Mirion Technologies Inc

Previous wording

Our business is subject to certain risks and uncertainties. Any of the following risk factors to one or more of our business segments could cause our actual results to differ materially from historical or anticipated results. You should carefully consider the following risk factors, together with all of the other information included in this Annual Report on Form 10-K, before making an investment decision. The occurrence of one or more of the events or circumstances described in these risk factors, alone or in combination with other events or circumstances may have an adverse effect on our business, cash flows, financial condition and results of operations. You should also carefully consider the following risk factors in addition to the other information contained in this Annual Report on form 10-K, including Part II, Item 7 “Management’s Discussion and Analysis of Financial Condition and Results of Operations” and the “Notes to Consolidated Financial Statements” of Part II, Item 8 “Financial Statements and Supplementary Data.” However, the risks described below are not the only risks we face but represent the risks we believe are material. Additional risks and uncertainties not currently known to us or those we currently view to be immaterial may also materially and adversely affect our cash flows, financial condition and results of operations. In such a case, the trading price of our securities could decline and you may lose all or part of your investment.

Current wording

You should carefully consider the following risk factors, together with all of the other information included in this Annual Report on Form 10-K, before making an investment decision. The occurrence of one or more of the events or circumstances described in these risk factors, alone or in combination with other events or circumstances may have an adverse effect on our business, results of operations and financial condition. The risks described below are not the only risks we face but represent known risks we believe are material. Additional risks and uncertainties not currently known to us, or those we currently view to be immaterial, may also adversely affect our business, results of operations and financial condition.

Previous wording

Our business depends on the demand for our radiation detection, measurement, analysis and monitoring products, our nuclear medicine and related quality management products, and services in the nuclear, defense, medical and other end markets. In the past, the demand for our products in these markets has fluctuated due to a variety of factors, many of which are beyond our control. This has caused our results of operations to fluctuate.

Current wording

Our results of operations may fluctuate significantly and cause our results of operations to fall below expectations. Our business depends on the demand for our radiation detection, measurement, analysis and monitoring products, our nuclear medicine and related quality management products, and services in the nuclear, defense, medical and other end markets. In the past demand for our solutions in these markets has fluctuated due to a variety of factors, many of which are beyond our control. Our highest volume of sales and cash flows occurs in the fourth quarter of the fiscal year due in large part to the timing of customers’ capital spending programs and increased outages occurring in the fall in our Nuclear & Safety segment. This has caused our results of operations to fluctuate. The nuclear sector has recently seen a resurgence in demand, driven by an overall increase in electricity demand from a number of sources, including electric cars, the anticipated infrastructure build of data centers for Artificial Intelligence (AI), and other sources. This presents both opportunities if the additional electricity demand is supplied by nuclear power plants (“NPPs”) and risks if demand is lower than expected or electricity is produced by other means. This has caused and we expect it will continue to cause our results of operations to fluctuate. See also “Risks Related to Our Business and Industry—Our sales cycles in certain end markets can be long and unpredictable.”

Previous wording

•The military conflict between Russia and Ukraine and the sanctions imposed as a result have adversely affected and may further adversely affect our business, results of operations, and financial condition.

Current wording

Volatile geopolitical conditions and international conflicts such as the military conflict between Russia and Ukraine have adversely affected and may further adversely affect our business, results of operations, and financial condition. Actual or threatened adverse changes in geopolitical conditions, particularly in countries where we, our customers or our suppliers operate, may adversely impact the cost of, and demand for, our products, solutions and services, our ability to conduct business, and could adversely affect our business, results of operations, cash flows, and financial condition. Geopolitical tensions, terrorism and military conflicts have impacted, and will continue to impact global trade and global supply chains through import or export restrictions, global sanctions, increased tariffs, foreign exchange rates volatility, interest rates, inflation, labor challenges, credit availability, cash flows and other macroeconomic conditions. We do business with Russian customers both within and outside of Russia and with customers who have contracts with Russian counterparties. Russia’s invasion of Ukraine, the ensuing build-up of Russian sanctions and other impacts on this region have impacted the global economic environment resulting in fluctuating demand for our products and services, delays or cancellations of customer projects and difficulties in supplying and sourcing products from this and other geographic regions. We have also experienced and may continue to experience delays in revenue recognition, order fulfillment and contract payments due to export controls and other sanctions instituted to date. A number of nuclear power plants are being constructed or are operated by or with the participation of Russian state-owned enterprises. As the situation evolves, there is a growing risk that those Russian state-owned enterprises could become further sanctioned by the United States or the European Union. We also sell medical equipment and related products into Russia for medical and humanitarian applications, however this process has become more complicated, time consulting and uncertain as some of our medical equipment exports require export licenses. We may also be subject to criticism for continuing to sell products to Russia, which could damage our reputation and adversely affect our business, results of operations and financial condition. It has become more difficult to transact with Russian parties due to the continued expansion of U.S. and EU sanctions directed at Russia and the United States has announced additional restrictions if the conflict does not end quickly.

Previous wording

The broader consequences of the conflict between Russia and Ukraine cannot be predicted, nor can we predict the conflict's ultimate impact on the global economy or our business, results of operations, and financial condition. We could be prevented from selling our products or required to cease work on certain customer projects if additional sanctions related to the Russia-Ukraine conflict are imposed or due to changes in applicable export control or sanctions regulations. The Russia-Ukraine conflict has heightened other risks disclosed herein, including through increased inflation, limited availability of certain commodities, supply chain disruption, disruptions to our global technology infrastructure, including cyber-attacks, increased terrorist activities, volatility or disruption in the capital markets, and delays or cancellations of customer projects, each of which could materially adversely affect our business, results of operations, and financial condition.

Current wording

The broader consequences of the conflict between Russia and Ukraine cannot be predicted, nor can we predict the ultimate impact of other volatile conditions in the Middle East and Asia, including the South China Sea, on the global economy or our business, results of operations, and financial condition. We could be prevented from selling our products or required to cease work on certain customer projects if additional sanctions related to these or other conflicts are imposed. These volatile geopolitical conditions have heightened other risks disclosed herein, including through increased inflation, limited availability of certain commodities, supply chain disruption, disruptions to our global technology infrastructure, including cyberattacks, increased terrorist activities, volatility or disruption in the capital markets, and delays or cancellations of customer projects, each of which could adversely affect our business, results of operations, and financial condition.

Previous wording

The risks associated with radioactive materials and the public perception of those risks can affect our business. Successful execution of our business model in the nuclear power end market is dependent upon a certain level of public support for nuclear power. Opposition by third parties including competitive energy sources, individuals, and organizations can slow down or prevent construction of new nuclear power plants, or lead to an early shut down of existing power plants, or a dampening of the favorable regulatory climate needed to introduce new nuclear technologies all of which could negatively impact our business. A nuclear incident at a nuclear power plant or any use of nuclear weapons could have devastating consequences and, could foster public opposition to nuclear power, lead to more onerous regulatory requirements with increased costs and dampen customer demand for our products in the nuclear end market, all of which could materially and adversely affect our business, results of operations and financial condition.

Current wording

We operate in an industry where the risks associated with radioactive materials and the public perception of nuclear energy could materially and adversely affect the markets in which we operate and increase regulatory requirements and costs that could in turn materially and adversely affect our business. The risks associated with radioactive materials and the public perception of those risks can affect our business. Successful execution of our business model in the nuclear power end market relies on public support for nuclear power. Opposition from various third parties including competitive energy sources, individuals, and organizations can hinder or prevent construction of new nuclear power plants, cause early shutdowns of existing power plants, or create an unfavorable regulatory environment for nuclear technologies all of which could negatively impact our business. Additionally, a nuclear accident or the use of nuclear weapons could have devastating consequences on public sentiment, and lead to stricter regulatory requirements with increased costs and reduced customer demand for our products thereby materially and adversely affecting our business, results of operations and financial condition.

Previous wording

Our reliance upon sole or limited sources for certain materials and components and supply shortages could cause production interruptions, delays and increasing costs for the commodities or components that we use in our operations which may materially and adversely impact our business, results of operations and financial condition.

Current wording

Supply chain issues could cause production interruptions, delays and increased costs for the commodities or components that we use in our operations which may materially and adversely impact our business, results of operations and financial condition. We purchase materials, components, and equipment from third parties for our manufacturing operations including from sole or limited source suppliers due to quality assurance, cost effectiveness, availability, contractual obligations or unique design or technology. Our reliance on our supply chain to secure raw materials, parts, components and subassemblies exposes us to volatility in their prices and availability. Our supply chain is global and suppliers are often located in developing countries which further exposes us to the geopolitical risks. If these suppliers face issues or trade controls with their countries changes, we may struggle to establish or qualify replacement sources of supply quickly or at equivalent costs. Our supply chains could also be disrupted by factors such as supplier capacity constraints, operational or quality issues, bankruptcy or exiting of the business for other reasons, decreased availability of key materials, and external events like natural disasters, pandemics, war, terrorism, tariffs wars and other governmental actions. Such disruptions could cause increased expenses, production interruptions, delays, extended lead times, and inefficiencies, and adversely impact our business, results of operations and financial condition.

Previous wording

Our long and uncertain sales cycle and the unpredictable period of time between the placement of an order and our ability to recognize the revenue associated with the order makes revenue predictions difficult, particularly on a quarterly basis, and can cause our operating results to fluctuate significantly.

Current wording

Our sales cycles in certain end markets can be long and unpredictable. The sales cycle for our products related to new construction or refurbishment of existing NPPs ranges from 12 to 36 months and occasionally extends up to 60 months or more. In the medical end market, the typical sales cycle varies between 1 to 18 months. Significant resources are invested before orders are secured, with no assurances of a sale. Revenue recognition may be delayed due to the need for customer notices to proceed, certification of successful installation and operation or construction or scheduled outage delays. This lengthy and uncertain sales cycle, coupled with the unpredictable period of time between the placement of an order and our ability to recognize the revenue associated with the order makes revenue predictions difficult, particularly on a quarterly basis, and can cause our operating results to fluctuate significantly.

Previous wording

•We have made and continue to make acquisitions, investments and divestitures that involve certain risks and uncertainties.

Current wording

We have made and plan to continue to make acquisitions, investments and divestitures that involve numerous risks and uncertainties. As part of our business and growth strategy, we have made and plan to continue to consider acquisitions of, and significant investments in, businesses, products or technologies on a selective basis. We also periodically divest businesses that no longer align with our strategic plans. There can be no assurance that suitable acquisition, investment or divestiture opportunities will be identified or that we will be able to consummate any such transactions on terms and conditions acceptable to us. Additionally, the expected benefits may not materialize, and our existing operations and financial condition could be adversely affected. Our growth through acquisitions and investments is subject to various risks, including competition for attractive or promising businesses or assets, financing needs, and regulatory approvals. The sale of equity or equity-linked securities or issuance of debt to finance any such acquisitions could result in dilution to our stockholders. The incurrence of indebtedness would result in increased fixed obligations and could also include covenants or other restrictions that would impede our ability to manage our operations. Divestitures also require significant time and resources, could disrupt our business, may not close on the expected timing or at all, have in the past resulted in additional costs following the transaction and may continue to do so in the future. Potential and actual transactions could also divert management's attention, and could potentially deplete corporate resources and adversely impact the Company's business, results of operations and financial condition.

Previous wording

Our products and services involve the detection and monitoring of radiation and are crucial components of the safety measures employed with respect to ionizing radiation. In the medical end market, our products and services are often used, for example, to ensure that radiation oncology patients receive accurate doses of radiation. We are committed to upholding high standards for our products. The failure of our products to perform to specification could result in personal injury or death and we have had to implement safety notices and voluntary product recalls to mitigate against such risks in the past. Product failures could also cause property damage (including environmental contamination), or the incorrect treatment being administered to patients. Legal and regulatory actions taken in response to product failure could result in significant costs to us. Additionally, the failure of our products to perform to specification could adversely affect market perception of the quality and effectiveness of our products and services, which would harm our ability to attract new customers and could cause our existing customers to cease doing business with us.

Current wording

Many of our products and services involve the detection, identification, measurement or monitoring of radiation and the failure of our products or services to perform to specification could materially and adversely affect our business, results of operations and financial condition. Our products and services are technically complex, involve the detection and monitoring of radiation and are crucial components of the safety measures employed with respect to ionizing radiation. Any actual or perceived quality issues or safety failures could adversely affect our business. In the medical end market for example, our products and services are often used to ensure that radiation oncology patients receive accurate doses of radiation. Product failure could lead to the incorrect treatment being administered to a patient, personal injury death or property damage (including environmental contamination). Resulting legal claims and regulatory actions could generate significant costs to us. Additionally, the failure of our products to perform to specifications could adversely affect market perception of the quality and effectiveness of our products and services, which could harm our ability to attract new customers and could cause our existing customers to cease doing business with us. While we have attempted to secure appropriate insurance coverage at a reasonable cost, we may not be fully covered against all risks and we are also subject to significant deductibles. There can be no assurances that insurance policies will continue to be available on commercially acceptable terms or at all. We seek to limit our liability in customer contracts, but these contractual limitations may not always be effective or sufficient in scope in all cases, potentially which could subject us to material and adverse impacts on our business, results of operations and financial condition.

Previous wording

Certain of our products require the use of radioactive sources or incorporate radioactive materials, which subject us and our customers to regulations, related costs and delays and potential liabilities for injuries or violation of environmental, health and safety laws.

Current wording

Certain of our products require the use of radioactive sources or incorporate radioactive materials, which subject us and our customers to regulations, related costs and potential liabilities for violation of environmental, health and safety laws. The majority of our products are designed to detect, quantify and analyze ionizing radiation and require the use of radioactive sources for testing and calibration. The required radioactive sources, or other sources of ionizing radiation e.g., X-ray machines, are held in our facilities. Our customers hold equivalent sources for ongoing testing and re-calibration that they may have purchased from us or other third-party providers. Certain of our reactor instrumentation and control equipment and systems also incorporate radioactive materials. In all such cases, licenses for radioactive sources and materials or other sources ionizing radiation are provided by the appropriate regulatory authority in the relevant jurisdiction. Our failure, or our customer's failure, to obtain the necessary licenses for radioactive sources or materials required by or incorporated into our products could result in the cancellation, or delay, of purchases by our customers or remedial action by the relevant regulators. While the specific process and criteria for receiving a license differ from jurisdiction to jurisdiction, it generally involves policies and procedures designed to ensure worker, workplace and public safety, including emergency plans; setting forth the proper handling, control and security of radioactive sources or materials on site; detailing any disposal or decommissioning considerations, including financial assurance therefor; and adequately training personnel at the site. Our non-compliance with, or failure to properly implement, such policies and procedures could delay or otherwise preclude us from obtaining the necessary license(s), which could result in the cancellation or delay or purchases by our customers. Licenses impose specific on-going compliance obligations tht typically include requirements to pay periodic license fees, submit periodic compliance reports, and agree to site inspections by regulators. Our failure to comply with any of these on-going obligations could result in the revocation of the applicable license, which could result in the cancellation or delay of purchases by our customers. The improper handling of radioactive materials by us or our customers could result in our direct or secondary liability, including penalties and fines to us. We cannot completely eliminate the risk of accidental contamination or injury from those radioactive materials in our facilities and cannot control the practices of our customers. Related claims for related violations of environmental, health and safety laws could result in substantial damages, be costly and time-consuming to defend and adversely affect the marketability of our products, our reputation, our results of operations and financial condition.

Previous wording

We enter into fixed-price contracts with our customers and our failure to mitigate certain risks associated with such contracts may result in reduced operating margins.

Current wording

We enter into fixed-price contracts and contracts with limited pricing escalation and our failure to mitigate certain risks associated with such contracts may result in reduced operating margins. For NPPs new builds, we periodically enter into fixed-price arrangements and contracts with price escalation terms that may not fully cover all possible cost increases. The revenue, cost and gross profit realized on these contracts can vary, sometimes substantially, from original projections due to a variety of factors including inaccurate costs estimation, inflation, currency fluctuations, errors in specifications or designs, other unanticipated technical problems with our products or services which require that we remedy the problem at our cost, supplier failures, customer difficulty in obtaining required governmental permits or approvals or other customer-caused delays, changes in regulations and laws, construction delays of new NPPs and decommissioning of existing NPPs, limited history with new products and customers, contract termination, or other unanticipated circumstances over the contract period. We may experience cost overruns due to these factors resulting in losses or reduced profitability which could materially and adversely affect our business, results of operations and financial condition.

Previous wording

•We derive a significant portion of our revenue from international sales and our operations in foreign countries are subject to political, economic, legal and other risks, which could materially and adversely affect us.

Current wording

We derive a significant portion of our revenue from international sales and our operations in non-U.S. countries are subject to political, economic, legal, currency and other risks, which could materially and adversely affect us. Revenue generated from outside of North America accounted for approximately 37%, 36%, and 36% of our net sales for the years ended December 31, 2024, December 31, 2023, and December 31, 2022, respectively. International sales are expected to remain a material percentage of our total net sales in future periods. As a result, our operations are subject to risks associated with global operations and sales, such as currency fluctuations, compliance with complex non-U.S. laws and regulations, new or increased tariffs, obtaining governmental approvals for products that may require certification, localization requirements, export and import licenses, difficulties in collecting accounts receivable, intellectual property protection, staffing and managing international operations, managing local sales agents, distributors and other third parties that assist in selling our products and services, related contract management, restrictions on cross-border transfers of funds, tax consequences, and regional political and economic instability, all of which could materially and adversely affect our business, results of operations and financial condition.

Previous wording

•We derive a material portion of our revenue from contracts with governmental customers or their contractors and such customers may be subject to reduced spending levels from government budgets.

Current wording

We derive a substantial portion of our revenue from contracts with U.S. governmental customers or their contractors, and such customers may be required to reduce their spending, cancel contracts, initiate audits and investigations, and require unusual or more onerous contractual terms. A substantial portion of our business is driven by government budgets and spending, such as nuclear power plants and medicine, and a substantial portion of our revenue is derived from government customers or their contractors or sub-contractors. Any reduction in the resources or government funding of our customers, including as a result of a government shutdown, the U.S. government's failure to raise the debt ceiling, or other governmental action or order to reduce governmental budgets and spending generally, including in non-U.S. countries, could reduce our sales and impede our ability to generate revenue. Any change in policy regarding capital spending, or reduction, or scrutiny of the capital budgets of U.S. government customers could reduce demand for our solutions and could also result in audits and investigations. In addition, even when our direct customer is not a government entity, we must comply with stringent procurement processes applicable to government contractors and subcontracts, in particular in the United States, European Union and United Kingdom. Furthermore, we have bid, and may in the future submit bids, for government contracts that require government-specific terms such as various levels of security clearances with the Department of Defense or Department of Energy, or that supplies be U.S-made, and similar such measures in other countries, including the European Union and the United Kingdom. Obtaining and maintaining security clearances involves a lengthy process, such clearances may ultimately be denied or revoked and it can also be difficult to identify, recruit and retain employees qualified for security clearances. If the current requirements of the Buy-American Act are revised, it could also impede our ability to sell to the U.S. government. We are subject from time to time to government audits and investigations, and if any such audit or investigation results in an adverse finding to us, we may be subject to financial penalties and debarment or otherwise be unable to continue doing business with the applicable customer. Initiatives to reduce government spending could also drive additional audits and investigations. Failure to secure or retain security clearances, to qualify products as U.S.-made or adverse findings in audits or investigations could result in contract delays, inability to secure new government contracts, contract modification or termination, criminal and civil penalties and fines, and loss of business opportunities, any of which could adversely affect impact our business, results of operations and financial condition.

Previous wording

While we have implemented information security systems and processes to protect against unauthorized access to or use of secured data and to prevent data loss and theft, there is no guarantee that these procedures are adequate to safeguard against all data security breaches or misuse of the data. We have previously been, and may in the future become, the target of cyberattacks by third parties seeking unauthorized access to our information, systems, or infrastructure, or to disrupt our operations. In addition, certain of our confidential information, and information regarding our customers, may be gathered, processed, and stored through, or on, the networks or other systems of third-party vendors or service providers whom we have engaged. While we endeavor to conduct due diligence on those third parties regarding their data security and protection policies and procedures, and the methods they use to safeguard such information, we ultimately do not, and are unable to, manage or control those third parties' efforts to safeguard against data security breaches or misuse of data, or data loss or theft, that may involve our confidential information or the confidential information of our customers. We maintain private liability insurance intended to help mitigate the financial risks of such incidents, but there can be no guarantee that insurance will be sufficient to cover all losses related to such incidents, and our exposure resulting from any serious unauthorized access to, or use of, secured data, or serious data loss or theft, could far exceed the limits of our insurance coverage for such events. Further, a significant compromise of PII or other confidential information could result in regulatory penalties and harm our reputation with our customers and others, potentially resulting in a material adverse effect on our business, results of operations or financial condition.

Current wording

We have, and could continue to experience cyberattacks, intrusions into our systems by unauthorized parties or other data theft or loss, which could cause us to incur significant costs, and could also subject us to litigation, regulatory enforcement actions and damage to our reputation, any one of which could materially and adversely impact our business, reputation, results of operations and financial condition. Our cybersecurity risks are growing due to increasingly aggressive and sophisticated attacks by threat actors, including AI-powered cyberattacks. These include hacking, computer viruses, malicious code, ransomware, social engineering attacks (including phishing and impersonation), denial-of-service attacks and machine learning algorithms and techniques that automate, accelerate or enhance cyberattacks. Our IT systems are subject to constant attempts to gain unauthorized access to, capture, destroy or manipulate confidential information and we have experienced, and may in the future experience, cyberattacks and data breaches. Despite the implementation of information security systems and processes to protect against unauthorized access, data loss and theft (see "Item 1C. Cybersecurity"), there is no guarantee that this governance will be adequate to safeguard against all breaches or misuse of our data and systems. Additionally, certain of our confidential information, and customer data, may be gathered, processed, and stored on third-party networks of vendors or service providers whom we have engaged. While we endeavor to conduct due diligence on those third parties regarding their data security and protection policies and procedures, and the methods they use to safeguard such information, we ultimately do not, and are unable to, control those third parties' efforts to safeguard against data security breaches or misuse of data, or data loss or theft. We maintain private liability insurance intended to help mitigate the financial risks of such incidents, but there can be no guarantee that insurance will be sufficient to cover all losses related to such incidents or available on commercially acceptable terms or at all, and our exposure resulting from any unauthorized access to, or use of our data and systems, could far exceed the limits of our insurance coverage for such events. Any significant data breach or misuse of confidential information may result in significant costs, litigation and regulatory enforcement actions, harm our reputation, and therefore, may have a material adverse impact on our business, reputation, results of operations and financial condition.

Previous wording

We have started to leverage AI in certain of our operations and implemented policies and controls to mitigate many of the novel risks presented by these new technologies. If our employees, customers or business partners do not comply, or are dissatisfied with, our policies and practices related to the use of such technologies we may experience legal, regulatory or reputational liability. Further, new laws and regulations will be adopted in the United States and other jurisdictions to regulate the use of these technologies, the impact and cost of which could be significant.

Current wording

Issues raised by the use of Artificial Intelligence (AI) and machine learning in our operations may subject us to new or heightened legal, regulatory, ethical or other concerns and result in liability or reputational harm. We have started to leverage AI in certain of our operations and implemented policies and controls to mitigate many of the novel risks presented by these new technologies. We face risks related to the incorporation of AI in our operations due to the challenges inherent with properly managing its use. There can be no assurance that our investments in AI will pay off. If our employees, customers or business partners do not comply, or are dissatisfied with, our policies and practices related to the use of such technologies we may experience legal, regulatory or reputational liability. Further, we need to continuously adapt to new laws and regulations such as the European Union's Artificial Intelligence (AI) Act, and others in the United States and other jurisdictions, regulating the use of these technologies, the impact and cost of which could be significant.

Previous wording

The Company's future success depends to a significant degree on the skills, experience and efforts of its executive management team and other key personnel and their ability to provide the Company with uninterrupted leadership and direction. The loss of leadership of any of the executive officers or a failure to provide adequate succession plans for key personnel could have an adverse impact on our business and operations. Further, we believe that the unexpected loss of certain key technical personnel in the future could have a material adverse effect on our business and operations. The inability to attract, develop and retain qualified individuals, or a significant increase in the costs to do so, could have a material adverse effect on our operations.

Current wording

The loss of the services of our key personnel, including our executive officers, and our ability to attract, develop and retain key talent could materially and adversely effect our business and operations. The Company's future success depends to a significant degree on the skills, experience and efforts of its executive management team and other key personnel and their ability to provide the Company with uninterrupted leadership and direction. The loss of leadership of any of the executive officers or a failure to provide adequate succession plans for key personnel could have an adverse impact on our business and operations. The inability to attract, develop and retain qualified individuals, or a significant increase in the costs to do so, could adversely affect our business, results of operations and financial conditions.

Previous wording

If we encounter manufacturing problems, or if our manufacturing facilities do not continue to meet federal, state or foreign manufacturing standards, we may be required to temporarily cease all or part of our manufacturing operations, which would result in delays and lost revenue.

Current wording

If we encounter manufacturing problems, or if our manufacturing facilities do not continue to meet federal, state or international manufacturing standards, we may be required to adapt our manufacturing operations, which would result in delays and lost revenue. Our products require complex manufacturing and assembly involving multiple suppliers and regulatory requirements in different countries, which can face a number of challenges such as limited qualified personnel availability, or higher costs of sourcing components due to trade policy developments. For example, we manufacture whole body monitors exclusively in Ontario, Canada. Any disruption in manufacturing operations at this site due to the higher costs of imported materials and components would be difficult to remediate, in particular it would be difficult to manufacture elsewhere because qualified personnel may not relocate and could not be sourced locally and this could result in production delays, reliance on third parties, and potential negative financial impacts. Additionally, our manufacturing processes are subject to inspections and regulatory requirements, See "Risk Factors—Legal and Regulatory Requirements." Failure to comply could lead to enforcement actions, product recalls, civil or criminal penalties, or other sanctions, penalties, and negative publicity.

Previous wording

Our operations, and the operations of our suppliers, distributors or customers, could be subject to natural and man made disasters, other business disruptions as well as the impact of governmental actions and regulations in response to climate change, any of which could materially and adversely affect our business and increase our expenses.

Current wording

Our operations, and the operations of our suppliers, distributors or customers, could be subject to natural and man made disasters as well as the impact of governmental actions and regulations in response to such events, any of which could materially and adversely affect our business and increase our expenses. Extreme weather events such as winter storms, hurricanes, earthquakes, fires, and tornadoes could disrupt our operations, leading to reduced revenue and increased costs and expenses. For example, some of our facilities are located in areas with earthquake fault lines or in hurricane zones such as our Sun Nuclear factory located in Florida . Depending on the location and severity of such events we could experience business interruptions, destruction of, or damage to, facilities or loss of life, any of which could materially and adversely affect our business, results of operations and financial condition. We could also be required to incur significant costs to report on, and enhance the resiliency of, our operations, infrastructure and supply chain in order to comply with government regulations addressing climate change. For example, the EU's Corporate Sustainability Reporting Directive has resulted, and is likely to continue to result, in an increase to our direct and indirect operational and compliance burdens. These additional expenses will place pressure on profit margins or require us to increase the price of our products and services potentially affecting demand and, consequently, our business, results of operations and financial condition.

Previous wording

Our business is subject to extensive regulation by various federal, state, and local governmental agencies in the United States and all other countries in which we conduct business, including with respect to radioactive material exposure, antitrust, environmental, health and occupational safety, food and drug, medical device and other applicable healthcare and laboratory regulations, import and export controls, and labor and employment regulations. Noncompliance with applicable regulations could subject us to investigations, sanctions, prosecution, enforcement actions, damages, fines, civil and criminal penalties, settlements, injunctions or debarment from government contracting or subcontracting. In addition, from time to time we have received, and may in the future receive, correspondence from former employees who threaten to bring claims against us alleging that we have violated one or more labor or employment regulations. An adverse outcome in any such litigation could require us to pay damages. If we become subject to government enforcement actions, or any governmental sanctions are imposed, or if we do not prevail in any civil or criminal litigation, our business, results of operations and financial condition could be materially and adversely affected. In addition, responding to any action could be costly and result in a significant diversion of management’s attention and resources.We are subject to anti-corruption laws such as the U.S. Foreign Corrupt Practices Act, the U.K. Bribery Act, and other anti-corruption, sanctions, anti-bribery, anti-money laundering and similar laws in the United States and other countries in which we conduct activities. We leverage third parties, including intermediaries, agents and channel partners, to conduct our business in the U.S. and in other countries. Wrongful actions by those third parties may be imputed to the Company and as we increase our international sales and business, our risks under these laws may increase. While we have policies and procedures to address compliance with these laws, we cannot assure you that they will be effective, or that all of our employees, representatives, contractors, and third parties have not taken, or will not take actions, in violation of our policies and applicable law, for which we may be ultimately held responsible.

Current wording

We are subject to extensive laws and regulatory regimes and any failure to comply with them could subject us to penalties and legal expenses which could materially and adversely affect our business, results of operations, revenue, supply chain and financial condition. Our business operations are subject to extensive regulation by various federal, state, and local governmental agencies in the United States and other countries in which we conduct business. These regulations pertain to areas such as radioactive material handling, antitrust, environmental, health and occupational safety, food and drug, medical device and other applicable healthcare and laboratory regulations, import and export controls, and labor and employment regulations. Noncompliance may result in investigations, sanctions, prosecution, enforcement actions by governments or claims from other third parties, damages, fines, civil and criminal penalties, settlements, injunctions or debarment from government contracting or subcontracting. Separately, compliance with anti-corruption laws, including the U.S. Foreign Corrupt Practices Act (FCPA) and the U.K. Bribery Act, is critical as we operate globally including through third parties, agents, or other business partners whose misconduct could be imputed to us. While we

Previous wording

Many of our products are controlled items under export control laws and regulations and we are subject to a variety of import laws, export controls and economic sanctions laws and regulations, including rule changes, and evolving enforcement practices. Changes in import and export control or trade sanctions laws may restrict our business practices and affect our ability to supply our products to various countries and/or to various customers, including cessation of business activities in sanctioned countries or with sanctioned entities, and may result in claims for breach of existing contracts and modifications to existing compliance programs and training schedules. Violations of the applicable export or import control, or economic sanctions laws and regulations, such as an export to an embargoed country, or to a denied party, or the export of a product without the appropriate governmental license, may result in penalties, including fines, debarment from export privileges, and loss of authorizations needed to conduct aspects of our international business, and may harm our ability to enter into contracts with our customers who have contracts with the U.S. government. A violation of the laws and regulations enumerated and the impact of sanctions and export controls imposed against Russia, China or other countries or parties in those countries where we do business could materially and adversely impact our business, results of operations and financial condition. For more information, see “Risks Related to Our Business and Industry—The military conflict between Russia and Ukraine and the sanctions imposed as a result have adversely affected and may further adversely affect our business, results of operations, and financial condition.”

Current wording

Legal compliance with import and export controls, as well as with sanctions, in the United States and other countries, is complex, and compliance restrictions and expenses could materially and adversely impact our revenue and supply chain. Many of our products are subject to complex and continuously evolving trade controls the violations of which can result in penalties, including fines, debarment from export privileges, and the loss of authorizations needed to conduct our business. Trade wars and sanctions and export controls imposed against Russia, China or other countries or specific parties in those countries where we do business could materially and adversely impact our business, results of operations and financial condition. If we become subject to audits, investigations, or other actions with respect to these matters, we could become subject to significant penalties or be prevented from selling our products and services in other countries. For more information, see “Risks Related to Our Business and Industry—The military conflict between Russia and Ukraine and the sanctions imposed as a result have adversely affected and may further adversely affect our business, results of operations, and financial condition.”

Previous wording

Enhanced international tariffs, including tariffs that affect our products or components within our products, other trade barriers or global trade wars or domestic preferences could increase our costs and materially and adversely affect our business, results of operations and financial condition.

Current wording

International tariffs, including tariffs that affect our products or components within our products, other trade barriers or global trade wars or domestic preferences could increase our costs and materially and adversely affect our business, results of operations and financial condition. Our global business could be negatively affected by tariffs, trade barriers and other governmental protectionist measures, any of which can be, and have been imposed unpredictably and without much or any prior notice. There is currently significant uncertainty about the future trade relationships between the United States and various other countries, most significantly Russia, Canada, Mexico, China and the EU. Certain components that we import into the United States from suppliers in such jurisdictions may become subject to enhanced or extraordinary tariffs and such additional tariffs in the near future. Further, the U.S. may impose global reciprocal tariffs on all countries it trades with. The imposition of global additional tariffs could increase our costs and require us to raise prices on our products, which may negatively impact the demand for our products in the affected market. If we are not successful in offsetting the impact of any such added tariffs, our business revenue, gross margins, results of operations and financial condition may be adversely affected.

Previous wording

We are subject from time to time to various claims, disputes, investigations, demands, arbitration, litigation or other legal proceedings which may result in material damages or place restrictions on our business operations and/or divert our management's attention from other business issues and opportunities. Legal matters are inherently uncertain and we cannot predict the duration, scope, cost, outcome or consequences of such matters. Significant adverse judgments, penalties, settlement amounts or defense costs could materially and adversely affect our liquidity and capital resources. It is also possible that, as a result of a present or future governmental or other proceeding or settlement, significant restrictions will be placed upon, or significant changes made to our business practices and operations. Any such restrictions or changes may adversely affect our profitability or increase our compliance costs. The unfavorable resolution of one or more of these matters could have a material and adverse impact on our business, results of operations and financial condition.

Current wording

We are subject to risks related to legal claims and proceedings filed by or against us, and adverse outcomes in these matters may materially harm our business. We are subject from time to time to various claims, disputes, investigations, demands, arbitration, litigation or other legal proceedings which may result in material damages, place restrictions on our business operations or divert our management's attention from other business issues and opportunities. Legal matters are unpredictable and significant adverse judgments, penalties, settlement amounts or defense costs could materially and adversely affect our liquidity and capital resources. It is also possible that, as a result of a present or future governmental or other proceeding or settlement significant restrictions will be placed upon, or significant changes made to our business practices and operations. Any such restrictions or changes may adversely affect our profitability or increase our compliance costs. The unfavorable resolution of one or more of these matters could have a material and adverse impact on our business, results of operations and financial condition.

Previous wording

Many of our products are subject to various domestic and international standards and are subject to product testing. Our customers and partners are required to obtain, and to comply with, federal, state, local and foreign government licenses, permits and approvals with respect to either their facilities or possession and use of radioactive sources or other radioactive materials. Any of these accreditations, qualifications, licenses, permits or other approvals may be subject to denial, revocation or modification under various circumstances. If the requirements to obtain such permits or approvals change, we or our customers or partners may incur substantial costs to adapt our products. We cannot assure you that we or our customers will be able to meet all potential regulatory challenges on a timely or cost-effective basis, or at all, and as such our business, results of operations and financial condition could be materially and adversely affected.

Current wording

We and our customers and partners operate in highly regulated industries that require us and them to obtain, and comply with, federal, state, local and international government permits and approvals. We and our customers operate in a highly regulated environment. Our products must comply with various domestic and international standards, necessitating product testing and requiring compliance with various standards and certifications from agencies such as the National Voluntary Laboratory Accreditation Program and the FDA in the United States and by other governmental agencies in international markets. In addition, our customers and partners are required to obtain, and to comply with, federal, state, local and non-U.S. government licenses, permits and approvals with respect to either their facilities or possession and use of radioactive sources or other radioactive materials. Accreditations, qualifications, licenses, permits or approvals may be denied, revoked or modified due to non-compliance with environmental and safety laws and regulations, permit conditions, local opposition or other governmental action. Changing regulatory requirements could cause us to incur substantial costs or delays if we need to modify our products or cancel customer orders. Failure to meet new regulatory requirements could materially and adversely impact our business, results of operations and financial condition.

Previous wording

Government mandates, standards or regulations intended to reduce greenhouse gas emissions or projected climate change impacts have resulted, and are likely to continue to result, in operational constraints and cause us to incur expenses that will place pressure on margins or that will require us to increase the price of our products and services to the point that it affects demand for those products and services and our business, results of operations and financial condition could be materially and adversely affected.

Current wording

Failure to meeting environmental, social and governance expectations or standards could adversely affect our business, reputation, brand, results of operations and financial condition. Many governments, regulators, investors, employees, customers, and other stakeholders are increasingly focused on the environmental, social and governance performance of companies, including their focus on climate change, greenhouse gas emissions, human and civil rights, diversity, equity and inclusion initiatives, with diverging and sometimes polar opposite goals and objectives. For global companies, this has resulted in the need to navigate expanding and increasingly complex expectations related to reporting, diligence, and disclosure on environmental, social and governance topics. Compliance with conflicting rules could be difficult and costly to implement. Our failure to successfully answer to any such mandates could adversely affect our business, results of operations and financial condition as they may result in operational constraints and cause us to incur expenses that may place pressure on margins or require us to increase the price of our products and services to the point that it affects demand for those products and services.

Previous wording

Our operations and properties are subject to a variety of federal, state, local and foreign environmental, health and safety laws and regulations governing, among other things, air emissions, wastewater discharges, management and disposal of hazardous, non-hazardous and radioactive materials and waste and remediation of releases of hazardous materials. Compliance with environmental requirements could require us to incur significant operating or capital expenditures or result in significant restrictions on our operations. Our failure to comply with these environmental, health and safety laws and regulations, including failing to obtain any necessary permits, could cause us to incur substantial civil or criminal fines or penalties or enforcement actions, including regulatory or judicial orders enjoining or curtailing our operations or requiring us to conduct or fund remedial or corrective measures, install pollution control equipment or perform other actions.

Current wording

We could incur substantial costs as a result of violations of, or liabilities under, environmental laws. Our operations and properties are governed by various environmental, health and safety laws and regulations related to emissions, wastewater discharges, and hazardous materials management, as well as worker health and safety. The European Union (“EU”) has implemented directives on restricting hazardous substances (“RoHS Directive”) and waste electrical and electronic equipment (“WEEE Directive”), with similar laws enacted in China and South Korea. Other countries, including the United States, have implemented or are considering implementing similar laws or regulations. Additionally, the EU's REACH regulation, requires the substitution of certain chemicals contained in our products with substances the EU considers less dangerous. Failure to comply may result in significant civil or criminal fines or penalties or enforcement actions, including regulatory or judicial orders enjoining or curtailing our operations or requiring us to conduct or fund remedial or corrective measures, install pollution control equipment or perform other actions. We have been, and may continue to be, subjected to claims of violations which could lead to costly litigation. Compliance with these and future laws and regulations may involve significant costs potentially adversely impacting our business, results of operations and financial condition.

Previous wording

•Our ability to compete successfully and achieve future growth will depend on our ability to obtain, maintain, protect, defend and enforce our intellectual property and to operate without infringing, misappropriating or otherwise violating the intellectual property of others.

Current wording

Our ability to compete successfully and achieve future growth will depend on our ability to obtain, maintain, protect, defend and enforce our intellectual property and to operate without infringing, misappropriating or otherwise violating the intellectual property of others. Our intellectual property is an essential asset of our business and insufficient protection or invalidation of these rights could significantly affect our business, results of operations and financial condition, including forcing us to, among other things, rebrand or re-design our affected products. Additionally, foreign laws may not adequately protect our intellectual property rights, including due to a lack of adequate remedies and enforcement mechanisms, posing considerable risks as we conduct a substantial portion of our operations and a majority of our sales outside of the United States. Third parties have claimed and may continue to claim that we have infringed upon, misappropriated or misused their proprietary rights. These allegations have led and may continue to lead to litigation, necessitating significant defense costs, even if we are successful. If we are not successful in defending against such claims, we could be required to pay substantial damages, halt the production, use and sale of certain products, invest heavily in developing or acquiring non-infringing technology, cease certain processes, obtain licenses to use the infringed technology or indemnify our customers. Any of these results would materially and adversely affect our business, results of operations and financial condition.

Previous wording

A portion of our products incorporate so-called “open source” software, and we may incorporate additional open source software in the future. If an author or other third party that distributes such open source software were to allege that we had not complied with the conditions of one or more of these licenses, we could be required to incur significant legal expenses defending against such allegations and could be subject to significant damages, enjoined from the sale of our products that contained the open source software and required to comply with the foregoing conditions, which could disrupt the distribution and sale of some of our products and adversely affect our business, results of operations and financial condition.

Current wording

Our use of “open source” software could negatively affect our ability to sell our products and subject us to possible litigation. A portion of our products incorporate so-called “open source” software, and we may incorporate additional open source software in the future. If an author or other third party that distributes such open source software were to allege that we had not complied with the conditions of one or more of these licenses, we could be required to incur significant legal expenses defending against such allegations and could be subject to significant damages, enjoined from the sale of our products that contained the open source software and required to comply with the foregoing conditions, which could disrupt the distribution and sale of some of our products and adversely affect our business, results of operations and financial condition.

Previous wording

We currently have in effect, and may in the future enter into, agreements in which we agree to defend, indemnify and hold harmless our customers or suppliers from damages and costs that may arise from the infringement, misappropriation or other violation by our products of third-party patents, trademarks or other proprietary rights. Litigation related to such obligations could result in significant expense to us and divert the efforts of our technical and management personnel, whether or not such litigation is ultimately determined in our favor. Our insurance does not cover intellectual property infringement. Any of the foregoing could materially and adversely affect our business, results of operations and financial condition.

Current wording

Our obligations to indemnify our customers for the infringement, misappropriation or other violation by our products of the intellectual property rights of others could require us to pay substantial damages and impose other costs and fees. We currently have in effect, and may in the future enter into, agreements in which we agree to defend, indemnify and hold harmless our customers or suppliers from damages and costs that may arise from the infringement, misappropriation or other violation by our products of third-party patents, trademarks or other proprietary rights. Litigation related to such obligations could result in significant expense to us and divert the efforts of our technical and management personnel, whether or not such litigation is ultimately determined in our favor. Our insurance does not cover intellectual property infringement. Any of the foregoing could materially and adversely affect our business, results of operations and financial condition.

Previous wording

Privacy and data security have become significant issues in the United States, Europe and in many other jurisdictions where we conduct our operations. Our collection, processing, distribution, and storage of personal information is subject to a variety of laws and regulations both in the United States and abroad, which could limit the way we market and provide our products and services. Compliance with these privacy and data security requirements is rigorous and time-intensive and may increase our cost of doing business and, despite these efforts, there is a risk that we fail to comply and may become subject to government enforcement actions, fines and penalties, litigation and reputational harm, which could materially and adversely affect our business, results of operations and financial condition. In addition, the regulatory framework for the handling of personal and confidential information is rapidly evolving and is likely to remain uncertain for the foreseeable future as new privacy laws are being enacted globally and existing laws are being updated and strengthened. These regulations include Health Insurance Portability and Accountability Act of 1996 ("HIPAA") for certain medical data in the US, as well as the California Consumer Privacy Act (“CCPA”) and California Privacy Rights Act (“CPRA”). The CPRA also establishes a regulatory agency dedicated to enforcing the CCPA and the CPRA, which is in the process of developing new regulations. Numerous other states have also enacted or are in the process of enacting or considering comprehensive state-level data privacy and security laws, rules and regulations. Moreover, we are required to provide notice under certain circumstances to consumers whose personal information has been disclosed as a result of a data breach. These state statutes, and other similar state or federal laws that may be enacted in the future, may require us to modify our data processing practices and policies, incur substantial compliance-related costs and expenses, and otherwise suffer adverse impacts on our business. Internationally, virtually every jurisdiction in which we operate has established its own data privacy and security legal framework with which we must comply. For example, we are required to comply with the European Union General Data Protection Regulation (“GDPR”). Additionally, following the United Kingdom’s withdrawal from the EU, we also are subject to the U.K. General Data Protection Regulation, a version of the GDPR as implemented into the laws of the U.K.

Current wording

Any actual or perceived failure to comply with data privacy or security laws and regulations could lead to government enforcement actions, private litigation or adverse publicity and could materially and adversely affect our business. Privacy and data security have become significant issues in many jurisdictions where we conduct business. Due to the global nature of our business, our collection, processing, distribution, and storage of personal information is subject to a variety of evolving laws and regulations. Compliance with these existing and new privacy and data security requirements may increase our cost of doing business and, despite these efforts, there is a risk that we fail to comply and may become subject to government enforcement actions, fines and penalties, litigation and reputational harm. In the United States, these regulations include the Health Insurance Portability and Accountability Act of 1996 ("HIPAA") for certain medical data in the US, as well as the California Consumer Privacy Act (“CCPA”) and California Privacy Rights Act (“CPRA”). Internationally, virtually every jurisdiction in which we operate has established its own data privacy and security legal framework with which we must comply including the comprehensive European Union General Data Protection Regulation (“GDPR”), regulations in individual countries in the EU, including France and Germany, and UK GDPR in the United Kingdom. These laws and regulations and others that may be enacted in the future, may require us to modify our data processing practices and policies, incur substantial compliance-related costs and expenses, divert resources from other initiatives and project and otherwise suffer adverse impacts on our business. Further, they may be inconsistent from one jurisdiction to another, subject to differing interpretations and may be interpreted to conflict with our practices. We cannot ensure that our compliance programs and policies will be sufficient to protect us from claims, proceedings, liability or adverse publicity. Although we endeavor to comply with our policies, we may at times fail to do so or be alleged to have failed to do so.

Previous wording

These laws, rules and regulations may be inconsistent from one jurisdiction to another, subject to differing interpretations and may be interpreted to conflict with our practices. Additionally, we may be bound by contractual requirements applicable to our collection, use, processing and disclosure of various types of data, including personal information, and may be bound by, or voluntarily comply with, self-regulatory or other industry standards relating to these matters. Claims that we have violated individuals’ privacy rights, failed to comply with privacy and data security laws, or breached our contractual obligations, even if we are not found liable, could be expensive and time consuming to defend and could result in adverse publicity could increase our operational costs and harm our business, results of operations and financial condition.

Current wording

Additionally, we may be bound by contractual requirements applicable to our collection, use, processing and disclosure of various types of data, including personal information, and may be bound by, or voluntarily comply with, self-regulatory or other industry standards relating to these matters. Claims that we have violated individuals’ privacy rights, failed to comply with privacy and data security laws, or breached our contractual obligations, even if we are not found liable, could be expensive and time consuming to defend and could result in adverse publicity, increase our operational costs and harm our business, results of operations and financial condition.

Previous wording

We do not control our suppliers, customers or partners, or their environmental or other practices. A violation of environmental or other laws by our suppliers, other customers or partners, or an environmental or public health incident at customer locations could create negative publicity and harm our reputation. Any conduct or actions that our suppliers could take could reduce demand for our products, harm our ability to meet demand or harm our reputation, brand image, business, results of operations and financial condition.

Current wording

We do not control our suppliers, customers or business partners, and their actions or omissions could harm our reputation and sales. We do not control our suppliers, customers or partners or their business practices. A violation of environmental or other laws by our suppliers, other customers or partners, or an environmental or public health incident at customer locations could create negative publicity and harm our reputation. Any conduct or actions that our suppliers could take could reduce demand for our products, harm our ability to meet demand or our reputation, brand image, business, results of operations and financial condition.

Previous wording

The majority of our EU employees are members of, or are represented by, works councils or trade unions and are covered by collective bargaining agreements, and in addition a small number of our U.S. employees are presently unionized. In addition, employees who are not currently members of, or otherwise represented by, labor organizations may seek such membership or representation, as applicable, in the future. We may experience related work stoppages or other labor disturbances in the future, including in connection with the renegotiation of collective bargaining agreements as they expire, which could adversely affect our business. Union and works council rules may limit our flexibility to respond to changing market conditions and the application of these rules could harm our business. Additionally, any renegotiation of current collective bargaining agreements may result in terms that are less favorable to us.

Current wording

Portions of our workforce are represented by unions or works councils and are covered by collective bargaining agreements. Labor group representation has led to and may lead in the future to work stoppages that could materially and adversely affect our business. The majority of our EU employees are members of, or are represented by, works councils or trade unions and are covered by collective bargaining agreements, and a small number of our U.S. and U.K. employees are presently unionized. In addition, employees who are not currently members of, or otherwise represented by, labor organizations may seek such membership or representation, as applicable, in the future. We have in the past and may experience in the future work stoppages or other labor disturbances in the future, including in connection with the renegotiation of collective bargaining agreements as they expire, which could adversely affect our business. Union and works council rules may limit our flexibility to respond to changing market conditions and the application of these rules could harm our business, results of operations and financial condition. Additionally, renegotiation of collective bargaining agreements may result in terms that are less favorable to us.

Previous wording

Certain of our products require the use of radioactive sources. In the United States, the Atomic Energy Act of 1954, as amended (“AEA”), comprehensively regulates the manufacture, use and storage of radioactive materials. Section 170 of the AEA, which is known as the Price-Anderson Act, supports the nuclear services industry by offering financial protection through nuclear liability insurance and broad indemnification for third-party public liability claims arising from a nuclear accident occurring at any commercial NPP in the United States. If the nuclear liability and indemnification authority in the United States or other countries is eliminated or adversely modified in the future, our business could be adversely affected if the owners and operators of NPPs cancel or delay plans to build new plants or curtail the operations of existing plants. Although it is unlikely that the nuclear liability financial protection authority under the Price-Anderson Act would be completely abolished, some aspects of the Act could be changed during future reauthorizations.

Current wording

The elimination or any modification of the Price-Anderson Act’s financial protection and indemnification authority could have adverse consequences for our business. The Price-Anderson Act, supports the nuclear services industry by offering financial protection through nuclear liability insurance and broad indemnification for third-party public liability claims arising from a nuclear accident occurring at any commercial NPP in the United States. If the nuclear liability and indemnification authority in the United States or other countries is eliminated or adversely modified in the future, our business could be materially and adversely affected if the owners and operators of NPPs cancel or delay plans to build new plants or curtail the operations of existing plants. Although it is unlikely that the nuclear liability financial protection authority under the Price-Anderson Act would be completely abolished, some aspects of the Act could be changed during future reauthorizations and if the owners and operators of NPPs cancel or delay plans to build new plants or curtail the operations of existing plants as a result of such modifications our business could be adversely affected.

Previous wording

The FDA regulates virtually all aspects of a medical device design, development, testing, manufacturing, labeling, storage, record keeping, adverse event reporting, sale, promotion, distribution and shipping. Additionally, outside of the United States, our products are subject to clearances and approvals by foreign FDA counterparts. In order to market our products internationally, we must obtain licenses or approvals from these governmental agencies, which could include local requirements, safety standards, testing or certifications, and this process can be time consuming, burdensome and uncertain. We can offer no assurance that a particular device or a modification of a device will be approved or cleared by the FDA, or any foreign governmental agency in a timely fashion or at all. Even if we are granted regulatory clearances or approvals, they may include significant limitations on the indicated uses of the product, which may limit the market for those products and how those products can be promoted.

Current wording

Certain of our products are subject to regulation by the FDA or international regulatory bodies as medical devices . If we are not able to obtain or maintain required approvals or registrations or if the timeline for receiving the approvals or registrations were to increase significantly due to staffing shortages we may not be able to continue to market and sell such products and it may make it more difficult for us to attract new customers, retain existing customers or maintain sales at existing levels, which could adversely affect our business. The FDA regulates virtually all aspects of a medical device design, development, testing, manufacturing, labeling, storage, record keeping, adverse event reporting, sale, promotion, distribution and shipping. Additionally, international marketing of these products requires approvals from international counterparts of the FDA, which can be a time consuming and uncertain process. We can offer no assurance that devices or their modifications will be approved or cleared by the FDA or international agencies in a timely manner or at all. Even with regulatory clearances or approvals, significant limitations on the products, indicated uses may be imposed.

Previous wording

We are subject to federal, state, local and international laws and regulations related to healthcare, the violation of which could result in substantial penalties and harm our business in the medical end market.

Current wording

We are subject to federal, state, local and international regulations related to healthcare, the violation of which could result in substantial penalties and harm to our business. Our operations are subject to numerous laws and regulations that affect our interactions with healthcare providers, particularly in sales, marketing and promotional activities. These laws limit financial arrangements with customers, potential customers, marketing consultants and other service providers, impacting how we structure our sales offerings, including discount practices, customer support, product loans, education and training programs, physician consulting, research grants and other service arrangements. Additionally, federal and state “false claims” laws generally prohibit the knowing filing or causing the filing of a false claim, or the knowing use of false statements to obtain payment from government payers. We are also subject to federal and state physician self-referral laws and laws protecting the confidentiality of certain patient health information such as the Health Insurance Portability and Accountability Act (“HIPAA”). Non-compliance with HIPAA can lead to civil and criminal liabilities, adverse publicity, and harm our business and financial condition and impair our ability to attract new customers.

Previous wording

In addition,the Physician Payments Sunshine Act requires each applicable entity, which includes medical device manufacturers, to track and report to the federal government on an annual basis all payments and other transfers of value from such applicable manufacturer to U.S. licensed physicians and teaching hospitals as well as physician ownership of such applicable manufacturer’s equity, in each case subject to certain statutory exceptions. Failure to comply can result in monetary penalties, which could materially impact our financial condition. In addition, we are subject to similar state and foreign laws related to the tracking and reporting of payments and other transfers of value to healthcare professionals, the violation of which could, among other things, result in civil monetary penalties and adversely impact our reputation and business and financial condition.

Current wording

The Physician Payments Sunshine Act requires annual reporting of payments to U.S. licensed physicians and teaching hospitals as well as physician ownership of such applicable manufacturer’s equity, with non-compliance resulting in monetary penalties. Similar state and foreign laws also apply, and violations could lead to civil monetary penalties and adversely impact our reputation and business, results of operations and financial condition.

Previous wording

As of December 31, 2023, we had $694.6 million aggregate principal amount of indebtedness outstanding under our senior secured term loan facility (the “Term Loan Facility”) and there is additional availability under our senior secured revolving facility (the “Revolving Facility” and, together with the Term Loan Facility, the “Credit Facilities”) of up to $90.0 million. In addition, our Credit Facilities bear interest based on variable interest rates which have recently increased and may increase further from time to time in the future. Continued increases in interest rates will increase the cost of servicing our outstanding indebtedness as well incurring new indebtedness and refinancing our outstanding indebtedness, and could materially and adversely affect our business, results of operations and financial condition.

Current wording

Our indebtedness could adversely affect our financial condition. As of December 31, 2024, we had $694.6 million aggregate principal amount of indebtedness outstanding under our senior secured term loan facility (the “Term Loan Facility”) and there is additional availability under our senior secured revolving facility (the “Revolving Facility” and, together with the Term Loan Facility, the “Credit Facilities”) of up to $90.0 million. In addition, our Credit Facilities bear interest based on variable interest rates which have recently increased and may increase further from time to time in the future. Continued increases in interest rates will increase the cost of servicing our outstanding indebtedness as well incurring new indebtedness and refinancing our outstanding indebtedness, and could materially and adversely affect our business, results of operations and financial condition. Our indebtedness could have important consequences to us, such as requiring us to dedicate a significant portion of our cash flows to debt payments, reducing available funds for other needs, increasing vulnerability to economic changes, limiting business flexibility, placing us at a competitive disadvantage, restricting future financing options, and exposing us to variable interest rate risks. If we fail to make scheduled payments on our debt, we risk default, which could lead to lenders terminating their commitments, demanding immediate repayment, or foreclosing on secured assets, potentially resulting in bankruptcy or liquidation.

Previous wording

We may incur additional debt in the future and the terms of the credit agreement governing our Credit Facilities (the “Credit Agreement”) permits us to do so subject to certain limitations. We have the ability to draw upon our $90 million Revolving Facility. We also have the ability to utilize the uncommitted “accordion” under the Credit Facilities (subject to the receipt of commitments and satisfaction of certain other conditions), which permits the incurrence of additional debt if certain incurrence and leverage ratio tests in the Credit Agreement are satisfied, and the Credit Agreement contains other provisions allowing us to incur significant amounts of additional debt. If additional debt is added to the debt that is originally incurred under the Credit Facilities, the related risks could intensify and we may not be able to meet all our respective debt obligations.

Current wording

We may incur additional debt in the future and the credit agreement governing our Credit Facilities (the “Credit Agreement”) permits us to do so subject to certain limitations. We have the ability to draw upon our $90 million Revolving Facility and utilize an uncommitted “accordion” feature for additional debt if certain incurrence and leverage ratio tests are satisfied. If additional debt is incurred, the related risks could increase, making it harder to meet debt obligations.

Previous wording

Additionally, the Credit Agreement contains restrictive covenants that restrict our activities by, among other limitations, limiting our ability to incur additional indebtedness, merge or consolidate with other entities and create liens. The covenants in the Credit Agreement include a certain “First Lien Net Leverage Ratio” (as defined in the Credit Agreement). Our ability to meet this financial ratio could be affected by events beyond our control, and there can be no assurance that we will meet that ratio. The failure to comply with any of the covenants or any other term of the Credit Agreement could cause a default under the Credit Agreement. A default, if not waived, could result in acceleration of the outstanding indebtedness under the Credit Agreement, in which case such indebtedness would become immediately due and payable, and could also cause the acceleration of other indebtedness outstanding at such time. If any default occurs, we may not be able to pay our debt or borrow sufficient funds to refinance it. Even if new financing is available, it may not be available on terms that are acceptable to us. Complying with these covenants may cause us to take actions that we otherwise would not take or not take actions that we otherwise would take.

Current wording

The Credit Agreement imposes restrictive covenants limiting our activities, such as incurring additional debt, merge or consolidate with other entities and creating liens. It includes a “First Lien Net Leverage Ratio” (as defined in the Credit Agreement), that could be affected by uncontrollable events, and failure to comply with any of the covenants or any other term of the Credit Agreement could cause a default. A default could accelerate of the outstanding indebtedness an cause further financial difficulties. Complying with these covenants may cause us to take actions that we otherwise would not take or not take actions that we otherwise would take.

Previous wording

Our international sales and our operations in countries other than the United States expose us to risks associated with fluctuating currency values and exchange rates. A significant amount of our international sales, costs, assets and liabilities are denominated in currencies other than the U.S. dollar. For example, in fiscal 2023, approximately 31% of our sales were denominated in euros, 3% in pounds sterling, 2% in Japanese yen and 2% in Canadian dollars. Gains and losses on the conversion of accounts receivable, accounts payable and other monetary assets and liabilities to U.S. dollars have contributed and may continue to contribute to fluctuations in our results of operations. In addition, continued increases in the value of the U.S. dollar relative to the euro could have an adverse effect on our results of operations. We do not currently purchase forward contracts to hedge against the risks associated with fluctuations in exchange rates.

Current wording

Our international sales and our operations in countries other than the United States expose us to risks associated with fluctuating currency values and exchange rates which may exacerbate if trade wars escalate. A significant amount of our international sales, costs, assets and liabilities are denominated in currencies other than the U.S. dollar. Gains and losses on the conversion of accounts receivable, accounts payable and other monetary assets and liabilities to U.S. dollars have contributed and may continue to contribute to fluctuations in our results of operations. In addition, continued increases in the value of the U.S. dollar relative to the euro could have an adverse effect on our results of operations. We do not currently purchase forward contracts to hedge against the risks associated with fluctuations in exchange rates.