What changed in this filing

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Item 1A. Risk Factors

2024-02-29 compared with 2023-02-23 · 271 added, 373 removed, 436 unchanged (60% of the section changed)

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The following is a summary of the principal risks that could adversely affect our business, results of operations and financial condition:

• risks related to the consummation of the Combinations, including (i) failure to integrate successfully the businesses of Quidel and Ortho in the expected timeframe, or at all;

(ii) the synergies attributable to the Combinations may vary from expectations;

(iii) continued incurrence of significant transaction and merger-related costs;

(iv) disruption of our business relationships;

and (v) business issues of Quidel or Ortho prior to the Combinations being imputed to the other;

• outbreaks of contagious diseases and other adverse public health developments, such as the COVID-19 global pandemic;

• the highly competitive nature of our industry and market segment;

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• adverse developments in global market, macroeconomic and geopolitical conditions;

• fluctuations or a decline in sales of our COVID-19 and influenza diagnostics tests;

• fluctuations or a decline in sales of our respiratory products;

• the loss of any key distributor or the failure to retain or expand our customer relationships;

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• the failure of our collaboration partners to fulfill their obligations to us;

• our inability to meet demand for our products and services;

• decreases in the number of surgical procedures performed, and the resulting decrease in blood demand;

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• consolidation of our customer base and the formation of group purchasing organizations;

• inability to realize the anticipated benefits of acquisitions and divestitures;

• the occurrence of natural disasters, public health crises, geopolitical crises and other catastrophic events that may adversely affect our results of operations;

• inability to realize the anticipated benefits of acquisitions, divestitures or discontinuances of certain business operations;

• risks associated with our non-U.S.

operations and international sales, including currency translation risks, the impact of possible new tariffs, trade embargoes or trade wars and compliance with applicable trade measures;

• our inability to protect our information systems from cyber-based attacks, security breaches or privacy violations and failure to protect our cloud-based solutions;

• failure to integrate successfully the businesses of Quidel and Ortho in the expected timeframe;

• continued incurrence of significant transaction and merger-related costs;

• our inability to protect our information systems and personal and confidential information from data corruption, cyber-attacks and security breaches;

• interruptions to our third-party IT service providers and/or the inability of our digital solutions to interoperate with certain operating systems;

• our inability to develop, obtain and protect our proprietary technology rights or defend against intellectual property infringement suits against us by third parties;

• the loss of EUA by the FDA on our COVID-19 products;

• the loss of EUAs on our respiratory products;

• our inability to obtain or maintain required clearances or approvals for our products, including approval requirements of the foreign countries in which we sell our products;

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• failure to comply with applicable regulations, which may result in significant costs or the suspension or withdrawal of previously obtained clearances or approvals;

• disruptions at government agencies that prevent new or modified products from being developed, cleared or approved or commercialized in a timely manner;

• disruptions at government agencies that prevent them from performing normal business functions or prevent new or modified products from being developed, cleared, approved or commercialized in a timely manner, or at all;

• inability to procure government contracts, including due to government-sponsored tendering requirements, lack of funding and compliance and possible sanctions risks associated with our contracts with government entities;

• liability claims and harm to our reputation resulting from claims that our products are defective;

• failure to comply with laws and regulations, including healthcare regulations, laws and regulations associated with our use of hazardous materials, anti-corruption laws and regulations, and federal, state and foreign data protection laws and regulations;

• risks related to changes in U.S.

and foreign income tax laws and regulations;

• changes in our tax rates or exposure to additional income tax liabilities or assessments;

• need to raise additional funds to finance our future capital or operating needs or other business purposes;

• risks related to our indebtedness, which as of January 1, 2023, includes indebtedness of $2,638.3 million, as well as remaining availability under our Revolving Credit Facility (as defined in this Annual Report) of $786.9 million (net of $13.1 million of outstanding letters of credit);

• risks related to our indebtedness;

• our ability to generate cash flow to service our debt obligations;

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• difficulty attracting, motivating and retaining executives and other key employees;

• unexpected payments to any pension plans applicable to our employees;

• unexpected payments to any defined benefit plans or other post-employment benefit plans applicable to our employees;

• work stoppages, union negotiations, labor disputes and other matters associated with our labor force;

• the outcomes of legal proceedings instituted against us;

• additional costs and new risks associated with ESG matters, including evolving legal standards and regulations concerning such matters;

• risks that the insurance we maintain may not fully cover any or all potential exposures;

• certain provisions of our amended and restated certificate of incorporation (our “Charter”), Delaware law and our amended and restated bylaws (our “Bylaws”) that may make takeover attempts difficult, which could depress the price of our common stock, or limit our stockholders’ ability to obtain a favorable judicial forum for disputes;

• additional costs and new risks associated with ESG matters;

• certain provisions of our amended and restated certificate of incorporation (our “Charter”), our amended and restated bylaws (our “Bylaws”) and Delaware law that may make takeover attempts difficult, which could depress the price of our common stock, or limit our stockholders’ ability to obtain a favorable judicial forum for disputes;

• the volatility of the market price of our common stock;

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The following is a more complete discussion of the risks facing our business that we have determined are currently material.

Risks Relating to the Consummation of the Combinations

The failure to integrate successfully the businesses of Quidel and Ortho in the expected timeframe, or at all, would adversely affect our future business and financial performance.

The combination of two previously independent companies, Quidel and Ortho, is a complex, costly and time-consuming process.

As a result of the Combinations, we will be required to devote significant management attention and resources to integrate the business practices and operations of Quidel and Ortho.

The integration process may disrupt the business of either or both of Quidel and Ortho and, if implemented ineffectively, could preclude realization of the full benefits, or any benefits, we expect to result from the Combinations.

Any failure to meet the challenges involved in successfully integrating the operations of Quidel and Ortho or otherwise to realize the anticipated benefits of the Combinations could also seriously harm our results of operations.

In addition, the overall integration of Quidel and Ortho may result in material unanticipated problems, expenses, liabilities, competitive responses, loss of or harm to customer or other partner relationships and diversion of management’s attention, and may cause our stock price to decline.

The difficulties of combining the operations of Quidel and Ortho include, among others:

• managing a significantly larger company and expanded business, which will pose substantial challenges for management, including challenges related to the management and monitoring of the current and expanded operations and associated increased costs and complexity;

• coordinating geographically separate organizations, including extensive international operations;

• the potential diversion of management’s focus and resources from other strategic opportunities and from operational matters;

• performance shortfalls as a result of the diversion of management’s attention;

• aligning and executing our strategy;

• the disruption of relationships with, or the loss of customers, potential customers and other business partners and potential business partners;

• maintaining employee morale and retaining and attracting key management and other employees;

• the disruption of, or the loss of momentum in, Quidel’s and Ortho’s ongoing business or inconsistencies in standards, controls, systems, procedures and policies;

• integrating two unique business cultures;

• the possibility of faulty assumptions underlying expectations regarding the integration process and results;

• consolidating corporate and administrative infrastructures and addressing duplicative operations;

• coordinating sales, distribution and marketing efforts;

• integrating IT, communications and other systems;

• changes in applicable laws and regulations and addressing multiple laws and regulations across the globe;

• managing tax costs or inefficiencies associated with integrating the operations of Quidel and Ortho;

• unforeseen expenses associated with the Combinations;

• taking actions that may be required in connection with obtaining regulatory approvals.

Many of these factors are outside of our control and any one of them could result in increased costs, decreased revenues and diversion of management’s time and energy, which could materially impact our business, financial condition and results of operations.

In addition, even if the operations of Quidel and Ortho are integrated successfully, we may not realize the full benefits of the Combinations, including the synergies, cost savings or sales or growth opportunities that we expect.

These benefits may not be achieved within the anticipated timeframe, or at all.

The synergies attributable to the Combinations may vary from expectations.

We may fail to realize the anticipated benefits and synergies expected from the Combinations, which could adversely affect our business, financial condition and operating results.

The success of the Combinations will depend, in significant part, on our ability to successfully integrate the businesses of Quidel and Ortho and realize the anticipated strategic benefits and synergies from the Combinations.

We believe that the combination of the businesses of Quidel and Ortho will complement each party’s strategy by providing a balanced and diversified product portfolio, operational efficiencies, supply chain optimization, complementary geographic footprints, product development synergies and cash flow and margin enhancement opportunities.

However, achieving these goals requires, among other things, successful integration and realization of the targeted cost synergies expected from the Combinations.

The successful integration and anticipated benefits of the Combinations and actual operating, technological, strategic and revenue opportunities may not be realized fully or at all, or may take longer to realize than expected.

If we are unable to achieve these objectives and realize the anticipated benefits and synergies expected from the Combinations within the anticipated timeframe or at all, our business, financial condition and operating results may be adversely affected.

We will continue to incur significant transaction and merger-related costs in connection with the Combinations.

We have incurred and expect to continue to incur a number of non-recurring direct and indirect costs associated with the Combinations.

These costs and expenses include fees paid to financial, legal and accounting advisors, severance, retention and other employment-related costs, including payments that may be made to certain of our executives, filing fees, travel expenses and other related charges.

There are also processes, policies, procedures, operations, technologies and systems that must be integrated in connection with the Combinations and the integration of Quidel’s and Ortho’s businesses.

While we have assumed that a certain level of expenses would be incurred in connection with the Combinations and continue to assess the magnitude of these costs, there are many factors beyond our control that could affect the total amount or the timing of the integration and implementation expenses.

In addition, there may be additional unanticipated significant costs and expenses in connection with the Combinations.

Although we expect that the strategic benefits of the Combinations will offset the transaction expenses and implementation costs over time, this net benefit may not be achieved in the near term or at all.

Our business relationships may be subject to disruption due to uncertainty associated with the Combinations.

Companies with which we do business may experience uncertainty associated with the Combinations, including with respect to current or future business relationships.

Our business relationships may be subject to disruption as customers, distributors, suppliers, vendors and others may attempt to negotiate changes in existing business relationships or consider terminating their business relationships with us.

These disruptions could have an adverse effect on our business, financial condition, results of operations or prospects, including an adverse effect on our ability to realize the anticipated benefits of the Combinations.

Business issues faced by Quidel or Ortho prior to the Combinations may be imputed to the operations of the other.

To the extent either Quidel or Ortho had, or was perceived by customers to have, operational challenges, such as product availability, product or service performance, quality, workforce or other issues, those challenges may raise concerns by existing customers of the other company, which may limit or impede our future ability to obtain additional business from those customers.

Risks Relating to Our Business, Strategy and Operations

The COVID-19 global pandemic has adversely affected, and may continue to adversely affect, our business operations, strategy, financial performance and results of operations, the extent of which is uncertain and difficult to predict.

Any significant outbreak of contagious diseases and other adverse public health developments in countries where we operate could have a material and adverse effect on our business, financial condition and results of operations.

As a result of the COVID-19 pandemic and the related responses from government authorities, our business operations, strategy, financial performance and results of operations have been affected in a number of ways and may be further adversely impacted in a number of ways, including, but not limited to, the following:

• increased costs in our manufacturing, production and shipping processes;

• a slowdown or stoppage in the supply chain of our raw materials, components, including but not limited to the key components of our instruments and assays, equipment and packaging services used to manufacture our products or our inability to secure additional or alternate sources of supplies or services needed to manufacture our products;

• our inventory might be requisitioned, diverted or allocated by government order such as under emergency, disaster and civil defense declarations.

For example, government actions in response to the COVID-19 pandemic affected and may in the future affect our supply allocation, and those and our own allocation decisions can impact our customer relationships;

• interruptions or delays in global shipping to transport and deliver our products to our distributors and customers;

• interruptions in normal operations of certain customers that could result in reductions in demand for routine, elective and other non-COVID-19 related healthcare procedures and testing;

• disruptions to our operations, sales, distribution, R&D and other important business activities and those of our business partners, including a shutdown of one or more of our facilities, warehouses or product lines;

• our ability to meet any increased demand for our COVID-19 testing products;

• limitations on employee resources and availability, including due to sickness or personal quarantine;

• disruptions encountered by health regulatory agencies globally in their operations.

For example, the FDA and comparable foreign regulatory agencies may have slower response times or be under-resourced, and as a result, review and approval of product registrations may be materially delayed;

• an adverse impact on collections and timing of cash receipts from our customers, which could result in significant fluctuations in our cash flows from period to period;

• an increase in the volatility of our stock price, fluctuations in foreign currency exchange rates or rising interest rates.

In response to increased demand of some of our products brought on by COVID-19, we rapidly and significantly expanded our manufacturing capacity, including expanding and scaling our infrastructure to support existing and anticipated COVID-19 testing demand and commercial activities.

This rapid expansion has placed and may continue to place significant strain on our management, personnel, operations, systems and financial resources.

Failure to successfully manage this expansion could negatively affect our operating results, including due to decreases in demand for our products, inefficiencies in implementing such expansion or higher costs for materials, technology, equipment and human capital.

Moreover, we may not realize the revenue growth and profitability we anticipate for our COVID-19 and other diagnostic products, which could cause, among other results, a failure to realize the benefits of our manufacturing capacity expansion, excess capacity and the value of those investments being written down or written off.

Similarly, we have experienced significant volatility in demand for our COVID-19 products since they launched, with periods of significant demand and periods where we experienced dramatic decreases in demand.

Demand has fluctuated as a result of various factors, including the resurgences of COVID-19 and its variants, the supply of COVID-19 tests generally, the purchasing activity of government entities, and the dissemination and effectiveness of vaccinations.

As the COVID-19 pandemic reaches an endemic stage, the extent to which it may continue to impact demand for our products depends on these and future developments, which are highly uncertain and difficult to predict.

The COVID-19 pandemic has also resulted in global supply chain challenges.

For instance, we have experienced shortages and delays in receiving certain raw materials and other components for our products and have experienced logistics and distribution

challenges, as well as challenges in labor availability and rising labor costs, all of which have affected our ability to fulfill customer orders, including instrument placements, on a timely basis.

Supply chain, production, logistics and distribution challenges have impacted, and we expect will continue for some period of time to impact, our results of operations.

Although we and our contract manufacturer partners, suppliers of raw materials and other third-party vendors are pursuing additional sources for certain of these components, we may be unable to identify additional suppliers.

We have also encountered and may continue to encounter increases in idle facility costs and freight and distribution costs, which in some instances have affected the pricing of our products.

Any prolonged and significant supply chain disruptions or inability to provide products in countries adversely impacted by the COVID-19 pandemic could impact our revenues, increase our costs and negatively affect our business relationships and reputation, as well as our operating results.

The effects of COVID-19 may exacerbate the impact of other risks described in this Annual Report.

As the COVID-19 pandemic reaches an endemic state, the degree to which it continues to impact our business operations, strategy, financial condition and results of operations will depend on future developments that are uncertain and difficult to predict.

Although COVID-19 infection rates and severity have decreased recently, the occurrence, spread, severity and duration of any new outbreaks or resurgences, including the emergence and spread of new variants of COVID-19, actions taken to contain the resurgences or variants, and economic repercussions of the virus remain uncertain.

We continue to evaluate the nature and extent to which COVID-19 may impact our business and operations.

The industry and market segment in which we operate are highly competitive, and our failure to compete effectively could adversely affect our sales and results of operations.

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We may not be able to supply customers with products and services that they deem superior or at competitive prices, and we may lose business to our competitors.

There are a large number of multinational and regional competitors making investments in competing technologies and products, including several large pharmaceutical and diagnostics companies and diagnostic divisions of diversified healthcare companies and conglomerates.

We also face competition from our distributors and retail customers as some have created, and others may decide to create, their own products to compete with ours.

A number of our competitors have competitive advantages, such as substantially greater financial, managerial, technical, R&D, clinical, manufacturing, and regulatory resources, capabilities and experience, and larger, more established marketing, sales, distribution and service organizations and other resources than we have.

There are a large number of multinational and regional competitors making investments in competing technologies, products and services, including several large pharmaceutical and diagnostics companies and diagnostic divisions of diversified healthcare companies and conglomerates.

We also face competition from our distributors and retail customers as some have created, and others may decide to create, their own products and services to compete with ours.

A number of our competitors have competitive advantages, such as substantially greater financial, managerial, technical, R&D, clinical, manufacturing, and regulatory resources, capabilities and experience, and more established, larger and broader coverage in marketing, sales, distribution and service organizations and other resources than we have.

Moreover, some competitors offer broader product lines and have greater name recognition than we have.

Our operating results could be materially and adversely affected if:

• customers and potential customers believe our competitors’ products and services better address their needs and expectations through product performance, product offerings, cost, automation or work-flow efficiencies, and even if we can demonstrate that our products meet their needs and expectations, they may resist changing to our products;

• customers and potential customers believe our competitors’ products and services better address their needs and expectations through product performance, product offerings, cost, automation or work-flow efficiencies, and even if we can demonstrate that our products and services meet their needs and expectations, they may resist changing to our products;

• our competitors take market share from our products, or we may not win opportunities because our competitors have or are perceived to have more effective servicing or marketing or greater or more timely product availability;

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Competitive and regulatory conditions in many markets in which we operate restrict our ability to fully recover through price increases, higher costs of acquired goods and services resulting from inflation, and other drivers of cost increases.

Furthermore, the introduction of counterfeit products into the markets we serve may have the effect of eroding confidence in our products or in our industry as a whole.

In addition, there has been a trend toward industry consolidation in our markets over the last few years.

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We devote a significant amount of financial and other resources to researching and developing new technologies, products, services and markets.

The development, manufacture and sale of diagnostic products and services and new technologies require a significant investment of

resources, such as employee time, offices and R&D and manufacturing facilities, and development of new partners and channels.

The development, manufacture and sale of diagnostic products and services and new technologies require a significant investment of resources, such as employee time, offices and R&D and manufacturing facilities, and development of new partners and channels.

Furthermore, developing and manufacturing new products and services require us to anticipate customers’ and patients’ needs and emerging technology trends accurately.

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This process is conducted in various stages, and each stage presents the risk that we will not achieve our goals.

In addition, innovations may not be accepted quickly in the marketplace because of, among other things, entrenched patterns of clinical practice or uncertainty over third-party reimbursements.

In addition, innovations may not be accepted quickly in the marketplace, or at all, because of, among other things, entrenched patterns of clinical practice or uncertainty over third-party reimbursements.

In the event of such failure, we may need to abandon a product or service in which we have invested substantial resources.

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• these products and services, if and when approved, can be successfully marketed or will be adopted in the market.

These factors, as well as supply, manufacturing or distribution problems or other factors beyond our control, could delay the launch of new products or services.

If we are unable to deliver reliable products in a timely manner, promptly respond to and address quality issues, provide expected levels of customer service, and comply with applicable regulations and rules, our ability to deliver products that meet our customers’ needs and expectations and our competitive position, branding and results of operations may be adversely and materially affected.

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Demand for our products and services could change more dramatically than in previous years based on funding and reimbursement constraints and support levels from governments, universities, hospitals and the private industry, including laboratories.

Our global business is adversely affected by decreases in the general level of economic activity, such as decreases in business and consumer spending, increases in unemployment rates, the inflationary environment, rising interest rates, the recessionary environment, and budgeting constraints of governmental entities.

Disruptions in the U.S., Europe or in other economies, including due to geopolitical conflict, including the ongoing conflict in Ukraine and rising tensions between China and Taiwan, or weakening of emerging markets, including China, could adversely affect our sales, profitability and/or liquidity.

A future deterioration in financial markets or confidence in major economies or other macroeconomic developments could affect businesses such as ours in a number of ways.

Our global business is adversely affected by decreases in the general level of economic activity, such as decreases in business and consumer spending, increases in unemployment rates, the inflationary environment, rising interest rates, a recessionary environment, instability in financial institutions and budgeting constraints of governmental entities.

Disruptions in the U.S., Europe, China or in other geographies, including as a result of the ongoing conflict in Ukraine and the Israel-Hamas conflict, or weakening of emerging markets, such as China, could adversely affect our sales, profitability and/or liquidity.

A deterioration in financial markets, including due to instability in financial institutions, or reduction in confidence in major economies or other macroeconomic developments could affect businesses such as ours in a number of ways.

A tightening of credit in financial markets could adversely affect the ability of our customers and suppliers to obtain financing for significant purchases and operations, could result in a decrease in or cancellation of orders for our products and services and could impact the ability of our customers to make payments.

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Our financial position, results of operations and cash flows could be materially adversely affected by difficult conditions and volatility in the capital, credit and commodities markets.

Fluctuations or a decline in sales of our COVID-19 and influenza diagnostic tests can have a significant impact on our operating results and if sales or revenues of our COVID-19 or influenza tests fluctuate or decline for any reason, our operating results could be materially and adversely affected.

Fluctuations or a decline in sales of our respiratory products could materially and adversely affect our operating results.

A significant percentage of our total revenues is generated from a limited number of our product families.

In particular, revenues from the sales of our COVID-19 tests have represented a significant portion of our total revenues.

Sales of our COVID-19 products accounted for approximately 44% of our total revenues for the year ended January 1, 2023, which includes the impact of Ortho’s operations from the date of the Combinations.

Demand for our COVID-19 testing products has and may continue to fluctuate or decline as a result of a number of factors, including but not limited to the emergence and impact of new variants or resurgences, the effectiveness of global containment efforts, and the increased market supply of COVID-19 tests by our competitors.

Sales of our influenza tests accounted for approximately 11% of our total revenues for the year ended January 1, 2023, which includes the impact of Ortho’s operations from the date of the Combinations.

Demand for our influenza tests can fluctuate or decline based on the severity of the flu season.

The gross margins derived from sales of our COVID-19 and influenza tests are generally significantly higher than the gross margins from many of our other core products.

if sales or revenues of our COVID-19 or influenza tests fluctuate or decline for any reason, whether as a result of a waning of the COVID-19 pandemic, a mild flu season, market share loss or price pressure, obsolescence, regulatory matters, such as loss of EUAs from the FDA for our COVID-19 products, or any other reason, our operating results would be materially and adversely affected on a disproportionate basis.

In particular, revenues from the sales of our respiratory products have represented a significant portion of our total revenues.

Sales of our respiratory products accounted for approximately 24% of our total revenues for the year ended December 31, 2023.

our respiratory products has and may continue to fluctuate or decline as a result of a number of factors, including but not limited to the severity of the respiratory season, the emergence and impact of new variants or resurgences, the effectiveness of vaccination efforts, and the increased market supply of respiratory products by our competitors.

The gross margins derived from sales of our respiratory products are generally significantly higher than the gross margins from many of our other core products.

As a result, if sales or revenues of our respiratory products fluctuate or decline for any reason, whether as a result of COVID-19 reaching an endemic stage, a mild respiratory season, market share loss or price pressure, obsolescence, regulatory matters, or any other reason, our operating results would be materially and adversely affected on a disproportionate basis.

A significant portion of our total revenues are from a relatively small number of customers, and if we fail to retain or expand our customer relationships or significant customers terminate or do not renew their contracts, our business, operating results and financial condition could be adversely affected.

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and globally, the market is dominated by a small number of these distributors and as a result, we rely on certain key distributors for the sales of some of our products.

The loss or termination of our relationship with any of these key distributors could significantly disrupt our business unless suitable alternatives are timely found or lost sales to a distributor are taken up by another distributor.

Finding a suitable alternative to a lost or terminated distributor may pose challenges in our industry’s competitive environment, and another suitable distributor may not be found on satisfactory terms, if at all.

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The loss of any key distributor or an unsuccessful effort by us to directly distribute our products could lead to reduced sales.

In addition to distributors, we also have a number of other customers who are significant.

If our relationships with such customers are terminated, or such customers do not renew their contracts with us, or substantially reduce or stop ordering from us, and if we do not add new large customers over time, our business could be harmed.

In addition to distributors, we also have a number of direct customers who are significant.

If our relationships with these customers are terminated, or such customers do not renew their contracts with us, or substantially reduce or stop ordering from us, and if we do not add new large customers over time, our business could be harmed.

Our ability to continue to generate revenue from our significant customers will depend on our ability to maintain strong relationships with these customers and introduce competitive new products and services at competitive prices.

Moreover, customer consolidation could reduce the number of customers and may increase the risk of our dependence on a small number of customers.

Government agencies are also important customers, and in fiscal year 2022, have represented significant revenues.

Our ability to procure further government contracts will depend on a number of factors, including the general level of support for testing, including for COVID-19, other macroeconomic and geopolitical conditions, budgeting constraints of governmental entities, tendering requirements and funding, and there can be no assurance that we will procure additional contracts, or if procured, the timing, pricing or amount contracted.

If total revenues from some of our significant customers were to decrease or not continue in any material amount in the future, or if we are not successful in growing our current or new customer relationships or timely transitioning our business from a lost or terminated distributor to one or more new distributors, our business, operating results and financial condition could be materially and adversely affected.

If total revenues from some of our significant customers were to decrease or not continue in any material amount in the future, or if we are not successful in growing our current or new customer relationships or timely transitioning our business from a lost or terminated distributor to one or more new distributors or to direct sales, our business, operating results and financial condition could be materially and adversely affected.

Interruptions and delays in the supply of raw materials, components, equipment and other products and services could adversely affect our operations and financial results.

We depend on third-party manufacturers, suppliers and vendors for some of our materials, components, equipment, packaging and other products and services.

Any change in our relationship with our contract manufacturers, suppliers of raw materials and other third-party vendors or changes to contractual terms of our agreements with any of them could adversely affect our financial condition and results of operations.

Further, unexpected increases in demand for our products or supply shortfalls could require us to obtain additional supplies or services in order to manufacture products to meet the demand.

Some supplies require significant ordering lead time and we may not be able to timely access sufficient supplies in the event of an unexpected increase in demand or supply shortfall, or the cost of such supplies may be significantly greater.

Our reliance on a small number of contract manufacturers and a large number of single and sole source suppliers makes us vulnerable to possible capacity or other production constraints of such suppliers or in their supply chain, reduced control over product availability, delivery schedules and costs and reduced ability to monitor compliance with our product manufacturing specifications.

As a result of the COVID-19 pandemic and other macroeconomic and geopolitical conditions, including inflationary pressures, general economic slowdown or a recession, rising interest rates, foreign exchange rate volatility and changes in monetary policy, we have experienced shortages and delays in receiving certain raw materials and other components for our products and have experienced logistics and distribution challenges, as well as challenges in labor availability and rising labor costs, all of which have affected our ability to fulfill customer orders, including instrument placements, on a timely basis.

Supply chain, production, logistics and distribution challenges, including shortages of raw materials and components, cost inflation, shipping delays, labor availability constraints and rising labor costs, have impacted, and we expect will continue for some period of time to impact, our results of operations.

As a result, we are currently encountering, and may continue to encounter, increased customer backlogs of orders and inventory shipments out of our warehouse facilities.

If these increased customer backlogs continue, they may adversely impact customer relationships and affect our financial performance.

Any change in our relationship with our contract manufacturers, suppliers of raw materials and other third-party vendors or changes to terms of our arrangements with any of them could adversely affect our financial condition and results of operations.

In addition, we have experienced shortages and delays in receiving certain raw materials and other components for our products and have experienced logistics and distribution challenges, as well as challenges in labor availability and rising labor costs.

We cannot predict the frequency, duration or scope of these supply, production, logistics, distribution and labor disruptions and challenges.

Unexpected increases in demand for our products or services or supply shortages could require us to incur additional costs to meet customer demand.

These costs could involve purchasing or producing a safety stock of components or products, purchasing new machinery, obtaining additional labor resources or even acquiring or constructing new manufacturing facilities.

Some supplies require significant ordering lead time and we may not be able to timely access sufficient supplies in the event of an unexpected increase in demand or supply shortage, or the cost of such supplies may be significantly greater.

This would increase our capital and other costs, which could adversely affect our earnings and cash resources.

Additionally, our reliance on a small number of contract manufacturers and a large number of single and sole source suppliers makes us vulnerable to possible production capacity or other constraints of such suppliers or in their supply chain and reduced control over manufacturing, product availability, delivery schedules and costs.

While we proactively work with our suppliers, manufacturers, distributors, industry partners and government agencies to address these challenges in our efforts to meet the needs of our customers, such disruptions and challenges have materially affected and could further materially affect our ability to timely manufacture and distribute our products and have unfavorably impacted and could further unfavorably impact our results of operations.

As a result, we have encountered, and may in the future encounter, significant customer backlogs of orders and inventory shipments.

Further significant customer backlogs and

our inability to meet customer demand for our products and services may adversely impact customer relationships, impair our reputation and affect our financial performance.

Our business is also subject to risks associated with U.S.

and foreign legislation, regulations and trade agreements relating to the materials we import, including quotas, duties, tariffs or taxes, and other charges or restrictions on imports, which could adversely affect our operations and our ability to import materials used in our products at current or increased levels, if at all.

We cannot predict whether additional U.S.

and foreign customs quotas, duties (including antidumping or countervailing duties), tariffs, taxes or other charges or restrictions, requirements as to where raw materials must be purchased, or other restrictions on our imports will be imposed in the future or adversely modified, or what effect such actions would have on our costs of operations.

Future quotas, duties or tariffs may have a material adverse effect on our business, financial condition, results of operations or cash flows.

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For example, stringent requirements of the FDA and other regulatory authorities regarding the manufacture of certain of our products may prevent us from quickly establishing additional or replacement sources for the raw materials, products, components or manufacturing services that we use, or from doing so without excessive cost.

Further, our suppliers may be subject to regulation by the FDA and other regulatory authorities that could hinder their ability to produce necessary raw materials, products and components.

The SEC also requires disclosure for public companies whose products contain conflict minerals, such as tin, tantalum, tungsten and gold, that originate from the Democratic Republic of Congo and/or adjoining countries.

The implementation of these requirements has caused and will continue to cause increased costs to comply with these disclosure requirements and may inhibit our ability to source these materials.

If our current contract manufacturers, suppliers of raw materials and other third-party vendors are unable or unwilling to manufacture or supply our products or components or requirements for raw materials in required volumes and at required quality levels or renew existing terms under supply agreements, we may be required to replace such manufacturers, suppliers and vendors and may be unable to do so in a timely or cost-effective manner, or at all.

Any shortfall in our supply of raw materials, equipment or components, or our inability to quickly and cost-effectively obtain alternative sources for this supply, could have a material adverse effect on our business, financial condition and operating results.

We may experience manufacturing or warehousing problems or delays due to, among other reasons, our volume, specialized processes, and macroeconomic and geopolitical conditions.

The global supply of some of our products depends on the uninterrupted efficient operation of our manufacturing facilities, and the continued performance of our contract manufacturers, suppliers of raw materials and other third-party vendors under our contractual arrangements.

Further, our suppliers may be subject to regulation or other actions by the FDA and other regulatory authorities that could hinder their ability to produce necessary raw materials, products and components.

The implementation of these requirements has caused and will continue to cause increased costs to comply with these requirements and may inhibit our ability to source these materials.

If our current contract manufacturers, suppliers of raw materials and other third-party vendors are unable or unwilling to manufacture or supply our products or components or requirements for raw materials in required volumes and at required quality levels or renew or continue existing terms under supply arrangements, we may be required to replace such manufacturers, suppliers and vendors and may be unable to do so in a timely or cost-effective manner, or at all.

Any shortage in our supply of raw materials, equipment or components, or our inability to quickly and cost-effectively obtain alternative sources for this supply, could have a material adverse effect on our business, financial condition and operating results.

We may experience manufacturing or warehousing problems or delays due to, among other reasons, our volume, specialized processes, natural disasters, public health crises and macroeconomic and geopolitical conditions.

Many of our manufacturing processes are complex and involve sensitive scientific processes involving the use of unique and often proprietary antibodies and other raw materials that cannot be replicated or acquired through alternative sources without undue delay or expense.

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In addition, our manufacturing processes may require complex and specialized equipment, which can be expensive to maintain, repair or replace with required lead times of up to a year.

The manufacturing of certain of our products is concentrated in one or more of our manufacturing plants or those of our suppliers, with no or limited alternate facilities.

Weather, natural disasters, public health emergencies, fires, terrorism, political change or unrest, failure to follow specific internal protocols and procedures, equipment malfunction, environmental factors, damage to our equipment or one or more of our facilities, or any other event that negatively impacts our manufacturing process, facilities, systems or equipment, or the process, facilities, systems or equipment of our contract manufacturers or suppliers, could delay, reduce, suspend or terminate shipments of products or the release of new products or could result in the delivery of inferior products.

In such circumstances, our revenue from the affected products would decline and we could incur losses until such time as we or our contract manufacturers are able to restore or rebuild our or their production processes or we are able to put in place alternative contract manufacturers or suppliers.

The manufacturing of certain of our products is concentrated in one or more of our manufacturing plants or those of our contract manufacturers, with no or limited alternate facilities.

We have significant operations in California, near major earthquake faults and areas vulnerable to wildfire, which make us susceptible to earthquake and fire risk.

We also have significant operations in Rochester, New York, Raritan, New Jersey, Pencoed, Wales, Pompano Beach, Florida, and Athens, Ohio.

Severe weather, natural disasters, public health crises, fires, power shortages or outages, terrorism, political change or unrest, failure to follow specific internal protocols and procedures, equipment malfunction, environmental factors, damage to our equipment or one or more of our facilities, catastrophic events or other events outside of our control, or any other event that negatively impacts our manufacturing process, facilities, systems or equipment, or the process, facilities, systems or equipment of our contract manufacturers, suppliers or other third-party vendors on which we depend, could delay, reduce, suspend or terminate production of products or the release of new products, result in the delivery of inferior products or otherwise disrupt our operations.

In such circumstances, our revenue would decline and we could incur losses until such time as we or our contract manufacturers are able to restore or rebuild our or their production processes or we are able to put in place alternative contract manufacturers, suppliers or third-party vendors.

Similarly, any disruption or other operational challenges to one of our primary warehouse facilities could result in decreased revenue or increased costs given the challenge in finding suitable alternative facilities.

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The nature of a collaboration arrangement requires us to share control over significant decisions with unaffiliated third parties.

For example, governance of the Joint Business is shared with Grifols through a supervisory board made up of equal representation by us and Grifols.

The supervisory board is responsible for all significant decisions relating to the Joint Business that are not exclusively assigned to either us or Grifols under the contract that established the Joint Business.

Since we may not exercise exclusive control over our current or

future collaboration arrangements, we may not be able to require our collaboration arrangement partners to take actions that we believe are necessary to implement our business strategy.

Since we may not exercise exclusive control over our current or future collaboration arrangements, we may not be able to require our collaboration arrangement partners to take actions that we believe are necessary to implement our business strategy.

Disputes between us and our collaboration arrangement partners could also result in litigation, which can be expensive and time-consuming.

Additionally, differences in views among collaboration arrangement partners may result in delayed decisions or failures to agree on major issues.

Additionally,

differences in views among collaboration arrangement partners may result in delayed decisions or failures to agree on major issues.

If these differences cause our collaboration arrangements to deviate from our business strategy, our results of operations could be materially adversely affected.

Unexpected increases in, or inability to meet, demand for our products and services could require us to spend considerable resources to meet such demand or harm our reputation and customer relationships if we are unable to meet demand.

Our inability to meet customer demand for our products and services, including as a result of manufacturing or warehousing problems or supply shortages or shortfalls, could harm our customer relationships and impair our reputation within the industry.

For instance, we are currently encountering, and may continue to encounter, increased customer backlogs of orders and inventory shipments out of our warehouse facilities, due to a number of factors.

Further, if we experience unexpected increases in the demand for our products or services or supply shortages or shortfalls, we may be required to incur additional costs to meet these demands.

These costs could involve purchasing or producing safety stock of components or products, purchasing new machinery or obtaining additional labor resources or even the cost of acquiring or constructing new manufacturing facilities.

This would increase our capital and other costs, which could adversely affect our earnings and cash resources.

If we are unable to develop or obtain necessary manufacturing and production capabilities in a timely manner, our total revenues could be adversely affected.

Failure to increase production volumes in a cost-effective manner, lower than anticipated yields or production problems could result in shipment delays, as well as increased manufacturing costs, which could also have a material adverse effect on our business, reputation, operating results and financial condition.

A decrease in the number of surgical procedures performed, and the resulting decrease in blood demand, could negatively impact our financial results.

Our immunohematology and donor screening products are frequently used in connection with the testing of blood prior to transfusion, which is typically associated with surgical procedures.

A decrease in the number of surgeries being performed in the markets in which we operate could result in decreased demand for blood for transfusions, which would in turn result in lower testing volumes and, therefore, decreased sales of our products.

For example, we believe markets in developed countries have, at times, seen a decrease in the number of surgical procedures and lower demand for blood in recent years.

A decrease in the number of surgical procedures performed could result from a variety of factors, such as fewer elective procedures and the improved efficacy and popularity of non-surgical treatments.

In addition to lower surgical volumes, blood demand could also be negatively affected by more efficient blood utilization by hospitals.

Blood is a large expense for hospital laboratories and pressure on hospital budgets due to macroeconomic factors and healthcare reform could force changes in the ways in which blood is used.

A decrease in the number of surgeries being performed in the markets in which we operate can result in decreased demand for blood for transfusions, resulting in lower testing volumes and, therefore, decreased sales of our products.

In addition, blood is a large expense for hospitals and pressure on hospital budgets due to macroeconomic factors and healthcare reform could force changes in the ways in which blood is used and lower blood demand.

Fewer surgeries and lower blood demand could negatively impact our revenue, profitability and cash flows.

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The use of cash in connection with this model causes our cash flows to fluctuate from quarter to quarter and may have a negative effect on our financial condition.

We may not achieve market acceptance of our products among physician offices, hospitals, clinical laboratories, reference laboratories, urgent care clinics, leading universities, retail clinics, pharmacies, wellness screening centers, other POC settings, blood banks and donor centers, individual, non-professional OTC customers, or other customers, and this would have a negative effect on future sales.

We may not achieve market acceptance of our products by customers and this would have a negative effect on future sales.

We maintain customer relationships with numerous physician offices, hospitals, clinical laboratories, reference laboratories, urgent care clinics, leading universities, retail clinics, pharmacies, wellness screening centers, other POC settings, blood banks and donor centers, individual, non-professional OTC customers and other customers.

We believe that sales of our products depend significantly on our customers’ confidence in, and recommendations of, our products.

In addition, in a number of cases, our success depends on technicians’ acceptance and confidence in the effectiveness and ease-of-use of our products, including our new products.

If we do not capture sales at the levels anticipated in our budget, our total revenues will not be at the levels that we expect and the costs we incur or have incurred may be disproportionate to our sales levels.

In order to achieve acceptance by healthcare professionals, we seek to educate the healthcare community as to the distinctive characteristics, perceived benefits, clinical efficacy and cost-effectiveness of our products compared to alternative products, including the products offered by our competitors.

Acceptance of our products also requires effective training of healthcare

professionals in the proper use and application of our products.

Failure to effectively educate and train our technician end-users, continue to develop relationships with leading healthcare professionals or achieve market acceptance from healthcare providers or other customers with respect to the use of our diagnostic products could result in less frequent acceptance or recommendations of our products, which may adversely affect our sales and profitability.

In addition, in a number of cases, our success depends on technicians’ acceptance and confidence in the effectiveness and ease-of-use of our products and services, including our new products.

If we do not capture sales at the levels anticipated, our total revenues will not be at the levels that we expect and the costs we incur or have incurred may be disproportionate to our sales levels.

Acceptance of our products also requires effective training of healthcare professionals in the proper use and application of our products.

Failure to effectively educate and train our technician end-users, continue to develop relationships with leading healthcare professionals or achieve market acceptance from healthcare providers or other customers with respect to the use of our diagnostic products could result in lower acceptance or fewer recommendations of our products, which may adversely affect our sales and profitability.

The healthcare industry and related industries that we serve have undergone, and are in the process of undergoing, significant changes in an effort to reduce costs, which could adversely affect our business, financial condition and results of operations.

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Many of our customers, and the end-customers to whom our customers provide products, rely on private or government funding of and reimbursement for healthcare products and services and research activities.

In the U.S., healthcare providers such as hospitals and physicians who purchase diagnostic products generally rely on third-party payors, principally private health insurance plans and federal Medicare and Medicaid, to reimburse all or part of the cost of the procedure.

For example, MACRA repealed the formula by which Medicare made annual payment adjustments to physicians and replaced the former formula with fixed annual updates and a new system of incentive payments that are based on various performance measures and physicians’ participation in alternative payment models such as accountable care organizations.

In 2018, CMS implemented certain provisions of PAMA, which made substantial changes to the way in which clinical laboratory services are paid under Medicare.

For example, CMS implemented certain provisions of PAMA, which made substantial changes to the way in which clinical laboratory services are paid under Medicare.

The revised reimbursement methodology under PAMA results in relatively lower reimbursement under Medicare for clinical diagnostic lab tests than has been historically available.

These legislative changes in the U.S., healthcare austerity measures in Europe and other potential global healthcare reform changes and government austerity measures may reduce the amount of government funding or reimbursement available to customers or end-customers of our products and services and/or the volume of medical procedures using our products and services.

Such changes in the U.S., healthcare austerity measures in Europe and other potential global healthcare reform changes and government austerity measures may reduce the amount of government funding or reimbursement available to customers or end-customers of our products and services and/or the volume of medical procedures using our products and services.

Third-party reimbursement and coverage may not be available or adequate in either the U.S.

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This behavior may reduce the demand for certain of our diagnostics products and services.

The foregoing changes in the healthcare industry and related industries that we serve may cause participants in the healthcare industry to purchase fewer of our products and services, reduce the prices they are willing to pay for our products or services, reduce the amounts of reimbursement and funding available for our products or services from governmental agencies or third-party payors, reduce the volume of medical procedures that use our products and services and increase our compliance and other costs.

Such changes may cause participants in the healthcare industry to purchase fewer of our products and services, reduce the prices they are willing to pay for our products or services, reduce the amounts of reimbursement and funding available for our products or services from governmental agencies or third-party payors, reduce the volume of medical procedures that use our products and services and increase our compliance and other costs.

Moreover, we believe the overall escalating cost of medical products and services has led to, and will continue to lead to, increased pressures on the healthcare industry, both foreign and domestic, to reduce the cost of products and services.

Any of the factors described above could adversely affect our business, financial condition and results of operations.

Consolidation of our customer base and the formation of group purchasing organizations could materially adversely affect our sales and results of operations.

Consolidation of our customer base, the formation of group purchasing organizations and government-sponsored tendering processes could materially adversely affect our sales and results of operations.

Consolidation among healthcare providers and the formation of buying groups and, with respect to our international operations, government-sponsored tendering processes, have put pressure on pricing and sales of our products, and in some instances, required payment of fees to group purchasing organizations or required us to provide lower pricing in the tendering process.

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Even if we are able to enter into these contracts or have our pricing terms accepted in the tendering process, they may be on terms that negatively affect our current or future profitability.

For example, the Chinese government has started to expand its volume-based procurement (“VBP”) program to diagnostics at the provincial level, which aims to lower prices in exchange for high volume purchases.

Some of our immunoassay products fall within the VBP scope in Anhui Province in China.

Furthermore, given the average industry contract length for our Ortho instruments is five to seven years, if we are unable to enter into a contract with a new customer or renew a given contract with an existing customer, it may be several years before we have an opportunity to acquire or reacquire, as applicable, such customer’s business, which may have a material adverse effect on our results of operations in the interim period.

We may engage in acquisitions and divestitures, and may encounter difficulties integrating acquired businesses with, or disposing of divested businesses from, our current operations;

therefore, we may not realize the anticipated benefits of these acquisitions and divestitures.

We may engage in acquisitions or divestitures or discontinue business operations, and may encounter difficulties integrating acquired businesses with, or disposing of divested or discontinued businesses from, our current operations;

therefore, we may not realize the anticipated benefits of these acquisitions, divestitures or discontinuances.

We may seek to grow through strategic acquisitions.

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We may incur unanticipated costs or expenses, including post-closing asset impairment charges, expenses associated with eliminating duplicate facilities, litigation and other liabilities.

We also may encounter difficulties in integrating acquisitions with our operations, applying our internal controls processes to these acquisitions, retaining key technical and management personnel, complying with regulatory requirements, or in managing strategic investments.

Additionally, we may not achieve the benefits we anticipate when we first enter into a transaction in the amount or timeframe anticipated, if at all.

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In addition, accounting requirements relating to business combinations, including the requirement to expense certain acquisition costs as incurred, may cause us to experience greater earnings volatility and generally lower earnings during periods in which we acquire new businesses.

We may also make strategic divestitures from time to time.

These divestitures may result in continued financial involvement in the divested businesses, such as through guarantees, indemnity obligations or other financial arrangements, following those transactions.

We may also make strategic divestitures or discontinue certain business operations from time to time if certain of our businesses do not meet our strategic, growth or profitability objectives.

For example, in February 2024, we initiated a wind-down plan to transition out of the U.S donor screening portfolio, which has a lower growth and margin profile than other parts of our Transfusion Medicine business.

Divestitures may result in continued financial involvement in the divested businesses, such as through guarantees, indemnity obligations or other financial arrangements, following those transactions.

Under these arrangements, nonperformance by those divested businesses could result in financial obligations imposed upon us and could affect our future financial results.

Natural disasters, public health crises, geopolitical crises and other catastrophic events or other events outside of our control may disrupt our facilities or the facilities of third parties on which we depend and adversely affect our results of operations.

We have significant operations in California, near major earthquake faults and areas vulnerable to wildfire, which make us susceptible to earthquake and fire risk.

We also have significant operations in Rochester, New York, Raritan, New Jersey, Pencoed, Wales and Pompano Beach, Florida.

An earthquake, fire or other natural disaster or power shortages or outages could disrupt our operations or impair our critical systems, which could have an adverse effect on our results of operations.

Further, as a multinational company with a large international footprint, we are also subject to increased risk of damage or disruption to us, our employees, facilities, partners, suppliers, distributors, resellers or customers due to terrorist acts, civil unrest, conflicts, wars, adverse weather conditions, natural disasters, power outages, pandemics, endemics or other public health crises and environmental incidents, wherever located around the world.

The potential for future terrorist attacks and natural disasters, the national and international responses to such attacks and natural disasters or perceived threats to national security and other actual or potential conflicts or wars may create macroeconomic and geopolitical uncertainties.

In addition, as a multinational company with headquarters and significant operations located in the U.S., actions against or by the U.S., including sanctions, could result in a decrease in demand for our products, make it difficult or impossible to deliver products to our customers or to receive components from our suppliers, create delays and inefficiencies in our supply chain and pose risks to our employees, resulting in the need to impose travel restrictions.

Any interruption in production capability could require us to make substantial capital expenditures to remedy the situation, if it can be remedied, which could negatively affect our profitability and financial condition.

Moreover, these types of events could negatively impact customer spending in the impacted regions or depending on the severity, globally, which could also adversely impact our operating results.

There can be no assurance that we will be able to complete any such divestiture on terms favorable to us.

The divestiture or discontinuance of certain businesses could result, individually or in the aggregate, in the recognition of material losses and a material adverse effect on our results of operations.

Risks Relating to Our International Operations

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We conduct our business on a global basis, as our products are sold internationally, with the majority of our international sales to our customers in our EMEA and China regions.

Our international operations are subject to inherent macroeconomic, geopolitical and regulatory risks, which could impact our financial performance, cause interruptions in our business operations and impede our international growth.

Our international operations are subject to inherent macroeconomic, geopolitical and regulatory risks, which could adversely impact our financial performance, cause interruptions in our business operations, impede our international growth and subject us to civil or criminal penalties, other remedial measures and legal expenses.

These foreign risks include, among others:

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laws and regulations that apply to our international operations, including U.S.

laws on import/export limitations, the FCPA, and local laws prohibiting corrupt payments to governmental officials, could expose us or our employees to fines and criminal sanctions and damage our reputation;

laws on import/export limitations, the FCPA, and local laws prohibiting corrupt payments to governmental officials;

• lost revenue as a result of macroeconomic developments, including the inflationary environment and recessionary fears;

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• decreased liquidity resulting from longer payment cycles, generally lower average selling prices and greater difficulty in accounts receivable collection and enforcing agreements through foreign legal systems;

• lower productivity resulting from difficulties we may encounter in staffing and managing sales, support and R&D operations across many countries;

• lower productivity resulting from difficulties we may encounter in staffing and managing sales, customer support and R&D operations across many countries;

• difficulties associated with navigating foreign laws and legal systems;

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and foreign countries;

• international sanctions regimes, including sanctions imposed by the U.S.

on foreign countries;

• international sanction regimes, including future regulations and sanctions that could further limit the countries in which our products may be manufactured or sold, increase the cost of conducting business in these countries, or restrict our access to, or increase the cost of obtaining, products from foreign sources;

• reduced or lack of protection for and enforcement of our intellectual property rights;

• social, geopolitical or macroeconomic instability in some of the regions where we currently sell our products or operate or that we may expand into in the future, including as a result of acts of war, including the ongoing conflict in Ukraine, and rising tensions between China and Taiwan, acts of terrorism, health pandemics, natural disasters and disruptions in global transportation;

• social, geopolitical or macroeconomic instability in some of the regions where we currently sell our products or operate or where we may expand into in the future, including as a result of conflicts, including the ongoing conflict in Ukraine and the Israel-Hamas conflict, acts of terrorism, civil unrest, wars, pandemics, endemics or other public health crises, environmental incidents and disruptions in global transportation;

• increased financial accounting and reporting burdens and complexities;

• import and export duties, changes to import and export regulations, customs regulations and processes, and restrictions on the transfer of funds, including currency controls;

• complex and potentially adverse tax consequences resulting from international tax laws;

• transportation difficulties and delays resulting from inadequate local infrastructure;

• diversion to the U.S.

of our products sold into international markets at lower prices.

• diversion of our products into the U.S.

or other markets that are sold into other international markets at lower prices.

The occurrence of any of these or other factors over which we do not have control could lead to reduced revenue and profitability.

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dollar against other currencies in countries where we operate will affect our results of operations and the value of balance sheet items denominated in foreign currencies.

Furthermore, many of our local businesses generate revenues and incur costs in a currency other than their functional currency, which can impact the operating results for these operations if we are unable to mitigate the impact of foreign currency fluctuations.

Furthermore, many of our local businesses generate revenues and incur costs in a currency other than their functional currency,

which can impact the operating results for these operations if we are unable to mitigate the impact of foreign currency fluctuations.

Accurately predicting the effects of exchange rate fluctuations upon our future operating results is difficult because of the number of currencies involved, the variability of currency exposures and the potential volatility of currency exchange rates.

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We have entered into hedging agreements to address certain of our currency risks and intend to utilize local currency funding of expansions when appropriate.

We do not intend to hold financial instruments for trading or speculative purposes.

Continuing worldwide geopolitical and social uncertainty, including tariffs and trade measures, trade embargoes, trade wars and social tensions, may adversely affect our business, financial results and prospects, both domestically and internationally.

Geopolitical and social uncertainty in the U.S.

and throughout the world, including due to the ongoing conflict in Ukraine and rising tensions between China and Taiwan, could impair political, trade and economic relations worldwide.

Changes in policy in the U.S.

and other countries regarding international trade, including import and export regulation and international trade agreements, could limit the countries in which some of our products may be manufactured or sold, or could restrict our access to, or increase the cost of obtaining, products from foreign sources.

The occurrence of any of the foregoing could negatively impact our business, financial condition and results of operations.

Governments sometimes impose additional duties, tariffs or taxes on certain imported products.

The imposition of import tariffs or restrictions, or other changes in U.S.

trade policy, could trigger retaliatory actions by affected countries.

For instance, the

and China have implemented import tariffs and retaliatory tariffs on certain categories of goods, including from time to time, some of our reagent products sold in China.

These tariffs, depending upon their ultimate scope and value and how they are implemented, could negatively impact our business by affecting the demand for our products and services or the supply of materials we use to manufacture our products and increasing our costs, thereby making our products less cost competitive.

Risks Relating to the Consummation of the Combinations and our Transformation Efforts

The failure to integrate successfully the businesses of Quidel and Ortho would adversely affect our future business and financial performance.

As a result of the Combinations, we have been and continue to devote significant management and employee attention and resources to integrate the business practices and operations of Quidel and Ortho.

The integration process may disrupt our business and, if implemented ineffectively, could preclude realization of the full benefits we expect to result from the Combinations.

In addition, the integration of Quidel and Ortho may result in material unanticipated problems, expenses and liabilities.

The difficulties of combining the operations of Quidel and Ortho, some of which we have already experienced, include, among others:

• managing a significantly larger company and expanded business operations and the associated increased costs and complexity;

• aligning and executing our strategy;

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

• the possibility of faulty assumptions underlying expectations regarding the integration process and results;

• coordinating sales, distribution and marketing efforts;

• integrating IT, enterprise resource planning (“ERP”), customer relationship management and other systems, including the implementation of a new ERP system to integrate certain existing business, operational and financial processes, which requires significant investment of capital and human resources and the reengineering of many business processes;

• managing tax costs or inefficiencies associated with integrating the operations of Quidel and Ortho;

• taking actions that may be required in connection with obtaining regulatory approvals.

Many of these factors are outside of our control and any one of them could subject us to increased costs, decreased revenues and diversion of management’s and employees’ time and energy, which could materially impact our business, financial condition and results of operations.

In addition, we are transitioning from integration efforts of the two independent businesses to focusing on transformation of the combined company with the goal of creating a more efficient and agile company.

We may not realize the full benefits of the Combinations, including the synergies, cost savings or sales or growth opportunities that we expect from the Combinations and transformation, or these benefits may take longer to realize than expected.

If we are unable to realize the anticipated benefits and synergies expected from the Combinations and transformation within the anticipated timeframe, our business, financial condition and operating results may be adversely affected.

We will continue to incur significant transaction and merger-related costs in connection with the Combinations.

We have incurred and expect to continue to incur a number of non-recurring direct and indirect costs associated with the Combinations.

There are processes, policies, procedures, operations, technologies and systems that still must be integrated in connection with the Combinations and the integration of Quidel’s and Ortho’s businesses.

Risks Relating to Our IT Systems

Our ability to protect our information systems and electronic transmissions of personal data and sensitive data from data corruption, cyber-based attacks, security breaches or privacy violations is critical to the success of our business.

We are highly dependent on IT networks and systems, including our office networks, operational environment, special purpose networks, systems and software used to operate our instruments and devices and those networks and systems managed by vendors or third parties, to securely process, transmit and store electronic information (including sensitive personal information and proprietary or confidential information).

Our systems may prove inadequate to our business needs and necessary upgrades may not be available or operate as designed, which could result in excessive costs or disruptions in portions of our business.

Our ability to protect our information systems and personal and confidential information from data corruption, cyber-attacks and security breaches is critical to the success of our business.

We are highly dependent on IT networks and systems, including our office networks, operational environment, special purpose networks, systems and software used to provide our products and services, including operating our instruments and devices, and those networks and systems managed by vendors or third parties, to securely collect, process, transmit, disclose, share, use and store electronic information (including sensitive personal information and proprietary or confidential information) (collectively, “information systems”).

Our information systems may prove inadequate to our business needs and necessary upgrades may not be available or operate as designed, which could result in excessive costs or disruptions in portions of our business.

These risks may be heightened as we integrate the combined systems and operations of Quidel and Ortho.

Like any large corporation, from time to time the information systems on which we rely, including those controlled and managed by third parties, may be subject to computer viruses, malicious software, attacks by hackers and other forms of cyber intrusions or unauthorized access, any of which can create system disruptions, shutdowns or unauthorized disclosure of sensitive data.

In addition, a security breach that leads to disclosure of information protected by privacy laws could require us to comply with breach notification requirements under applicable laws, result in litigation or regulatory action, or otherwise subject us to liability under laws that protect personal data.

If we experience a significant technology incident, such as a serious product vulnerability or security breach, or any other disruptions, delays or deficiencies from our enterprise resource planning systems, it could adversely affect our ability to, among other matters, process orders, procure supplies, manufacture and ship products, track inventory, provide services and customer support, send invoices and track payments, fulfill contractual obligations or otherwise operate our business.

If this happens, our revenues could decline and our business could suffer, and we may need to make significant further investments to protect data and infrastructure.

An actual or perceived vulnerability, failure, disruption or breach of our network or privileged account security in our systems also could adversely affect the market perception of our products and services, as well as our perception among new and existing customers.

Additionally, a significant security breach could result in theft of trade secrets and intellectual property, cause us to incur increased costs for insurance premiums and security remediation and subject us to potential liability, litigation and regulatory or other government action.

If any of the foregoing were to occur, our business may suffer.

We attempt to mitigate the above risks by employing a number of measures, including monitoring and testing of our security controls, employee training and maintenance of protective systems and contingency plans.

Further, our contractual arrangements with service providers aim to ensure that third-party cybersecurity risks are appropriately mitigated.

We also maintain insurance relating to cybersecurity incidents, which we cannot guarantee will be adequate.

It is impossible to eliminate all cybersecurity risk and thus our systems, products and services, as well as those of our service providers, remain potentially vulnerable to known or unknown threats.

Additionally, our IT systems may also be vulnerable to damage or interruption from circumstances beyond our control, including fire, natural disasters, power outages and system failures.

Information security risks have generally increased in recent years because of the increased proliferation, sophistication and availability of complex malware and hacking tools to carry out cyber-attacks.

As a result of the COVID-19 pandemic, we may also face increased cybersecurity risks due to our reliance on internet technology and the number of our employees with flexible work arrangements, which may create additional opportunities for cybercriminals to exploit vulnerabilities.

In addition, a security breach that impacts personal information could require us to comply with breach notification requirements under applicable data privacy and security laws, result in litigation or regulatory action, or otherwise subject us to liability under those laws.

If we experience a significant incident, such as a serious product vulnerability or security breach, or any other disruptions, delays or deficiencies from our ERP systems, it could adversely affect our ability to, among other processes, process orders, procure supplies, manufacture and ship products, track inventory, provide services and customer support, send invoices and track payments, fulfill contractual obligations or otherwise operate our business.

If this happens, our revenues could decline and our business could suffer, and we may need to make significant further investments to protect our information systems, data and infrastructure.

An actual or perceived vulnerability, failure, disruption or breach of our information systems also could adversely affect the market perception of our products and services, as well as our perception among new and existing customers.

Additionally, a significant security breach could result in theft of trade secrets and intellectual property, cause us to incur increased costs from insurance premiums and remediation measures and subject us to potential liability, litigation and regulatory or other government action.

If any of the foregoing were to occur, our business strategy, results of operations or financial condition could be materially and adversely affected.

We attempt to mitigate the above risks by employing a number of measures, including implementing technical, physical and organizational security measures, monitoring and testing our security controls, conducting employee training and maintaining protective systems and contingency plans.

Further, our contractual arrangements with service providers aim to appropriately mitigate third-party cybersecurity risks.

We also maintain insurance coverage for cybersecurity incidents, which may not be adequate or cover all incidents.

It is impossible to eliminate all cybersecurity risk and thus our information systems, products and services, as well as those of our service providers, remain potentially vulnerable to known or unknown threats.

Additionally, our information systems may be vulnerable to damage or interruption from circumstances beyond our control, including fire, natural disasters, power outages and system failures.

Cybersecurity risks have generally increased in recent years because of the increased proliferation, sophistication and availability of complex malware and hacking tools to carry out cyber-attacks.

As a result of the increased number of our employees with flexible work arrangements, we may also face increased cybersecurity risks due to our reliance on internet technology, which may create additional opportunities and vulnerabilities for cybercriminals to exploit.

Furthermore, because the techniques used to obtain unauthorized access to, or to sabotage, systems change frequently and often are not recognized until launched against a target, we may be unable to anticipate these techniques or implement adequate preventative measures.

We may also experience security breaches that may remain undetected for an extended period of time.

As cyber threats continue to evolve, we may be required to expend additional resources to mitigate new and emerging threats while continuing to enhance our information security capabilities or to investigate and remediate security vulnerabilities.

As cybersecurity risks continue to evolve, we may be required to expend additional resources to mitigate new and emerging threats, while continuing to enhance our information security capabilities and investigate and remediate security vulnerabilities.

For more information on our cybersecurity risk management, strategy and governance, see Part I, Item 1C, “Cybersecurity.”

Interruptions to our third-party IT service providers and/or the inability of our digital solutions to interoperate with certain operating systems could impair the delivery of our cloud-based solutions and negatively impact our business.

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We do not control the hosting of these solutions, including data center facilities, or our or other parties’ access to the Internet.

These facilities are vulnerable to damage or interruption from weather, natural disasters, fires, power loss, telecommunications failures, global

pandemics and similar events.

These facilities are vulnerable to damage or interruption from severe weather, natural disasters, fires, power loss, telecommunications failures, global pandemics and similar events.

They are also subject to break-ins, computer viruses, sabotage, intentional acts of vandalism and other misconduct.

We also depend on the interoperability of our mobile applications with popular mobile operating systems that we do not control, such as Android and iOS.

Any changes in such systems that degrade the functionality of our digital solutions or give preferential treatment to competitors could negatively impact our business.

Any changes in such systems that degrade the functionality of our digital solutions could negatively impact our business.

Risks Relating to Our Intellectual Property

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Our ability to compete successfully in the diagnostic market depends on continued development and introduction of new proprietary technology and the improvement of existing technology, and our competitive position is therefore heavily dependent on obtaining and protecting our own proprietary technology or obtaining licenses to proprietary technology from others.

We own significant intellectual property, including patents, patent applications, technology, trade secrets, know-how and trademarks in the U.S.

and other countries, including, among others, Australia, Canada, China, various European countries, India, Japan and South Africa.

We make strategic decisions on whether to apply for intellectual property protection and what kind of protection to pursue based on a cost-benefit analysis.

We own significant intellectual property, including patents, patent applications, trade secrets, know-how and trademarks in the U.S.

and certain other countries.

We make strategic decisions on whether to apply for intellectual property protection and the types of protection to pursue based on a cost-benefit analysis.

While we endeavor to protect our intellectual property rights in certain jurisdictions in which our products are produced or used and in jurisdictions into which our products are imported, the decision to file for intellectual property protection is made on a case-by-case basis.

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Certain of our intellectual property rights are held through license agreements and collaboration arrangements with third parties.

We also rely on trade secrets and certain other unpatented proprietary technology and it is possible that others will independently develop the same technology or otherwise obtain access to our unpatented technology.

We license some of the rights to use our patents and know-how to third parties.

We also rely on trade secrets and certain other know-how and unregistered rights in and to our products and it is possible that others will independently develop the same trade secrets, know-how and unregistered rights or obtain access to our trade secrets, know-how and unregistered rights.

We license some of the rights to use our patents, trade secrets and know-how to third parties.

Further, we rely on confidentiality agreements and other similar arrangements with our employees, consultants, advisors, collaborators and other persons who have access to our proprietary and confidential information, which may not provide meaningful protection for our proprietary technology.

If we cannot continue to improve upon or develop, obtain and protect proprietary technology, we may lose market share or need to reduce prices as a result of competitors selling lower priced or technologically superior products or services that compete with our products.

Failure to obtain or maintain adequate protection of our intellectual property rights for any reason, including failure to file patent or trademark applications successfully or at all, failure to obtain licenses on commercially reasonable terms if at all, failure to retain intellectual property rights upon termination of our licenses or collaboration agreements, or failure to police our intellectual property through our licensees, could have a material adverse effect on our business, results of operations and financial condition.

Intellectual property risks and third-party claims of infringement, misappropriation of proprietary rights or other claims against us could adversely affect our ability to market our products and services, require us to redesign our products or services or attempt to seek licenses from third parties, and materially adversely affect our operating results.

Failure to obtain or maintain adequate protection of our intellectual property rights for any reason, including failure to file patent or trademark applications successfully or at all, failure to obtain licenses on commercially reasonable terms if at all, failure to retain intellectual property rights, including upon termination of our licenses or collaboration agreements, or failure to police our intellectual property, including through our licensees, could have a material adverse effect on our business, results of operations and financial condition.

Intellectual property risks, third-party claims of infringement, misappropriation or violation of proprietary rights and other claims against us could adversely affect our ability to market our products and services, require us to redesign our products or services or attempt to seek licenses from third parties, and materially adversely affect our operating results.

In addition, the defense of such claims could result in significant costs and divert the attention of our management and other key employees.

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We have hired and will continue to hire individuals or contractors who have experience in medical diagnostics and these individuals or contractors may have confidential trade secret or proprietary information of third parties.

These individuals or contractors may use third-party information in connection with performing services for us or otherwise reveal this third-party information to us.

These individuals or contractors may use third-party information in connection with performing services for us or otherwise reveal third-party information to us.

For these and other reasons, we could be sued for misappropriation of proprietary information and trade secrets.

Such claims are expensive to defend and could result in substantial damage awards and injunctions that could have a material adverse effect on our business, financial condition or results of operations.

In addition, to the extent that individuals or contractors apply technical or scientific information independently developed by them to our projects, disputes may arise as to the proprietary rights to such data and may result in litigation.

Our customers may also be sued by other parties that claim that our products have infringed their patents or misappropriated their proprietary rights or that may seek to invalidate one or more of our patents.

The defense and prosecution of patent and trade secret claims are both costly and time consuming and could divert management’s attention from other business concerns.

Moreover, an adverse determination in any of these types of disputes could prevent us from developing, using, manufacturing or selling some of our products or processes;

The defense and prosecution of patent and trade secret claims are both costly and time-consuming and could divert management’s attention from other business matters.

Moreover, an adverse determination in any of these types of disputes could prevent us from developing, using, manufacturing or selling some of our processes or products and services;

limit or restrict the type of work that employees involved with such products may perform for us;

require us to obtain a license on the disputed rights, which may not be available on commercially reasonable

terms, if at all;

subject us to significant liability in the form of royalty payments, penalties, special and punitive damages and attorneys’ fees;

require us to obtain a license on the disputed rights, which may not be available on commercially reasonable terms, if at all;

subject us to significant liability in the form of royalty payments, penalties, special and punitive

damages and attorneys’ fees;

cause our distributors or end users to reduce or terminate purchases of our products;

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Our contractors, suppliers and licensors may not be required or financially able to indemnify us in the event that a claim of infringement is asserted against us, or they may be required to indemnify us only up to a maximum amount, above which we would be responsible for any further costs or damages.

Risks Relating to Government Regulations

Our COVID-19 products were approved by the FDA through an EUA and the loss of such authorization could have a material adverse impact on our business, results of operations, financial position and cash flows.

Risks Relating to Government Regulation

Regulation of Our Industry and Products

Some of our respiratory products were authorized by the FDA through an EUA and the loss of such authorization could have a material adverse effect on our business, results of operations, financial position and cash flows.

The FDA can authorize the emergency use of an unapproved medical product or an unapproved use of an approved medical product for certain emergency circumstances after the HHS Secretary has made a declaration of emergency justifying authorization of emergency use.

An EUA allows use in a public health emergency to diagnose, treat or prevent serious or life-threatening diseases or conditions caused by emerging infectious disease threats when there are no adequate, approved and available alternatives.

These EUA standards for marketing authorization are lower than if the FDA had reviewed our tests under its traditional marketing authorization pathways, and we cannot assure you that our tests would be cleared or approved under those more onerous clearance and approval standards.

These EUA standards for marketing authorization are lower than if the FDA had reviewed our tests under its traditional marketing authorization pathways, and we cannot assure you that our EUA-approved tests would be cleared or approved under those more onerous clearance and approval standards.

The FDA has also established certain conditions that must be met in order to maintain authorization under these EUAs.

The requirements that apply to the manufacture and sale of these products may be unclear and are subject to change.

The FDA may also waive otherwise applicable Consumer Good Manufacturing Practice requirements to accommodate emergency response needs.

All of our current COVID-19 products used for testing for the COVID-19 virus were obtained under EUAs.

We may also seek EUA approvals for our other products.

EUAs are only effective until the emergency declaration by the HHS Secretary ends and EUAs can also be revised or revoked by the FDA at any time as the FDA continues to evaluate the available data concerning the efficacy and safety of the product, including with respect to whether superior approved products exist.

Changes to FDA regulations or requirements could require changes to our authorized tests, necessitate additional measures or make it impractical or impossible for us to continue to market our tests.

The loss of one or more of our EUAs for our COVID-19 products, or any of our other products that receive EUAs, could have a material adverse effect on our business, results of operations, financial condition or cash flows.

The FDA may also waive otherwise applicable cGMP requirements to accommodate emergency response needs.

Some of our current respiratory products were initially authorized by the FDA under EUAs.

HHS intends to publish advance notice of termination of each EUA declaration pertaining to medical devices in the Federal Register 180 days before the day on which the EUA declaration is terminated.

HHS has not yet published such notice of termination for the EUAs we hold .

While we have been working closely with the FDA to obtain traditional premarket clearance for some of our respiratory products by submitting de novo and 510(k) submissions, the loss of one or more of our EUAs for our respiratory products, if we are unable to timely obtain traditional premarket clearance, could have a material adverse effect on our business, results of operations, financial condition or cash flows.

If we are unable to obtain or maintain required clearances or approvals for the commercialization of our products in the U.S.

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Regulatory clearance and approval can be a lengthy, expensive and uncertain process, making the timing and costs of clearances and approvals difficult to predict.

Conducting clinical studies that may be required for regulatory approvals or clearances is a complex, time-consuming and expensive process, requiring months or years to complete, and our studies are not guaranteed to generate data that demonstrate safety and effectiveness or substantial equivalence of the evaluated product.

In addition, regulatory processes are subject to change, and new or changed regulations can result in increased costs, unanticipated delays, or lengthened review times of our products.

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The FDA may deny approval of a PMA or BLA because, among other reasons, it determines that our product is not sufficiently safe or effective.

Failure to obtain FDA

clearance or approval would preclude commercialization in the U.S., which could materially and adversely affect our future results of operations.

In addition, even after we obtain necessary authorizations, clearances or approvals to market our products, the FDA and other regulatory agencies may require post-market testing and additional surveillance to monitor the performance and use of approved products or may place conditions on any product approvals that could restrict the commercial applications of those products.

Our results of operations would be negatively affected by failures or delays in the receipt of regulatory authorizations, approvals or clearances, changes in laws and regulations, the loss of previously received authorizations, approvals or clearances or the placement of limits on the manufacture, marketing and use of our products.

Failure to obtain FDA clearance or approval would preclude commercialization in the U.S., which could materially and adversely affect our future results of operations.

Modifications or enhancements to a cleared or approved product that could significantly affect safety or effectiveness, or that constitute a major change in the intended use of the product, could require new 510(k) clearances or possibly approval of a new PMA or BLA, or a supplement to those applications.

Manufacturers determine in the first instance whether a change to a product requires a new 510(k) clearance or premarket submission, but the FDA may review any manufacturer’s decision not to seek a new 510(k).

If the FDA disagrees with our determinations and requires us to submit a new 510(k), PMA or PMA supplement, or BLA or BLA supplement for any product modification, we may be required to cease marketing such product or to recall the modified product until we obtain clearance, and we may be subject to civil, criminal, monetary and non-monetary penalties and damage to our reputation.

The advertising, marketing and labeling of medical devices is highly regulated by the FDA and FTC.

We determine in the first instance whether a change to a product requires a new 510(k) clearance or premarket submission, but the FDA may review our decision not to seek a new 510(k).

If the FDA disagrees with our determinations and requires us to submit a new 510(k), PMA or PMA supplement, or BLA or BLA supplement for any product modification, we may be required to cease marketing such product or to recall the modified product until we obtain clearance or approval, and we may be subject to civil, criminal, monetary and non-monetary penalties and damage to our reputation.

In addition, the advertising, marketing and labeling of medical devices are highly regulated by the FDA and FTC.

Our efforts to promote our products, including via direct-to-consumer marketing or social media initiatives, could subject us to additional scrutiny of our communication of risk information, benefits or claims by the FDA, FTC or both.

If the results of clinical studies required to gain regulatory approval to sell our products are not available when expected, or do not demonstrate the safety and effectiveness of those products, we may be unable to sell those products.

Before we can sell certain of our products, we must conduct clinical studies intended to demonstrate that those products are safe and effective and perform as expected.

The results of these clinical studies (which are experiments involving human patients having the diseases or medical conditions that the product is trying to evaluate or diagnose) are used to obtain regulatory clearance or approval from government authorities, such as the FDA.

Conducting clinical studies is a complex, time-consuming and expensive process.

In some cases, we may spend several years completing the necessary clinical studies.

If we fail to adequately manage our clinical studies, those clinical studies and corresponding regulatory clearances or approvals may be delayed or we may fail to gain clearance or approval for our products altogether.

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We are also subject to laws relating to matters such as privacy, safe working conditions, manufacturing practices, environmental protection, fire hazard control and disposal of hazardous or potentially hazardous substances.

significant costs to comply with these laws and regulations.

If we fail to comply with applicable regulatory requirements, we may be subject to fines, suspension or withdrawal of regulatory approvals, product recalls, seizure of products or injunctions against our distribution of products, termination of our service agreements by our customers, disgorgement of money, operating restrictions and criminal prosecution.

Disruptions at the FDA and other government agencies caused by funding shortages or global health concerns could hinder their ability to hire, retain or deploy key leadership and other personnel, or otherwise prevent new or modified products from being developed, cleared, approved or commercialized in a timely manner or at all, which could negatively impact our business.

We may incur significant costs to comply with these laws and regulations.

If we fail to comply with applicable regulatory requirements, we may be subject to fines, suspension or withdrawal of regulatory approvals, product recalls, seizure of products or injunctions

against our distribution of products, termination of our service agreements by our customers, disgorgement of money, operating restrictions and criminal prosecution.

Disruptions at the FDA and other government agencies, including disruptions caused by funding shortages or statutory, regulatory or policy changes, could hinder their ability to hire, retain or deploy key leadership and other personnel, prevent them from performing normal business functions on which the operation of our business may rely, or otherwise prevent new or modified products from being developed, cleared, approved or commercialized in a timely manner or at all, which could negatively impact our business.

The ability of the FDA to review and approve new or modified products can be affected by a variety of factors, including government budget and funding levels, statutory, regulatory and policy changes, the FDA’s ability to hire and retain key personnel and accept the payment of user fees, and other events that may otherwise affect the FDA’s ability to perform routine functions.

Average review times at the FDA have fluctuated in recent years as a result of these factors.

In addition, government funding of other government agencies that fund R&D activities is subject to the political process, which is inherently fluid and unpredictable.

In addition, government funding of other government agencies, such as those that fund R&D activities, is subject to the political process, which is inherently fluid and unpredictable.

Disruptions at the FDA and other agencies may increase the time it takes for new or modified medical devices and biologics to be reviewed and/or cleared or approved by necessary government agencies, which would adversely affect our business.

For example, over the last several years the U.S.

government shut down several times and certain regulatory agencies, such as the FDA and the SEC, have had to furlough critical government employees and stop critical activities.

If a prolonged government shutdown or other disruption occurs, it could significantly impact the ability of the FDA or other regulatory authorities to timely review and process our regulatory submissions, or to provide feedback on our submissions, which could have a material adverse effect on our business.

Further, future government shutdowns or other disruptions to normal operations could impact our ability to access the public markets and obtain funding necessary to properly capitalize and continue our operations.

We may encounter challenges entering into contracts with government entities due to government-sponsored tendering requirements, and any contracts that we have entered into or will enter into with government entities may involve future funding, compliance and possible sanctions risks.

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As a result, we may face challenges meeting such government-sponsored tendering requirements, and ultimately, may not be awarded such contracts with government entities.

In addition, any government contract that we have entered into or will enter into may expose us to higher potential liability than do other types of contracts due to government funding shortfalls, the government’s right to terminate for convenience, heightened legal compliance requirements, and our inability to meet key deliverables and milestones.

In addition, any government contract that we have entered into or will enter into may expose us to higher potential liability than do other types of contracts due to government funding shortfalls, the government’s right to terminate for convenience, heightened legal compliance requirements, challenges from other industry participants, and our inability to meet key deliverables and milestones.

Government funding applicable to our government grant contracts may be limited, and there is no guarantee that budget pressure at the federal, state and local level or changing governmental priorities will not eliminate funding availability.

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Government contracts subject us to government audits, compliance investigations and oversight proceedings.

Government agencies routinely review and audit government contractors to determine whether they are complying with applicable contractual and legal requirements.

Implementing policies, procedures and controls relating to the accounting and recordkeeping requirements is expensive and could divert management’s attention from other concerns.

Government agencies routinely review and audit government contractors or other vendors to determine whether they are complying with applicable contractual and legal requirements.

Implementing policies, procedures and controls relating to the accounting and recordkeeping requirements is expensive and time-consuming.

If we fail to comply with these requirements relating to any government contract that we have entered into or will enter into, or we fail an audit, we could be subject to various sanctions, including monetary damages, criminal and civil penalties, termination of contracts and suspension or debarment from government contract work.

These requirements complicate our business and increase our compliance burden.

The failure to meet key deliverables, milestones or compliance requirements could harm our reputation and might have a materially adverse impact on our business operations and our financial position or results of operations.

The failure to meet key deliverables, milestones or compliance requirements could harm our reputation and may have a materially adverse impact on our business operations and our financial position or results of operations.

If one or more of our products is claimed to be defective, we could be subject to claims of liability and harm to our reputation that could adversely affect our business.

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Similarly, our diagnostic products could lead to a false positive or false negative result, affecting the eventual diagnosis or treatment of a patient and could lead to allegations that our products have caused injury or are found to be unsuitable for their intended use.

Our immunohematology business in particular is subject to the risk of product liability claims, as even the slightest inaccuracies in a specimen’s analysis can lead to critical outcomes in the life of a patient, thereby leaving little to no room for error in the precision and accuracy of such testing.

In addition, our marketing of monitoring services may cause us to be subjected to various product liability or other claims, including, among others, claims that inaccurate monitoring results lead to injury or death, or, in the case of our toxicology monitoring services, the imposition of criminal sanctions.

The risk of a product liability claim is also heightened for at-home tests that may be purchased and administered by the end-user customer and not a medical professional and our

communication of risk information, benefits or claims, which is highly regulated by the FTC and the FDA could be alleged to be misleading or erroneous.

Our immunohematology business in particular is subject to the risk of product liability claims, as even the slightest inaccuracies in a specimen’s analysis

can lead to critical outcomes in the life of a patient, thereby leaving little to no room for error in the precision and accuracy of such testing.

In addition, our marketing of monitoring services may cause us to be subject to various product liability or other claims, including, among others, claims that inaccurate monitoring results lead to injury or death, or, in the case of our toxicology monitoring services, the imposition of criminal sanctions.

The risk of a product liability claim is also heightened for at-home tests that may be purchased and administered by the end-user customer and not a medical professional and our communication of risk information, benefits or claims, which is highly regulated by the FTC and the FDA, could be alleged to be misleading or erroneous.

If the FTC or the FDA alleges or establishes that any of our communications are misleading, we could be subject to litigation and material penalties and fines.

Depending on the corrective action we take to redress a product’s deficiencies, we may be required to obtain new clearances or approvals before we may market or distribute the corrected device.

A defect or claim of a defect in the design or manufacture of our products could also have a material adverse effect on our reputation in the industry and decrease sales of our products, and we could also face additional regulatory enforcement action, including FDA warning letters, untitled letters, product seizure, injunctions, administrative penalties, or civil or criminal fines.

A defect or claim of a defect in the design or manufacture of our products could also have a material adverse effect on our reputation in the industry and decrease sales of our products, and we could also face additional regulatory enforcement action, including FDA warning letters, untitled letters, product seizures, injunctions, administrative penalties, or civil or criminal fines.

Moreover, any product liability or other claim brought against us, regardless of merit, could be costly to defend and could result in an increase to our insurance premiums.

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In particular, these laws and regulations may restrict or prohibit a wide range of pricing, discounting, marketing and promotion, sales commissions, customer incentive programs and other business arrangements, as well as interactions with healthcare professionals through consultant arrangements, product training, sponsorships or other activities.

Efforts to help ensure that our business arrangements with third parties comply with applicable healthcare and other laws and regulations involve substantial costs.

Efforts to support compliance of our third-party business arrangements with applicable healthcare and other laws and regulations involve substantial costs.

Due to the breadth of these laws, the narrowness of statutory exceptions and regulatory safe harbors available, and the range of interpretations to which they are subject, governmental authorities may conclude that our business practices do not comply with healthcare laws and regulations.

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For example, the medical device industry’s relationship with physicians has been under increasing scrutiny by the U.S.

Office of Inspector General (“OIG”), the U.S.

Department of Health and Human Services Office of Inspector General (“OIG”), the U.S.

Department of Justice (“DOJ”), the state attorney generals and other foreign and domestic government agencies.

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We may be subject to private qui tam actions brought by individual whistleblowers on behalf of federal or state governments, with potential liability under the FCA, including mandatory treble damages and significant per-claim penalties.

Additionally, as a result of these investigations and qui tam actions, we may need to agree to additional compliance and reporting requirements as part of a consent decree or corporate integrity agreement.

Additionally, as a result of these investigations and qui tam actions, we may need to agree to additional compliance and reporting requirements as part of a consent decree, corporate integrity agreement or other type of government resolution.

Any such investigation, or failure to comply with such investigation, including those led by the OIG or the DOJ, or settlement could increase our costs or otherwise have an adverse effect on our business, financial condition and results of operations.

Even an unsuccessful challenge or investigation into our practices could cause adverse publicity and be costly to respond to.

If our operations are found to be in violation of any of the federal and state laws described above or any other current or future fraud and abuse or other healthcare laws and regulations that apply to us, we may be subject to significant penalties, including significant criminal, civil and administrative penalties, damages, fines, exclusion from participation in government programs, such as Medicare and Medicaid, imprisonment, contractual damages, reputational harm, oversight if we become subject to a consent decree or corporate integrity agreement, and disgorgement, and we could be required to curtail, restructure or cease our operations.

If our operations are found to be in violation of any of the federal, state or foreign laws described above or any other current or future fraud and abuse or other healthcare laws and regulations that apply to us, we may be subject to significant penalties, including significant criminal, civil and administrative penalties, damages, fines, exclusion from participation in government programs, such as Medicare and Medicaid, imprisonment, contractual damages, reputational harm, oversight if we become subject to a consent decree, corporate integrity agreement or other government resolution, and disgorgement, and we could be required to curtail, restructure or cease our operations.

Any of the foregoing consequences will negatively affect our business, financial condition and results of operations.

Certain Other Regulations Relating to Our Business

We use hazardous materials in our business that may result in substantial compliance costs or claims against us relating to handling, storage or disposal.

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Compliance with such laws and regulations requires significant effort and costs.

For example, our R&D and manufacturing activities involve the controlled use of hazardous materials that may be

subject to federal statutes commonly known as the Comprehensive Environmental Response, Compensation, and Liability Act, the Resource Conservation and Recovery Act, and the Clean Water Act, among other laws and regulations.

For example, our R&D and manufacturing activities involve the controlled use of hazardous materials that may be subject to federal statutes commonly known as the Comprehensive Environmental Response, Compensation, and Liability Act, the Resource Conservation and Recovery Act, and the Clean Water Act, among other laws and regulations.

Noncompliance with such laws and regulations can result in fines or penalties or limitations on our operations or liability for remediation costs, as well as claims alleging personal injury, property, natural resource or environmental damages.

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We are subject to the jurisdiction of various governments and regulatory agencies outside of the U.S., which may bring our personnel into contact with foreign officials responsible for issuing or renewing permits, licenses or approvals or for enforcing other governmental regulations.

The FCPA also contains accounting provisions requiring issuers of securities listed in the U.S.

to make and keep books and records that accurately and fairly reflect the transactions and dispositions of the assets of the company, and to devise and maintain an adequate system of internal accounting controls.

The provisions of the Bribery Act extend beyond bribery of foreign public officials and are more onerous than the FCPA in a number of other respects, including jurisdiction, non-exemption of facilitation payments and penalties.

Economic and trade sanctions restrict our transactions or dealings with certain sanctioned countries, territories and designated persons, absent authorizations or exemptions under applicable law, such as OFAC’s licenses permitting certain humanitarian trade.

While we endeavor to have a strong culture of compliance and an adequate system of internal controls, including procedures to minimize and detect fraud in a timely manner, as well as processes for complying with OFAC authorizations or exemptions, there can be no assurance that our policies and procedures will be followed at all times or will effectively detect and prevent violations of the applicable laws by one or more of our employees, consultants, agents or partners and, as a result, we could be subject to penalties and material adverse consequences on our business, financial condition or results of operations.

Our collection, use and disclosure of personal information, including health information, is subject to federal and state privacy and security regulations, as well as data privacy and security laws outside the U.S., including in the EEA, the U.K.

and the People’s Republic of China, and our failure to comply with those laws and regulations or to adequately secure the information we hold could result in significant liability or reputational harm.

We and our partners may be subject to federal, state and foreign data protection laws, regulations and other obligations as further described in Part I, Item 1, “Business—Government Regulations” of this Annual Report.

The legislative and regulatory landscape for privacy and data protection continues to evolve, with jurisdictions in which we operate and in which our customers operate adopting or considering adopting new privacy and data security laws and regulations regarding the collection, use, processing and storage of information obtained from consumers and other end users, including health-related information.

We may also be bound by contractual obligations with our customers relating to privacy, data protection and information security that are more stringent than applicable privacy laws and regulations, and some companies often will not contract with vendors that do not meet more rigorous standards.

Complying with these various laws, regulations, standards and contractual obligations could cause us to incur substantial costs, require us to change our business practices in a manner adverse to our business (including limiting our ability to collect, control, process, share, disclose and otherwise use personal data (including health and medical information which are subject to strict requirements)), reduce demand for certain of our digital solutions, restrict our ability to offer certain digital solutions in certain jurisdictions or subject us to sanctions, investigations, fines, penalties or other inquiries by U.S., federal, state and foreign data protection regulations, all of which could negatively impact our business or reputation.

While we endeavor to have a strong culture of compliance and an adequate system of internal controls, including procedures to minimize and detect fraud in a timely manner, as well as processes for complying with OFAC authorizations or exemptions, there can be no assurance that our policies and procedures will be followed at all times or will effectively detect and prevent violations of applicable laws by one or more of our employees, consultants, agents or partners and, as a result, we could be subject to penalties and material adverse consequences on our business, financial condition or results of operations.

Our collection, use and disclosure of personal information, including health information, and confidential information is subject to federal and state privacy, data security and data protection regulations, as well as privacy, data security and data protection laws outside the U.S., including in the EEA, the U.K.

and the People’s Republic of China, and our failure to comply with those laws and regulations or to adequately secure this information could result in significant liability or reputational harm.

In the ordinary course of business, we collect, process, transfer, disclose, share and use personal and confidential information, including from customers, employees and business contacts.

These activities may subject us and our partners to federal, state and foreign privacy, data security and data protection laws, regulations, guidance, self-governing rules, industry standards, contractual requirements and other obligations as further described in Part I, Item 1, “Business—Government Regulations” of this Annual Report.

In the U.S., there are various laws regulating data privacy and security at the federal, state and local level, some of which are further described in the “Business—Government Regulations” section of this Annual Report.

We are also subject to other regulations, guidance, self-governing rules, industry standards and contractual requirements.

The legislative and regulatory landscape for privacy, data security and data protection continues to evolve, with jurisdictions in which we and our customers operate adopting or considering adopting new privacy, data security and data protection laws and regulations regarding the collection, use, processing, transfer, disclosure, sharing, security and storage of information obtained from consumers, employees and other individuals, including health-related information.

There is also an increasing focus on incident response and breach notification requirements with regulations dictating how to prepare for, respond to and report security incidents and breaches.

We may also be bound by contractual obligations with our customers relating to privacy, data protection and data security that are more stringent than applicable privacy, data security and data protection laws and regulations, and some companies often will not contract with vendors that do not meet more rigorous standards.

Complying with these various laws, regulations, standards and contractual obligations could cause us to incur substantial costs, require us to change our business practices in a manner that does not align with our business objectives (including limiting our ability to collect, control, process, share, disclose and otherwise use personal information (including health and medical information that are subject to strict requirements)), reduce demand for certain of our digital solutions, restrict our ability to offer certain digital solutions in certain jurisdictions or subject us to inquiries by U.S., federal, state and foreign data protection regulatory agencies, all of which could result in sanctions, investigations, fines, penalties or otherwise negatively impact our business or reputation.

Moreover, these requirements are evolving and may be modified, interpreted and applied in an inconsistent manner from one jurisdiction to another, and may conflict with one another or other legal obligations with which we must comply, further increasing costs to comply, and increasing risks of potential failures or perceived failures to comply.

Because many of these laws and regulations are new, it is also generally unclear how the laws will be interpreted and enforced in practice by the relevant government authorities as many of the laws are drafted broadly and leave great discretion to the relevant government authorities to exercise.

Any failure or perceived failure by us or our employees, representatives, contractors, consultants, collaborators or other third parties to comply with such requirements or adequately address privacy and security concerns, even if unfounded, could result in additional cost and liability to us, including as a cost of doing business, or due to new or increasing fines or penalties for privacy and cybersecurity violations, damage our reputation, and adversely affect our business and results of operations.

Further, a cyber-attack or other data breach affecting sensitive personal information, including health information, could also result in significant legal and financial exposure and reputational damages that could potentially have an adverse effect on our business, including under these same laws and contractual obligations.

We continue to monitor the evolving data protection landscape to support our efforts to comply with the requirements in the countries in which we do business.

Because many of these laws and regulations are recent, it is also generally unclear how the laws will be interpreted and enforced in practice by the relevant government authorities as many of the laws are drafted broadly and leave great discretion to the relevant government authorities to exercise.

Any failure or perceived failure by us or our employees, representatives, contractors, consultants, collaborators or other third parties to comply with such requirements or adequately address privacy and data security concerns, even if unfounded, could result in significant cost and liability to us, including civil and/or criminal penalties, injunctions, fines and exposures to private litigation, as a cost of doing business, or due to new or increasing fines or penalties for violations, damage our reputation, and adversely affect our business and results of operations.

Further, a cyber-attack or other security breach affecting personal information, including health or employee information, could also result in significant legal and financial exposure and reputational damage that could potentially have an adverse effect on our business, including limiting our ability to process personal information or to operate in certain jurisdictions.

We continue to monitor the evolving privacy, data security and data protection landscape to support our efforts to comply with the requirements in the countries in which we do business.

We are subject to U.S.

and foreign tax laws, and changes to such tax laws or differing interpretation of those laws by the relevant governmental authorities could adversely affect us.

Congress, the Organisation for Economic Co-operation and Development and other government agencies in jurisdictions where we do business have had an extended focus on issues related to the taxation of multinational corporations.

One example is in the area of “base erosion and profit shifting,” where payments are made between affiliates from a jurisdiction with high tax rates to a jurisdiction with lower tax rates.

Thus, the tax laws in the U.S., the U.K.

and other countries in which we do business could change on a prospective or retroactive basis, and any such changes could adversely affect us.

In addition, the tax laws and regulations in the U.S., the U.K.

and the numerous other jurisdictions in which we operate are inherently complex, and we are and will be obligated to make judgments and interpretations about the application of these laws and regulations to us and our operations and businesses.

Our interpretation and application of these laws and regulations could be challenged by the relevant governmental authorities, which could result in material administrative or judicial procedures, actions or sanctions.

Changes in our tax rates or exposure to additional income tax liabilities or assessments could affect our profitability.

We are subject to income taxes in the U.S.

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jurisdictions.

One example is in the area of “base erosion and profit shifting,” where payments are made between affiliates from a jurisdiction with high tax rates to a jurisdiction with lower

Thus, the tax laws in the U.S., the U.K.

and other countries in which we do business could change on a prospective or retroactive basis, and any such significant changes could adversely affect our financial statements.

In addition, the amount of income taxes we pay is subject to ongoing audits by U.S.

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tax authorities.

Due to the potential for changes to tax laws (or changes to the interpretation thereof) and the ambiguity of tax laws, the subjectivity of factual interpretations, the complexity of our foreign operations and intercompany arrangements and other factors, our estimates of income tax assets or liabilities may differ from actual payments, assessments or receipts.

Due to the potential for changes to tax laws (or changes to the interpretation thereof) and the ambiguity and complexity of tax laws, the subjectivity of factual interpretations, the complexity of our foreign operations and intercompany arrangements and other factors, our estimates of income tax assets or liabilities may differ from actual payments, assessments or receipts.

If these audits result in payments or assessments different from our reserves, our future results may include unfavorable adjustments to our tax liabilities and our financial statements could be adversely affected.

Additionally, our interpretation and application of these laws and regulations could be challenged by the relevant governmental authorities, which could result in material administrative or judicial procedures, actions or sanctions.

If we determine to repatriate earnings from foreign jurisdictions that have been considered permanently re-invested under existing accounting standards, it could also increase our effective tax rate.

In addition, any significant change to the tax system in the U.S.

or in other jurisdictions could adversely affect our financial statements.

We continue to monitor changes in tax laws in the U.S.

and the impact of proposed and enacted legislation in the various foreign jurisdictions in which we operate.

President Biden has provided informal guidance on tax law changes he may support.

Among other things, proposed changes would raise the rate on both domestic and foreign income.

If any of these proposals are ultimately enacted into legislation, they could materially impact our tax provision, cash tax liability and effective tax rate .

Legislative or taxation changes or HM Revenue & Customs (“HMRC”) enforcement actions may have a material adverse impact on our business, results of operations and financial condition.

We are subject to the laws of England and Wales and the taxation rules administered by HMRC.

Changes in legislation or regulations and actions by regulators, including changes in administration and enforcement policies, could from time to time require operational improvements or modifications, including in relation to the conduct of reviews and audits, that could result in higher costs or restrict our ability to operate our business and, as a result, have a material adverse effect on our business, results of operations and financial condition.

HMRC may also take enforcement actions against us which may result in fines, penalties and/or interest charges being imposed on us which may have a material adverse effect on its business, results of operations and financial condition.

We continue to monitor changes in tax laws and the impact of proposed and enacted legislation in the U.S.

and in the various foreign jurisdictions in which we operate.

Risks Relating to Corporate Finance

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Our indebtedness could adversely affect our financial condition, limit our ability to raise additional capital to fund our operations and prevent us from fulfilling our obligations under our indebtedness.

Our Credit Agreement governs our senior secured credit facilities, which consists of (i) a Term Loan in an original amount of $2,750.0 million and (ii) a $800.0 million Revolving Credit Facility (each capitalized term as defined in this Annual Report).

Our Credit Agreement governs our senior secured credit facilities, which consist of (i) a Term Loan in an original amount of $2,750.0 million and (ii) an $800.0 million Revolving Credit Facility (each capitalized term as defined in this Annual Report).

As a result of our indebtedness, a portion of our cash flows will be required to pay interest and principal on our outstanding indebtedness, and we may not generate sufficient cash flows from operations, or have future borrowings available under the Revolving Credit Facility, to enable us to repay our indebtedness or to fund our other liquidity needs.

As of January 1, 2023, we had total indebtedness of $2,638.3 million, and we had availability under our Revolving Credit Facility of $786.9 million (net of $13.1 million of outstanding letters of credit).

As of December 31, 2023, we had total indebtedness of $2,414.6 million, and we had availability under our Revolving Credit Facility of $787.1 million (net of $12.9 million of outstanding letters of credit).

Subject to the limits contained in the Credit Agreement, we may incur additional debt from time to time to finance working capital, capital expenditures, investments or business acquisitions, or for other purposes.

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We have entered into a series of interest rate cap and interest rate swap agreements to hedge our interest rate exposures related to our variable rate borrowings under the credit facilities.

However, it is possible that these interest rate cap and interest rate swap agreements or any future interest rate cap agreements or swaps we enter into may not fully or effectively mitigate our interest rate risk and we may decide not to maintain interest rate swaps in the future.

However, it is possible that these hedging instruments or any future hedging instruments we enter into may not fully or effectively mitigate our interest rate risk and we may decide not to maintain hedging instruments in the future.

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

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Our ability to make scheduled payments on or refinance our debt obligations depends on our financial condition and operating performance, which are subject to prevailing economic and competitive conditions and to financial, business, legislative, regulatory and other factors beyond our control.

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

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

If our cash flows and capital resources are insufficient to fund our debt service obligations, we could face substantial liquidity problems and could be forced to reduce or delay investments and capital expenditures or to dispose of material assets or operations, seek additional debt or equity capital or restructure or refinance our indebtedness.

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The Credit Agreement restricts our ability to dispose of assets and use the proceeds from such dispositions and may also restrict our ability to raise debt or equity capital to be used to repay other indebtedness when it becomes due.

Because of these restrictions, we may not be able to consummate those dispositions or to obtain proceeds in an amount sufficient to meet any debt service obligations then due.

Because of these restrictions, we may not be able to consummate those dispositions or to obtain proceeds in an amount sufficient to meet any debt service obligations when due.

In addition, we conduct all of our operations through our subsidiaries, some of which are not guarantors of our indebtedness.

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In addition, the Credit Agreement requires us to comply with two financial covenants consisting of a maximum Consolidated Leverage Ratio (as defined in the Credit Agreement) and a minimum Consolidated Interest Coverage Ratio (as defined in the Credit Agreement).

See Note 8 to the Consolidated Financial Statements for more information related to our financial covenants.

Our ability to comply with these covenants may be affected by circumstances and events beyond our control, such as prevailing economic conditions and changes in regulations, and we cannot assure you that we will be able to comply with such covenants.

These restrictions also limit our ability to obtain future financings to withstand a future downturn in our business or the economy in general.

Further, in order to respond to market conditions, we may need to seek waivers of various provisions in the Credit Agreement and we might not be able to obtain such waivers on reasonable terms, if at all.

See Part II, Item 8, “Financial Statements and Supplementary Data—Note 8.

Borrowings” for more information related to our financial covenants.

Our ability to comply with these covenants may be affected by financial, business, economic, regulatory and other circumstances and events beyond our control, such as prevailing economic conditions, changes in regulations and industry conditions, and we cannot assure you that we will be able to comply with such covenants.

For example, compliance with the financial covenants would be more difficult to achieve if we were to experience substantially lower revenues or greater costs than budgeted.

The covenants under the Credit Agreement also limit our ability to obtain future financings to withstand a future downturn in our business or the economy in general.

Further, in order to respond to market conditions, or if we are unable to comply with any of the covenants, we may need to seek an amendment or waiver from our lenders of various provisions in the Credit Agreement and we may not be able to obtain such an amendment or waiver on reasonable terms, if at all.

Additionally, our costs under these agreements would likely increase.

A breach of any of the covenants under our Credit Agreement could result in an event of default, which could result in the accelerated payment of outstanding indebtedness or foreclosure on our assets pledged to secure the indebtedness, which could have a material adverse effect on us.

Risks Relating to Our Employees

We may have difficulty attracting, motivating and retaining executives and other key employees.

Our success will depend in part upon our ability to attract, retain and motivate executives and sales, marketing, manufacturing, technical, scientific, technology and other key personnel.

Our success will depend in part upon our ability to attract, motivate and retain executives and sales, marketing, manufacturing, technical, scientific, technology and other key personnel.

Competition for qualified personnel can be intense, both in the industry in which we operate and where our operations are located.

Further, our current and prospective employees may experience uncertainty about the effect of the Combinations, which may impair our ability to attract, retain and motivate executives and other key personnel.

Accordingly, no assurance can be given that we will be able to attract or retain executives or key employees.

The loss of any executive or other key personnel, particularly key manufacturing, R&D and technical personnel, could harm our business and prospects and could impede the achievement of our R&D, operations or strategic objectives.

In addition, there could be disruptions to or distractions for the workforce and management, including in connection with activities of labor unions or work councils.

While we may employ the use of certain retention programs, there can be no guarantee that they will prove to be successful.

If our key employees depart, the integration of Quidel and Ortho may be more difficult and our business may be harmed.

Furthermore, we may be required to incur significant costs in identifying, hiring, training and retaining replacements for departing employees and may lose significant expertise and talent relating to our business, which may adversely affect our business and ability to realize the anticipated benefits of the Combinations.

In addition, there could be disruptions to or distractions for the workforce and management associated with activities of labor unions or works councils or integrating employees into the Company.

Accordingly, no assurance can be given that we will be able to attract or retain key employees to the same extent that Quidel and Ortho were able to attract or retain employees in the past.

In addition, pursuant to severance provisions in legacy Quidel and Ortho executive employment agreements, certain of our employees are entitled to receive severance payments upon certain qualifying terminations of their employment.

These employees potentially could terminate their employment following specified circumstances set forth in the applicable executive employment agreement, including certain changes in such key employees’ title, status, authority, duties, responsibilities or compensation, and be entitled to receive severance.

For example, such circumstances could occur in connection with the integration of Quidel and Ortho as a result of changes in roles and responsibilities.

If we are required to make unexpected payments to any pension plans applicable to our employees, our financial condition may be adversely affected.

Some of our current and former employees participate or participated in defined benefit pension plans that were sponsored by Ortho prior to the closing of the Combinations.

We assumed certain underfunded and unfunded net pension liabilities of approximately $33.0 million in relation to these plans.

Several of these plans are unfunded and, while we do not believe the liabilities in relation to these plans are significant, they will need to be satisfied as they mature from our cash resources.

In jurisdictions where the defined benefit pension plans are intended to be funded with assets in a trust or other funding vehicle, we expect that, while not significant, the liabilities will exceed the corresponding assets in each of the plans.

Various factors, such as changes in actuarial estimates and assumptions (including in relation to life expectancy, discount rates and rates of return on assets), as well as actual return on assets, can increase the expenses and liabilities of the defined benefit pension plans.

The assets and liabilities of the plans must be valued from time to time under applicable funding rules and as a result we may be required to increase the cash payments we make in relation to these defined benefit pension plans.

We could also be required in some jurisdictions to make accelerated payments up to the full buy-out deficit in our defined benefit pension plans, which would likely be far higher than the normal ongoing funding cost of the plans.

Our operations and financial condition may be adversely affected to the extent that we are required to (i) make any additional payments to any relevant defined benefit pension plans in excess of the amounts assumed in our current projections and assumptions or (ii) report higher pension plan expenses under relevant accounting rules.

If we are required to make unexpected payments to any defined benefit plans or other post-employment benefit plans (“Benefit Plans”) applicable to our employees, our financial condition may be adversely affected.

Some of our current and former employees participate or participated in Benefit Plans that were sponsored by Ortho prior to the closing of the Combinations.

We assumed certain underfunded and unfunded Benefit Plan liabilities, which amounted to approximately $36.0 million as of December 31, 2023.

Several of these plans are unfunded and, while we do not believe the

liabilities in relation to these plans are significant, they must be satisfied as they mature from our cash resources.

In jurisdictions where the Benefit Plans are intended to be funded with assets in a trust or other funding vehicle, we expect that, while not significant, the liabilities will exceed the corresponding assets in each of the plans.

The assets and liabilities of the plans must be valued from time to time under applicable funding rules and, as a result, we may be required to increase the cash payments we make in relation to these Benefit Plans.

We could also be required in some jurisdictions to make accelerated payments up to the full buy-out deficit in our Benefit Plans, which would likely be far higher than the normal ongoing funding cost of the plans.

Our operations and financial condition may be adversely affected to the extent that we are required to (i) make any additional payments to any relevant Benefit Plans in excess of the amounts assumed in our current projections and assumptions or (ii) report higher Benefit Plan expenses under relevant accounting rules.

We are subject to work stoppages, union negotiations, labor disputes and other matters associated with our labor force, which may adversely impact our operations and cause us to incur incremental costs.

As of January 1, 2023, we had approximately 7,000 employees located around the world consisting of commercial, supply chain, quality, regulatory and compliance, R&D and general administrative personnel.

Approximately 15% of our employees globally are covered by a union, collective bargaining agreement or works council.

As of December 31, 2023, we had approximately 7,100 employees located around the world consisting of commercial, supply chain, quality, regulatory and compliance, R&D and general administrative personnel.

As of such date, approximately 15% of our employees globally were covered by a union, collective bargaining agreement or works council.

Historically, we have not experienced work stoppages;

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Furthermore, in the ordinary course of business, we must frequently make subjective judgments with respect to compliance with applicable laws and regulations.

If regulators disagree with the manner in which we have sought to comply with applicable laws and regulations, we could be subjected to substantial civil and criminal penalties, as well as corrective actions, product recalls, seizures or injunctions with respect to the sale of our products.

If regulators disagree with the manner in which we have sought to comply with applicable laws and regulations, we could be subject to substantial civil and criminal penalties, as well as corrective actions, product recalls, seizures or injunctions with respect to the sale of our products.

The FDA may also withdraw any clearances or approvals we have obtained, or decline to issue additional clearances or approvals for any outstanding 510(k)s, PMAs or BLAs.

The assessment of any civil and criminal penalties against us could severely impair our reputation within the industry and affect our operating results, and any limitation on our ability to manufacture and market our products could also have a material adverse effect on our business.

We are exposed to business risk which, if not covered by insurance, could have an adverse effect on our results of operations.

We face a number of business risks, including exposure to product liability, property, business interruption and cybersecurity claims.

Although we maintain insurance for a number of these risks, we may face claims for types of damages, or for amounts

of damages, that are not covered by our insurance, or our insurance coverage may not be sufficient to offset the costs of any losses, lost sales or increased costs experienced during business interruptions.

Expectations of our performance related to ESG matters, or the reporting of such matters, may impose additional costs on us and expose us to new risks.

There is an increasing focus and scrutiny from the SEC and other regulators, investors, customers, suppliers, vendors, employees and other stakeholders concerning corporate responsibility and sustainability and ESG factors in particular.

Government entities are enhancing or advancing legal and regulatory requirements, including disclosure requirements, specific to ESG matters.

For example, the state of California has adopted new climate change disclosure requirements and the E.U.

has adopted the Corporate Sustainability Reporting Directive.

Compliance with such rules could require significant effort and resources and result in changes to our current ESG goals.

Additionally, many investors use ESG factors to help guide their

investment strategies and, in some cases, may choose not to invest in us if they believe our ESG performance is inadequate.

Moreover, a number of customers who are payors or distributors have adopted, or may adopt, procurement policies that include ESG provisions that their suppliers or manufacturers must comply with, or they may seek to include such provisions in their terms and conditions.

Standards for tracking and reporting ESG matters continue to evolve.

Our use of disclosure frameworks and standards, and the interpretation or application of those frameworks and standards, may change from time to time or differ from those of others.

This may result in a lack of consistent or meaningful comparative data from period to period or between us and other companies in the same industry.

Third-party providers of corporate responsibility ratings and reports have also increased in number to meet growing stakeholder demand for measurement of ESG performance.

The criteria by which our corporate responsibility practices are assessed must be routinely monitored and may change, which could result in greater expectations of us and cause us to undertake costly initiatives to satisfy such new criteria.

If we elect not to or are unable to satisfy such evolving standards for identifying, measuring and reporting ESG metrics, including ESG-related disclosures that may be required of public companies by the SEC and other regulators, stakeholders may conclude that our performance related to corporate responsibility and ESG matters is inadequate.

Moreover, our market capitalization has increased significantly in the last few years.

Accordingly, we may be benchmarked against larger peer companies, some of which may have more resources than us and thus may have achieved better ESG performance and/or a higher ESG rating profile.

We may face reputational damage if our ESG performance or ESG rating profile is, or is perceived as being, below that of our competitors or peer companies.

In addition, we could fail, or be perceived as failing, in our achievement of certain ESG-related initiatives or goals, or we could be criticized for the scope of such initiatives or goals or our standards for measuring and reporting such goals.

Our failure to satisfy stakeholder expectations related to our ESG performance or to accomplish or accurately track and report on our ESG goals on a timely basis, or at all, could result in the loss of business or difficulty obtaining new business or new supplier relationships, adversely affect our reputation, stock price, financial condition, results of operation or growth, expose us to increased scrutiny from stakeholders and enforcement authorities, which may result in litigation or regulatory action or otherwise subject us to liability, and present challenges in attracting and retaining talented employees.

We are exposed to business risk which, if not fully covered by insurance, could have an adverse effect on our results of operations.

We face a number of business risks, including exposure to product liability, property, business interruption and cybersecurity risks.

Although we maintain insurance for a number of these risks, we may face claims for types of damages, or for amounts of damages, that are not covered by our insurance, or our insurance coverage may not be sufficient to offset the costs of any payments or other losses, lost sales or increased costs experienced during business interruptions.

For some risks, we may not obtain insurance if we believe the cost of available insurance is excessive related to the risks presented.

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Our Bylaws include advance notice requirements for stockholder proposals that require stockholders to give written notice of any proposal or director nomination to us within a specified period of time prior to any stockholder meeting and do not permit stockholders to call a special meeting of the stockholders, unless such stockholders hold at least 50% of our stock entitled to vote at the meeting.

We are also subject to anti-takeover provisions under Delaware law.

These provisions may delay, deter or prevent a change in control of us, adversely affecting the market price of our common stock.

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If a court were to find these provisions of our Bylaws inapplicable to, or unenforceable in respect of, one or more of the specified types of actions or proceedings, we may incur additional costs associated with resolving such matters in other jurisdictions, which could adversely affect our business, financial condition or results of operations.

Expectations of our performance related to ESG matters, or the reporting of such matters, may impose additional costs on us and expose us to new risks.

There is an increasing focus and scrutiny from certain investors, customers, vendors, employees and other stakeholders concerning corporate responsibility, specifically related to ESG factors.

In addition, government organizations are enhancing or advancing legal and regulatory requirements, including disclosure requirements, specific to ESG matters.

Many investors may use these factors to guide their investment strategies and, in some cases, may choose not to invest in us if they believe our ESG performance is inadequate.

Third-party providers of corporate responsibility ratings and reports have increased in number to meet growing investor demand for measurement of ESG performance.

The criteria by which our corporate responsibility practices are assessed must be continuously monitored and may change, which could result in greater expectations of us and cause us to undertake costly initiatives to satisfy such new criteria.

If we elect not to or are unable to satisfy such new criteria, investors may conclude that our performance related to corporate responsibility and ESG matters is inadequate.

Moreover, our market capitalization has increased significantly in the last few years.

Accordingly, we may be benchmarked against larger peer companies, some of which may have more resources than us and thus may have achieved better ESG performance and/or a higher ESG rating profile.

We may face reputational damage if our ESG performance or ESG rating profile is, or is perceived

as being, below that of our competitors or peer companies.

In addition, we could fail, or be perceived as failing, in our achievement of certain ESG-related initiatives or goals, or we could be criticized for the scope of such initiatives or goals.

If we fail to satisfy the expectations of investors, customers, vendors, employees and other stakeholders related to our ESG performance or our ESG initiatives are not executed as planned, we may not realize the anticipated benefits of implementing such ESG initiatives and our reputation, business, stock price, financial condition or results of operation could be adversely impacted.

The market price of our common stock may be volatile.

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• announcements of investigations or regulatory scrutiny of our operations or lawsuits filed against us;

• our inability to execute on our stock repurchase program as planned, including failure to meet internal or external expectations around the timing or price of stock repurchases, and any reductions or discontinuances of repurchases thereunder;

• additions or departures of key personnel;

• issuances or sales of our common stock, including sales of common stock by our directors and officers or our significant investors.

• issuances, repurchases or sales of our common stock, including sales of common stock by our directors and officers or our significant investors and any stock repurchase program.

Future sales of our common stock by us or our stockholders in the public market, or the perception that such sales may occur, could reduce the price of our common stock, and any additional capital raised by us through the sale of equity or convertible securities may dilute ownership in the Company.

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All of our issued shares of common stock are freely tradable without restriction or further registration under the Securities Act, except for any shares held by our affiliates, as that term is defined under Rule 144 of the Securities Act (“Rule 144”), including certain of our directors, executive officers and other affiliates, which shares may be sold in the public market only if they are registered under the Securities Act or are sold pursuant to an exemption from registration such as Rule 144.

Shares of our common stock covered by registration rights represent approximately 19% of our outstanding shares as of January 1, 2023.

Shares of our common stock covered by registration rights represent approximately 19% of our outstanding shares as of December 31, 2023.

Registration of any of these outstanding shares of common stock would result in such shares becoming freely tradable without compliance with Rule 144 upon effectiveness of the registration statement.

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These factors could also make it more difficult for us to raise additional funds through future offerings of our shares of common stock or other securities.

In addition, we filed a registration statement with the SEC on Form S-8 providing for the registration of approximately 5.5 million shares of common stock issued or available for issuance under the QuidelOrtho Amended and Restated 2018 Equity Incentive Plan (the “2018 Plan”) and the QuidelOrtho Amended and Restated 1983 Employee Stock Purchase Plan (the “ESPP”).

Subject to the satisfaction of vesting conditions, shares of common stock registered under the registration statement on Form S-8 may be made available for resale immediately in the public market without restriction.

In the future, we may also issue our securities in connection with investments or acquisitions, or otherwise.

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Ineffective internal controls could also cause investors to lose confidence in our reported financial information, which would likely have a negative effect on the trading price of our common stock.

Unresolved Staff Comments

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