless of our operating performance.

Our operating results and the trading price of our Class A common stock may fluctuate in response to various factors, including:

• market conditions in our industry or the broader stock market;

• actual or anticipated fluctuations in our quarterly financial and operating results;

• introduction of new products or services by us or our competitors;

• issuance of new or changed securities analysts’ reports or recommendations;

• sales, or anticipated sales, of large blocks of our stock;

• additions or departures of key personnel;

• regulatory or political developments;

• litigation and governmental investigations;

• changing economic conditions;

• investors’ perception of us;

• events beyond our control such as weather, war and health crises such as the COVID-19 pandemic;

• any default on our indebtedness.

These and other factors, many of which are beyond our control, may cause our operating results and the market price and demand for our Class A common stock to fluctuate substantially.

Fluctuations in our quarterly operating results could limit or prevent investors from readily selling their shares of Class A common stock and may otherwise negatively affect the market price and liquidity of our shares of Class A common stock.

In addition, in the past, when the market price of a stock has been volatile, holders of that stock have sometimes instituted securities class action litigation against the company that issued the stock.

If any of our shareholders brought a lawsuit against us, we could incur substantial costs defending the lawsuit.

Such a lawsuit could also divert the time and attention of our management from our business, which could significantly harm our profitability and reputation.

In addition, securities markets worldwide have experienced, and are likely to continue to experience, significant price and volume fluctuations, including as a result of the current macroeconomic environment and fiscal and monetary policy uncertainty.

This market volatility, as well as other general economic, market or political conditions, could subject the market price of our Class A common stock to wide price fluctuations regardless of our operating performance.

Our operating results and the trading price of our Class A common stock may fluctuate in response to various factors, including those discussed throughout this section.

A significant portion of our total outstanding shares of Class A common stock, including newly issued shares of Class A common stock issued upon the exchange of UP-C interests by MLSH 1, may be sold into the market in the near future.

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Further, as of December 31, 2022, an additional 123,669,196 shares of Class A common stock are issuable upon the exchange by MLSH 1 of its interest in Topco.

The market price of our stock could decline if the holders of those shares sell them or are perceived by the market as intending to sell them.

Because we have no current plans to pay regular cash dividends on our Class A common, you may not receive any return on investment unless you sell your Class A common stock for a price greater than that which you paid for it.

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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