BIOLIFE SOLUTIONS INC
For the period ended Dec 31, 2024. Filed Mar 3, 2025.
View on SEC.govAbout this filing
A company's yearly report to the SEC, with audited financial statements. It is the fullest account a company gives of its business, its finances and the risks it sees.
FY2024 · Filed Mar 3, 2025
BLFS$38.61+3.5%Stored close · as of Oct 5, 2026
What changed in Risk Factors?
Read the current filingPrevious report: 10-K
Period ended 2023-12-31; filed 2024-02-29.
0001628280-24-008061
ITEM 1A. RISK FACTORSCurrent report: 10-K
Period ended 2024-12-31; filed 2025-03-03.
0001628280-25-009511
ITEM 1A. RISK FACTORSThe baseline is this issuer’s latest earlier reporting period of the same form that was filed before the current report. A previous 10-Q is a different quarter, not a year-over-year comparison. Amendments are excluded.
Compared 151 previous paragraphs and 168 current paragraphs.
86 unchanged; 38 reworded; 41 added; 24 removed; 3 previous and 3 current paragraphs rearranged.
Tables are not compared: 0 previous and 0 current tables excluded. Dates, whitespace, punctuation and numbering changes are ignored; changes to financial figures remain significant.
A changed paragraph is not evidence that risk increased or decreased. An unchanged paragraph does not establish that risk stayed the same.
Added paragraphs (41)
Current report
As of December 31, 2024 the net carrying value of our goodwill and other intangible assets totaled $221.9 million. We periodically review our goodwill and the estimated useful lives of our identifiable intangible assets, taking into consideration any events or circumstances that might result in either a diminished fair value, or for intangible assets, a revised useful life. These events and circumstances include significant changes in the business climate, legal factors, operating performance indicators, advances in technology and competition. Any reduction or impairment of value of intangible assets and goodwill will result in a charge against earnings, which could materially adversely affect our results of operations and shareholders’ equity in future periods.
Current report
Our success in implementing our business strategy depends largely on the skills, experience and performance of key members of our executive management team and others in key management positions. The continuing service of our executive management team and other key management positions, together with our ability to attract and retain such management personnel, is critical to our ability to implement our business strategy. There is substantial competition to attract such key management personnel and the loss of one or more of these individuals could have a material adverse effect on our business and operating results.
Current report
While none of our products are subject to FDA regulation, we comply with cGMP requirements and other relevant quality standards to support our current and prospective clinical customers. However, we cannot assure you that our products will not be subject to FDA regulation in the future, and we may develop products in the future that subject us to regulation by the FDA and similar foreign regulatory agencies. The regulations enforced by the FDA and similar foreign regulatory agencies govern a wide variety of product-related activities, including the research, development, testing, manufacture, quality control, approval, clearance, labeling, packaging, storage, record-keeping, promotion, advertising, distribution, marketing, post-approval monitoring and reporting, pricing, and export and import of pharmaceutical products. If we or any of our customers, suppliers or distributors fail to comply with applicable regulatory requirements, we may face, among other things, warning letters; adverse publicity affecting both us and our customers; investigations or notices of non-compliance, fines, injunctions, and civil penalties; import or export restrictions; partial suspensions or total shutdown of production facilities or the imposition of operating restrictions; increased difficulty in obtaining required FDA clearances or approvals or foreign equivalents; seizures or recalls of our products or those of our customers; or the inability to sell our products and services. Any such FDA or other foreign regulatory agency actions could disrupt our business and operations, lead to significant remedial costs and have a material adverse impact on our financial position and results of operations.
Current report
We and our customers are subject to various international governmental regulations. Compliance with or changes in such regulations may cause us to incur significant expenses, and if we fail to maintain satisfactory compliance with certain regulations, we may be forced to recall products and cease their manufacture and distribution, and we could be subject to civil or criminal penalties.
Current report
We and our customers are subject to various significant international, federal, state and local regulations, including but not limited to regulations in the areas of health and safety, employment, labor and immigration, import/export controls, trade restrictions and anti-competition. In addition, as an international organization, we are subject to data privacy and security laws, regulations, and customer-imposed controls in numerous jurisdictions as a result of having access to and processing confidential, personal, or sensitive data in the course of our business. The EU’s General Data Protection Regulation, or GDPR, which became effective in May 2018, applies to our activities related to products and services that we offer to EU customers and workers. The GDPR established new requirements regarding the handling of personal data and includes significant penalties for non-compliance. Other governmental authorities around the world have passed or are considering similar types of legislative and regulatory proposals concerning data protection. Each of these privacy, security and data protection laws and regulations could impose significant limitations and increase our cost of providing our products and services where we process end user personal data and could harm our results of operations and expose us to significant fines, penalties and other damages. We must also comply with complex foreign and U.S. laws and regulations, such as the U.S. Foreign Corrupt Practices Act, the U.K. Bribery Act, and other local laws prohibiting corrupt payments to governmental officials, anti-competition regulations and sanctions imposed by the U.S. Office of Foreign Assets Control and other similar laws and regulations. Violations of these laws and regulations could result in fines and penalties, criminal sanctions, restrictions on our business conduct and on our ability to offer our products in one or more countries, and could also materially affect our brand, our ability to attract and retain employees, our international operations, our business and our operating results. Although we have implemented policies and procedures designed to ensure compliance with these laws and regulations, there can be no assurance that our employees, contractors, or agents will not violate our policies. These regulations are complex, change frequently and have tended to become more stringent over time. We may be required to incur significant expenses to comply with these regulations or to remedy any violations of these regulations.
Current report
Any failure by us to comply with applicable government regulations could also result in the cessation of our operations or portions of our operations, product recalls or impositions of fines and restrictions on our ability to carry on or expand our operations.
Current report
Our business and operations could be negatively affected by securities litigation or stockholder activism, which could impact the trading price and volatility of our common stock and may constrain capital deployment opportunities and adversely impact our ability to expand our business.
Current report
Our business and operations could be negatively affected if we become subject to any securities litigation or from continued stockholder activism, which could cause us to incur significant expenses, hinder the execution of our business and growth strategy, constrain our capital deployment opportunities, and impact the price of our common stock. In the past, following periods of volatility in the market price of a company’s securities, securities class action litigation has often been brought against that company. Stockholder activism, which can take many forms or arise in a variety of situations, has been increasing recently. Volatility in the price of our common stock, our cash balance, our financial performance or other reasons may cause us to become the target of securities litigation or continue to be the target of stockholder activism.
Current report
Securities litigation and stockholder activism, including potential proxy contests, could result in substantial costs and divert management’s and our board of director’s attention and resources from our business. Additionally, such securities litigation and stockholder activism could give rise to perceived uncertainties as to our future, adversely affect our relationships with service providers and make it more difficult to attract and retain qualified personnel. Also, we may be required to incur significant legal fees and other expenses related to any securities litigation and activist stockholder matters. Further, the price of our common stock could be subject to significant fluctuation or otherwise be adversely affected by the events, risks and uncertainties of any securities litigation and stockholder activism. In addition, stockholder activism may constrain our capital deployment opportunities and may limit the types of investments that are available to us.
Current report
•the potential loss of key strategic partners of acquired companies;
Current report
Even if we are able to successfully integrate acquired businesses, we may not be able to realize the revenue and other synergies and growth that we anticipated from the acquisition in the time frame that we expected, and the costs of achieving these benefits may be higher than what we expected. As a result, the acquisition and integration of acquired businesses may not contribute to our earnings as expected and we may not achieve the other anticipated strategic and financial benefits of such transactions.
Current report
We cannot predict the extent to which we might be required to seek licenses or alter our products or services so that they no longer infringe the rights of others. We also cannot guarantee that licenses will be available or the terms of any licenses we may be required to obtain will be reasonable. Similarly, changing our products, services or processes to avoid infringing the rights of others may be costly or impractical and could detract from the value of our products and services. If a judgment of infringement were obtained against us, we could be required to pay substantial damages and a court could issue an order preventing us from selling one or more of our products or offering certain of our services. Further, the cost and diversion of management attention brought about by such litigation could be substantial, even if we were to prevail. Any of these events could result in significant expense to us and may materially harm our business and our prospects.
Current report
Even if we are granted a patent, in certain circumstances we may be unable protect our rights to, or use of, our technology.
Current report
We employ individuals who previously worked with other companies, including our competitors or potential competitors. We may be subject to claims that we or our employees, consultants or independent contractors have inadvertently or otherwise used or disclosed confidential information, including trade secrets or other proprietary information, of former employers or other third parties. We may also be subject to claims that former employers or other third parties have an ownership interest in our patents. Litigation may be necessary to defend against these claims. We may not be successful in defending these claims, and even if we are successful, litigation could result in substantial cost and be a distraction to our management and other employees. Any litigation or the threat thereof may adversely affect our ability to hire employees and we may lose valuable intellectual property rights if we fail in defending any such claims. A loss of key personnel or their work product could diminish or prevent our ability to commercialize our products, which could have an adverse effect on our business, results of operations and financial condition.
Current report
Although we take the security of our network systems and information seriously, there can be no assurance that the security measures we and our associated third parties employ will effectively prevent unauthorized persons from obtaining unauthorized access to our systems and information due to the evolving nature and intensity of cyberattacks and threats to data security, in light of new and sophisticated tools and methods used by criminals and cyberterrorists to penetrate and compromise systems, including computer viruses, malware, ransomware, phishing, misrepresentation, social engineering and forgery, which make it increasingly challenging to anticipate, harder to detect, and more difficult to adequately mitigate these risks. Additionally, threats to our systems and our associated third parties’ systems can derive and have derived from human error, fraud or malice on the part of employees or third parties, or may result from accidental technological failure, including as a result of natural disasters, power failures or other events beyond our control. While we have cyber security insurance, we may incur significant costs in the event of a successful cyber incident against us or in responding to and recovering from a cyber incident that are not covered by, or exceed the limits of, such insurance. Additionally, the cost and operational consequences of implementing, maintaining and enhancing further data or system protection measures could increase significantly to overcome increasingly intense, complex and sophisticated global cyber threats.
Current report
The protection and security of our network systems and our own information, as well as information relating to our employees, customers, suppliers, business partners and others, is vitally important to us. Any failure of us or our associated third parties to maintain the security of our network systems and the proprietary, confidential, and personal data in our possession, including via the penetration of our network security and the misappropriation of proprietary, confidential and personal information, could result in costly investigations and remediation, business disruption, damage to our reputation, financial obligations to third parties, fines, penalties, regulatory proceedings and private litigation with potentially large costs, and also result in deterioration in our employees’, customers’, suppliers’ and business partners’ confidence in us and other competitive disadvantages, and thus could have a material adverse effect on our business, financial condition and results of operations.
Current report
We have not paid dividends on our common stock in the past and do not expect to pay dividends in the foreseeable future. Any return on investment may be limited to the value of our common stock.
Current report
•establish advance notice procedural mechanics and disclosure requirements applicable to stockholder nominations of directors and submissions of proposals regarding other business at stockholder meetings; and
Current report
•provide that any vacancies on our Board resulting from death, resignation, disqualification, removal or other cause or in increase in the authorized number of directors may be filled only by a majority of directors then in office, even though less than a quorum, or by the sole remaining director.
Current report
Our Amended and Restated Bylaws designate the Court of Chancery of the State of Delaware and U.S. federal district courts as the exclusive forums for certain types of actions and proceedings that may be initiated by our stockholders, which limits our stockholders’ ability to choose the judicial forum for disputes with us or our directors, officers, or other employees.
Current report
Our Amended and Restated Bylaws provide that, with certain limited exceptions, any:
Current report
•derivative action, suit or proceeding brought on our behalf;
Current report
•action asserting a claim of breach of a fiduciary duty owed by any of our directors, officers, employees to us or our stockholders;
Current report
•civil action to interpret, apply or enforce any provision of the General Corporation Law of the State of Delaware;
Current report
•civil action to interpret, apply, enforce or determine the validity of the provisions of our Amended and Restated Certificate of Incorporation and Amended and Restated Bylaws; or
Current report
•action asserting a claim governed by the internal affairs doctrine;
Current report
will be exclusively brought in the Court of Chancery of the State of Delaware (or, if the Court of Chancery of the State of Delaware lacks jurisdiction, the sole and exclusive forum for such action shall be another state or federal court located within the State of Delaware).
Current report
Furthermore, unless we consent in writing to the selection of an alternative forum, the federal district courts of the United States of America will be the sole and exclusive forum for the resolution of any complaint asserting a cause of action under the Securities Act.
Current report
The enforceability of similar choice of forum provisions in other companies’ certificates of incorporation or similar governing documents has been challenged in legal proceedings, and it is possible that a court could find the choice of forum provisions contained in our bylaws to be inapplicable or unenforceable, including with respect to claims arising under the U.S. federal securities laws.
Current report
This exclusive forum provision may limit the ability of a stockholder to commence litigation in a forum that the stockholder prefers, or may require a stockholder to incur additional costs in order to commence litigation in Delaware or
Current report
U.S. federal district court, each of which may discourage such lawsuits against us or our directors or officers. Alternatively, if a court were to find this exclusive forum provision inapplicable to, or unenforceable in respect of, one or more of the specified types of actions or proceedings described above, we may incur additional costs associated with resolving such matters in other jurisdictions, which could negatively affect our business, results of operations, and financial condition.
Current report
In the course of making our assessment of the effectiveness of internal control over financial reporting as of December 31, 2024, we identified one material weakness. The material weakness identified was in relation to not maintaining effective internal controls to verify that key inputs for our stock-based awards were entered correctly into the equity system early in 2024, which was attributable to an outdated internal policy with unclear guidance regarding appropriate inputs.
Current report
The extent to which public health crises, including health pandemics and epidemics and other outbreaks, impact our business operations, financial performance and results of operations remains uncertain and will depend on many factors outside our control, including the timing, extent, trajectory and duration of the public health crisis, the emergence of new variants, the development, availability, distribution and effectiveness of vaccines and treatments, and the imposition of protective public safety measures. Additional future impacts on us may include material adverse effects on our manufacturing, supply chain and distribution channels, our ability to execute our strategic plans, and our profitability. The potential effects of public health crises may also impact and potentially heighten many of our other risk factors discussed in this “Risk Factors” section.
Current report
Global climate change and related legal and regulatory developments could negatively affect our business, financial condition and results of operations.
Current report
Climate change presents risks to us and to our customers, with the risks expected to increase over time. Our products and services are subject to and affected by environmental regulation by federal, state, and local authorities in the United States and regulatory authorities with jurisdiction over our international operations. Future regulations or voluntary actions on our part in response to climate change could result in costly changes to our facilities to reduce carbon emissions and could increase energy costs as a result of switching to less carbon-intensive, but more expensive, sources of energy to operate our facilities and to transport and ship products and samples. There can be no assurance that climate change or environmental regulation and response will not have a negative competitive impact on our ability to provide our products or that economic returns will match the investments that we are making in the development of new products and services. We will likely face increasing complexity related to product design, the use of regulated materials, energy consumption and efficiency, and the reuse, recycling, or disposal of products and their components at end-of-use or useful life. There continues to be a lack of consistent climate legislation, which creates economic and regulatory uncertainty regarding future incentives for energy-efficiency and costs of compliance, which may impact the demand for our products and services, our costs associated with providing our products and services, and our results of operations and financial condition. In addition, the potential physical impacts of climate change on our operations are highly uncertain and would be particular to the geographic circumstances in areas in which we operate. These may include changes in global weather patterns, which could include local changes in rainfall and storm patterns and intensities, water shortages, changing sea levels, and changing temperature averages or extremes. These impacts may also adversely affect our properties, our business, financial condition and results of operations.
Current report
Tariffs and other trade policies could have a substantial impact on our business.
Current report
Our business is dependent upon the availability of supplies for our products. U.S. relations with the rest of the world remains uncertain with respect to taxes, trade policies and tariffs, especially under an increasingly volatile political landscape within the U.S. and abroad. Changes in U.S. administrative policy may lead to significant increases in tariffs for imported goods among other possible changes. There have been significant tariffs imposed on imported goods within the U.S. and there are currently indications that future tariffs are likely to be imposed. The imposition of such tariffs may strain international trade relations and increase the risk that foreign governments implement retaliatory tariffs on goods imported from the United States. Similarly, interest rates may continue to rise and create further uncertainty and volatility in the market which would negatively impact our business, financial condition and results of operations. In addition, the potential exists that other countries may impose retaliatory tariffs, which could adversely affect our sales to those countries.
Current report
These political and economic changes could have a material effect on global economic conditions and the stability of financial markets and could significantly reduce global trade. In addition to potential increases on tariffs, wars or conflicts could affect our ability to obtain raw materials. Ongoing and future conflicts and other geopolitical events may result in sanctions or other export controls imposed by the U.S. or United Nations.
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Removed paragraphs (24)
Previous report
We have announced that we intend to divest our Freezer Business. The failure to complete such divestiture on favorable terms or at all, or the pursuit of such divestiture, could adversely affect our businesses, results of operations and financial condition.
Previous report
Subsequent to the second quarter of 2023, we began to actively seek divestment of our Freezer Business to optimize the performance of our product portfolio. Although we are diligently pursuing a sale of the Freezer Business, no potential buyer has yet committed to purchasing the business and we have not yet entered into any agreement for the sale of such business. We may not be successful in selling our Freezer Business in a timely manner, if at all, or may do so on terms that are less favorable than we currently anticipate. If the Freezer Business is not sold as an ongoing business, we may have to liquidate those assets and incur substantial costs to shut down those operations. In addition, we have already recorded impairment charges over the property and equipment and definitive-lived intangible assets of the Freezer Business, as reflected in our consolidated financial statements. See Note 2: Impairment of property and equipment and definite-lived intangible assets, to our consolidated financial statements included in this Annual Report on Form 10-K for more information. If the Freezer Business is sold, it is possible that the net proceeds from the sale could be less than its current carrying value on our books, which would require us to take an additional impairment charge against our earnings in the amount of the difference, which could be significant. Moreover, the announcement and conduct of the divestiture process could cause disruptions in, and create uncertainty surrounding, our Freezer Business, including affecting relationships with its existing and future customers, suppliers and employees, which could have an adverse effect on the Freezer Business’s operations and financial condition, potentially making it more difficult to successfully complete a transaction on favorable terms. The divestiture process may also divert our management’s attention from overseeing and exploring opportunities that may be beneficial to our other businesses and operations. If we are unable to complete a divestiture of our Freezer Business on favorable terms or at all, we may suffer negative publicity, and our business, results of operations, and financial condition may be adversely affected and the price of our common stock may decline.
Previous report
In connection with the accounting for our completed acquisitions in recent years, we recorded a significant amount of intangible assets, including developed technology, in-process research and development, and customer relationships relating to the acquired product lines, and goodwill. As of December 31, 2023, the net carrying value of our goodwill and other intangible assets totaled $245.9 million. Under generally accepted accounting principles in the United States, we must assess, at least annually and potentially more frequently, whether the value of indefinite-lived intangible assets and goodwill have been impaired. Intangible assets and goodwill are assessed for impairment in the event of an impairment indicator, as was the case in the third quarter of 2023 when we began to actively seek divestment of our GCI and CBS freezer product lines (the “Freezer Business”). The announcement, coupled with broader economic uncertainty leading to reductions in spending across the biopharma industry and our customer base constituted interim triggering events that required further analysis with respect to potential impairment to goodwill, indefinite-lived intangibles, and our long-lived asset groups. As a result of the interim quantitative impairment analysis performed, we recorded a $5.8 million non-cash impairment charge over definite-lived intangible assets reflected in our consolidated statements of operations. Any future reduction or impairment of the value of intangible assets and goodwill will result in a charge against earnings, which could materially adversely affect our results of operations and shareholders’ equity in future periods.
Previous report
Our recent acquisitions may result in unexpected consequences to our business and results of operations.
Previous report
Although we believe that our acquired product lines will generally be subject to risks similar to those to which we are subject to in our existing operations, we may not have discovered all risks applicable to these businesses during the due diligence process. Some of these risks could produce unexpected and unwanted consequences for us. Undiscovered risks may result in us incurring financial liabilities, which could be material and have a negative impact on our business operations.
Previous report
We may engage in future acquisitions or other strategic transactions which may require us to seek additional financing or financial commitments, increase our expenses and/or present significant distractions to our management.
Previous report
We continue to actively evaluate opportunities and consider other strategic transactions to grow our portfolio of bioproduction tools and services for the cell and gene therapy and broader biopharma markets. In the event we engage in an acquisition or strategic transaction, including by making an investment in another company, we may need to acquire additional financing. Obtaining financing through the issuance or sale of additional equity and/or debt securities, if possible, may not be at favorable terms and may result in additional dilution to our current stockholders (which in the case of certain of our prior acquisitions were significant). We also may be unable to issue our equity to finance or as consideration for any acquisition if the price of our common stock decreases or is volatile. Additionally, any such transaction may require us to incur non-recurring or other charges, may increase our near and long-term expenditures and may pose significant integration challenges or disrupt our management or business, which could adversely affect our operations and financial results. For example, an acquisition or strategic transaction may entail numerous operational and financial risks, including the risks outlined above and additionally:
Previous report
•exposure to unknown financial or product liabilities;
Previous report
•disruption of our business and diversion of our management's time and attention in order to negotiate and close on such transaction or develop acquired products or technologies;
Previous report
•higher than expected acquisition and integration costs;
Previous report
•write-downs of assets or goodwill or impairment charges;
Previous report
•difficulty and cost in combining the operations and personnel of any acquired businesses with our operations and personnel;
Previous report
Accordingly, any transactions that we complete could have a material adverse effect on our business, results of operations, financial condition, and prospects.
Previous report
•global viruses and pandemics, including COVID-19.
Previous report
None of our products are subject to FDA regulation. In particular, we are not required to sponsor formal prospective, controlled clinical-trials to establish safety and efficacy. A group of isothermal, standard, and carousel LN2 freezers in our freezers and thaw systems product line is currently regulated as Class 2 medical devices in the EU. Additionally, we comply with cGMP requirements and other relevant quality standards. This is done solely to support our current and prospective clinical customers. However, there can be no assurance that we will not be required to obtain approval from the FDA, or foreign regulatory authorities, as applicable, prior to marketing any of our products in the future. Any such requirements could delay or prevent the sale of our products or may subject us to additional expenses.
Previous report
If we fail to protect our intellectual property rights, our competitors may take advantage of our ideas and compete directly against us.
Previous report
If we wish to use the technology claimed in issued and unexpired patents owned by others, we will need to obtain a license from the owner, enter into litigation to challenge the validity or enforceability of the patents or incur the risk of litigation in the event that the owner asserts that we infringed its patents. The failure to obtain a license to technology or the failure to challenge an issued patent that we may require to discover, develop or commercialize our products may have a material adverse effect on us.
Previous report
The techniques used to obtain unauthorized access, disable or degrade service, or sabotage systems change frequently and are often difficult to detect. Threats to our systems and our associated third parties’ systems can derive and have derived from human error, fraud or malice on the part of employees or third parties, or may result from accidental technological failure, including as a result of natural disasters, power failures or other events beyond our control. Computer viruses and other malware can be distributed and have infiltrated, and could in the future infiltrate, our systems or those of our associated third parties. In addition, denial of service or other attacks could be launched against us for a variety of purposes, including to interfere with our services or create a diversion for other malicious activities. Our defensive measures in the past have not, and in the future, may not, prevent downtime, unauthorized access, or use of sensitive data. Further, while we select our associated third parties carefully, and we seek to ensure that our customers adequately protect their systems and data, we do not control their actions and are not able to oversee their processes. Any problems experienced by our associated third parties, including those resulting from breakdowns or other disruptions in the services provided by such parties or cyber-attacks and security breaches, could adversely affect our ability to conduct our business and our financial condition.
Previous report
We could also be subject to liability for claims relating to the loss or misuse of personal information, such as violation of data privacy laws. We cannot provide assurance that the contractual requirements related to security and privacy that we impose on our service providers who have access to our data, including customer information, will be followed or will be adequate to prevent the unauthorized use or disclosure of such data. Any failure to adequately enforce or provide these protective measures or to prevent unauthorized access to our data, including customer information could result in liability, loss of business, protracted and costly litigation, governmental intervention, fines and damage to our reputation.
Previous report
•establish an advance notice procedure for stockholder nominations;
Previous report
In the course of making our assessment of the effectiveness of internal control over financial reporting as of December 31, 2022, we identified several material weaknesses. Material weaknesses were identified in relation to (i) inappropriately designed entity-level controls impacting the control environment, risk assessment, and monitoring activities to prevent or detect material misstatements to the consolidated financial statements attributed to an insufficient number of qualified resources and inadequate oversight and accountability over the performance of controls, ineffective identification and assessment or risks impacting internal control over financial reporting, and ineffective monitoring controls; (ii) information system logical access within certain key financial systems; (iii) accounting policies and procedures and related controls over certain financial statement areas; (iv) inadequate risk assessment, accounting policies, procedures, and related controls performed over the recognition and measurement of indirect tax liabilities.
Previous report
The extent to which public health crises, including health epidemics and other outbreaks, such as COVID-19, impacts our business or results will depend on future developments, which are highly uncertain and cannot be predicted, including new information which may emerge concerning the severity of a particular virus and its variants and the actions to contain it or treat its impact, among others. Such impacts of the COVID-19 pandemic include, among others, the extent of harm to public health, including the duration of the pandemic, any potential subsequent waves of COVID-19 infection, the emergence of new variants of COVID-19, some of which may be more transmissible or virulent than the initial strain, and the availability and distribution of effective vaccines and medical treatments, further disruption to the manufacturing of and demand for our products, our ability to effectively manage inventory levels and adjust our production schedules to align with demand, impairments and other charges, the impact of the global business and economic environment on liquidity and the availability of capital, the costs incurred to keep our employees safe while maintaining continued operations, and our ability to effectively motivate and retain the necessary workforce. Even after the COVID-19 pandemic has subsided, we may continue to experience impacts to our business as a result of its global economic impact. In addition, we cannot at this time quantify or forecast the potential business impact of any future public health crisis. To the extent the COVID-19 pandemic or other public health crisis adversely affects our business, results of operations or financial condition, many of the other risks described in this “Risk Factors” section may also be heightened.
Reworded paragraphs (38)
Previous wording
The life sciences industry is highly competitive and subject to rapid technological change. We anticipate that we will continue to face increased competition as existing companies may choose to develop new or improved products and as new companies enter the market with new technologies, any of which could compete with our products or even render our products obsolete. Many of our competitors are significantly larger than us and have greater financial, technical, research, marketing, sales, distribution and other resources than us and may have longer operating histories. These companies may develop technologies that are superior alternatives to our products or may be more effective at commercializing and marketing their technologies in products. We may need to improve our existing technologies or develop new technologies for our products to remain competitive. Our future success depends on our ability to compete effectively against current technologies, as well as to respond effectively to technological advances by developing and marketing products that are competitive in the continually changing technological landscape. Our competitors may succeed in developing or marketing technologies and products that are more effective or commercially attractive than any that are being developed or marketed by us, or may succeed in obtaining regulatory approval, or introducing or commercializing any such products, prior to us. Such developments could have a material adverse effect on our business, financial condition and results of operations. Also, even if we can compete successfully, we may not continue do so in a profitable manner.
Current wording
Many of our competitors are significantly larger than us and have greater financial, technical, research, marketing, sales, distribution and other resources than us and may have longer operating histories. These companies may develop technologies that are superior alternatives to our products or may be more effective at commercializing and marketing their technologies. There may also be other companies which are currently developing competitive products and services, or which may in the future develop technologies and products that are comparable, superior or less costly than our own. We may need to improve our existing technologies or develop new technologies for our products to remain competitive. Our future success depends on our ability to compete effectively against current technologies, as well as to respond effectively to technological advances by developing and marketing products that are competitive in the continually changing technological landscape. Our competitors may succeed in developing or marketing technologies and products that are more effective or commercially attractive than any that are being developed or marketed by us, or may succeed in obtaining regulatory approval, or introducing or commercializing any such products, prior to us. Such developments could have a material adverse effect on our business, financial condition and results of operations. Also, even if we can compete successfully, we may not continue do so in a profitable manner.
Previous wording
During the years ended December 31, 2023, 2022, and 2021, we derived approximately 16%, 18%, and 17% of our revenue from the same customer, respectively. No other customer accounted for more than 10% of revenue in the years ended December 31, 2023, 2022 and 2021. In the years ended December 31, 2023, 2022, and 2021, we derived approximately 39%, 36%, and 33% of our revenue from CryoStor products, respectively. Additionally, during the years ended December 31, 2023, 2022 and 2021, we derived approximately 19%, 22% and 22% of our revenues from our 780XLE freezers, respectively. Our principal customers may vary from period to period and such customers may not continue to purchase products from us at current levels or at all. Further, the inability of some of our customers to consummate anticipated purchases of our products due to changes in end-user demand, and other unpredictable factors that may affect customer ordering patterns could lead to significant reductions in net product revenue which could harm our business.
Current wording
During the years ended December 31, 2024, 2023, and 2022, we derived approximately 28%, 25%, and 32% of our revenue from two customers, respectively. In the years ended December 31, 2024, 2023, and 2022, we derived approximately 73%, 73%, and 77% of our revenue from CryoStor products, respectively. Our principal customers may vary from period to period and such customers may not continue to purchase products from us at current levels or at all. Further, the inability of some of our customers to consummate anticipated purchases of our products due to changes in end- user demand, and other unpredictable factors that may affect customer ordering patterns could lead to significant reductions in net product revenue which could harm our business.
Previous wording
Our revenue, operating margins and other operating results have varied significantly in the past and may continue to fluctuate from period to period in the future due to a variety of factors, many of which are beyond our control. Factors relating to our business that may contribute to these fluctuations include changes in customer demand, pricing pressures applicable to our products, the length of our sales cycles, supply chain and inventory management, changes in competitive conditions, including the introduction of new products and enhancements by our competitors, among other factors described elsewhere in this Annual Report. In addition, following our acquisitions from 2019 through 2021, we have increased our fixed costs and now sell products having higher costs of product revenue than our biopreservation media products. We expect that the result of these acquisitions and subsequent operational decisions regarding the businesses acquired will make it more difficult to predict our revenue and operating results from period-to-period and that, as a result, comparisons of our results of operations are not currently and will not be for the foreseeable future a good indicator of our future performance. For example, if revenue declines in a quarter, whether due to a delay in recognizing expected revenue, adverse economic conditions, supply chain issues or otherwise, our results of operations in such period will be harmed because many of our expenses are now relatively fixed. In particular, a large portion of our manufacturing costs, research and development expenses, sales and marketing expenses and general and administrative expenses are not significantly affected by variations in revenue. Further, a shift in product revenue concentration away from our CryoStor products and towards other developing products with higher costs of product revenue will adversely affect our operating margin. If our quarterly operating results fail to meet expectations of investors or research analysts, the price of our common stock may decline.
Current wording
Our revenue, operating margins and other operating results have varied significantly in the past and may continue to fluctuate from period to period in the future due to a variety of factors, many of which are beyond our control. Factors relating to our business that may contribute to these fluctuations include, but are not limited to, changes in the timing and terms of product orders and service contracts by our customers as a result of our customer concentration or otherwise, changes in the demand for the mix of products and services that we offer, the timing and market acceptance of our new product and service introductions, delays or problems in the planned introduction of new products or services, or in the performance of any such products following delivery to customers or the quality of such services, new products, services or technological innovations by our competitors, and potential supply chain issues, which can, among other things, render our products and services less competitive due to the rapid technological changes in the markets in which we provide products and services, impact our ability to reduce our costs in response to decreased demand for our products and services, impact our ability to accurately estimate customer demand, including the accuracy of demand forecasts used by us, create disruptions in our manufacturing process or in the supply of components to us, and lead to write-offs for excess or obsolete inventory, competitive pricing pressures, and increased investment into our infrastructure to support our growth, including capital equipment, research and development, as well as selling and marketing initiatives to support continuous product and services innovation, technological capability enhancements and sales efforts, among other factors described elsewhere in this Annual Report. If our quarterly operating results fail to meet expectations of investors or research analysts, the price of our common stock may decline.
Previous wording
If intangible assets and goodwill that we recorded in connection with our acquisitions become impaired, we may have to take significant charges against earnings.
Current wording
If intangible assets and goodwill become impaired, we may have to take significant charges against earnings.
Previous wording
We rely on outside suppliers, including several single-source suppliers, for all our manufacturing supplies, parts and components. There can be no assurance that, in the future, our current or alternative sources for manufacturing supplies will be able to meet all our demands on a timely basis. Unavailability of necessary components could require us to re-engineer our products to accommodate available substitutions, which could increase costs to us and/or have a material adverse effect on manufacturing schedules, products performance and market acceptance. In addition, an uncorrected defect or supplier’s variation in a component or raw material, either unknown to us or incompatible with our manufacturing process, could harm our ability to manufacture products. We might not be able to find a sufficient alternative supplier in a reasonable amount of time, or on commercially reasonable terms, if at all. If we fail to obtain an alternative supplier for the components of our products, our operations could be disrupted.
Current wording
We rely on outside suppliers, including several single-source suppliers, for all our manufacturing supplies, parts and components. Our ability to negotiate favorable terms with those suppliers may be limited, and if those suppliers experience operational, financial, quality, or regulatory difficulties, or if those suppliers and/or their facilities refuse to supply us or cease operations temporarily or permanently, or if those suppliers take unreasonable business positions, we could be forced to cease product manufacturing until the suppliers resume operations, until alternative suppliers could be identified and qualified, or permanently if the suppliers do not resume operations and no alternative suppliers could be identified and qualified. We cannot assure you that, in the future, our current or alternative sources for manufacturing supplies will be able to meet all our demands on a timely basis. Unavailability of necessary components could require us to re-engineer our products to accommodate available substitutions, which could increase costs to us and/or have a material adverse effect on manufacturing schedules, products performance and market acceptance. We might not be able to find a sufficient alternative supplier in a reasonable amount of time, or on commercially reasonable terms, if at all. If we fail to obtain an alternative supplier for the components of our products, our operations could be disrupted.
Previous wording
In order to execute our business plan, we must attract, retain and motivate highly qualified managerial, scientific, manufacturing, and sales personnel. If we fail to attract and retain skilled scientific and sales personnel, our sales efforts will be hindered. Our future success depends to a significant degree upon the continued services of key scientific and technical personnel. If we do not attract and retain qualified personnel, we will not be able to achieve our growth objectives.
Current wording
In addition, a critical factor to our business is our ability to attract and retain essential engineering, scientific, sales and management personnel. Our future success depends to a significant degree upon the continued services of key scientific and technical personnel. We are continually at risk of losing such personnel or being unable to hire additional engineering, scientific, sales and management personnel. If we fail to attract and retain such personnel, our sales efforts will be hindered and we will not be able to achieve our growth objectives.
Previous wording
Our business exposes us to potential product liability risks that are inherent in designing, manufacturing, and marketing our products. In particular, we are a supplier of bioproduction tools to the cell and gene therapy industry. Our products are used in basic and applied research, and commercial manufacturing of biologic-based therapies. Customers use our products to maintain the health and function of biologic material during sourcing, manufacturing, storage, and distribution of cells and tissues, and component failures, manufacturing flaws, design defects or inadequate disclosure of product-related risks with respect to these or other products we manufacture or sell could result in an unsafe condition or injury. As a result, we face an inherent risk of damage to our reputation if one or more of our products are, or are alleged to be, defective. We may be exposed to risks from product liability and warranty claims in the event that our products actually or allegedly fail to perform as expected or the use of our products results, or is alleged to result, in bodily injury and/or property damage. The outcome of litigation, particularly any class-action lawsuits, is difficult to quantify. Plaintiffs often seek recovery of very large or indeterminate amounts, including punitive damages. The magnitude of the potential losses relating to these lawsuits may remain unknown for substantial periods of time and the cost to defend against any such litigation, whether or not we are found liable, may be significant. Accordingly, we could experience product liability losses in the future and incur significant costs to defend these claims. While we maintain product liability insurance coverage, which we deem to be adequate based on historical experience, there can be no assurance that coverage will be available for such risks in the future or that, if available, it would prove sufficient to cover potential claims or that the present amount of insurance can be maintained in force at an acceptable cost to us.
Current wording
As a result, we face an inherent risk of damage to our reputation if one or more of our products are, or are alleged to be, defective. We may be exposed to risks from product liability and warranty claims in the event that our products actually or allegedly fail to perform as expected or the use of our products results, or is alleged to result, in bodily injury and/or property damage. The outcome of litigation, particularly any class-action lawsuits, is difficult to quantify. Plaintiffs often seek recovery of very large or indeterminate amounts, including punitive damages. The magnitude of the potential losses relating to these lawsuits may remain unknown for substantial periods of time and the cost to defend against any such litigation, whether or not we are found liable, may be significant. Accordingly, we could experience product liability losses in the future and incur significant costs to defend these claims. While we maintain product liability insurance coverage, which we deem to be adequate based on historical experience, we cannot assure you that coverage will be available for such risks in the future or that, if available, it would prove sufficient to cover potential claims or that the present amount of insurance can be maintained in force at an acceptable cost to us.
Previous wording
In addition, if any of our products are, or are alleged to be, defective, we may voluntarily participate, or be required by applicable regulators, to participate in a recall of that product if the defect or the alleged defect relates to safety. In the event of a recall, we may experience lost sales and be exposed to individual or class-action litigation claims and reputational risk. Product liability, warranty and recall costs may have a material adverse effect on our business, financial condition and results of operations.
Current wording
In addition, if any of our products are, or are alleged to be, defective, we may voluntarily participate, or be required by applicable regulators, to participate in a recall of that product if the defect or the alleged defect relates to safety. We cannot assure you that we will be successful in initiating appropriate market recall or market withdrawal efforts that may be required in the future or that these efforts will have the intended effect of preventing product malfunctions and the accompanying product liability that may result. In the event of a recall, we may experience lost sales and be exposed to individual or class-action litigation claims and reputational risk. Product liability, warranty and recall costs may have a material adverse effect on our business, financial condition and results of operations.
Previous wording
We currently manufacture all of our biopreservation media products, freezer products and related components. We currently outsource the manufacturing of certain thaw products, certain cold chain products, two ULT freezer models, and components of our LN2 freezers. The manufacturing of our products is difficult and complex. To support our current and prospective clinical customers, we comply with, and intend to continue to comply with, cGMP in the manufacture of our products. Our ability to adequately manufacture and supply our products in a timely matter is dependent on the uninterrupted and efficient operation of our facilities and those of third parties manufacturing certain of our products or producing raw materials and supplies upon which we rely in our manufacturing. The manufacture of our products may be impacted by:
Current wording
We currently manufacture all of our biopreservation media products and other related components. We currently outsource the manufacturing of certain thaw products, and certain cold chain products. Manufacturing our products is difficult and complex. To support our current and prospective clinical customers, we and our outsources manufacturers comply with, and intend to continue to comply with, cGMP in the manufacture of our products. Our ability to adequately manufacture and supply our products in a timely matter is dependent on the uninterrupted and efficient operation of our facilities and those of third parties manufacturing certain of our products or producing raw materials and supplies upon which we rely in our manufacturing. Manufacturing our products may be impacted by:
Previous wording
If efficient manufacture and supply of our products is interrupted, we may experience delayed shipments or supply constraints. If we are at any time unable to provide an uninterrupted supply of our products to customers, our customers may be unable to supply their end-products incorporating our products to their patients and other customers, which could materially and adversely affect our product revenue and results of operations. In addition, if we are unable to procure a component from one of our outside manufacturers, we may be required to enter into arrangements with one or more alternative manufacturing companies, which may cause delays in producing components or result in significant increase in expenses.
Current wording
If efficient manufacturing and supply of our products is interrupted, we may experience delayed shipments or supply constraints. If we are at any time unable to provide an uninterrupted supply of our products to customers, our customers may be unable to supply their end-products incorporating our products to their patients and other customers, which could materially and adversely affect our product revenue and results of operations. In addition, if we are unable to procure a component from one of our outside manufacturers, we may be required to enter into arrangements with one or more alternative manufacturing companies, which may cause delays in producing components or result in significant increase in expenses.
Previous wording
While we are not currently subject to FDA or other regulatory approvals on substantially all of our products, if our products become subject to regulatory requirements, the manufacture and sale of our products may be delayed or prevented, or we may become subject to increased expenses.
Current wording
While we are not currently subject to FDA or other regulatory approvals, if our products become subject to regulatory requirements, the manufacture and sale of our products may be delayed or prevented, or we may become subject to increased expenses.
Previous wording
The efforts of governmental and third-party payors to contain or reduce the costs of healthcare and, more generally, to reform the U.S. healthcare system may adversely affect the business and financial condition of pharmaceutical and biotechnology companies, including ours. Specifically, in both the United States and some foreign jurisdictions, there have been a number of legislative and regulatory proposals to change the healthcare system in ways that could affect our ability to sell our products profitably, including by limiting the prices we are able to charge for our products, the amounts of reimbursement available for our products or the acceptance and availability of our products. Efforts by governments and other third-party payors to contain or reduce the costs of healthcare through various means may limit our commercial opportunities and adversely affect our operating results and result in a decrease in the price of our common stock or limit our ability to raise capital.
Current wording
In response to perceived increases in healthcare costs in recent years, the efforts of governmental and third-party payors to contain or reduce the costs of healthcare and, more generally, to reform the U.S. healthcare system may adversely affect the business and financial condition of pharmaceutical and biotechnology companies, including ours. Specifically, in both the United States and some foreign jurisdictions, there have been a number of legislative and regulatory proposals to change the healthcare system in ways that could affect our ability to sell our products profitably, including by limiting the prices we are able to charge for our products, the amounts of reimbursement available for our products or the acceptance and availability of our products. Efforts by governments and other third-party payors to contain or reduce the costs of healthcare through various means may limit our commercial opportunities and adversely affect our operating results and result in a decrease in the price of our common stock or limit our ability to raise capital. We anticipate additional uncertainty as debates about healthcare and public health continue.
Previous wording
While we currently maintain product liability insurance, directors’ and officers’ liability insurance, general liability insurance, and other types of insurance, first- and third-party insurance is increasingly more costly and narrower in scope, and we may be required to assume more risk in the future. If we are subject to third-party claims or suffer a loss or damage in excess of our insurance coverage, we may be required to share that risk in excess of our insurance limits. Furthermore, any first- or third-party claims made on our insurance policies may impact our future ability to obtain or maintain product liability insurance coverage at reasonable costs, if at all.
Current wording
While we currently maintain product liability insurance, directors’ and officers’ liability insurance, general liability insurance, and other types of insurance, first- and third-party insurance is increasingly more difficult to obtain and maintain and has become more costly and narrower in scope, and we may be required to assume more risk in the future. We cannot predict the magnitude of potential liabilities and claims that may be made against us which could exceed the limits of these policies. Additionally, our insurance coverage may not protect us against all liability because our policies typically have various exceptions to the claims covered and also require us to assume some costs of the claim even though a portion of the claim may be covered. If we are subject to third-party claims or suffer a loss or damage in excess of our insurance coverage, we may be required to share that risk in excess of our insurance limits. A partially or completely uninsured claim, if successful and of significant magnitude, could have a material adverse effect on our business, financial condition and results of operations. Furthermore, any first- or third-party claims made on our insurance policies may impact our future ability to obtain or maintain product liability insurance coverage at reasonable costs, if at all.
Previous wording
As a part of our growth strategy, we have made, and may continue to make, selected acquisitions of complementary products and/or businesses. Any acquisition involves numerous risks and operational, financial, and managerial challenges, including the following, any of which could adversely affect our business, financial condition, or results of operations:
Current wording
From time to time, potential acquisition opportunities may become available to us, and we may periodically engage in discussions or negotiations relating to potential acquisitions, including acquisitions that may be material in size or scope to our business. As a part of our growth strategy, we have made, and may continue to make, selected acquisitions of other companies and technologies and continue to evaluate expansion through acquisitions of other companies or technologies, which may carry numerous risks and operational, financial, and managerial challenges, including, but not limited to, the following, any of which could adversely affect our business, financial condition, or results of operations:
Previous wording
In addition, the successful integration of acquired businesses requires significant efforts and expense across all operational areas, including sales and marketing, research and development, manufacturing, finance, legal, and information technologies. Our acquisitions we may not be successful or may not be, or remain, profitable. Our failure to successfully address the foregoing risks may prevent us from achieving the anticipated benefits from any acquisition in a reasonable time frame, or at all.
Current wording
Additionally, the successful integration of acquired businesses requires significant efforts and expense across all operational areas, including sales and marketing, research and development, manufacturing, finance, legal, and information technologies. Acquisitions and strategic investments and alliances may require us to integrate and collaborate with a different company culture, management team, business model, business infrastructure and sales and distribution methodology, and assimilate and retain geographically dispersed, decentralized operations and personnel. Depending on the size and complexity of an acquisition, our successful integration of the entity depends on a variety of factors, including introducing new or modified products and meeting revenue targets as expected, the retention of key employees and key customers, increased exposure to certain governmental regulations and compliance requirements and increased costs and use of resources. The integration of acquired businesses is also likely to result in our systems and internal controls becoming increasingly complex and more difficult to manage. Any difficulties in the assimilation of acquired businesses into our control system could harm our operating results or cause us to fail to meet our financial reporting obligations. We are unable to guarantee the success of any acquisitions that we complete and such acquisitions may not be, or remain, profitable. Our failure to successfully address the foregoing integration risks may prevent us from achieving the anticipated benefits from any acquisition in a reasonable time frame, or at all.
Previous wording
Our commercial success will depend on our ability to obtain patents and/or regulatory exclusivity and maintain adequate protection for our technologies and products in the United States and other countries. We will be able to protect our proprietary rights from unauthorized use by third-parties only to the extent that our proprietary technologies and products are covered by valid and enforceable patents or are effectively maintained as trade secrets.
Current wording
Our technology is critical to the implementation of our business plan, and we are dependent on our patent rights and other intellectual property rights to maintain our competitive position. Our policy is to seek to protect our proprietary position and our commercial success will depend on our ability to obtain patents and/or regulatory exclusivity and maintain adequate protection for our technologies and products in the United States and other countries. We will be able to protect our proprietary rights from unauthorized use by third-parties only to the extent that our proprietary technologies and products are covered by valid and enforceable patents or are effectively maintained as trade secrets.
Previous wording
Our success will depend to a significant degree on our ability to secure and protect intellectual property rights and enforce patent and trademark protections relating to our technology. While we believe that the protection of patents and trademarks is important to our business, we also rely on a combination of copyright, trade secret, nondisclosure and confidentiality agreements, know-how and continuing technological innovation to maintain our competitive position. From time to time, litigation may be advisable to protect our intellectual property position. However, these legal means afford only limited protection and may not adequately protect our rights or permit us to gain or keep any competitive advantage. Any litigation in this regard could be costly, and it is possible that we will not have sufficient resources to fully pursue litigation or to protect our intellectual property rights. This could result in the rejection or invalidation of our existing and future patents. Any adverse outcome in litigation relating to the validity of our patents, or any failure to pursue litigation or otherwise to protect our patent position, could materially harm our business and financial condition. In addition, confidentiality agreements with our employees, consultants, customers, and key vendors may not prevent the unauthorized disclosure or use of our technology. It is possible that these agreements will be breached or that they will not be enforceable in every instance, and that we will not have adequate remedies for any such breach. Enforcement of these agreements may be costly and time consuming.
Current wording
Our success will depend to a significant degree on our ability to secure and protect intellectual property rights and enforce patent and trademark protections relating to our technology. While we believe that the protection of patents and trademarks is important to our business, we also rely on a combination of copyright, trade secret, nondisclosure and confidentiality agreements, know-how and continuing technological innovation to maintain our competitive position. From time to time, litigation may be advisable to protect our intellectual property position. However, these legal means afford only limited protection and may not adequately protect our rights or permit us to gain or keep any competitive advantage. If we choose to go to court to stop someone else from using the inventions claimed in our patents or our licensed patents, that individual or company has the right to ask the court to rule that these patents are invalid and/or should not be enforced against that third party. These lawsuits are expensive and would consume time and other resources even if we were successful in stopping the infringement of these patents. In addition, there is a risk that the court will decide that these patents are invalid or unenforceable and that we do not have the right to stop the other party from using the inventions. There is also the risk that, even if the validity or enforceability of these patents is upheld, the court will refuse to stop the other party on the grounds that such other party’s activities do not infringe our rights. Any adverse outcome in litigation relating to the validity of our patents, or any failure to pursue litigation or otherwise to protect our patent position, could materially harm our business and financial condition. In addition, confidentiality agreements with our employees, consultants, customers, and key vendors may not prevent the unauthorized disclosure or use of our technology. It is possible that these agreements will be breached or that they will not be enforceable in every instance, and that we will not have adequate remedies for any such breach.
Previous wording
Our inability to protect our systems and data from continually evolving cybersecurity risks or other technological risks, including as a result of breaches of our associated third parties' information technology systems, could affect our ability to conduct our business.
Current wording
Our inability to protect our information systems and networks and the proprietary and confidential information in our possession from continually evolving cybersecurity risks or other technological risks, including as a result of breaches of our associated third parties' information technology systems, could materially adversely impact our business, financial condition and results of operations, in addition to our reputation and relationships with our employees, customers, suppliers and business partners.
Previous wording
In conducting our business, we process, transmit and store sensitive, proprietary and confidential information about our employees, customers, vendors, and other parties, including business and personal information. This information may include account access credentials, credit and debit card numbers, bank account numbers, social security numbers, driver’s license numbers, names and addresses and other types of sensitive business or personal information. Some of this information is also processed and stored by our third-party service providers to whom we outsource certain functions and other agents, including our customers, which we refer to collectively as our associated third parties.
Current wording
In conducting our business, we collect, process, transmit and store sensitive, proprietary and confidential information about our employees, customers, vendors, and other parties, including business and personal information, which may be entitled to protection under a number of regulatory regimes. This information may, include, but is not limited to, account access credentials, credit and debit card numbers, bank account numbers, social security numbers, driver’s license numbers, names and addresses and other types of sensitive business or personal information. Some of this information is also processed and stored by our third-party service providers to whom we outsource certain functions and other agents, including our customers, which we refer to collectively as our associated third parties.
Previous wording
We are a regular target of malicious third-party attempts, some of which have been successful, to identify and exploit system vulnerabilities and/or penetrate or bypass our security measures in order to gain unauthorized access to our networks and systems or those of our associated third parties. Such access has led and could lead in the future to the compromise of sensitive, business, personal or confidential information or instructions to transfer funds by us or customers to unauthorized recipients. In the third quarter during the year ended December 31, 2022, we experienced an immaterial security breach that successfully redirected payments from BioLife customers to unauthorized bank accounts. As a result, we proactively employ multiple methods at different layers of our systems to defend our systems against intrusion and attack and to protect the data we collect. These measures have been breached in the past, and we cannot be certain that they will be successful and sufficient to counter current and emerging technology threats that are designed to breach our systems in order to gain access to confidential information.
Current wording
The frequency, intensity, and sophistication of cyberattacks and data security incidents has significantly increased in recent years and is constant. We are continually subject to cyberattacks and the risk of data security incidents, some of which have been successful. Such incidents include malicious third party attempts to identify and exploit system vulnerabilities and/or penetrate or bypass our security measures in order to gain unauthorized access to our networks and systems or those of our associated third parties. Such access has led and could lead in the future to the compromise of sensitive, business, personal or confidential information or instructions to transfer funds by us or customers to unauthorized recipients. In the third quarter during the year ended December 31, 2022, we experienced an immaterial security breach that successfully redirected payments from our customers to unauthorized bank accounts. As a result, we proactively employ multiple methods at different layers of our systems to defend our systems against intrusion and attack and to protect the data we collect. These measures have been breached in the past, and we cannot be certain that they will be successful and sufficient to counter current and emerging technology threats that are designed to breach our systems in order to gain access to confidential information. Further, while we select our associated third parties carefully, and we seek to ensure that our customers adequately protect their systems and data, we do not control their actions and are not able to oversee their processes. Any problems experienced by our associated third parties, including those resulting from breakdowns or other disruptions in the services provided by such parties or cyber-attacks and security breaches, could adversely affect our ability to conduct our business and our financial condition.
Previous wording
The trading price and volume of our common stock, traded on the NASDAQ Capital Market ("NASDAQ"), has been, and may in the future be, volatile. For example, in the year ended December 31, 2023, the highest intra-day sale price of our common stock on NASDAQ was $26.89 per share and the lowest intra-day sale price of our common stock on NASDAQ was $8.92 per share. Our highest trading day volume was 2,242,100 shares traded and the lowest trading day volume was 138,500 shares traded. We may continue to incur substantial increases or decreases in our stock price and volume in the foreseeable future.
Current wording
The trading price and volume of our common stock, traded on the NASDAQ Capital Market, or NASDAQ, has been highly volatile and could fluctuate widely in price in response to various factors, many of which are beyond our control. In addition, the securities markets have from time-to-time experienced significant price and volume fluctuations that are unrelated to the operating performance of companies. These market fluctuations may also materially and adversely affect the market price of our common stock. For example, in the year ended December 31, 2024, the highest intra-day sale price of our common stock on NASDAQ was $28.88 per share and the lowest intra-day sale price of our common stock on NASDAQ was $14.50 per share. Our highest trading day volume was 1,692,900 shares traded and the lowest trading day volume was 106,600 shares traded. We may continue to incur substantial increases or decreases in our stock price and volume in the foreseeable future.
Previous wording
•Changes in our product offerings and business structure through acquisitions or divestitures;
Current wording
•Changes in our product offerings and business structure through acquisitions or divestitures, and public perception of our announced acquisitions and divestitures;
Current wording
•General trends in the health care and biotechnology industries;
Previous wording
•Global viruses, epidemics, and pandemics, including COVID-19; and
Previous wording
As of December 31, 2023, based on our review of public filings and the Company’s records, one of our existing stockholders, Casdin Capital, LLC (“Casdin”), owned 8,707,165 shares of our common stock, representing 19.3% of the issued and outstanding shares of common stock. Accordingly, this stockholder has had, and will continue to have, significant influence in determining the outcome of any corporate transaction or other matter submitted to our stockholders for approval, including mergers, consolidations and the sale of all or substantially all our assets, election of directors and other significant corporate actions. In addition, without the consent of this stockholder where a stockholder vote may be necessary, we could be prevented from entering into transactions that could be beneficial to us.
Current wording
As of December 31, 2024, based on our review of public filings and our records, one of our existing stockholders, Casdin Capital, LLC owned 8,707,165 shares of our common stock, representing 18.6% of the issued and outstanding shares of common stock. Accordingly, this stockholder has had, and will continue to have, significant influence in determining the outcome of any corporate transaction or other matter submitted to our stockholders for approval, including mergers, consolidations and the sale of all or substantially all our assets, election of directors and other significant corporate actions. In addition, without the consent of this stockholder where a stockholder vote may be necessary, we could be prevented from entering into transactions that could be beneficial to us.
Previous wording
We do not anticipate declaring any cash dividends on our common stock.
Current wording
We have never paid cash dividends on our common stock and do not anticipate paying cash dividends in the foreseeable future. Any future determination to pay dividends will be at the discretion of our board of directors (the "Board"), subject to compliance with covenants in current and future agreements governing our indebtedness, and will depend on our results of operations, financial condition, capital requirements, contractual arrangements and other factors that our Board deems relevant. Our current policy is to retain all funds and earnings for use in the operation and expansion of our business.
Previous wording
Anti-takeover provisions in our Amended and Restated Certificate of Incorporation and Amended and Restated Bylaws and under Delaware law could make an acquisition of us, which may be beneficial to our stockholders, more difficult and may prevent attempts by our stockholders to replace or remove our current management and limit the market price of our common stock.
Current wording
Certain provisions in our Amended and Restated Certificate of Incorporation and Amended and Restated Bylaws and under Delaware law could make an acquisition of us, which may be beneficial to our stockholders, more difficult and may prevent attempts by our stockholders to replace or remove our current management.
Previous wording
Provisions in our Amended and Restated Certificate of Incorporation and Amended and Restated Bylaws may have the effect of delaying or preventing a change of control or changes in our management, including provisions that:
Current wording
Certain provisions in our Amended and Restated Certificate of Incorporation and Amended and Restated Bylaws may have the effect of delaying or preventing a change of control or changes in our management, including, among other things, provisions that:
Previous wording
•authorize our board of directors to issue, without further action by the stockholders, undesignated preferred stock;
Current wording
•authorize our Board to issue, without further action by the stockholders, shares of preferred stock and to determine the price and other terms, including preferences and voting rights;
Previous wording
•allow stockholders to require us to call a special meeting of stockholders upon written request of the holders of 35% of the outstanding shares entitled to vote thereat;
Current wording
•restrict the ability of our stockholders to call a special meeting of stockholders except upon written request of the holders of 35% of the outstanding shares entitled to vote thereat;
Previous wording
These provisions may frustrate or prevent any attempts by our stockholders to replace or remove our current management by making it more difficult for stockholders to replace members of our board of directors, which is responsible for appointing the members of our management. In addition, because we are incorporated in Delaware, we are governed by the provisions of Section 203 of the Delaware General Corporation Law, which limits the ability of stockholders owning in excess of 15% of our outstanding voting stock to merge or combine with us.
Current wording
As a Delaware corporation, we are also subject to certain Delaware anti-takeover provisions. Under Delaware law, a corporation may not engage in a business combination with any holder of 15% or more of its capital stock unless the holder has held the stock for three years or, among other things, the Board has approved the transaction. Our Board could rely on Delaware law to prevent or delay an acquisition of us. These provisions may frustrate or prevent any attempts by our stockholders to replace or remove our current management by making it more difficult for stockholders to replace members of our Board, which is responsible for appointing the members of our management.
Previous wording
To address our material weaknesses, we have developed and begun to implement the remediation plans described in Item 9A — Controls and Procedures and elsewhere in this Form 10-K. However, elements of our remediation plans can only be accomplished over time and we can offer no assurance that these initiatives will ultimately have the intended effects. Any failure to establish and maintain effective internal control over financial reporting and disclosure controls and procedures could adversely impact our ability to report our financial results on a timely and accurate basis. If our financial statements are not accurate, investors may not have a complete understanding of our operations or may lose confidence in our reported financial information. Likewise, if our financial statements are not filed on a timely basis as required by the SEC and The NASDAQ Stock Market LLC, we could face severe consequences from those authorities. In either case, it could result in a material adverse effect on our business or have a negative effect on the trading price of our common stock. Further, if we fail to remedy these deficiencies (or any other future deficiencies) or maintain the adequacy of our internal control over financial reporting and disclosure controls and procedures, we could be subject to regulatory scrutiny, civil or criminal penalties or shareholder litigation. We can give no assurance that the measures we have taken and plan to take in the future will remediate the material weaknesses identified or that any additional material weaknesses or restatements of our financial statements will not arise in the future due to a failure to implement and maintain adequate internal control over financial reporting or disclosure controls and procedures.
Current wording
To address our material weaknesses, we have developed and begun to implement the remediation plans described in Item 9A — Controls and Procedures in this Form 10-K. However, elements of our remediation plans can only be accomplished over time and we can offer no assurance that these initiatives will ultimately have the intended effects. Any failure to establish and maintain effective internal control over financial reporting and disclosure controls and procedures could adversely impact our ability to report our financial results on a timely and accurate basis. If our financial statements are not accurate, investors may not have a complete understanding of our operations or may lose confidence in our reported financial information. Likewise, if our financial statements are not filed on a timely basis as required by the SEC and The NASDAQ Stock Market LLC, we could face severe consequences from those authorities. In either case, it could result in a material adverse effect on our business or have a negative effect on the trading price of our common stock. Further, if we fail to remedy these deficiencies (or any other future deficiencies) or maintain the adequacy of our internal control over financial reporting and disclosure controls and procedures, we could be subject to regulatory scrutiny, civil or criminal penalties or shareholder litigation. We can give no assurance that the measures we have taken and plan to take in the future will remediate the material weaknesses identified or that any additional material weaknesses or restatements of our financial statements will not arise in the future due to a failure to implement and maintain adequate internal control over financial reporting or disclosure controls and procedures.
Previous wording
Section 382 and 383 of the Internal Revenue Code of 1986, as amended, contain rules that limit the ability of a company that undergoes an ownership change, which is generally any change in ownership of more than 50% of its stock over a three-year period, to utilize its net operating loss and tax credit carryforwards and certain built-in losses recognized in years after the ownership change. These rules generally operate by focusing on ownership changes involving stockholders owning directly or indirectly 5% or more of the stock of a company and any change in ownership arising from a new issuance of stock by the company. Generally, if an ownership change occurs, the yearly taxable income limitation on the use of net operating loss and tax credit carryforwards and certain built-in losses is equal to the product of the applicable long-term, tax-exempt rate and the value of the company’s stock immediately before the ownership change. We may be unable to offset our taxable income with losses, or our tax liability with credits, before such losses and credits expire and therefore would incur larger federal income tax liability.
Current wording
Section 382 and 383 of the Internal Revenue Code of 1986, as amended, contain rules that limit the ability of a company that undergoes an ownership change, which is generally any change in ownership of more than 50% of its stock over a three-year period, to utilize its net operating loss and tax credit carryforwards and certain built-in losses recognized in years after the ownership change. These rules generally operate by focusing on ownership changes involving stockholders owning directly or indirectly 5% or more of the stock of a company and any change in ownership arising from a new issuance of stock by us. Generally, if an ownership change occurs, the yearly taxable income limitation on the use of net operating loss and tax credit carryforwards and certain built-in losses is equal to the product of the applicable long-term, tax-exempt rate and the value of our stock immediately before the ownership change. We may be unable to offset our taxable income with losses, or our tax liability with credits, before such losses and credits expire and therefore would incur larger federal income tax liability.
Previous wording
Public health crises, such as the COVID-19 pandemic, have adversely affected, and could in the future adversely affect, our business, financial condition. results of operations and cash flows.
Current wording
Public health crises have adversely affected, and could in the future adversely affect, our business, financial condition. results of operations and cash flows.
Previous wording
We are subject to risks associated with public heath crises, including those related to the COVID-19 global pandemic. The COVID-19 pandemic has created significant volatility, uncertainty, and economic disruption, which has had, and may continue to have, an adverse effect our business operations, results of operations, cash flows and financial condition. Other future public health crises may also have a negative impact on our business.
Current wording
We are subject to risks associated with public heath crises, including those related to pandemics and epidemics. The occurrence of such public health risks could materially affect our business, financial condition, results of operations and cash flows, including due to negative impacts to the global economy, disruptions to global supply chains and workforce participation, and volatility and disruption of financial markets. For example, the COVID-19 pandemic created significant volatility, uncertainty, and economic disruption, which had an adverse effect on our business operations, results of operations, cash flows and financial condition.
Previous wording
In particular, the financial or operational impacts as a result of COVID-19 or other future public health crises have included, and may in the future include:
Current wording
In particular, the financial or operational impacts as a result of public health crises have included, and may in the future include:
Previous wording
•Unavailability of supplies and other components for our products, including difficulties in obtaining sheet metal and electrical components incorporating semiconductor chips for the manufacture of our UL freezer products, which have largely abated during the year ended December 31, 2023;
Current wording
•Unavailability of supplies and other components for our products;
Previous wording
We are subject to the risk of disruption by earthquakes, floods and other natural disasters, fire, power shortages, geopolitical unrest, war, terrorist attacks and other hostile acts, public health issues, epidemics or pandemics and other events beyond our control and the control of the third parties on which we depend. Any of these catastrophic events, whether in the United States or abroad, may have a strong negative impact on the global economy, our employees, facilities, partners, suppliers, distributors or customers, and could decrease demand for our products, create delays and inefficiencies in our supply chain and make it difficult or impossible for us to deliver products to our customers. A catastrophic event that results in the destruction or disruption of our data centers or our critical business or information technology systems would severely affect our ability to conduct normal business operations and, as a result, our operating results would be adversely affected.
Current wording
We are subject to the risk of disruption by earthquakes, floods and other natural disasters, fire, power shortages, geopolitical unrest, war, terrorist attacks and other hostile acts and other events beyond our control and the control of the third parties on which we depend. Any of these catastrophic events, whether in the United States or abroad, may have a strong negative impact on the global economy, our employees, facilities, partners, suppliers, distributors or customers, and could decrease demand for our products, create delays and inefficiencies in our supply chain and make it difficult or impossible for us to deliver products to our customers. A catastrophic event that results in the destruction or disruption of our data centers or our critical business or information technology systems would severely affect our ability to conduct normal business operations and, as a result, our operating results would be adversely affected.
Rearranged current paragraphs (3)
Current report — wording carried from elsewhere
The life sciences industry is highly competitive and subject to rapid technological change. We anticipate that we will continue to face increased competition as existing companies may choose to develop new or improved products and as new companies enter the market with new technologies, any of which could compete with our products or even render our products obsolete. While there are technological and marketing barriers to entry, we cannot guarantee that these barriers will be sufficient to defend our market share against current and future competitors.
Current report — wording carried from elsewhere
In addition, an uncorrected defect or supplier’s variation in a component or raw material, either unknown to us or incompatible with our manufacturing process, could harm our ability to manufacture products.
Current report — wording carried from elsewhere
Our business exposes us to potential product liability risks that are inherent in designing, manufacturing, and marketing our products. In particular, we are a supplier of bioproduction products to the cell and gene therapy industry. Our products are used in basic and applied research, and commercial manufacturing of biologic-based therapies and must meet stringent requirements. Products and services as sophisticated as ours could contain undetected errors or defects, especially when first introduced or when new equipment or versions are released. Customers use our products to maintain the health and function of biologic material during sourcing, manufacturing, storage, and distribution of cells and tissues, and component failures, manufacturing flaws, design defects or inadequate disclosure of product-related risks with respect to these or other products we manufacture or sell could result in an unsafe condition or injury.
Rearranged previous paragraphs (3)
Previous report — wording carried elsewhere
Risks related to our financial condition
Previous report — wording carried elsewhere
If we choose to go to court to stop someone else from using the inventions claimed in our patents or our licensed patents, that individual or company has the right to ask the court to rule that these patents are invalid and/or should not be enforced against that third party. These lawsuits are expensive and would consume time and other resources even if we were successful in stopping the infringement of these patents. In addition, there is a risk that the court will decide that these patents are invalid or unenforceable and that we do not have the right to stop the other party from using the inventions. There is also the risk that, even if the validity or enforceability of these patents is upheld, the court will refuse to stop the other party on the grounds that such other party’s activities do not infringe our rights.
Previous report — wording carried elsewhere
We have never declared or paid cash dividends on our common stock and do not plan to pay any cash dividends in the near future. Our current policy is to retain all funds and earnings for use in the operation and expansion of our business.