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What changed in ORASURE TECHNOLOGIES INC's 10-K — 2023 vs 2024

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Paragraph-level year-over-year comparison of ORASURE TECHNOLOGIES INC's 2023 and 2024 10-K annual filings, covering the Business, Risk Factors, Legal Proceedings, Cybersecurity, MD&A and Market Risk sections. Every new, removed and edited paragraph is highlighted side-by-side so you can see exactly what management changed in the 2024 report.

+422 added−397 removedSource: 10-K (2025-03-07) vs 10-K (2024-03-11)

Top changes in ORASURE TECHNOLOGIES INC's 2024 10-K

422 paragraphs added · 397 removed · 287 edited across 6 sections

Item 1. Business

Business — how the company describes what it does

95 edited+26 added−47 removed165 unchanged
Biggest changeThe Company believes these products provide significant advantages over competing DNA and RNA collection methods such as blood collection or buccal swabs, particularly in human genetic applications. 5 Table of Contents Benefits include: • Reliable high-quality and stable genetic samples. • Simple, non-invasive collection methods. • The ability to store and transport collected samples for extended periods at ambient temperatures. • Compatibility with fully automated laboratory testing systems.
Biggest changeBenefits include: • Reliable high-quality and stable genetic samples. 5 Table of Contents • Simple, non-invasive collection methods. • The ability to store and transport collected samples for extended periods at ambient temperatures. • Compatibility with fully automated laboratory testing systems. The Company also sells the Colli-Pee ® collection device for the volumetric collection of first void urine samples.
In the EU, products that fall under the scope of the MDR and the IVDR may not be placed on the EU market without a valid CE mark. Approval of a regulatory authority is not required to obtain CE certification, but, depending on the class of product, conformity assessment by a notified body may be required.
In the EU, products that fall under the scope of the MDR and the EU IVDR may not be placed on the EU market without a valid CE mark. Approval of a regulatory authority is not required to obtain CE certification, but, depending on the class of product, conformity assessment by a notified body may be required.
In the United States, the Company owns a number of trademarks, including the OraSure ® , Intercept ® , Intercept i2 ® he, Intercept i2 he ® , OraQuick ® , OraQuick ADVANCE ® , ORASURE QUICKFLU ® , SUREQUICK ® , Q.E.D. ® , InteliSwab ® , Oragene ® , DNA Genotek ® , OMNImet ® , ORAcollect ® , OMNIgene ® , Diversigen ® , CoreBiome ® , Boostershot ® , MetaGene ® , Benchmark TM , Novosanis ® , Colli-Pee ® , UCM ® , UAS TM , THINK OUTSIDE THE CUP ® , AUTO-LYTE ® , prepIT ® , and HEMAgene ® trademarks.
In the United States, the Company owns a number of trademarks, including the OraSure ® , Intercept ® , Intercept i2 ® he, Intercept i2 he ® , OraQuick ® , OraQuick ADVANCE ® , ORASURE QUICKFLU ® , SUREQUICK ® , Q.E.D. ® , InteliSwab ® , Oragene ® , DNA Genotek ® , OMNImet ® , ORAcollect ® , OMNIgene ® , Diversigen ® , CoreBiome ® , Boostershot ® , MetaGene ® , Benchmark ® , Novosanis ® , Colli-Pee ® , UCM ® , UAS™, THINK OUTSIDE THE CUP ® , AUTO-LYTE ® , prepIT ® , and HEMAgene ® trademarks.
The Company regularly searches for third-party patents in fields related to its business to shape its own patent and product commercialization strategies as effectively as possible and to identify licensing opportunities. United States patents generally have a maximum term of 20 years from the date an application is filed. The Company has patents throughout its product and service lines.
The Company regularly searches for third-party patents in fields related to its business to shape its own patent and product commercialization strategies as effectively as possible and to identify licensing opportunities. United States patents generally have a maximum term of 20 years from the date an application is filed. The Company has patents throughout its product lines.
Genomic Products The Company sells many genomic products that provide all-in-one systems for the collection, stabilization, transportation, and storage of DNA, RNA, as well as both DNA and RNA together from human and animal biological samples. The Company's lead products are sold under the Oragene ® and ORAcollect ® brands and are used to collect genetic material from human saliva.
Genomic Products The Company sells genomic products that provide all-in-one systems for the collection, stabilization, transportation, and storage of DNA, RNA, as well as both DNA and RNA together from human and animal biological samples. The Company's lead products are sold under the Oragene ® and ORAcollect ® brands and are used to collect genetic material from human saliva.
WHO prequalification helps ensure that diagnostic tests for high burden diseases meet global standards of quality, safety, and efficacy in order to optimize use of health resources and improve health outcomes. WHO prequalification enables governmental organizations implementing HIV Self-Test pilots and programs to access international funding to purchase the Company's test.
WHO prequalification helps ensure that diagnostic tests for high burden diseases meet global standards of quality, safety, and efficacy in order to optimize use of health resources and improve health outcomes. WHO prequalification enables governmental organizations implementing self-test pilots and programs to access international funding to purchase the Company's test.
The Company manufactures all of the proprietary chemistry and assay cards for its InteliSwab ® COVID-19 Rapid Tests in its Bethlehem, Pennsylvania facilities. The Company significantly scaled up manufacturing capacity in the United States for its InteliSwab ® COVID-19 Rapid Tests and has achieved manufacturing capacity targets under its 2021 contract with the U.S. DOD, in coordination with HHS.
The Company manufactures all of the proprietary chemistry and assay cards for its InteliSwab ® COVID-19 Rapid Tests in its Bethlehem, Pennsylvania facilities. The Company significantly scaled up manufacturing capacity in the United States for its InteliSwab ® COVID-19 Rapid Tests and achieved manufacturing capacity targets under its 2021 contract with the U.S. DOD, in coordination with the HHS.
The Company's business also includes molecular sample management solutions and services that are used by clinical laboratories, direct-to-consumer laboratories, researchers, pharmaceutical companies, and animal health service and product providers. The revenues from sample management solutions are derived from product sales to commercial customers and sales into the academic and research markets.
The Company's business also includes sample management solutions and services that are used by clinical laboratories, direct-to-consumer laboratories, researchers, pharmaceutical companies, and animal health service and product providers. The revenues from sample management solutions are derived from product sales to commercial customers and sales into the academic and research markets.
Sample Management Solutions In order to intersect evolving customer needs within the academic and commercial markets, the Company's molecular sample management solutions business product development pipeline is focused on extending offerings across different sample types and analytes within both the genomics and microbiome areas.
Sample Management Solutions In order to intersect evolving customer needs within the academic and commercial markets, the Company's sample management solutions business product development pipeline is focused on extending offerings across different sample types and analytes within both the genomics and microbiome areas.
Some of the Company's products are used for research only or for other nonclinical or non-diagnostic purposes. The Company's molecular sample management solutions are sold to many academic and research institutions for research purposes and the Company's drugs-of-abuse products are sold to laboratories and clinics for forensic or other non-medical uses.
Some of the Company's products are used for research only or for other nonclinical or non-diagnostic purposes. The Company's sample management solutions are sold to many academic and research institutions for research purposes and the Company's drugs-of-abuse products are sold to laboratories and clinics for forensic or other non-medical uses.
The Company has U.S. and international PCT patent applications that are directed to a new developer solution vial for use with sampling and assay devices. The international application entered its national phase in countries throughout the world in May 2023 and patents issuing from these applications will expire in December 2041.
The Company has U.S. and international PCT patent applications that are directed to a new developer solution vial for use with sampling and assay devices. The international application entered its national phase in countries throughout the world in May 2023 and patents issuing from these applications are expected to expire in December 2041.
The Company cannot predict the effect, if any, that these changes might have on its business, financial condition or results of operations. 14 Table of Contents Many of the Company's FDA-regulated products require some form of review and action by the FDA before they can be marketed in the United States.
The Company cannot predict the effect, if any, that these changes might have on its business, financial condition or results of operations. 13 Table of Contents Many of the Company's FDA-regulated products require some form of review and action by the FDA before they can be marketed in the United States.
Health Canada also requires all companies that market Class II, Class III and Class IV products in Canada to be certified as part of the Medical Device Single Audit Program ("MDSAP"). The Company has obtained WHO pre-qualification for its OraQuick ® HIV-1/Antibody Test, OraQuick® HIV Self-Test and OraQuick ® HCV.
Health Canada also requires all companies that market Class II, Class III and Class IV products in Canada to be certified as part of the Medical Device Single Audit Program ("MDSAP"). The Company has obtained WHO pre-qualification for its OraQuick ® HIV-1/2 Antibody Test, OraQuick® HIV Self-Test, OraQuick ® HCV Rapid Antibody Test, and OraQuick ® HCV Self-Test.
The In-Home test is performed in the same manner as the OraQuick ADVANCE ® test, except that it has product labeling and instructions designed for consumers. In addition, the Company has established toll-free, 24/7, 365-day per year customer telephone support to provide additional information and referral services for consumers that use this product.
The In-Home test is performed in the same manner as the OraQuick ADVANCE ® test, except that it has product labeling and instructions designed for consumers. In addition, the Company has established toll-free, 365-day per year customer telephone support to provide additional information and referral services for consumers that use this product.
The FDA does not currently regulate products used for these purposes, although other state and federal regulatory requirements may apply. 16 Table of Contents Most devices distributed in the United States must comply with the FDA’s Quality System Regulations (“QSRs”), including current good manufacturing practices.
The FDA does not currently regulate products used for these purposes, although other state and federal regulatory requirements may apply. 15 Table of Contents Most devices distributed in the United States must comply with the FDA’s Quality System Regulations (“QSRs”), including current good manufacturing practices.
Companies that market devices are also subject to other post-market and general requirements, including product listing and establishment regulations, which help facilitate FDA inspections and other regulatory action, post-market surveillance requests, restrictions imposed on marketed products, promotional standards and requirements for recordkeeping and reporting of certain adverse reactions and device malfunctions.
Companies that market devices are also subject to other post-market and general requirements, including product listing and establishment licenses, which help facilitate FDA inspections and other regulatory action, post-market surveillance requests, restrictions imposed on marketed products, promotional standards and requirements for recordkeeping and reporting of certain adverse reactions and device malfunctions.
The Company believes that its facilities and procedures are in material compliance with the FDA’s OSR regulations, the European Union's Quality Management Systems requirements, ISO 13485:2016, and other post-market requirements, but the regulations are subject to change or may be unclear, and the Company cannot be sure that FDA investigators will agree with the Company's compliance with the FDA’s post-market requirements.
The Company believes that its facilities and procedures are in material compliance with the FDA’s QSR requirements, the European Union's Quality Management Systems requirements, ISO 13485:2016, and other post-market requirements, but the regulations are subject to change or may be unclear, and the Company cannot be sure that FDA investigators will agree with the Company's compliance with the FDA’s post-market requirements.
The OraQuick® test has received World Health Organization ("WHO") pre-qualification and registration in other countries for the detection of HIV-1 and HIV-2 antibodies in oral fluid, whole blood (fingerstick and venous), serum and plasma. The device uses a porous flat pad to collect an oral fluid specimen.
The OraQuick® test has received World Health 2 Table of Contents Organization ("WHO") pre-qualification and registration in other countries for the detection of HIV-1 and HIV-2 antibodies in oral fluid, whole blood (fingerstick and venous), serum and plasma. The device uses a porous flat pad to collect an oral fluid specimen.
The Company's COVID-19 and HIV products are also sold in a consumer-friendly format in the over-the-counter (“OTC”) market in the U.S. and, in the case of the HIV product, as a self-test to individuals in a number of other countries, including as an oral swab in-home test for HIV-1 and HIV-2 in Europe.
The Company's HIV, HCV and COVID-19 products are also sold in a consumer-friendly format in the over-the-counter (“OTC”) market in the U.S. and, in the case of the HIV and HCV products, as a self-test to individuals in a number of other countries, including, for the HIV products, as an oral swab in-home test for HIV-1 and HIV-2 in Europe.
If the FDA’s evaluation of the PMA or the manufacturing facility is not favorable, the FDA may deny approval of the PMA application or issue a “not approvable” 15 Table of Contents letter. The FDA may also require additional clinical trials, which can delay the PMA approval process by several years or prevent a PMA approval from being obtained.
If the FDA’s evaluation of the PMA or the manufacturing facility is not favorable, the FDA may deny approval of the PMA application or issue a “not approvable” 14 Table of Contents letter. The FDA may also require additional clinical trials, which can delay the PMA approval process by several years or prevent a PMA approval from being obtained.
The InteliSwab ® test has received EUA from the FDA for non-prescription, OTC home use in individuals aged two years or older, with symptoms within the first seven (7) days of onset when tested at least twice over a three-day period with at least 48 hours between tests and without symptoms or epidemiological reasons to suspect COVID-19 when tested at least three times over a five-day period with at least 48 hours between tests.
The InteliSwab ® test has received an Emergency Use Authorization ("EUA") from the FDA for non-prescription, OTC home use in individuals aged two years or older, with symptoms within the first seven (7) days of onset when tested at least twice over a three-day period with at least 48 hours between tests and without symptoms or epidemiological reasons to suspect COVID-19 when tested at least three times over a five-day period with at least 48 hours between tests.
Beginning in 2022 and continuing through 2023, demand for COVID-19 PCR testing declined significantly, which was primarily driven by the availability of antigen tests, the reduction in the number of COVID-19 cases, and the wider availability of vaccines that negatively impacted the sales of the collection products.
Beginning in 2022 and continuing through 2024, demand for COVID-19 PCR testing declined significantly, which was primarily driven by the availability of antigen tests, the reduction in the number of COVID-19 cases, and the wider availability of vaccines that negatively impacted the sales of the collection products.
The EU Medical Devices Regulation (EU) 2017/745 (the “EU MDR”) and the In Vitro Diagnostic Medical Devices Regulation (EU) 2017/74 (the “EU IVDR”), which repealed and replaced the Medical Devices Directive 93/42/EEC (“MDD”) and the In Vitro Diagnostic Medical Devices Directive 98/79/EC (“IVDD”) respectively, govern the regulation of medical devices and in vitro diagnostic devices in the European Union (“EU”).
The EU Medical Devices Regulation (EU) 2017/745 (the “EU MDR”) and the In Vitro Diagnostic Medical Devices Regulation (EU) 2017/746 (the “EU IVDR”), which repealed and replaced the Medical Devices Directive 93/42/EEC (“MDD”) and the In Vitro Diagnostic Medical Devices Directive 98/79/EC (“IVDD”) respectively, govern the regulation of medical devices and in vitro diagnostic devices in the European Union (“EU”).
The Company believes that when all voices are heard, it honors and exemplifies its core values and best serves its communities. Competition The diagnostic industry is a multi-billion dollar international industry and is intensely competitive. Many of the Company's competitors are substantially larger than the Company, and have greater financial, research, manufacturing and marketing resources.
The Company believes that when all voices are heard, it honors and exemplifies its core values and best serves its communities. 10 Table of Contents Competition The diagnostic industry is a multi-billion dollar international industry and is intensely competitive. Many of the Company's competitors are substantially larger than the Company, and have greater financial, research, manufacturing and marketing resources.
If the FDA determines that the Company's promotional materials or training constitute promotion of an uncleared or unapproved use, it could request that the Company modify its training or promotional materials or subject the Company to regulatory or enforcement actions, including the issuance of an untitled letter, a notice of violation, a warning letter, injunction, seizure, civil fine or criminal penalties.
If the FDA determines that the Company's promotional materials or training constitute promotion of an uncleared or unapproved use, it could request that the Company modify its training or promotional materials or subject the Company to regulatory or enforcement actions, including the issuance of an untitled letter, a notice 16 Table of Contents of violation, a warning letter, injunction, seizure, civil fine or criminal penalties.
In recent years, there has been greater scrutiny of marketing practices in the medical device industry which has resulted in several government investigations by various government authorities and the introduction and/or passage of federal and state legislation regulating interactions between medical device manufacturers and healthcare professionals and providers and requiring the disclosure by medical device manufacturers of payments to certain healthcare providers.
In recent years, there has been greater scrutiny of marketing practices in the 18 Table of Contents medical device industry which has resulted in several government investigations by various government authorities and the introduction and/or passage of federal and state legislation regulating interactions between medical device manufacturers and healthcare professionals and providers and requiring the disclosure by medical device manufacturers of payments to certain healthcare providers.
Promotional activities for FDA-regulated products of other companies have also been the subject of enforcement actions brought under healthcare reimbursement laws and consumer protection 17 Table of Contents statutes. In addition, under the federal Lanham Act and similar state laws, competitors and others can initiate litigation relating to advertising claims.
Promotional activities for FDA-regulated products of other companies have also been the subject of enforcement actions brought under healthcare reimbursement laws and consumer protection statutes. In addition, under the federal Lanham Act and similar state laws, competitors and others can initiate litigation relating to advertising claims.
Many of the raw materials and components used in these products are also purchased from third parties, some of which are purchased from a single source supplier. The Company is actively seeking to qualify other suppliers that can manufacture and supply the raw materials and components for the DNAG products. All DNAG products are produced in Canada.
Many of the raw materials and components used in these products are also purchased from third parties, some of which are purchased from a single source supplier. The Company is actively seeking to qualify other suppliers that can manufacture and supply the raw materials and components for the DNAG products.
OraSure believes a variety of perspectives are critical to achieving success, and that inclusion and belonging are key drivers to growth-based innovation and profitability. The Company aims to create a culture where all people feel valued, supported, and inspired to be themselves fearlessly, without judgment.
OraSure believes a variety of perspectives are critical to achieving success, and that inclusion and belonging are key drivers to growth-based innovation and profitability. The Company aims to create a culture where all people feel valued, supported, and inspired to be themselves authentically and fearlessly.
This product has received WHO pre-qualification and is eligible for procurement by purchasing entities entitled to access funding and other resources from the Global Fund, UNITAID and other agencies. OraQuick ® HCV Rapid Antibody Test Another test available on the OraQuick ® platform is the OraQuick ® HCV rapid antibody test.
This product has received WHO pre-qualification and is eligible for procurement by purchasing entities entitled to access funding and other resources from the Global Fund, PEPFAR and other agencies. OraQuick ® HCV Rapid Antibody Test and Self-Test Another test available on the OraQuick ® platform is the OraQuick ® HCV rapid antibody test.
Supply and Manufacturing The Company manufactures its OraQuick ADVANCE ® Rapid HIV test, OraQuick ® In-Home HIV test, OraQuick ® HCV test, OraQuick ® Ebola test, OraSure ® , Intercept ® and Intercept i2 ® he collection devices, AUTO-LYTE ® and MICRO-PLATE assays and Q.E.D. ® saliva alcohol test in its Bethlehem, Pennsylvania facilities.
Supply and Manufacturing The Company manufactures its InteliSwab ® COVID-19 Rapid Test, OraQuick ADVANCE ® Rapid HIV test, OraQuick ® In-Home HIV test, OraQuick ® HCV test, OraQuick ® Ebola test, OraSure ® , Intercept ® and Intercept i2 ® he collection devices, AUTO-LYTE ® and MICRO-PLATE assays and Q.E.D. ® saliva alcohol test in its Bethlehem, Pennsylvania facilities.
This enables the Company to serve specific segments where the products provide a unique benefit. 11 Table of Contents The future market for diagnostic products is expected to be characterized by greater cost consciousness, the development of new technologies, tighter reimbursement policies and consolidation.
This enables the Company to serve specific segments where the products provide a unique benefit. The future market for diagnostic products is expected to be characterized by greater cost consciousness, the development of new technologies, tighter reimbursement policies and consolidation.
Taken 19 Table of Contents together, these fraud and abuse laws constrain the sales, marketing and other promotional activities of manufacturers of medical devices by limiting the kinds of financial arrangements, including sales programs, such manufacturers can enter into with physicians, hospitals, laboratories and other potential purchasers of medical devices.
Taken together, these fraud and abuse laws constrain the sales, marketing and other promotional activities of manufacturers of medical devices by limiting the kinds of financial arrangements, including sales programs, such manufacturers can enter into with physicians, hospitals, laboratories and other potential purchasers of medical devices.
Other Products In addition to the products described above, the Company offers the following products: OraSure ® Collection Device 6 Table of Contents The Company's OraSure® oral fluid collection device is used in conjunction with screening and confirmatory tests for HIV-1 antibodies and is FDA approved for use in the detection of HIV-1 antibodies.
Other Products In addition to the products described above, the Company offers the following products: OraSure ® Collection Device The Company's OraSure® oral fluid collection device is used in conjunction with screening and confirmatory tests for HIV-1 antibodies and is FDA approved for use in the detection of HIV-1 antibodies.
ISO certification of the quality system in accordance with the relevant standard for medical devices or in vitro diagnostic devices creates a rebuttable presumption that the product satisfies the applicable requirements of the EU MDR or EU IVDR (as applicable) with respect to the quality management system.
ISO certification of the quality system in accordance with the relevant standard for medical devices or in vitro diagnostic devices creates a rebuttable presumption that the product satisfies the applicable requirements of the EU MDR or EU IVDR (as applicable) 17 Table of Contents with respect to the quality management system.
The majority of the Company's sales outside the U.S. are in Africa due to the greater incidence of HIV in that region. The Company's OraQuick ® HIV Self-Test is CE marked, which enables it to participate in the European OTC market for HIV.
The majority of the Company's sales outside the U.S. are in Africa due to the greater incidence of HIV in that region. 11 Table of Contents The Company's OraQuick ® HIV Self-Test is CE marked, which enables it to participate in the European OTC market for HIV.
Sampling tools are the subject of several other patents and pending applications, including U.S. and international utility patent applications directed to a new oral fluid collection device. The international applications entered their national phase in countries throughout the world beginning in October 2023. Patents issuing from these applications will expire in March 2041.
Sampling tools are the subject of several other patents and pending applications, including U.S. and international utility patent applications directed to a new oral fluid collection device. The international applications entered their national phase in countries throughout the world beginning in October 2023. Patents issuing from these applications are expected to expire in March 2042.
In September 2022, the Company entered into an agreement with BARDA, pursuant to which BARDA will provide up to $8.6 million in funding to the Company to develop a 2nd generation Ebola test on the OraQuick ® testing platform with the objective of developing increased sensitivity, utilizing sustainable raw materials and increasing shelf life, with new chemistry and higher degrees of automation in the test’s manufacturing process.
In September 2022, the Company entered into an agreement with the Biomedical Advanced Research and Development Authority ("BARDA"), pursuant to which BARDA will provide up to $8.6 million in funding to the Company to develop a 2nd generation Ebola test on the OraQuick ® testing platform with the objective of developing increased sensitivity, utilizing sustainable raw materials and increasing shelf life, with new chemistry and higher degrees of automation in the test’s manufacturing process.
The Company believes that its products and manufacturing processes at its facilities comply in all material respects with applicable environmental laws and worker health and safety laws; however, the risk of environmental liabilities cannot be completely eliminated.
The Company believes that its products and manufacturing processes at its facilities comply in all material respects with 19 Table of Contents applicable environmental laws and worker health and safety laws; however, the risk of environmental liabilities cannot be completely eliminated.
The Company has received FDA 510(k) clearance to use 4 Table of Contents the Intercept ® collection device with laboratory-based EIAs to test for drugs-of-abuse commonly identified by the National Institute for Drug Abuse (“NIDA”) as the NIDA-5 (i.e., tetrahydrocannabinol (“THC” or marijuana), cocaine, opiates, amphetamines/methamphetamines and phencyclidine (“PCP”)), and for barbiturates, methadone and benzodiazepines.
The Company has received FDA 510(k) clearance to use the Intercept ® collection device with laboratory-based EIAs to test for drugs-of-abuse commonly identified by the National Institute for Drug Abuse (“NIDA”) as the NIDA-5 (i.e., tetrahydrocannabinol (“THC” or marijuana), cocaine, opiates, amphetamines/methamphetamines and phencyclidine (“PCP”)), and for barbiturates, methadone and benzodiazepines. 4 Table of Contents Each of these EIAs is also FDA 510(k) cleared for use with the Intercept ® device.
Although the Company believes the Oragene ® and ORAcollect ® 12 Table of Contents devices offer a number of advantages over these other products, the availability of lower price competitive devices can result in lost sales and degradation in pricing and profit margin.
Although the Company believes the Oragene ® and ORAcollect ® devices offer a number of advantages over these other products, the availability of lower price competitive devices can result in lost sales and degradation in pricing and profit margin.
The Company's Oragene ® and ORAcollect ® products are also facing increasing competition from similarly designed collection systems which are beginning to enter the market. OMNIgene ® • GUT is being sold in the emerging microbiome market and competes with a variety of non-standard in-house solutions developed by various researchers, including simply freezing the sample after collection.
The Company's Oragene ® and ORAcollect ® products are also facing increasing competition from similarly designed collection systems which have entered the market. OMNIgene ® • GUT is being sold in the emerging microbiome market and competes with a variety of non-standard in-house solutions developed by various researchers, including simply freezing the sample after collection.
The Company believes that other firms would be 9 Table of Contents able to assemble these OraQuick ® tests on terms no less favorable than those set forth in the agreement if the Thailand contractor would be unable or unwilling to continue assembling this product.
The Company believes that other firms would be able to assemble these OraQuick ® tests on terms no less favorable than those set forth in the agreement if the Thailand contractor would be unable or unwilling to continue assembling this product.
The information contained on the Company's website is not a part of this Annual Report. 21 Table of Contents
The information contained on the Company's website is not a part of this Annual Report. 20 Table of Contents
The specimen and developer solution then flow through the testing device 3 Table of Contents where test results are observable between 20 and 40 minutes. The OraQuick® device is a screening test and requires a confirmation test where an initial positive result is obtained.
The specimen and developer solution then flow through the testing device where test results are observable between 20 and 40 minutes. The OraQuick® device is a screening test and requires a confirmation test where an initial positive result is obtained.
Its patent portfolio includes pending applications and issued patents in diagnostics and testing, sampling tools, and services and analysis. The Company's portfolio protects its innovative sampling tools, services and diagnostics that provide access to accurate, essential information that advances global health and well-being.
Its patent portfolio includes pending applications and issued patents in diagnostics and testing, sampling tools and sample preservatives. The Company's portfolio protects its innovative sampling tools, sample preservatives, and diagnostics that provide access to accurate, essential information that advances global health and well-being.
There is a transitional period during which products that have a declaration of conformity issued under the IVDD prior to May 26, 2022 may continue to be placed on the EU market for a certain period before requiring certification under the IVDR (subject to compliance with certain requirements under the IVDR, including in respect of post-market surveillance); however, class A non-sterile products do not benefit from such transitional provisions and have been required to be IVDR compliant since May 26, 2022, class D devices benefit from such transitional provisions until May 26, 2025.
There is a transitional period (which was extended in July 2024) during which products that have a declaration of conformity issued under the IVDD prior to May 26, 2022 may continue to be placed on the EU market for a certain period before requiring certification under the EU IVDR (subject to compliance with certain requirements under the EU IVDR, including in respect of post-market surveillance); however, class A non-sterile products do not benefit from such transitional provisions and have been required to be EU IVDR compliant since May 26, 2022.
The Company holds, through its subsidiary, DNAG, thirty granted United States patents and numerous foreign patents issued for compositions, methods and apparatuses for the collection, stabilization, transportation, and storage of nucleic acids (DNA and RNA) from oral fluid and other bodily fluids and tissues. Certain patents expired in June 2023, and others will expire through October 2037.
The Company holds, through its subsidiary, DNAG, nineteen granted United States patents and numerous foreign patents issued for compositions, methods and apparatuses for the collection, stabilization, transportation, and storage of nucleic acids (DNA and RNA) from oral fluid and other bodily fluids and tissues. Certain patents expired in June 2023, and others will expire through November 2040.
The Company expects to continue to manufacture these products at this location for the foreseeable future. The Company has contracted with a third party in Thailand for the assembly of the OraQuick ® Rapid HIV test and the OraQuick ® HIV Self-Test in order to supply certain international markets.
With the exception of its substance abuse testing products, the Company expects to continue to manufacture these products at this location for the foreseeable future. The Company has contracted with a third party in Thailand for the assembly of the OraQuick ® Rapid HIV test and the OraQuick ® HIV Self-Test in order to supply certain international markets.
Notified bodies are accredited and supervised by 18 Table of Contents national regulatory authorities to conduct conformity assessment procedures of medical devices or other products.
Notified bodies are accredited and supervised by national regulatory authorities to conduct conformity assessment procedures of medical devices or other products.
Companies marketing 20 Table of Contents medical devices in the EU may also be subject to expensive waste take back obligations under the EU Directive on Waste Electrical and Electronic Directive, the Packaging and Packaging Waste Directive, and the Batteries Directive.
Companies marketing medical devices in the EU may also be subject to expensive waste take back obligations under the EU Directive on Waste Electrical and Electronic Directive, the Packaging and Packaging Waste Directive, and the Batteries Directive.
Through 2023, the Company maintained its expanded United States production capacity for InteliSwab ® tests to meet capacity targets, set out in its 2021 contract with the U.S. Department of Defense ("DOD") (in coordination with the HHS), of more than 100 million tests annually.
Through 2024, the Company maintained its expanded United States production capacity for InteliSwab ® tests to meet capacity targets set out in its 2021 contract with the U.S. Department of Defense ("DOD") (in coordination with the U.S. Department of Health and Human Services ("HHS")), of more than 100 million tests annually.
Products and Services The Company's business consists of the development, manufacture, marketing and sale of simple, easy to use diagnostic products and specimen collection devices using its proprietary technologies, as well as other diagnostic products including immunoassays and other in vitro diagnostic tests that are used on other specimen types.
Products and Services The Company's business consists of the development, manufacture, marketing, sale and distribution of simple, easy to use diagnostic products and specimen collection devices using its proprietary technologies, as well as other diagnostic products including immunoassays and other in vitro diagnostic tests.
No other individual customers accounted for more than 10% of the Company's consolidated net revenues for the years ended December 31, 2023 and 2022. The Company had no customers that accounted for more than 10% of consolidated net revenues for the year ended December 31, 2021.
The Company had no other customers that accounted for more than 10% of consolidated net revenues for the years ended December 31, 2024, 2023 and 2022.
The Company also sells its OraQuick ® HIV Self-Test in certain international markets. The Company's OraQuick ® HIV Self-Test is the only oral fluid HIV test prequalified by the WHO.
The Company also sells its OraQuick ® HIV Self-Test in certain international markets. The Company's OraQuick ® HIV Self-Test is the only oral fluid HIV test prequalified by the WHO and the Company's OraQuick ® HCV Self-Test is the first Hepatitis C self-test prequalified by the WHO.
The Company holds through its subsidiary, Novosanis, one granted United States patent and numerous foreign patents covering a medical device for capturing a predetermined volume of first void urine. This patent expires in September 2033. The Company has also applied for additional patents, in both the United States and certain foreign countries, in novel urine collection devices.
The Company holds one granted United States patent and numerous foreign patents covering a medical device for capturing a predetermined volume of first void urine. This patent expires in April 2034. The Company has also applied for additional patents and designs, in both the United States and certain foreign countries, in novel urine collection devices.
Throughout 2023, the Company made progress on consolidating its manufacturing footprint by using the Opus Way facility for a more significant portion of its manufacturing and distribution needs, including re-shoring of capacity to the United States. One Pennsylvania facility was eliminated from the Company's sites.
The Company's Opus Way facility was customized to accommodate increased manufacturing capacity. Throughout 2024, the Company made progress on consolidating its manufacturing footprint by using the Opus Way facility for a more significant portion of its manufacturing and distribution needs, including re-shoring of capacity to the United States.
Most of the Company's revenues from sample management products are derived from sales to commercial customers and sales into the academic and research markets. The Company's commercial customers provide consumer genetics and clinical diagnostic services and account for a majority of these revenues. A significant portion of total sales are derived from repeat customers in both markets.
However, in many international markets, distributors are used. Most of the Company's revenues from sample management products are derived from sales to commercial customers and sales into the academic and research markets. The Company's commercial customers provide consumer genetics and clinical diagnostic services and account for a majority of these revenues.
The Company has numerous foreign patents for its collection devices and technology relating to oral fluid collection, containers for oral fluids, methods to test oral fluids, and methods to control the volume of oral fluids collected and dispersed. The utility patents will expire in January 2028, and the design patents will expire in 2025.
The Company has numerous foreign patents for its collection devices and technology relating to oral fluid collection, containers for oral fluids, methods to test oral fluids, and methods to control the volume of oral fluids collected and dispersed.
AUTO-LYTE ® tests are sold in the form of bottles of liquid reagents, are run on commercially available laboratory-based automated analytical instruments, and are typically used in high volume, automated, commercial reference insurance laboratories to detect certain drugs or chemicals in urine.
AUTO-LYTE ® tests are sold in the form of bottles of liquid reagents, are run on commercially available laboratory-based automated analytical instruments, and are typically used in high volume, automated, commercial reference insurance laboratories to detect certain drugs or chemicals in urine. In November 2024, the Company announced that it intended to exit the substance abuse testing business.
OraQuick ® HIV Self-Test The OraQuick ® HIV Self-Test is sold for use by individuals in certain foreign countries, including under the CE mark in certain European countries, to meet the needs of those markets.
OraQuick ® HIV Self-Test The OraQuick ® HIV Self-Test is an in-vitro diagnostic home-use test for HIV (HIV-1 and HIV-2) in oral fluid, and is sold for use by individuals. OraQuick ® HIV Self-Test is sold for use by individuals in certain foreign countries, including under the CE mark in certain European countries, to meet the needs of those markets.
The Company is leveraging its existing sales force and global research connections to engage microbiome customers around the world and establish itself as among the leaders in ease-of-collection, stabilization and transport of microbiome communities in a variety of challenging sample types such as stool, skin, vaginal and oral.
The Company is leveraging its existing sales force and global research connections to engage microbiome customers around the world and establish itself as among the leaders in ease-of-collection, stabilization and transport of microbiome communities in a variety of challenging sample types such as stool, skin, vaginal and oral. 8 Table of Contents The Company's products include the Colli-Pee ® collection device for the volumetric collection of first void urine.
The Intercept i2 ® he device is currently being sold as a forensic use only device within the criminal justice and drug treatment markets along with a panel of fully-automated high-throughput oral fluid drug assays that the Company distributes under an agreement with Thermo Fisher Scientific.
The Intercept i2 ® he device is sold as a forensic use only device within the criminal justice and drug treatment markets along with a panel of fully-automated high-throughput oral fluid drug assays that the Company distributes under an agreement with Thermo Fisher Scientific. In November 2024, the Company announced that it intended to exit the substance abuse testing business.
The validity or enforceability of a patent or trademark can be challenged by litigation after its issuance or registration. If the outcome of such litigation is adverse to the owner of the patent, the owner’s rights could be diminished or withdrawn. Trade secret protection does not prevent independent discovery and exploitation of the secret product or technique.
If the outcome of such litigation is adverse to the owner of the patent, the owner’s rights could be diminished or withdrawn. Trade secret protection does not prevent independent discovery and exploitation of the secret product or technique.
The OraQuick ADVANCE® test has received premarket approval (“PMA”) from the FDA for the detection of antibodies to both HIV-1 and HIV-2 in oral fluid, finger-stick whole blood, venous whole blood and plasma.
This product is sold under the OraQuick ADVANCE® name in North America, Europe and certain other countries, and under the OraQuick® name in other developing countries. The OraQuick ADVANCE® test has received premarket approval (“PMA”) from the FDA for the detection of antibodies to both HIV-1 and HIV-2 in oral fluid, finger-stick whole blood, venous whole blood and plasma.
This test has received EUA from the FDA for use by laboratories located in the United States certified under CLIA.
This test has received EUA from the FDA for use by laboratories located in the United States certified under the Clinical Laboratory Improvement Amendments of 1988 (“CLIA”).
The table below shows a breakdown of those product lines (dollars in thousands): For the Years Ended December 31, 2023 2022 2021 InteliSwab® $ 257,493 $ 233,666 $ 22,405 Genomics 47,005 54,335 63,350 OraQuick® HIV 60,823 38,812 42,144 COVID-19 collection kits 286 9,659 54,167 One customer accounted for approximately 63% of the Company's consolidated net revenues for the year ended December 31, 2023 and 58% for the year ended December 31, 2022.
The table below shows a breakdown of those product lines (dollars in thousands): For the Years Ended December 31, 2024 2023 2022 OraQuick® HIV $ 60,804 $ 60,823 $ 38,812 InteliSwab® 45,136 257,493 233,666 Genomics 44,861 47,005 54,335 One non-commercial customer accounted for approximately 24% of the Company's consolidated net revenues for the year ended December 31, 2024 and 63% and 58% for the years ended December 31, 2023 and 2022, respectively.
As part of its compensation philosophy, the Company believes that it must offer and maintain market competitive compensation and benefits programs for its employees in order to attract and retain superior talent.
Personal protective equipment is provided to those employees where needed for the employee to safely perform their job function. As part of its compensation philosophy, the Company believes that it must offer and maintain market competitive compensation and benefits programs for its employees in order to attract and retain superior talent.
The Company's microbiome collection products support collecting and stabilizing metabolites found in fecal samples by capturing and preserving the microbiome after collection until the desired analysis can be performed.
When unstabilized, a microbiome sample can change when exposed to environmental fluctuations, such as temperature changes. The Company's microbiome collection products support collecting and stabilizing metabolites found in fecal samples by capturing and preserving the microbiome after collection until the desired analysis can be performed.
The Company's MICRO-PLATE and AUTO-LYTE ® assays require the production of highly specific and sensitive antibodies corresponding to the analyte of interest. Substantially all the Company's antibody raw materials are provided by contract suppliers. The Company believes that it has adequate reserves of antibody supplies and that it has access to sufficient raw materials for these products.
The Company's MICRO-PLATE and AUTO-LYTE ® assays require the production of highly specific and sensitive antibodies corresponding to the analyte of interest. Substantially all the Company's antibody raw materials are provided by 9 Table of Contents contract suppliers.
Substance Abuse Testing The Company's substance abuse testing products are marketed to laboratories serving the workplace testing, forensic toxicology, criminal justice and drug rehabilitation markets in the U.S. and certain international markets.
The Company's substance abuse testing products are marketed to laboratories serving the workplace testing, forensic toxicology, criminal justice and drug rehabilitation markets in the U.S. and certain international markets. Sample Management Solutions and Molecular Services The Company's sample management products are sold directly to customers, primarily through its internal sales force in U.S. markets.
Products The following is a summary of the Company's principal products for the infectious disease and risk management markets as well as its sample management products: InteliSwab ® COVID-19 Rapid Test InteliSwab ® is the Company's rapid immunoassay product designed to test nasal samples for the presence of antigen from SARS-CoV-2.
Products The following is a summary of the Company's principal products for the infectious disease and risk management markets as well as its sample management products: OraQuick ® Rapid HIV Test The OraQuick® Rapid HIV Test is the Company's rapid point-of-care test product designed to test for the presence of HIV-1 and HIV-2 antibodies.
The Company's products include the Colli-Pee ® device, a product developed and sold by its Novosanis subsidiary, for the volumetric collection of first void urine. This product is in its early stages and initial sales are occurring primarily through distributors and collaborations for use in the liquid biopsy and sexually transmitted disease markets.
This product is in its early stages and initial sales are occurring primarily through distributors and collaborations for use in the liquid biopsy and sexually transmitted disease markets. The Colli-Pee ® collection device is registered as a class I urine collection device without a claim for preservative.
The Company also sells the Colli-Pee ® collection device for the volumetric collection of first void urine samples. This product is used in liquid biopsy applications for the prostate and bladder cancer markets and in the sexually transmitted infection screening market.
This product is used in liquid biopsy applications for the prostate and bladder cancer markets and in the sexually transmitted infection screening market. The Colli-Pee ® collection device is registered as a class I urine collection device without a claim for preservative.
Related design patent applications are pending in the U.S., Canada, and Europe. The Company has additional pending applications directed to new direct sample collection pads for its InteliSwab ® COVID-19 Rapid Test. These applications entered their national phase in countries throughout the world in October 2023, and patents issuing from these applications will expire in December 2042.
One related design patent is issued in the U.S. and will expire in November 2038, and other related design patent applications are pending in the U.S., Canada, and Europe. The Company has additional pending applications directed to new direct sample collection pads for its InteliSwab ® COVID-19 Rapid Test.
Competitors may be able to produce products competing with the Company's patented products without infringing its patent rights. Issuance of a patent in one country generally does not prevent manufacture or sale of the patented product in other countries. The issuance of a patent is not conclusive as to validity or as to the enforceable scope of the patent.
Issuance of a patent in one country generally does not prevent manufacture or sale of the patented product in other countries. The issuance of a patent is not conclusive as to validity or as to the enforceable scope of the patent. The validity or enforceability of a patent or trademark can be challenged by litigation after its issuance or registration.
Significant Products and Customers Several different product lines have contributed significantly to the Company's financial performance, accounting for 10% or more of its total revenues during the past three years.
The Colli-Pee ® collection device with preservative solution does not have FDA clearance and is labeled “For Research Use Only” in the U.S. Significant Products and Customers Several different product lines have contributed significantly to the Company's financial performance, accounting for 10% or more of its total revenues during the past three years.
These products are sold in the United States and internationally to various clinical laboratories, hospitals, clinics, community-based organizations, and other public health organizations, distributors, government agencies, physicians’ offices, and commercial and industrial entities.
Our diagnostic products include tests for diseases including HIV, Hepatitis C, Syphilis and COVID-19 that are performed on a rapid basis at the point of care. These products are sold in the United States and internationally to various clinical laboratories, hospitals, clinics, community-based organizations, and other public health organizations, distributors, government agencies, physicians’ offices, and commercial and industrial entities.
In September 2023, the agreement was modified to add an additional $6.8 million in funding to be used to obtain the appropriate regulatory approvals for the product.
In September 2023, the agreement was modified to add an additional $6.8 million in funding to be used to obtain the appropriate regulatory approvals for the product. InteliSwab ® COVID-19 Rapid Test The InteliSwab ® COVID-19 rapid test ("InteliSwab") is the Company's rapid immunoassay product designed to test nasal samples for the presence of antigen from SARS-CoV-2.
Certain of the Company's products may also be affected by state regulations in the United States, which can restrict the use and sale of certain diagnostic products.
The InteliSwab ® COVID-19 Rapid Test Pro is authorized for use in patient care settings operating under CLIA Certificate, Certificate of Compliance and Certificate of Accreditation. Certain of the Company's products may also be affected by state regulations in the United States, which can restrict the use and sale of certain diagnostic products.

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Item 1A. Risk Factors

Risk Factors — what could go wrong, per management

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Biggest changeRisks Relating to the Company's Industry, Business and Strategy • Consolidation in the healthcare industry could adversely affect the Company's future revenues and operating results. • The Company's research, development and commercialization efforts may not succeed and its competitors may develop and commercialize more effective or successful offerings. • Customer concentration creates risk for the Company's business. • Acquisitions or investments may not generate the expected benefits and could disrupt the Company's ongoing business, distract its management, increase its expenses and adversely affect its business. 22 Table of Contents Risks Relating to the Company's Reliance on Third Parties • The use of third party supply sources for critical components of the Company's products could adversely affect its business. • The Company's failure to maintain existing distribution channels, or develop new distribution channels, may result in lower revenues.
Biggest changeRisks Relating to the Company's Industry, Business and Strategy • Consolidation in the healthcare industry could adversely affect the Company's future revenues and operating results. • The Company's research, development and commercialization efforts may not succeed and its competitors may develop and commercialize more effective or successful offerings. • Customer concentration creates risk for the Company's business. • The Company is subject to risks related to government funding and customer ordering. • Acquisitions or investments may not generate the expected benefits and could disrupt the Company's ongoing business, distract its management, increase its expenses and adversely affect its business.
It is possible that the Company may not be able to obtain those clearances or approvals in a timely manner, or at all, and that one or more of OraSure's competitors may obtain the necessary clearances or approvals for their products before it does.
It is possible that the Company may not be able to obtain those clearances or approvals in a timely manner, or at all, and that one or more of OraSure's competitors may obtain the necessary clearances or approvals for their products before the Company does.
However, there can be no assurance that compliance with all provisions of the IVDR will be demonstrated and the CE mark will be obtained or maintained for all products that the Company desires to sell in the EU.
However, there can be no assurance that compliance with all provisions of the EU IVDR will be demonstrated and the CE mark will be obtained or maintained for all products that the Company desires to sell in the EU.
These activities, and their impact on the Company's business, are subject to many risks, including the following: • Suitable acquisitions or investments may not be found or consummated on terms or schedules that are satisfactory to the Company or consistent with its objectives; • The Company may be unsuccessful in competing for acquisitions with other entities, some of which have greater financial resources or may be better able to realize synergies with a potential target; • The benefits expected to be derived from an acquisition or investment may not materialize and could be affected by numerous factors, such as regulatory developments, insurance reimbursement, the Company's inexperience with new businesses or markets, general economic conditions and increased competition; • The Company may be unable to successfully integrate an acquired company’s personnel, assets, management, information technology systems, accounting policies and practices, products, services and/or technology into the Company's business; • Worse than expected performance of an acquired business may result in the impairment of intangible assets; • Acquisitions may require substantial expense and management time and could disrupt the Company's business; • The Company may not be able to accurately forecast the performance or ultimate impact of an acquired business; • The Company may have difficulties in coordinating geographically separate organizations; • The Company may fail to successfully manage relationships with customers, distributors and suppliers of an acquired business; • An acquisition may result in a diversion of resources from the Company's existing products, business and technologies; • An acquisition and subsequent integration activities may require greater capital and other resources than originally anticipated at the time of acquisition; • To the extent the Company agrees to pay contingent consideration for an acquisition, if and how much of such consideration it is required to pay may be subject to dispute, resulting in the distraction of the Company's management team and the incurrence of legal costs; • An acquisition may result in employee anxiety, morale and/or engagement issues; • An acquisition may result in disparate information technology, internal control, financial reporting and record-keeping systems; • An acquisition may result in new partners or customers who may operate on terms and programs different than the Company's; 34 Table of Contents • An acquisition may result in employees not familiar with the Company's operations; • An acquisition may result in new products and services, including the risk that any underlying intellectual property associated with such products and services may not have been adequately protected or that such products and services may infringe on the proprietary rights of others; • An acquisition may result in the incurrence of unexpected expenses, stockholder lawsuits, the dilution of the Company's earnings or its existing stockholders’ percentage ownership, or potential losses from undiscovered liabilities not covered by an indemnification from the seller(s) of the acquired business; • An acquisition may result in the loss of the Company's or the acquired company’s key personnel, customers, distributors or suppliers; and • An acquisition of a foreign business may involve additional risks, including, but not limited to, foreign currency exposure, liability or restrictions under foreign laws or regulations, and the Company's inability to successfully assimilate differences in foreign business practices or overcome language or cultural barriers and other inherent risks of operating in unfamiliar legal and regulatory environments.
These activities, and their impact on the Company's business, are subject to many risks, including the following: • Suitable acquisitions or investments may not be found or consummated on terms or schedules that are satisfactory to the Company or consistent with its objectives; • The Company may be unsuccessful in competing for acquisitions with other entities, some of which have greater financial resources or may be better able to realize synergies with a potential target; • The benefits expected to be derived from an acquisition or investment may not materialize and could be affected by numerous factors, such as regulatory developments, insurance reimbursement, the Company's inexperience with new businesses or markets, general economic conditions and increased competition; • The Company may be unable to successfully integrate an acquired company’s personnel, assets, management, information technology systems, accounting policies and practices, products, services and/or technology into the Company's business; • Worse than expected performance of an acquired business may result in the impairment of intangible assets; • Acquisitions may require substantial expense and management time and could disrupt the Company's business; • The Company may not be able to accurately forecast the performance or ultimate impact of an acquired business; • The Company may have difficulties in coordinating geographically separate organizations; • The Company may fail to successfully manage relationships with customers, distributors and suppliers of an acquired business; • An acquisition may result in a diversion of resources from the Company's existing products, business and technologies; • An acquisition and subsequent integration activities may require greater capital and other resources than originally anticipated at the time of acquisition; • To the extent the Company agrees to pay contingent consideration for an acquisition, if and how much of such consideration it is required to pay may be subject to dispute, resulting in the distraction of the Company's management team and the incurrence of legal costs; • An acquisition may result in employee anxiety, morale and/or engagement issues; • An acquisition may result in disparate information technology, internal control, financial reporting and record-keeping systems; • An acquisition may result in new partners or customers who may operate on terms and programs different than the Company's; • An acquisition may result in employees not familiar with the Company's operations; • An acquisition may result in new products and services, including the risk that any underlying intellectual property associated with such products and services may not have been adequately protected or that such products and services may infringe on the proprietary rights of others; • An acquisition may result in the incurrence of unexpected expenses, stockholder lawsuits, the dilution of the Company's earnings or its existing stockholders’ percentage ownership, or potential losses from undiscovered liabilities not covered by an indemnification from the seller(s) of the acquired business; • An acquisition may result in the loss of the Company's or the acquired company’s key personnel, customers, distributors or suppliers; and • An acquisition of a foreign business may involve additional risks, including, but not limited to, foreign currency exposure, liability or restrictions under foreign laws or regulations, and 33 Table of Contents the Company's inability to successfully assimilate differences in foreign business practices or overcome language or cultural barriers and other inherent risks of operating in unfamiliar legal and regulatory environments.
The genomics market has been the largest component of the Company's overall molecular sample management solutions business for some time and the major drivers of this market have been the consumer genomics segment, which offers products and services to consumers to provide them with personalized health and genealogical information, and the disease risk management segment which offers genetic testing through physicians for a variety of applications including prenatal testing, risk screening and pharmacogenomics.
The genomics market has been the largest component of the Company's overall sample management solutions business for some time and the major drivers of this market have been the consumer genomics segment, which offers products and services to consumers to provide them with personalized health and genealogical information, and the disease risk management segment which offers genetic testing through physicians for a variety of applications including prenatal testing, risk screening and pharmacogenomics.
A number of factors could adversely affect the performance of the Company's business and/or cause it to incur substantially increased costs because of its international presence and sales, including, but not limited to those set forth below: • Uncertainty in the application of foreign laws and the interpretation of contracts with foreign parties; • The potential for inconsistent imposition of legal and regulatory requirements; • Cultural and political differences that favor local competitors or make it difficult to effectively market, sell and gain acceptance of the Company's products; • Cultural and language differences that make international operations and business management more difficult; • Inexperience in international markets and territories and difficulties in staffing and managing foreign operations; • Exchange rates, currency fluctuations, tariffs and other barriers, extended payment terms and dependence on international distributors or representatives; • Regulatory requirements, including compliance with applicable customs regulations and the need to obtain or maintain regulatory approvals, registrations or reimbursement approvals for the Company's products; • Trade protection measures, additional trade sanctions and import/export licensing requirements; • The inability to obtain or maintain ISO certification for the Company's or the Company's suppliers’ manufacturing facilities; • The Company's inability to identify international distributors and negotiate acceptable terms for distribution agreements; • Diversion to the U.S. of the Company's products that are sold at lower prices into international markets; • The loss of one or more distributors and difficulties or delays in obtaining new or transferred product registrations or approvals for use by a replacement distributor; • Differing tax laws across jurisdictions, as well as changes in those laws; • An increase of withholding and other taxes on remittances and other payments by a foreign subsidiary; • The creditworthiness of foreign distributors and customers and difficulty in collecting foreign accounts receivable; 28 Table of Contents • Difficulty of enforcing contractual obligations or recovering damages under foreign legal systems; • Difficulty collecting amounts owed by foreign governments or other customers; • Economic conditions, inflation, political instability, the absence of available funding sources, terrorism, civil unrest, war and natural disasters in foreign countries; • Exposure to infectious disease and epidemics, including the effects of the COVID-19 outbreak on the Company's business operations in geographic locations impacted by the outbreak and on the business operations of the Company's customers and suppliers; • Long sales cycles in international markets, especially for sales to foreign governments, quasi-governmental agencies and international public health agencies; • The sale of competing products by foreign competitors at prices at or below the prices offered for the Company's products; • Restrictions on the Company's ability to repatriate investments and earnings from foreign operations; • Changes in shipping costs; • The unavailability of licenses to certain patents in force in a foreign country which cover the Company's products; and • Reduced protection for, or enforcement of, the Company's patents and other intellectual property rights in foreign countries.
A number of factors could adversely affect the performance of the Company's business and/or cause it to incur substantially increased costs because of its international presence and sales, including, but not limited to those set forth below: • Uncertainty in the application of foreign laws and the interpretation of contracts with foreign parties; • The potential for inconsistent imposition of legal and regulatory requirements; • Cultural and political differences that favor local competitors or make it difficult to effectively market, sell and gain acceptance of the Company's products; • Cultural and language differences that make international operations and business management more difficult; • Inexperience in international markets and territories and difficulties in staffing and managing foreign operations; • Exchange rates, currency fluctuations, tariffs and other barriers, extended payment terms and dependence on international distributors or representatives; • Regulatory requirements, including compliance with applicable customs regulations and the need to obtain or maintain regulatory approvals, registrations or reimbursement approvals for the Company's products; 26 Table of Contents • Trade protection measures, additional trade sanctions and import/export licensing requirements, and tariffs; • The inability to obtain or maintain ISO certification for the Company's or the Company's suppliers’ manufacturing facilities; • The Company's inability to identify international distributors and negotiate acceptable terms for distribution agreements; • Diversion to the U.S. of the Company's products that are sold at lower prices into international markets; • The loss of one or more distributors and difficulties or delays in obtaining new or transferred product registrations or approvals for use by a replacement distributor; • Differing tax laws across jurisdictions, as well as changes in those laws; • An increase of withholding and other taxes on remittances and other payments by a foreign subsidiary; • The creditworthiness of foreign distributors and customers and difficulty in collecting foreign accounts receivable; • Difficulty of enforcing contractual obligations or recovering damages under foreign legal systems; • Difficulty collecting amounts owed by foreign governments or other customers; • Economic conditions, inflation, political instability, the absence of available funding sources, terrorism, civil unrest, war and natural disasters in foreign countries; • Exposure to infectious disease and epidemics, including the effects of the COVID-19 outbreak on the Company's business operations and on the business operations of the Company's customers and suppliers; • Long sales cycles in international markets, especially for sales to foreign governments, quasi-governmental agencies and international public health agencies; • The sale of competing products by foreign competitors at prices at or below the prices offered for the Company's products; • Restrictions on the Company's ability to repatriate investments and earnings from foreign operations; • Changes in shipping costs; • The unavailability of licenses to certain patents in force in a foreign country which cover the Company's products; and • Reduced protection for, or enforcement of, the Company's patents and other intellectual property rights in foreign countries.
Even if a product or service is developed and all applicable regulatory approvals, clearance or certifications are obtained, there may be little or no market for the product or service and entry into or development of new markets for the Company's products and services may require an investment of substantial resources, such as new employees, offices and manufacturing facilities.
Even if a product is developed and all applicable regulatory approvals, clearance or certifications are obtained, there may be little or no market for the product and entry into or development of new markets for the Company's products and services may require an investment of substantial resources, such as new employees, offices and manufacturing facilities.
The Oragene ® product line sold by the Company's subsidiary, DNAG, competes against other molecular sample management solutions, such as blood collection kits and buccal swabs and will likely face additional competition from collection devices similar in design and operation to the Company's Oragene ® and ORAcollect ® products.
The Oragene ® product line sold by the Company's subsidiary, DNAG, competes against other sample management solutions, such as blood collection kits and buccal swabs and will likely face additional competition from collection devices similar in design and operation to the Company's Oragene ® and ORAcollect ® products.
The Company's OraQuick ® HIV Self-Test is also currently available in six European countries: United Kingdom, Germany, France, Italy, Spain and Portugal. The Company is also working to expand international sales of its professional HIV and HCV products and its molecular sample management solutions.
The Company's OraQuick ® HIV Self-Test is also currently available in six European countries: United Kingdom, Germany, France, Italy, Spain and Portugal. The Company is also working to expand international sales of its professional HIV and HCV products and its sample management solutions.
The Company's future liquidity and ability to meet its future capital requirements will depend on numerous factors, including, but not limited to, the following: • The costs, scope and timing of strategic acquisitions; • The costs and timing of expansion of sales and marketing activities; • The timing and success of the commercial launch of new products or services; • The extent to which the Company gains or expands market acceptance for existing, new or enhanced products and services; • The costs and timing of the expansion of the Company's manufacturing and laboratory capacity; • The success of the Company's research and product development efforts; • The time, cost and degree of success of conducting clinical trials and obtaining regulatory approvals; • The magnitude of capital expenditures; 54 Table of Contents • Changes in existing and potential relationships with distributors and other business partners; • The costs involved in obtaining and enforcing patents, proprietary rights and necessary licenses; • The costs and liability associated with patent infringement or other types of litigation; and • Competing technological and market developments.
The Company's future liquidity and ability to meet its future capital requirements will depend on numerous factors, including, but not limited to, the following: • The costs, scope and timing of strategic acquisitions; • The costs and timing of expansion of sales and marketing activities; • The timing and success of the commercial launch of new products or services; • The extent to which the Company gains or expands market acceptance for existing, new or enhanced products and services; • The costs and timing of the expansion of the Company's manufacturing and laboratory capacity; • The success of the Company's research and product development efforts; • The time, cost and degree of success of conducting clinical trials and obtaining regulatory approvals; • The magnitude of capital expenditures; • Changes in existing and potential relationships with distributors and other business partners; • The costs involved in obtaining and enforcing patents, proprietary rights and necessary licenses; • The costs and liability associated with patent infringement or other types of litigation; and • Competing technological and market developments.
If significant reforms continue to be made to the healthcare system in the United States, or in other jurisdictions, those reforms may increase the Company's costs or otherwise have an adverse effect on its financial condition and results of operations. 35 Table of Contents New or Changed Testing Guidelines Could Affect Sales of the Company's Diagnostic Products.
If significant reforms continue to be made to the healthcare system in the United States, or in other jurisdictions, those reforms may increase the Company's costs or otherwise have an adverse effect on its financial condition and results of operations. 34 Table of Contents New or Changed Testing Guidelines Could Affect Sales of the Company's Diagnostic Products.
The Company's OraQuick ® HCV test has been purchased by customers who receive government funding, and the Company believes increased funding from the CDC and other agencies will be required to substantially increase the volume of HCV testing, especially in the public health market. There can be no assurance that purchases or funding from these agencies will occur or continue.
The Company's OraQuick ® HCV test has been purchased by customers who receive government funding, and the Company believes increased funding from government agencies will be required to substantially increase the volume of HCV testing, especially in the public health market. There can be no assurance that purchases or funding from these agencies will occur or continue.
We believe that our facilities and procedures are in material compliance with the FDA’s OSR regulations, the European Union’s Quality Management Systems requirements, ISO 13485:2016, but the regulations are subject to change or may be unclear, and we cannot be sure that FDA investigators will agree with our compliance with the FDA’s post-market requirements.
We believe that our facilities and procedures are in material compliance with the FDA’s QSR requirements, the European Union’s Quality Management Systems requirements, ISO 13485:2016, but the regulations are subject to change or may be unclear, and we cannot be sure that FDA investigators will agree with our compliance with the FDA’s post-market requirements.
These trends in the ancestry testing market may continue and revenues in this market may continue to be volatile. In an effort to increase the Company's molecular revenues, it has devoted increasing time and attention to expanding sales of its genomics products both domestically and internationally, with both new and existing accounts, including co-clearances and co-promotions with strategic partners.
These trends in the ancestry testing market may continue and revenues in this market may continue to be volatile. 22 Table of Contents In an effort to increase the Company's molecular revenues, it has devoted increasing time and attention to expanding sales of its genomics products both domestically and internationally, with both new and existing accounts, including co-clearances and co-promotions with strategic partners.
The activities have negatively affected this market and there is a risk that these enforcement actions will continue to negatively affect this market by forcing laboratories to either stop offering such services or restricting the use of such services. Such a reduction in testing could result in decreased sales of the Company's DNA collection devices.
The activities have negatively affected this market and there is a risk that these enforcement actions will continue to negatively affect this market by forcing 44 Table of Contents laboratories to either stop offering such services or restricting the use of such services. Such a reduction in testing could result in decreased sales of the Company's DNA collection devices.
Even if the Company can demonstrate that its products are more cost effective, save time, or have better performance or other benefits, physicians, other healthcare providers and consumers may resist changing to rapid point-of-care tests and instead may choose to obtain diagnostic results through laboratory tests.
Even if the Company can 24 Table of Contents demonstrate that its products are more cost effective, save time, or have better performance or other benefits, physicians, other healthcare providers and consumers may resist changing to rapid point-of-care tests and instead may choose to obtain diagnostic results through laboratory tests.
In addition, the impacts of political unrest, including as a result geopolitical tension, such as a deterioration in the relationship between the United States and China, escalation of tensions between China and Taiwan, or escalation in conflict between Russia and Ukraine or between Israel and the various countries in the surrounding regions, including any resulting sanctions, export controls or other restrictive actions that may be imposed by the United States and/or other countries against governmental or other entities in, for example, Russia, also could lead to disruption, instability and volatility in the global markets, which may have an adverse impact on the Company's business or ability to access the capital markets.
In addition, the impacts of political unrest, including as a result geopolitical tension, such as a deterioration in the relationship between the United States and China, escalation of tensions between China and Taiwan, or escalation in conflict between Russia and Ukraine or the Israel-Hamas war, including any resulting sanctions, export controls or other restrictive actions that may be imposed by the United States and/or other countries against governmental or other entities in, for example, Russia, also could lead to disruption, instability and volatility in the global markets, which may have an adverse impact on the Company's business or ability to access the capital markets.
Recently, the global supply chain has experienced significant disruptions, resulting in shortages of labor and equipment. These conditions, if not mitigated or remedied in a timely manner, could delay or preclude delivery of raw materials needed to manufacture the Company's products or delivery of the Company's products to customers, particularly in international markets.
In recent years, the global supply chain has experienced significant disruptions, resulting in shortages of labor and equipment. These conditions, if not mitigated or remedied in a timely manner, could delay or preclude delivery of raw materials needed to manufacture the Company's products or delivery of the Company's products to customers, particularly in international markets.
The Company's expectation is that the businesses of its foreign subsidiaries will continue to grow and its exposure to foreign currency exchange rates may be more significant than in past years. 47 Table of Contents Exchange rate fluctuations may affect the revenues and expenses of the Company's foreign subsidiaries and the translation of those financial results into U.S. dollars.
The Company's expectation is that the businesses of its foreign subsidiaries will continue to grow and its exposure to foreign currency exchange rates may be more significant than in past years. Exchange rate fluctuations may affect the revenues and expenses of the Company's foreign subsidiaries and the translation of those financial results into U.S. dollars.
The Company's genomics revenues have also been volatile due to changes in promotional strategies and purchasing patterns by certain customers which serve 23 Table of Contents the consumer ancestry and genetic testing market and cost cutting and de-stocking efforts at some of the Company's disease risk management customers.
The Company's genomics revenues have also been volatile due to changes in promotional strategies and purchasing patterns by certain customers which serve the consumer ancestry and genetic testing market and cost cutting and de-stocking efforts at some of the Company's disease risk management customers.
Other factors that could affect the success of the Company's efforts include its ability to manufacture products or provide laboratory services in a cost-effective manner and whether it can obtain necessary intellectual property rights and protection in the markets where the product or service is sold.
Other factors that could affect the success of the Company's efforts include its ability to manufacture products in a cost-effective manner and whether it can obtain necessary intellectual property rights and protection in the markets where the product or service is sold.
Regardless of merit or eventual outcome, product liability claims could result in: • Decreased demand for the Company's products; • Lost revenues; • Damage to the Company's image or reputation; • Costs related to litigation; • Increased product liability insurance costs; • Diversion of management time and attention; and • Incurrence of damages payable to plaintiffs.
Regardless of merit or eventual outcome, product liability claims could result in: • Decreased demand for the Company's products; • Lost revenues; • Damage to the Company's image or reputation; • Costs related to litigation; • Increased product liability insurance costs; 49 Table of Contents • Diversion of management time and attention; and • Incurrence of damages payable to plaintiffs.
For example, it could incur damages under state laws pursuant to an action brought by a private party for the wrongful use or disclosure of consumers’ personal information. Failure to Comply With Data Protection Requirements or Privacy Laws Could Increase the Company's Costs .
For example, it could incur damages under state laws pursuant to an action brought by a private party for the wrongful use or disclosure of consumers’ personal information. 41 Table of Contents Failure to Comply With Data Protection Requirements or Privacy Laws Could Increase the Company's Costs .
The Company May Become Involved in Intellectual Property Disputes, Which Could Increase Its Costs and Limit or Eliminate Its Ability to Sell Products, Provide Services or Use Certain Technologies. From time to time, the Company may seek to enforce its patents or other intellectual property rights through litigation.
The Company May Become Involved in Intellectual Property Disputes, Which Could Increase Its Costs and Limit or Eliminate Its Ability to Sell Products, Provide Services or Use Certain Technologies. From time to time, the Company has sought, and may in the future seek, to enforce its patents or other intellectual property rights through litigation.
The Company's failure to comply with applicable privacy or security laws or significant changes in these laws could significantly impact its business and future business plans. 53 Table of Contents Federal and State Laws Pertaining to Healthcare Fraud and Abuse Could Adversely Affect the Company's Business, Financial Condition and Results of Operations.
The Company's failure to comply with applicable privacy or security laws or significant changes in these laws could significantly impact its business and future business plans. Federal and State Laws Pertaining to Healthcare Fraud and Abuse Could Adversely Affect the Company's Business, Financial Condition and Results of Operations.
The Company has obtained the CE mark for several of its existing products under the IVDD. It also intends to apply for CE marks for certain of its future products and is not aware of any material reason why it would be unable to obtain those marks.
The Company has obtained the CE mark for several of its existing products under the IVDD. It also intends to apply for CE marks for certain of its future 39 Table of Contents products and is not aware of any material reason why it would be unable to obtain those marks.
These provisions could limit the price investors might be willing to pay in the future for shares of the Company's Common Stock. 49 Table of Contents General Risk Factors The Company May Face Product Liability Claims for Injuries Resulting From the Use of Its Products.
These provisions could limit the price investors might be willing to pay in the future for shares of the Company's Common Stock. General Risk Factors The Company May Face Product Liability Claims for Injuries Resulting From the Use of Its Products.
U.S. government 29 Table of Contents contracts typically contain a number of extraordinary provisions that would not typically be found in commercial contracts and which may create a disadvantage and additional risks to the Company as compared to competitors that do not rely on government contracts.
U.S. government contracts typically contain a number of extraordinary provisions that would not typically be found in commercial contracts and which may create a disadvantage and additional risks to the Company as compared to competitors that do not rely on government contracts.
On December 8, 2023, the National Institute of Standards and Technology published for comment a Draft Interagency Guidance Framework for Considering the Exercise of March-In Rights that would be voluntary for federal government agencies to follow when deciding whether to exercise march-in rights and which for the first time includes the price of a product as a factor a federal government agency can use when deciding to exercise march-in rights.
In late 2023, the National Institute of Standards and Technology published for comment a Draft Interagency Guidance Framework for Considering the Exercise of March-In Rights that would be voluntary for federal government agencies to follow when deciding whether to exercise march-in rights and which for the first time includes the price of a product as a factor a federal government agency can use when deciding to exercise march-in rights.
The Company believes that its products and procedures are in material compliance with all applicable FDA regulations, ISO requirements, and other applicable regulatory requirements, but the regulations regarding the manufacture and sale of its products, the QSR and ISO requirements, and other requirements may be unclear and are subject to change.
The Company believes that its products and procedures are in material compliance with all applicable FDA regulations, ISO requirements, and other applicable regulatory requirements, but the regulations regarding the manufacture and sale of 40 Table of Contents its products, the QSR and ISO requirements, and other requirements may be unclear and are subject to change.
The failure to obtain or maintain the CE mark for one or more of the 40 Table of Contents Company's products could lead to the termination of strategic alliances and agreements for sales of those products in the EU and mean that the Company is unable to sell such products in the EU.
The failure to obtain or maintain the CE mark for one or more of the Company's products could lead to the termination of strategic alliances and agreements for sales of those products in the EU and mean that the Company is unable to sell such products in the EU.
These developments could have a material adverse effect on the Company's business, financial condition and results of operations. 50 Table of Contents The Company also faces competition from products that are sold at a lower price.
These developments could have a material adverse effect on the Company's business, financial condition and results of operations. The Company also faces competition from products that are sold at a lower price.
Impacts of the COVID-19 pandemic that the Company has or may experience in the future include, but are not limited to: • a slowdown or stoppage in the supply chain of the raw materials and components used to manufacture its products; • interruptions or delays in domestic and/or international shipment of its products to its distributors and customers; • interruptions in normal operations of certain end-use customers that could result in reductions in demand for its products; • disruptions to the Company's operations, including a shutdown of its facilities or product lines; restrictions on its operations and sales, marketing and distribution efforts; and interruptions to its research and development, manufacturing, clinical/regulatory and other important business activities; • shutdown or interruption of the Company's manufacturing facilities due to contamination and costs incurred to clean and disinfect a facility following contamination; • inefficiencies and increased costs in the Company's production and shipping processes due to premium pay for manufacturing and certain other employees as well as social distancing and personal protective equipment requirements; • limitations on employee resources and availability, including due to sickness, government restrictions, the desire of employees to avoid contact with large groups of people or mass transit disruptions; • a fluctuation in foreign currency exchange rates or interest rates could result from market uncertainties; • an increase in exposure to credit losses for customers adversely affected by the COVID-19 pandemic; and • an increase in regulatory restrictions or continued market volatility could hinder the Company's ability to execute strategic business activities, including acquisitions.
Impacts of the COVID-19 pandemic that the Company has or may experience in the future include, but are not limited to: • a slowdown or stoppage in the supply chain of the raw materials and components used to manufacture its products; • interruptions or delays in domestic and/or international shipment of its products to its distributors and customers; • interruptions in normal operations of certain end-use customers that could result in reductions in demand for its products; • disruptions to the Company’s operations, including a shutdown of its facilities or product lines; restrictions on its operations and sales, marketing and distribution efforts; and interruptions to its research and development, manufacturing, clinical/regulatory and other important business activities; • shutdown or interruption of the Company’s manufacturing facilities due to contamination and costs incurred to clean and disinfect a facility following contamination; • inefficiencies and increased costs in the Company’s production and shipping processes due to premium pay for manufacturing and certain other employees as well as social distancing and personal protective equipment requirements; • limitations on employee resources and availability, including due to sickness, government restrictions, the desire of employees to avoid contact with large groups of people or mass transit disruptions; • a fluctuation in foreign currency exchange rates or interest rates could result from market uncertainties; • an increase in exposure to credit losses for customers adversely affected by the COVID-19 pandemic and any future health crises; and • an increase in regulatory restrictions or continued market volatility could hinder the Company’s ability to execute strategic business activities, including acquisitions. 55 Table of Contents These conditions could adversely affect the Company’s financial performance and condition or those of its customers and suppliers.
In addition, the Company could experience delays in 30 Table of Contents production as it increases manufacturing capacity or begins to manufacture new products that may result in its inability to meet product demand as the products ordered by its customers being on back-order as initial production issues are addressed.
In addition, the Company could experience delays in production as it increases manufacturing capacity or begins to manufacture new products that may result in its inability to meet product demand as the products ordered by its customers being on back-order as initial production issues are addressed.
The Company relies heavily on enterprise resource planning and other complex information technology systems across its operations and on the internet, including for management of inventory, processing and analyzing laboratory specimens, purchase orders, invoices, shipping, revenue and expense accounting, online business, consumer call support, and various other processes and transactions.
The Company relies heavily on enterprise resource planning and other complex information technology systems across its operations and on the internet, including for management of inventory, purchase orders, invoices, shipping, revenue and expense accounting, online business, consumer call support, and various other processes and transactions.
In addition, the Company has contracted with a third party in Thailand for the manufacture of a portion of the Company's OraQuick ® HIV tests and all of DNAG’s products are produced in Canada. The Company may enter into agreements to manufacture these or other products in additional foreign countries as well.
In addition, the Company has contracted with a third party in Thailand for the manufacture of a portion of the Company's OraQuick ® HIV tests and certain DNAG products are produced in Canada. The Company may enter into agreements to manufacture these or other products in additional foreign countries as well.
Government Contracts May Affect Its Intellectual Property Rights. Provisions in the Company's U.S. government contracts may affect its intellectual property rights. Certain of the Company's activities have been funded, and may in the future be funded, by the U.S. government, including its contracts with BARDA.
Government Contracts May Affect Its Intellectual Property Rights. 30 Table of Contents Provisions in the Company's U.S. government contracts may affect its intellectual property rights. Certain of the Company's activities have been funded, and may in the future be funded, by the U.S. government, including its contracts with BARDA.
Many of the Company's molecular sample management solutions are sold to researchers at academic institutions, pharmaceutical and biotechnology companies, government laboratories and private foundations. Many research customers are dependent for their funding on grants from U.S. governmental agencies such as the U.S. National Institutes of Health and agencies in other countries to pay for the products and services they purchase.
Many of the Company's sample management solutions are sold to researchers at academic institutions, pharmaceutical and biotechnology companies, government laboratories and private foundations. Many research customers are dependent for their funding on grants from U.S. governmental agencies such as the NIH and agencies in other countries to pay for the products and services they purchase.
As such, the Company's involvement in litigation or other legal proceedings with respect to patents or other intellectual property and proprietary technology, either as a plaintiff or defendant, could adversely affect its revenues, market share, results of operations and business because: • It could consume a substantial portion of managerial and financial resources; • Its outcome would be uncertain and a court may find that the Company's patents are invalid or unenforceable in response to claims by another party or that the third-party patent claims are valid and infringed by the Company's products or services; • An adverse outcome could subject the Company to the loss of the protection of its patents or to liability in the form of past royalty payments, penalties, reimbursement of litigation costs and legal fees, special and punitive damages, or future royalty payments, any of which could significantly affect the Company's future earnings; • Governmental agencies may commence investigations or criminal proceedings against the Company's employees, former employees and the Company itself relating to claims of misappropriation or misuse of another party’s proprietary rights; • Failure to obtain a necessary license upon an adverse outcome could prevent the Company from selling its current products or services or other products or services it may develop or acquire; • The Company may be required to alter its product or services, given the proprietary rights of others; • The pendency of any litigation may in and of itself cause the Company's distributors and customers to reduce or terminate purchases of its products or services; and • A court could award a preliminary and/or permanent injunction, which would prevent the Company from selling its current or future products or services. 39 Table of Contents The Company may indemnify some customers and strategic partners under its agreements with such parties if its products, services or activities have actually or allegedly infringed upon, misappropriated or misused another party’s proprietary rights.
As such, the Company's involvement in litigation or other legal proceedings with respect to patents or other intellectual property and proprietary technology, either as a plaintiff or defendant, could adversely affect its revenues, market share, results of operations and business because: • It could consume a substantial portion of managerial and financial resources; • Its outcome would be uncertain and a court may find that the Company's patents are invalid or unenforceable in response to claims by another party or that the third-party patent claims are valid and infringed by the Company's products or services; • An adverse outcome could subject the Company to the loss of the protection of its patents or to liability in the form of past royalty payments, penalties, reimbursement of litigation costs and legal fees, special and punitive damages, or future royalty payments, any of which could significantly affect the Company's future earnings; • Governmental agencies may commence investigations or criminal proceedings against the Company's employees, former employees and the Company itself relating to claims of misappropriation or misuse of another party’s proprietary rights; • Failure to obtain a necessary license upon an adverse outcome could prevent the Company from selling its current products or services or other products or services it may develop or acquire; 38 Table of Contents • The Company may be required to alter its product or services, given the proprietary rights of others; • The pendency of any litigation may in and of itself cause the Company's distributors and customers to reduce or terminate purchases of its products or services; and • A court could award a preliminary and/or permanent injunction, which would prevent the Company from selling its current or future products or services.
If the Company is unable to successfully hedge against unfavorable foreign currency exchange rate movements, its consolidated financial results may be adversely impacted. Risks Relating to the Company's Common Stock The Company's Stock Price Could Continue to be Volatile.
If the Company is unable to successfully hedge against unfavorable foreign currency exchange rate movements, its consolidated financial results may be adversely impacted. 47 Table of Contents Risks Relating to the Company's Common Stock The Company's Stock Price Could Continue to be Volatile.
The following factors, among others, could have a significant impact on the market for the Company's Common Stock: • The performance of the Company's business, including its efforts to increase sales of OraQuick ® HIV, HCV and Molecular sample management solutions and its OraQuick ® In-Home HIV test and HIV Self-Test; • The Company's efforts to expand sales of its genomic and microbiome laboratory service offerings; • The Company's efforts to produce and commercialize its InteliSwab® Covid-19 Rapid Tests; • Future announcements concerning the Company and its products or services, including with respect to significant acquisitions, strategic collaborations and joint ventures; • Ability to achieve the expected benefits, enhanced revenue growth and synergies from strategic acquisitions; • Clinical results with respect to the Company's products or services or those of its competitors; • The status of clinical studies and pending submissions for required regulatory approvals; • The announcement of regulatory or enforcement actions by the FDA or other agencies against the Company, its products or services, or one or more of its customers; • The gain or loss of significant contracts and availability of funding for the purchase of the Company's products and services; • Delays in the development, regulatory approval or commercialization of new or enhanced products or services; • Legislative developments and industry or competitive trends; • Biological or medical discoveries; • Disputes or developments with key customers, distributors or suppliers; • Developments in patent or other proprietary rights; • Litigation or threatened litigation; • Complaints or concerns about the performance or safety of the Company's products and publicity about those issues, including publicity expressed through social media or otherwise over the internet; • Failure to achieve, or changes in, financial estimates by securities analysts and comments or opinions about the Company by securities analysts or major stockholders; • Governmental regulation; • Changes in the level of competition; 48 Table of Contents • Loss of or declines in sales to major distributors or customers or changes in the mix of products sold; • Period-to-period fluctuations in the Company's operating results; • Additions or departures of key personnel; • General market and economic conditions; and • Terrorist attacks, civil unrest, war and national disasters, including pandemics.
The following factors, among others, could have a significant impact on the market for the Company's Common Stock: • The performance of the Company's business, including its efforts to increase sales of OraQuick ® HIV, HCV and sample management solutions and its OraQuick ® In-Home HIV test and HIV Self-Test; • Future announcements concerning the Company and its products or services, including with respect to significant acquisitions, strategic collaborations and joint ventures; • Ability to achieve the expected benefits, enhanced revenue growth and synergies from strategic acquisitions, including the Company's recent acquisition of Sherlock; • Clinical results with respect to the Company's products or services or those of its competitors; • The status of clinical studies and pending submissions for required regulatory approvals; • The announcement of regulatory or enforcement actions by the FDA or other agencies against the Company, its products or services, or one or more of its customers; • The gain or loss of significant contracts and availability of funding for the purchase of the Company's products and services; • Delays in the development, regulatory approval or commercialization of new or enhanced products or services; • Legislative developments and industry or competitive trends; • Biological or medical discoveries; • Disputes or developments with key customers, distributors or suppliers; • Developments in patent or other proprietary rights; • Litigation or threatened litigation; • Complaints or concerns about the performance or safety of the Company's products and publicity about those issues, including publicity expressed through social media or otherwise over the internet; • Failure to achieve, or changes in, financial estimates by securities analysts and comments or opinions about the Company by securities analysts or major stockholders; • Governmental regulation; • Changes in the level of competition; • Loss of or declines in sales to major distributors or customers or changes in the mix of products sold; • Period-to-period fluctuations in the Company's operating results; • Additions or departures of key personnel; • General market and economic conditions; and • Terrorist attacks, civil unrest, war and national disasters, including pandemics.
For instance, management identified a material weakness in the Company's internal control over financial reporting related to customer pricing in the revenue recognition process and concluded that its disclosure controls and procedures were not effective due to the existence of the material weakness as of September 30, 2023.
For instance, management identified a material weakness in the Company's internal control over financial reporting related to customer pricing in the revenue recognition process and concluded that its disclosure controls and procedures were not effective due to the existence of the material weakness as of September 30, 2023, which has since been remediated.
Relying on distributors or others to market and sell the Company's products could harm its business for various reasons, including: • The Company may not be able to find suitable distributors to distribute its products on satisfactory terms, or at all; • The Company's distributors or other customers may not fulfill their contractual obligations to it or otherwise market and distribute its products in the manner or at the levels it expects; • The Company does not control the incentives provided by its distributors to their sales personnel and the effectiveness of these incentives could affect sales of the Company's products; 36 Table of Contents • Agreements with distributors may terminate prematurely due to disagreements or may result in litigation between the parties; • The Company may not be able to renew existing distribution agreements on acceptable terms, or at all; • The Company's distributors may not devote sufficient resources or priority to the sale of its products; • The Company's distributors may prioritize their own private label products that compete with its products; • The Company's existing distributor relationships or contracts may preclude or limit it from entering into arrangements with other distributors; and • The Company may not be able to negotiate future distribution agreements on acceptable terms, or at all.
Its sales depend to a substantial degree on its ability to sell products to these customers and on the marketing and distribution abilities of the companies with which it collaborates. 35 Table of Contents Relying on distributors or others to market and sell the Company's products could harm its business for various reasons, including: • The Company may not be able to find suitable distributors to distribute its products on satisfactory terms, or at all; • The Company's distributors or other customers may not fulfill their contractual obligations to it or otherwise market and distribute its products in the manner or at the levels it expects; • The Company does not control the incentives provided by its distributors to their sales personnel and the effectiveness of these incentives could affect sales of the Company's products; • Agreements with distributors may terminate prematurely due to disagreements or may result in litigation between the parties; • The Company may not be able to renew existing distribution agreements on acceptable terms, or at all; • The Company's distributors may not devote sufficient resources or priority to the sale of its products; • The Company's distributors may prioritize their own private label products that compete with its products; • The Company's existing distributor relationships or contracts may preclude or limit it from entering into arrangements with other distributors; and • The Company may not be able to negotiate future distribution agreements on acceptable terms, or at all.
On February 4, 2020, the HHS issued a declaration that the threat to public health posed by COVID-19 justifies the emergency use of unapproved in vitro diagnostics for the detection or diagnosis of SARS-CoV-2.
In early 2020, the HHS issued a declaration that the threat to public health posed by COVID-19 justifies the emergency use of unapproved in vitro diagnostics for the detection or diagnosis of SARS-CoV-2.
As a result, the Company may expend considerable resources on unsuccessful sales efforts or it may not be able to complete transactions at all or on a schedule and in an amount consistent with its objectives. The Company's Inability To Expand International Sales Could Adversely Affect its Business and Results of Operations.
As a result, the Company may expend considerable resources on unsuccessful sales efforts or it 25 Table of Contents may not be able to complete transactions at all or on a schedule and in an amount consistent with its objectives or previous order patterns. The Company's Inability To Expand International Sales Could Adversely Affect its Business and Results of Operations.
The Company's ability to achieve and continue profitable operations in the future will be dependent upon a number of factors including, without limitation, the following: 44 Table of Contents • The Company's ability to continue growing sales of its molecular sample management solutions and related genomic and microbiome laboratory services; • The Company's ability to produce and successfully commercialize its InteliSwab® COVID-19 Rapid Tests and compete with comparable products; • The Company's ability to grow its OraQuick ADVANCE ® HIV 1/2 test in the United States and expand sales of its OraQuick® HIV Self-Test internationally; • Changes in the markets in which the Company operates, including changes in the prevalence of COVID-19; • Changes in customer buying patterns or a buildup of significant quantities in the Company's distributors’ inventories or distribution channels; • The level of expenditures the Company is required to make in order to develop, obtain regulatory approvals for and successfully commercialize its new products; • The Company's ability to expand its business through the acquisition of other companies or technologies or through internal development of new or improved products; • The Company's ability to realize revenues and other anticipated benefits from its distribution relationship with Sapphiros; • The Company's ability to improve manufacturing efficiencies and reduce cost of goods sold; • The Company's ability to successfully launch new products after receipt of required regulatory approvals or the acquisition of rights to those products; • The degree to which the Company's major distributors and customers comply with their contractual obligations, including minimum purchase commitments; • Whether the Company or entities in which it invests are successful in obtaining and maintaining required regulatory approvals and registrations for its new products; • The level of competition, including the degree to which competitors sell lower priced products or more attractive offerings to compete with the Company's products; • Changes in economic conditions in domestic or international markets, such as economic downturns, reduced demand, inflation and currency fluctuations; • Global economic and political instability and conflicts, such as terrorism, civil unrest, war and natural disasters in foreign countries; • Failure to achieve the Company's revenue growth targets; and • The costs and results of patent infringement, product liability and other litigation or claims asserted by or against the Company.
The Company's ability to achieve and continue profitable operations in the future will be dependent upon a number of factors including, without limitation, the following: • The Company's ability to continue growing sales of its sample management solutions and related genomic and microbiome laboratory services; • The Company's ability to successfully commercialize its products in the United States and internationally; • Changes in the markets in which the Company operates; • Changes in customer buying patterns or a buildup of significant quantities in the Company's distributors’ inventories or distribution channels; • The level of expenditures the Company is required to make in order to develop, obtain regulatory approvals for and successfully commercialize its new products; • The Company's ability to expand its business through the acquisition of other companies or technologies or through internal development of new or improved products; • The Company's ability to realize revenues and other anticipated benefits from its acquisitions and strategic transactions; • The Company's ability to improve manufacturing efficiencies and reduce cost of goods sold; • The Company's ability to successfully launch new products after receipt of required regulatory approvals or the acquisition of rights to those products; • The degree to which the Company's major distributors and customers comply with their contractual obligations, including minimum purchase commitments; 45 Table of Contents • Whether the Company or entities in which it invests are successful in obtaining and maintaining required regulatory approvals and registrations for its new products; • The level of competition, including the degree to which competitors sell lower priced products or more attractive offerings to compete with the Company's products; • Changes in economic conditions in domestic or international markets, such as economic downturns, reduced demand, inflation, currency fluctuations and tariffs; • Global economic and political instability and conflicts, such as terrorism, civil unrest, war and natural disasters in foreign countries; • Failure to achieve the Company's revenue growth targets; and • The costs and results of patent infringement, product liability and other litigation or claims asserted by or against the Company.
While there is still demand for COVID-19 testing products, there is no guarantee that current or anticipated demand will continue, or if demand does continue, that the 24 Table of Contents Company will be able to produce its InteliSwab® COVID-19 Rapid Test in quantities to meet the demand.
While there is still limited demand for COVID-19 testing products, there is no guarantee that current or anticipated demand will continue, or if demand does continue, that the Company will be able to produce its InteliSwab® COVID-19 Rapid Test in quantities to meet the demand.
In particular, the Company is subject to strict governmental controls on the development, manufacture, labeling, distribution and marketing of its products and the processes and procedure for its laboratory services. The Company's practice is to train its employees on the legal requirements applicable to its business, including the requirements of the FDA and other relevant agencies.
In particular, the Company is subject to strict governmental controls on the development, manufacture, labeling, distribution and marketing of its products. The Company's practice is to train its employees on the legal requirements applicable to its business, including the requirements of the FDA and other relevant agencies.
Failure to comply with the GDPR, and any supplemental European Economic Area (“EEA”) country’s national data protection laws which may apply by virtue of the location of the individuals whose personal data the Company collects, may result in fines and other administrative 42 Table of Contents penalties, including fines of up to the greater of 4% of worldwide turnover and €20 million.
Failure to comply with the GDPR, and any supplemental European Economic Area (“EEA”) country’s national data protection laws which may apply by virtue of the location of the individuals whose personal data the Company collects, may result in fines and other administrative penalties, including fines of up to the greater of 4% of worldwide turnover and €20 million (or £17.5 million in the UK).
Risks Relating to Products, Marketing and Sales • Changes in the genomics market may adversely affect the Company's business. • The Company's future success depends upon market acceptance of its existing and future products and service offerings. • The Company may not realize revenue levels from its InteliSwab® COVID-19 Rapid Test consistent with prior years. • The COVID-19 pandemic continues to cast uncertainty over the Company's consolidated results of operations, financial position and cash flows, while the consequences of COVID-19 and the governmental response to contain the pandemic and pandemic-related macroeconomic impacts could negatively affect the Company's operations and share price. • Marketing of the Company's COVID-19 tests and collection kits under EUAs from the FDA is subject to certain limitations and it is required to maintain compliance with the terms of the EUA, among other things, and the continuance of the EUAs is subject to government discretion. • If acceptance and adoption of oral fluid testing and collection products does not continue, the Company's future results may suffer. • The Company expects to face increasing competition from other providers of diagnostic tests, sample collection products and molecular laboratory services. • The Company's inability to expand international sales could adversely affect its business and results of operations. • The Company's international presence may increase its risks and expose its business to regulatory, cultural or other restraints. • The Company's U.S. government contracts require compliance with numerous laws and increase its risk and liability. • The Company's inability to manufacture products in accordance with applicable specifications, performance standards or quality requirements could adversely affect its business. • The Company's business will suffer if it does not effectively manage challenges to its manufacturing processes and it may be unable to successfully scale-up manufacturing of its products in sufficient quality and quantity to meet demand, which would negatively impact revenue expectations.
Risks Relating to Products, Marketing and Sales • Changes in the genomics market may adversely affect the Company's business. • The Company's future success depends upon market acceptance of its existing and future products and service offerings. • The Company may not realize revenue levels from its InteliSwab® COVID-19 Rapid Test consistent with prior years. • Marketing of the Company's COVID-19 tests and collection kits under EUAs from the FDA is subject to certain limitations and it is required to maintain compliance with the terms of the EUA, among other things, and the continuance of the EUAs is subject to government discretion. • If acceptance and adoption of oral fluid testing and collection products does not continue, the Company's future results may suffer. • The Company expects to face increasing competition from other providers of diagnostic tests, and sample collection products. • The Company's inability to expand international sales could adversely affect its business and results of operations. • The Company's international presence may increase its risks and expose its business to regulatory, cultural or other restraints. • The Company's U.S. government contracts require compliance with numerous laws and increase its risk and liability. • The Company's inability to manufacture products in accordance with applicable specifications, performance standards or quality requirements could adversely affect its business. • The Company's business will suffer if it does not effectively manage challenges to its manufacturing processes and it may be unable to successfully scale-up manufacturing of its products in sufficient quality and quantity to meet demand, which would negatively impact revenue expectations.
The Company's failure to achieve and expand market acceptance of its rapid point-of-care diagnostic tests with customers would have a negative effect on its future sales growth. The Company Expects to Face Increasing Competition From Other Providers of Diagnostic Tests, Sample Collection Products and Molecular Laboratory Services.
The Company's failure to achieve and expand market acceptance of its rapid point-of-care diagnostic tests with customers would have a negative effect on its future sales growth. The Company Expects to Face Increasing Competition From Other Providers of Diagnostic Tests and Sample Collection Products. The Company's rapid point-of-care tests compete with other point-of-care products made by the Company's competitors.
Obtaining and maintaining such licenses may require the payment of substantial amounts. In addition, if the Company is unable to obtain these types of licenses, its product development and commercialization efforts may be delayed or precluded. Moreover, some licenses may be nonexclusive, and therefore the Company's competitors may have access to the same technology also licensed to the Company.
In addition, if the Company is unable to obtain these types of licenses, its product development and commercialization efforts may be delayed or precluded. Moreover, some licenses may be nonexclusive, and therefore the Company's competitors may have access to the same technology also licensed to the Company.
If Acceptance and Adoption of Oral Fluid Testing and Collection Products Does Not Continue, the Company's Future Results May Suffer. The Company has made significant progress in gaining acceptance of oral fluid testing products, particularly for (i) HIV testing in the public health, hospital, insurance and other markets, and (ii) drugs-of-abuse testing in the workplace and criminal justice markets.
If Acceptance and Adoption of Oral Fluid Testing and Collection Products Does Not Continue, the Company's Future Results May Suffer. The Company has made significant progress in gaining acceptance of oral fluid testing products, particularly for HIV testing in the public health, hospital, insurance and other markets.
This would result in a loss of revenues and adversely affect the Company's results of operations, cash flow and business. 33 Table of Contents Customer Concentration Creates Risk for the Company's Business. One of the Company's customers accounted for approximately 63% of its net consolidated revenues for the year ended December 31, 2023.
This would result in a loss of revenues and adversely affect the Company's results of operations, cash flow and business. Customer Concentration Creates Risk for the Company's Business. One of the Company's customers accounted for approximately 24% of its net consolidated revenues for the year ended December 31, 2024.
LDTs are tests designed, developed, and performed in-house by a laboratory. Such laboratories are subject to regulation under CLIA but have not been subject to regulation by the FDA under the agency’s medical device requirements. A significant portion of the total volume of genetic or molecular testing is performed with LDTs.
Such laboratories are subject to regulation under CLIA but have not been subject to regulation by the FDA under the agency’s medical device requirements. A significant portion of the total volume of genetic or molecular testing is performed with LDTs.
In Addition, if the Company's Costs Increase and the Company Is Not Able to Pass Along These Price Increases to Its Customers, Its Net Income Would Be Adversely Affected, and the Adverse Impact May Be Material. Inflation rates, particularly in the United States, have increased recently to levels not seen in years.
In Addition, if the Company's Costs Increase and the Company Is Not Able to Pass Along These Price Increases to Its Customers, Its Net Income Would Be Adversely Affected, and the Adverse Impact May Be Material. Inflation rates, particularly in the United States, increased in recent years and continue to be subject to volatility.
In addition, changes in or evolving interpretations of these laws, regulations, or administrative or judicial interpretations, may require the Company to change its business practices or subject its business practices to legal challenges, which could have a material adverse effect on its business, financial condition and results of operations.
In addition, changes in or evolving interpretations of these laws, regulations, or administrative or judicial interpretations, may require the Company to change its business practices or subject its business practices to legal challenges, which could have a material adverse effect on its business, financial condition and results of operations. 53 Table of Contents The Company May Experience Fluctuations in Its Financial Results or Fail to Meet Its Financial Projections.
All in vitro diagnostic products that are to be sold in the EU must bear the CE mark indicating conformance with the requirements of the relevant EU in vitro diagnostic medical devices legislation. The new EU Regulation 2017/746 on in vitro diagnostic medical devices ("IVDR"), became applicable on May 26, 2022 and repealed the previous Directive 98/79/EC, ("IVDD").
All in vitro diagnostic products that are to be sold in the EU must bear the CE mark indicating conformance with the requirements of the relevant EU in vitro diagnostic medical devices legislation. The EU IVDR became applicable on May 26, 2022 and repealed the previous IVDD.
The GDPR imposes several mandatory requirements on companies that process personal data, including requirements relating to the processing of health and other sensitive data, legal basis for processing personal data which may include obtaining the consent of the individuals to whom the personal data relates, providing notice to individuals about personal data processing activities, having data processing agreements with third parties who process personal data, notification of personal data breaches to data protection authorities and individuals, and the implementing of safeguards to protect the security and confidentiality of the personal data.
The GDPR imposes several mandatory requirements on companies that process personal data, including requirements relating to the processing of special category personal data (such as health sensitive data), ensuring a legal basis or condition applies to the processing of personal data, which may include obtaining the consent of the individuals to whom the personal data relates, providing notice to individuals about personal data processing activities, having data processing agreements with third parties who process personal data, notification of personal data breaches to data protection authorities and individuals, and the implementing of safeguards to protect the security and confidentiality of the personal data.
The Company's Revenues Could be Affected by Third-Party Reimbursement Policies and Potential Cost Constraints. The end-users of certain of the Company's products include hospitals, physicians and other healthcare providers. Use of the Company's products could be adversely impacted if these end-users do not receive adequate reimbursement for the cost of its products from their patients’ healthcare insurers or payors.
The end-users of certain of the Company's products include hospitals, physicians and other healthcare providers. Use of the Company's products could be adversely impacted if these end-users do not receive adequate reimbursement for the cost of its products from their patients’ healthcare insurers or payors.
In 2023, approximately $43.8 million of the Company's consolidated net revenues were generated from sales in a variety of foreign countries. These international activities subject the Company to the FCPA, the U.K.
In 2024, approximately $13.9 million of the Company's consolidated net revenues were generated from sales in a variety of foreign countries. These international activities subject the Company to the FCPA, the U.K.
Relying on collaborative relationships could be risky to the Company's business for a number of reasons, including: • The Company may be required to transfer material rights to such strategic collaborators, government agencies, licensees and others; • The Company's collaborators may not devote sufficient resources or attach a sufficiently high priority to the success of its collaboration; • The Company's collaborators may not obtain regulatory approvals necessary to continue the collaborations in a timely manner; • The Company has limited access to its collaborator’s confidential corporate information and sudden unexpected changes in ownership or strategy or other material events affecting a collaborator of which the Company is not made aware of in a timely manner, or at all, could adversely impact the Company's relationship; • The Company's collaborators may be acquired by another company, sell the part of their business related to the Company's collaboration, decide to terminate the Company's collaborative arrangement or become insolvent; • The Company's collaborators may develop technologies or components competitive with its products; • The Company's collaborators may fail to deliver technologies or components that satisfy market requirements or such products may fail to perform properly; • Disagreements with collaborators could result in the termination of the relationship or litigation; • Collaborators may not have sufficient capital resources; and • The Company may not be able to negotiate future collaborative arrangements, or renewals of existing collaborative agreements, on acceptable terms or at all. 37 Table of Contents While the Company generally expects that its collaborative partners will have an economic motivation to succeed in performing their contractual responsibilities, there is no assurance that they will do so, either at the level required or at all, and the amount and timing of resources to be devoted to these activities will be controlled by others.
Relying on collaborative relationships could be risky to the Company's business for a number of reasons, including: • The Company may be required to transfer material rights to such strategic collaborators, government agencies, licensees and others; • The Company's collaborators may not devote sufficient resources or attach a sufficiently high priority to the success of its collaboration; • The Company's collaborators may not obtain regulatory approvals necessary to continue the collaborations in a timely manner; • The Company has limited access to its collaborator’s confidential corporate information and sudden unexpected changes in ownership or strategy or other material events affecting a collaborator of which the Company is not made aware of in a timely manner, or at all, could adversely impact the Company's relationship; • The Company's collaborators may be acquired by another company, sell the part of their business related to the Company's collaboration, decide to terminate the Company's collaborative arrangement or become insolvent; 36 Table of Contents • The Company's collaborators may develop technologies or components competitive with its products; • The Company's collaborators may fail to deliver technologies or components that satisfy market requirements or such products may fail to perform properly; • Disagreements with collaborators could result in the termination of the relationship or litigation; • Collaborators may not have sufficient capital resources; and • The Company may not be able to negotiate future collaborative arrangements, or renewals of existing collaborative agreements, on acceptable terms or at all.
This includes the EU General Data Protection Regulation (“GDPR”) as well as other national data protection legislation in force in relevant European Economic Area (“EEA”) member states, which govern the collection, use, storage, disclosure, transfer, or other processing of personal data: (i) regarding individuals in the EEA; and/or (ii) carried out in the context of the activities of the Company's establishment in any EEA member state.
This includes the EU General Data Protection Regulation (“EU GDPR”) as well as other national data protection legislation in force in relevant European Economic Area (“EEA”) member states, and the EU GDPR in such form as incorporated into the laws of the UK ("UK GDPR", together with EU GDPR, "GDPR"), which govern the collection, use, storage, disclosure, transfer, or other processing of personal data: (i) regarding individuals in the EEA; and/or (ii) carried out in the context of the activities of the Company's establishment in any EEA member state.
It is possible that other banks will face similar difficulty in the future. Although the Company does not maintain any deposit accounts, credit agreements or letters of credit with any financial institution currently in receivership, it is unable to predict the extent or nature of the impacts of these evolving circumstances at this time.
Although the Company does not maintain any deposit accounts, credit agreements or letters of credit with any financial institution currently in receivership, it is unable to predict the extent or nature of the impacts of these evolving circumstances at this time.
The Company's future capital requirements may be significantly different from its current estimates and will depend on many factors, including the need to: • finance unanticipated working capital requirements; • develop or enhance its technological infrastructure and its existing solutions; • pursue acquisitions or other strategic relationships; and • respond to competitive pressures. 45 Table of Contents Accordingly, the Company may need to pursue equity or debt financing to meet its capital needs.
The Company's future capital requirements may be significantly different from its current estimates and will depend on many factors, including the need to: • finance unanticipated working capital requirements; • develop or enhance its technological infrastructure and its existing solutions; • pursue acquisitions or other strategic relationships; and • respond to competitive pressures.
While march-in rights have not previously been exercised, it is uncertain whether the federal government will actually exercise such march-in rights in connection with medical products or whether any such exercise will be subject to judicial review or challenge. The Company's U.S.
While march-in rights have not previously been exercised, it is uncertain whether the federal government will actually exercise such march-in rights in connection with medical products or whether any such exercise will be subject to judicial review or challenge. The Company's U.S. Government Contracts and Related Administrative Processes Are Subject to Audits and Cost Adjustments by the Federal Government.
An Impairment of Goodwill and Intangible Assets Could Reduce the Company's Earnings . At December 31, 2023, the Company's consolidated balance sheet reflected approximately $35.7 million of goodwill and approximately $1.2 million of intangible assets. Goodwill is recorded when the purchase price of a business exceeds the fair value of the tangible and separately measurable intangible net assets.
An Impairment of Goodwill and Intangible Assets Could Reduce the Company's Earnings . At December 31, 2024, the Company's consolidated balance sheet reflected approximately $40.3 million of goodwill and approximately $17.4 million of intangible assets. Goodwill is recorded when the purchase price of a business exceeds the fair value of the tangible and separately measurable intangible net assets.
The absence of patent protection in this or other parts of the Company's business may make it more difficult to protect its intellectual property. In addition, the Company's competitors may independently develop similar or alternative technologies or products that are equal or superior to its technology.
The Company's trade secrets could become known through other unforeseen means. The absence of patent protection in certain parts of the Company's business may make it more difficult to protect its intellectual property. In addition, the Company's competitors may independently develop similar or alternative technologies or products that are equal or superior to its technology.
In February 2024, the FDA issued the Quality Management System Regulation (QMSR) Final Rule to amend the QSR, incorporating by reference the international standard for medical device quality management systems set by the International Organization for Standardization (ISO), ISO 13485:2016. The rule will become effective on February 2, 2026. Until then, manufacturers are required to comply with the QSR.
In February 2024, the FDA issued the Quality Management System Regulation (QMSR) Final Rule to amend the QSR, incorporating by reference the international standard for medical device quality management systems set by the 28 Table of Contents International Organization for Standardization (ISO), ISO 13485:2016. The rule will become effective on February 2, 2026.
These research customers also purchase the Company's genomic and microbiome laboratory tests and analytical services. The level of available government grants or funding in the U.S. and elsewhere is unpredictable and may be affected by various factors including economic conditions, legislative and regulatory developments, political changes, civil unrest and changing priorities for research and development activities.
The level of available government grants or funding in the U.S. and elsewhere is unpredictable and may be affected by various factors including economic conditions, legislative and regulatory developments, political changes, civil unrest and changing priorities for research and development activities.
Moreover, issued patents remain in effect for a fixed period and after expiration will not provide protection of the inventions they cover. Once the Company's patents expire, it may be faced with increased competition, which could reduce its revenues. It may also not be able to successfully protect its rights to unpatented trade secrets and know-how.
Moreover, issued patents remain in effect for a fixed period and after expiration will not provide protection of the inventions they cover. Once the Company's patents expire, it may be faced with increased competition, which could reduce its revenues.
Some of the Company's employees, including scientific and management personnel, were previously employed by competing companies. Although the Company encourages and expect all of its employees to abide by any confidentiality agreement with a prior employer, competing companies may allege trade secret violations and similar claims against the Company.
Although the Company encourages and expect all of its employees to abide by any confidentiality agreement with a prior employer, competing companies may allege trade secret violations and similar claims against the Company.
These changes or new or additional requirements may occur after the completion of substantial clinical work and other costly development activities. The implementation of such changes or new or additional requirements may result in additional clinical trials and substantial additional costs and could delay or make it more difficult or complicated to obtain approvals and sell the Company's products.
The implementation of such changes or new or additional requirements may result in additional clinical trials and substantial additional costs and could delay or make it more difficult or complicated to obtain approvals and sell the Company's products.
While it is not possible at this time to predict the extent of the impact that the failure of these financial institutions or the high market volatility and instability of the banking sector could have on economic activity and the Company's business in particular, the failure of other banks and financial institutions and the measures taken by governments, businesses and other organizations in response to these events could adversely impact the Company's business, financial condition and results of operations Terrorist Attacks, Natural Disasters, Public Health Crises, Political Unrest or Other Catastrophic Events Outside of the Company's Control May Adversely Affect Its Business.
While it is not possible at this time to predict the extent of the impact that the failure of these financial institutions or the high market volatility and instability of the banking sector could have on economic activity and the Company's business in particular, the failure of other banks and financial institutions and the measures taken by governments, businesses and other organizations in response to these events could adversely impact the Company's business, financial condition and results of operations.
In addition, the COVID-19 pandemic previously resulted in, and may in the future result in, increased government-imposed travel restrictions and extended shutdowns of certain businesses in the affected locations as well as logistics delays due to the global logistical crisis from the pandemic.
In addition, the COVID-19 pandemic resulted in, and potential future pandemics or other public health emergencies may in the future result in, increased government-imposed travel restrictions and extended shutdowns of certain businesses in the affected locations as well as logistics delays due to the global logistical crisis from such pandemic or other health emergency.
The content and timing of any final rule on LDTs is uncertain at this time. The Company's subsidiary, DNAG, sells its DNA collection systems to certain laboratories and other customers for use with LDTs. The FDA’s increased regulation of LDTs could make it more difficult for laboratories and other customers to continue offering LDTs that involve genetic or molecular testing.
The Company's subsidiary, DNAG, sells its DNA collection systems to certain laboratories and other customers for use with LDTs. The FDA’s increased regulation of LDTs could make it more difficult for laboratories and other customers to continue offering LDTs that involve genetic or molecular testing.
Under federal law, various forms of post issuance patent review proceedings have been authorized, including an inter-parties review process. These proceedings permit certain persons to challenge the validity of a patent on the grounds that it was known from the prior art.
Under federal law, various forms of post issuance patent review proceedings have been authorized, including inter-parties review processes. These proceedings permit certain persons to challenge the validity of a patent on the grounds that it was known from the prior art. As a result of such proceedings several of the Company's patents have been successfully challenged.
In addition, the stock market in general has experienced extreme price and volume fluctuations that have affected the market price of the Company's Common Stock, as well as the stock of many companies in the diagnostics and life sciences industries. Often, price fluctuations are unrelated to the operating performance of the specific companies whose stock is affected.
In addition, the stock market in general has experienced extreme price and volume fluctuations that have affected the market price of the Company's Common Stock, as well as the stock of many companies in the diagnostics and life sciences industries.
It may not be able to attract or retain a sufficient number of qualified employees in the future due to the intense competition for qualified personnel among medical products, laboratory services and other life science businesses.
The Company's business may be harmed by the loss of a significant number of its executive officers or senior managers. It may not be able to attract or retain a sufficient number of qualified employees in the future due to the intense competition for qualified personnel among medical products, laboratory services and other life science businesses.
The GDPR also imposes strict rules on the transfer of personal data out of the EEA to third countries, including the United States in certain circumstances, unless a derogation exists or a valid GDPR transfer mechanism (for example, the European Commission approved Standard Contractual Clauses, or SCCs) have been put in place and a transfer impact assessment carried out.
The GDPR also imposes strict rules on the transfer of personal data out of the EEA to third countries, including the United States in certain circumstances, unless a derogation exists or a valid GDPR transfer mechanism (for example, the European Commission approved Standard Contractual Clauses, or SCCs, or the EU-US Data Privacy Framework) applies.

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Item 2. Properties

Properties — owned and leased real estate

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Biggest changeWe own a 31,700 square foot facility that houses our primary corporate office, our sales and marketing, research and development, human resources, and regulatory and quality offices, a 48,000 square foot facility and a 33,500 square foot facility which are used for manufacturing activities, and we lease an additional 139,000 square foot manufacturing facility, which is primarily dedicated to the production of our InteliSwab ® COVID-19 Rapid Tests.
Biggest changeITEM 2. Properties. We own a 31,700 square foot facility that houses our primary corporate office, our sales and marketing, research and development, human resources, and regulatory and quality offices. We also own a 48,000 square foot facility and a 33,500 square foot facility which are used for manufacturing activities.
Each of these facilities is located in Bethlehem, Pennsylvania. Our subsidiary, DNAG, also leases a 35,883 square foot facility in Ottawa, Canada, which is used as its primary corporate office and houses sales and marketing, manufacturing, distribution, research and development, and regulatory and quality operations. Our other subsidiaries, Diversigen and Novosanis, also lease facilities for their operations.
Our subsidiary, DNAG, also leases a 36,000 square foot facility in Ottawa, Canada, which is used as its primary corporate office and houses sales and marketing, manufacturing, distribution, research and development, and regulatory and quality operations.
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The Company believes that the facilities described above are adequate for our current requirements. 57 Table of Contents
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We lease a 23,000 square foot storage facility as well as an additional 139,000 square foot manufacturing facility. Each of these facilities is located in Bethlehem, Pennsylvania.
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Our subsidiary, Sherlock, leases various facilities in the United Kingdom totaling approximately 37,600 square feet, as well as outside Boston, Massachusetts, totaling approximately 5,000 square feet. These facilities house its corporate offices, production, and research and development activities. Our other subsidiary, Diversigen, also leases facilities for its remaining operations. Novosanis's facility lease terminated on December 31, 2024.
Added
The Company believes that the facilities described above are adequate for its current requirements. ITEM 3. Legal Proceedings. Discussion of legal matters is incorporated by reference from Note 15, Commitments and Contingencies, to the Consolidated Financial Statements included in this Annual Report on Form 10-K. ITEM 4. Mine Safety Disclosures. Not Applicable. 58 Table of Contents PART II

Item 5. Market for Registrant's Common Equity

Market for Common Equity — stock, dividends, buybacks

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Biggest changeShare Repurchases and Retirements Period Total number of shares purchased Average price paid per Share Total number of shares purchased as part of publicly announced plans or programs Maximum number (or approximate dollar value) of shares that may yet be repurchased under the plans or programs (1, 2) October 1, 2023 - October 31, 2023 669 (3) $ 5.66 — 11,984,720 November 1, 2023 - November 30, 2023 4,987 (3) 5.64 — 11,984,720 December 1, 2023 - December 31, 2023 676 (3) 8.01 — 11,984,720 6,332 — (1) On August 5, 2008, the Board of Directors approved a share repurchase program pursuant to which the Company is permitted to acquire up to $25.0 million of outstanding shares.
Biggest changePurchases of Equity Security by the Issuer and Affiliated Purchasers Period Total number of shares purchased Average price paid per Share Total number of shares purchased as part of publicly announced plans or programs Maximum number (or approximate dollar value) of shares that may yet be repurchased under the plans or programs (1, 2) October 1, 2024 - October 31, 2024 669 (3) $ 4.21 — $11,984,720 November 1, 2024 - November 30, 2024 2,654 (3) $ 4.25 — $11,984,720 December 1, 2024 - December 31, 2024 0 (3) $ — — $11,984,720 3,323 — (1) On August 5, 2008, the Board of Directors approved a share repurchase program pursuant to which the Company is permitted to acquire up to $25.0 million of outstanding shares.
The graph assumes that $100 was invested on December 31, 2018 in the Company’s Common Stock and in each of the above-mentioned indices, and that all dividends, if any, were reinvested. The Nasdaq Composite Index was chosen because it is a broad index of companies whose equity securities are traded on Nasdaq.
The graph assumes that $100 was invested on December 31, 2019 in the Company’s Common Stock and in each of the above-mentioned indices, and that all dividends, if any, were reinvested. The Nasdaq Composite Index was chosen because it is a broad index of companies whose equity securities are traded on Nasdaq.
The following graph compares the cumulative total returns to investors in the Company’s Common Stock, the Nasdaq Composite Index, and the Nasdaq Health Care Index for the period from December 31, 2018 through December 31, 2023.
The following graph compares the cumulative total returns to investors in the Company’s Common Stock, the Nasdaq Composite Index, and the Nasdaq Health Care Index for the period from December 31, 2019 through December 31, 2024.
On February 16, 2024, there were 276 holders of record and approximately 24,589 holders in street name of the Company's Common Stock, and the closing price of its Common Stock was $6.75 per share. Dividends The Company has never paid any cash dividends and its Board of Directors does not anticipate paying cash dividends in the foreseeable future.
On February 24, 2025, there were 253 holders of record and approximately 22,476 holders in street name of the Company's Common Stock, and the closing price of its Common Stock was $3.99 per share. Dividends The Company has never paid any cash dividends and its Board of Directors does not anticipate paying cash dividends in the foreseeable future.
Stockholders are cautioned that the graph shows the returns to investors only as of the dates noted and may not be representative of the returns for any other past or future period. 59 Table of Contents Fiscal year ending December 31, 2018 2019 2020 2021 2022 2023 OraSure Technologies, Inc. 100.00 68.75 90.63 74.40 41.27 70.21 NASDAQ Composite 100.00 136.69 198.10 242.03 163.28 236.17 NASDAQ Health Care 100.00 110.75 140.85 126.71 95.29 96.06 Securities Authorized for Issuance Under Equity Compensation Plans For certain information concerning securities authorized for issuance under the Company's equity compensation plan, see Item 12, “Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters.” Item 6.
Stockholders are cautioned that the graph shows the returns to investors only as of the dates noted and may not be representative of the returns for any other past or future period. 59 Table of Contents Fiscal Year Ending December 31, 2019 2020 2021 2022 2023 2024 OraSure Technologies, Inc. 100.00 131.82 108.22 60.02 102.12 44.96 NASDAQ Composite 100.00 144.92 177.06 119.45 172.77 223.87 NASDAQ Health Care 100.00 127.18 114.41 86.04 86.74 84.53 Securities Authorized for Issuance Under Equity Compensation Plans For certain information concerning securities authorized for issuance under the Company's equity compensation plan, see Item 12, “Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters.” Item 6.

Item 7. Management's Discussion & Analysis

Management's Discussion & Analysis (MD&A) — revenue / margin commentary

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Biggest changeFor the Years Ended December 31, Dollars % Change Percentage of Total Net Revenues 2023 2022 2023 2022 COVID-19 Diagnostics $ 257,493 $ 233,666 10 % 64 % 60 % Diagnostics (1) 73,694 52,181 41 18 14 Molecular Sample Management Solutions (2) 54,274 63,342 (14) 13 16 Other products and services (3) 12,001 11,903 1 3 3 Molecular Services 4,474 7,296 (39) 1 2 COVID-19 Molecular Products 286 9,659 (97) — 3 Net product and services revenues 402,222 378,047 6 99 98 Non-product and services revenues (4) 3,250 9,432 (66) 1 2 Net revenues $ 405,472 $ 387,479 5 % 100 % 100 % (1) Includes HIV and HCV product revenues.
Biggest changeFor the Years Ended December 31, Dollars % Change Percentage of Total Net Revenues 2024 2023 2024 2023 Diagnostics (1) $ 75,917 $ 73,694 3 % 41 % 18 % Sample Management Solutions (2) 51,046 54,274 (6) 28 13 COVID-19 Diagnostics 45,136 257,493 (82) 24 64 Risk Assessment Testing (3) 8,354 9,736 (14) 4 2 Other products and services 2,417 2,265 7 1 1 Molecular Services 1,705 4,474 (62) 1 1 COVID-19 Molecular Products 36 286 (87) — — Net product and services revenues 184,611 402,222 (54) 99 99 Non-product and services revenues (4) 1,216 3,250 (63) 1 1 Net revenues $ 185,827 $ 405,472 (54) % 100 % 100 % (1) Includes HIV, HCV and Syphilis product revenues.
The Company's business also includes molecular sample management solutions and services that are used by clinical laboratories, direct-to-consumer laboratories, researchers, pharmaceutical companies, and animal health service and product providers. The revenues from sample management solutions are derived from product sales to commercial customers and sales into the academic and research markets.
The Company's business also includes sample management solutions and services that are used by clinical laboratories, direct-to-consumer laboratories, researchers, pharmaceutical companies, and animal health service and product providers. The revenues from sample management solutions are derived from product sales to commercial customers and sales into the academic and research markets.
These products include tests for diseases including COVID-19, HIV and Hepatitis C that are performed on a rapid basis at the point of care, and tests for drugs of abuse that are processed in a laboratory.
These products include tests for diseases including COVID-19, HIV, Hepatitis C, and Syphilis that are performed on a rapid basis at the point of care, and tests for drugs of abuse that are processed in a laboratory.
Discussion of 2021 items and year-to-year comparisons between 2022 and 2021 that are not included in this Annual Report can be found in “Management’s Discussion and Analysis of Financial Condition and Results of Operations” in Part II, Item 7 of the Company’s Annual Report on Form 10-K for the year ended December 31, 2022.
Discussion of 2022 items and year-to-year comparisons between 2023 and 2022 that are not included in this Annual Report can be found in “Management’s Discussion and Analysis of Financial Condition and Results of Operations” in Part II, Item 7 of the Company’s Annual Report on Form 10-K for the year ended December 31, 2023.
Although the Company has achieved another quarter of U.S. cumulative pre-tax earnings based on a rolling three year window the Company has not achieved a level of sustained profitability that would, in its judgement, support the release of the valuation allowance.
Although the Company has achieved U.S. cumulative pre-tax earnings based on a rolling three year window the Company has not achieved a level of sustained profitability that would, in its judgement, support the release of the valuation allowance.
The Company considers the following accounting policies, which have been discussed with its Audit Committee, to be most critical in understanding the more complex judgments that are involved in preparing its financial statements and the uncertainties that could impact its results of operations, financial condition, and cash flows. Revenue Recognition . Product sales .
The Company considers the following accounting policies, which have been discussed with its Audit Committee, to be most critical in understanding the more complex judgments that are involved in preparing its financial statements and the uncertainties that could impact its results of operations, financial condition, and cash flows. 65 Table of Contents Revenue Recognition . Product sales .
For the year ended December 31, 2023 the Company recorded income tax expense of $2.6 million. 2023 income tax expense is comprised of $1.9 million of U.S. state income tax expense, and foreign income tax expense of $0.7 million. For the year ended December 31, 2022, the Company recorded income tax expense of $1.5 million.
For the year ended December 31, 2023, the Company recorded income tax expense of $2.6 million. 2023 income tax expense is comprised of U.S. state income tax expense of $1.9 million, and foreign income tax expense of $0.7 million.
The Company generally does not grant product return rights to its customers, except for warranty returns and return rights on sales of its OraQuick ® In-Home HIV test to the retail trade, and InteliSwab ® products to the retail trade and certain customers. 65 Table of Contents Historically, returns arising from warranty issues have been infrequent and immaterial.
The Company generally does not grant product return rights to its customers, except for warranty returns and return rights on sales of its OraQuick ® In-Home HIV test to the retail trade, and InteliSwab ® products to the retail trade and certain customers. Historically, returns arising from warranty issues have been infrequent and immaterial.
Year ended December 31, 2023 compared to December 31, 2022. CONSOLIDATED NET REVENUES The table below shows a summary of total consolidated net revenues (dollars in thousands) for the years ended December 31, 2023 and 2022.
Year ended December 31, 2024 compared to December 31, 2023. CONSOLIDATED NET REVENUES The table below shows a summary of total consolidated net revenues (dollars in thousands) for the years ended December 31, 2024 and 2023.
This section of this Annual Report on Form 10-K for the year ended December 31, 2023 (this "Annual Report") generally discusses 2023 and 2022 items and year-to-year comparisons between 2023 and 2022.
This section of this Annual Report on Form 10-K for the year ended December 31, 2024 (this "Annual Report") generally discusses 2024 and 2023 items and year-to-year comparisons between 2024 and 2023.
This increase is largely due to $12.8 million of additional profit earned above the guaranteed profit earned under the $109 million DOD manufacturing expansion contract that completed in the fourth quarter. This additional profit resulted from lower spend under the fixed firm contract than originally budgeted.
This decrease is largely due to the inclusion in 2023 results of $12.8 million of additional profit earned above the guaranteed profit earned under the $109 million DOD manufacturing expansion contract that was completed in the fourth quarter of 2023. This additional profit resulted from lower spend under the fixed firm contract than originally budgeted.
Financing Activities Net cash used in financing activities was $3.0 million for the year ended December 31, 2023, which reflects $1.9 million used for the repurchase of common stock to satisfy withholding taxes related to the vesting of restricted awarded to the Company's employees and payments of lease liabilities of $1.3 million.
Financing Activities Net cash used in financing activities was $4.2 million for the year ended December 31, 2024, which reflects $3.5 million used for the repurchase of common stock to satisfy withholding taxes related to the vesting of restricted awarded to the Company's employees and payments for lease liabilities of $0.8 million.
Operating expenses for the year ended December 31, 2023, excluding the impairment charges, decreased by $25.4 million to $128.2 million compared to $153.7 million the year ended December 31, 2022, reflecting the impact of the Company's cost saving measures and headcount reductions.
Operating expenses for the year ended December 31, 2024, excluding the impairment charges, decreased by $25.0 million to $103.2 million compared to $128.2 million the year ended December 31, 2023, reflecting the impact of the Company's cost saving measures and headcount reductions.
All of the above contributed to the Company's operating income of $32.7 million for the year ended December 31, 2023, which included non-cash impairment charges of $10.8 million, non-cash charges of $20.9 million for depreciation and amortization, and $10.7 million for stock-based compensation.
The Company's operating income of $32.7 million for the year ended December 31, 2023 included a non-cash impairment charge of $10.8 million, non-cash charges of $20.9 million for depreciation and amortization, and $10.7 million for stock-based compensation.
Non-Product and Services Revenues Non-product and services revenues decreased 66% to $3.3 million for the year ended December 31, 2023 from $9.4 million for the year ended December 31, 2022 as a result lower funding for research and development activities and lower royalty income.
Non-Product and Services Revenues Non-product and services revenues decreased 63% to $1.2 million for the year ended December 31, 2024 from $3.3 million for the year ended December 31, 2023 as a result lower funding for research and development activities and lower royalty income.
Offsetting these increases 64 Table of Contents of cash was a $27.0 million decrease in accounts payable due to the timing of invoices received and payments made and a decrease in accrued expenses and other liabilities of $3.4 million.
Offsetting these increases in cash was a $7.6 million decrease in accounts payable due to the timing of invoices received and payments made and a decrease in accrued expenses and other liabilities of $6.4 million.
Also contributing to the higher other income is higher interest income offset by lower foreign currency gains. CONSOLIDATED INCOME TAXES The Company continues to believe the full valuation allowance established against its total U.S. deferred tax asset is appropriate as the facts and circumstances necessitating the allowance have not changed.
CONSOLIDATED INCOME TAXES The Company continues to believe the full valuation allowance established against its total U.S. deferred tax asset is appropriate as the facts and circumstances necessitating the allowance have not changed.
COVID-19 Diagnostics revenues increased by 10% to $257.5 million for the year ended December 31, 2023 compared to $233.7 million for the year ended December 31, 2022 due to increased sales of the Company's InteliSwab ® tests through its U.S. government procurement contracts.
COVID-19 Diagnostics revenues decreased 82% to $45.1 million for the year ended December 31, 2024 from $257.5 million for the year ended December 31, 2023 due to decreased sales of the Company's InteliSwab ® tests through its U.S. government procurement contracts.
(2) Includes Genomics, Microbiome and Novosanis product revenues. (3) Includes Risk assessment testing and other product and services revenues. (4) Includes funded research and development contracts, royalty income and grant revenues. Product and Services Revenues Consolidated net revenues increased 5% to $405.5 million for the year ended December 31, 2023 from $387.5 million for the year ended December 31, 2022.
(2) Includes Genomics, Microbiome and Colli-Pee product revenues. (3) Includes substance abuse testing product revenues. (4) Includes funded research and development contracts, royalty income and grant revenues. Product and Services Revenues Consolidated net revenues decreased 54% to $185.8 million for the year ended December 31, 2024 from $405.5 million for the year ended December 31, 2023.
Liquidity and Capital Resources December 31, 2023 December 31, 2022 (in thousands) Cash and cash equivalents $ 290,407 $ 83,980 Available-for-sale securities — 26,867 Working capital 346,923 256,127 The Company's cash and cash equivalents and available-for-sale securities increased to $290.4 million at December 31, 2023 from $110.8 million at December 31, 2022. $84.9 million, or 29%, of the Company's $290.4 million in cash, cash equivalents and available-for-sale securities is held by DNAG, the Company's Canadian subsidiary.
Liquidity and Capital Resources December 31, 2024 December 31, 2023 (in thousands) Cash and cash equivalents $ 267,763 $ 290,407 Working capital 299,737 346,923 The Company's cash and cash equivalents decreased to $267.8 million at December 31, 2024 from $290.4 million at December 31, 2023. $82.0 million, or 31%, of the Company's $267.8 million in cash, cash equivalents and available-for-sale securities is held by DNAG, the Company's Canadian subsidiary.
These improvements in margins were partially offset by $6.9 million of accelerated depreciation associated with the wind-down of InteliSwab® manual assembly in Thailand as the Company on-shores and automates the manufacturing of this product at its Pennsylvania facilities and $0.5 million from the exit from one of its leased warehouse in an effort to consolidate facilities and further lower costs.
Results for the year ended December 31, 2024 included lower depreciation expense as a result of the inclusion in 2023 results of $6.9 million of accelerated depreciation associated with the wind-down of InteliSwab® manual assembly in Thailand as the Company on-shored and automated the manufacturing of this product at its Pennsylvania facilities and $0.5 million from the exit from one of its leased warehouse in an effort to consolidate facilities and further lower costs.
Working capital improved also as a result of receiving final payment under the Company's $109 million manufacturing expansion contract. Working capital is primarily a function of sales, purchase volumes, inventory requirements, and vendor payment terms. Analysis of the Company's Cash Flows Operating Activities During the year ended December 31, 2023, net cash provided by operating activities was $141.6 million.
Working capital is primarily a function of sales, purchase volumes, inventory requirements, and vendor payment terms. Analysis of the Company's Cash Flows 64 Table of Contents Operating Activities During the year ended December 31, 2024, net cash provided by operating activities was $27.4 million.
Cash provided by the Company's working capital accounts included a decrease in inventory of $48.2 million as the Company fulfilled demand for its InteliSwab® product and a decrease in accounts receivable of $31.1 million largely associated with collections of monies due from the U.S. government for InteliSwab ® shipments.
Cash provided by the Company's working capital accounts included a decrease in accounts receivable of $15.9 million largely associated with lower overall sales and collections of balances due, a decrease in inventory of $13.1 million as the Company fulfilled demand for its InteliSwab® product, and a decrease in prepaid and other assets of $4.1 million.
The Company expects existing cash and cash equivalents will be sufficient to fund this obligation and its operating expenses and capital expenditure requirements over the next twelve months.
Resources The Company's contractual obligations are included in Note 15 of its consolidated financial statements. The Company expects existing cash and cash equivalents will be sufficient to fund its operating expenses and capital expenditure requirements over the next twelve months.
("Sapphiros"), a privately held consumer diagnostics portfolio company based in Boston, and certain of its related entities. Through this strategic relationship, the Company expects to be able to offer a more comprehensive range of low-cost diagnostic tests and molecular sample management solutions to the Company's customers globally.
Through this strategic relationship, the Company expects to be able to offer a more comprehensive range of low-cost diagnostic test and sample management solutions to the Company's customers globally. The Company has funded $30.0 million for its interest in Sapphiros.
CONSOLIDATED OPERATING RESULTS Consolidated gross profit margin increased to 42% for the year ended December 31, 2023 from 38% for the year ended December 31, 2022.
CONSOLIDATED OPERATING RESULTS Consolidated gross profit margin increased to 43% for the year ended December 31, 2024 from 42% for the year ended December 31, 2023. Gross margins increased in 2024 despite the significant decrease in revenues due to following factors.
Consolidated operating income for the year ended December 31, 2023 was $32.7 million, a $54.8 million improvement from the $22.2 million operating loss reported for the year ended December 31, 2022. Results for the year ended December 31, 2023 were positively impacted by lower operating expenses and lower impairment losses.
Consolidated operating loss for the year ended December 31, 2024 was $28.3 million, a $60.9 million decline from the $32.7 million operating income reported for the year ended December 31, 2023. Results for the year ended December 31, 2024 were negatively impacted by the decrease in revenues and were positively impacted by reduced operating expenses.
Investing activities also included $5.8 million to acquire property and equipment to support normal operations of the business and $4.5 million used to build additional manufacturing capacity as required by the government contract.
Investing activities also included $3.8 million to acquire property and equipment to support normal operations of the business and the acquisition of Sherlock of $5.0 million.
Results for the year ended December 31, 2023 included $10.8 million of impairment losses compared to $17.1 million for the year ended December 31, 2022. Impairment losses in 2023 were comprised of impairments of intangible assets and idle manufacturing equipment.
Results for the year ended December 31, 2024 included $4.4 million of impairment losses compared to $10.8 million for the year ended December 31, 2023.
The Company's net income of $53.7 million included non-cash charges of depreciation and amortization expense of $20.9 million, stock-based compensation expense of $10.7 million, impairment charges taken for idle equipment and intangible assets of $10.8 million, and a decrease in reserve for uncollectible accounts of $0.5 million.
The Company's net loss of $19.5 million included non-cash charges of depreciation and amortization expense of $10.9 million, stock-based compensation expense of $11.9 million, impairment charges taken for idle equipment and right-of-use assets associated with Diversigen and Novosanis of $4.4 million, a loss on equity investment of 1.7 million and other non-cash charges aggregating to $0.8 million.
The Company expects a significant decline in COVID-19 revenues during 2024 due to the fulfillment of these contracts and lower overall demand for COVID-19 testing. Sales of the Company's Diagnostics products increased 41% to $73.7 million for the year ended December 31, 2023 from $52.2 million for the year ended December 31, 2022.
The Company experienced a significant decline in COVID-19 revenues during 2024 due to the fulfillment of these contracts and lower overall demand for COVID-19 testing, and expects further declines in 2025.
Research and development expenses decreased 7% to $33.7 million for the year ended December 31, 2023 from $36.2 million for the year ended December 31, 2022 largely due a decrease in spend on COVID-19 product development, a decrease in employee costs associated with a reduction in headcount, partially offset by increased engineering consulting spend associated with the Company's $109 million DOD manufacturing expansion contract.
Research and development expenses decreased 23% to $26.0 million for the year ended December 31, 2024 from $33.7 million for the year ended December 31, 2023 largely due to lower staffing costs due to a decrease in headcount and no related project management fees for our $109 million manufacturing expansion contract which ended during the fourth quarter of 2023, and a decrease in spend on COVID-19 product development.
Investing Activities Net cash provided by investing activities was $66.2 million for the year ended December 31, 2023, which reflects proceeds from the maturities and redemptions of investments of $102.4 million, $48.7 million in reimbursement received under the Company's $109 million contract with the U.S. government offset by $74.7 million used to purchase investments.
Investing Activities Net cash used in investing activities was $39.0 million for the year ended December 31, 2024, which reflects proceeds from the maturities and redemptions of investments of $53.1 million, offset by $53.2 million used to purchase investments and $30.0 million used to purchase an equity stake in Sapphiros.
Other products and services revenues increased 1% to $12.0 million for the year ended December 31, 2023 from $11.9 million for the year ended December 31, 2022. 62 Table of Contents Molecular Services revenues, which are largely derived from the Company's laboratory services, decreased 39% to $4.5 million for the year ended December 31, 2023 from $7.3 million for the year ended December 31, 2022.
Molecular Services revenues, which are largely derived from the Company's microbiome molecular sequencing services, decreased 62% to $1.7 million for the year ended December 31, 2024 from $4.5 million for the year ended December 31, 2023. The decrease in services revenues was due to the decision to exit this line of business.
The Company has funded approximately $28.3 million for a minority interest in Sapphiros, with an aggregate commitment of up to $30.0 million to be funded by June 2024, contingent on certain terms and conditions being met. 61 Table of Contents Results of Operations The Company's consolidated net income for the year ended December 31, 2023 was $53.7 million, or $0.72 per share on a fully diluted basis, compared to a consolidated net loss of $17.1 million, or $0.24 per share on a fully diluted basis, for the year ended December 31, 2022.
Results of Operations The Company's consolidated net loss for the year ended December 31, 2024 was $19.5 million, or $0.26 per share on a fully diluted basis, compared to consolidated net income of $53.7 million, or $0.72 per share on a fully diluted basis, for the year ended December 31, 2023.
The Company's operating loss of $22.2 million for the year ended December 31, 2022 included a non-cash impairment charge of $17.1 million, non-cash charges of $15.3 million for depreciation and amortization, and $11.6 million for stock-based compensation. 63 Table of Contents CONSOLIDATED OTHER INCOME Other income for the year ended December 31, 2023 was $23.6 million compared to $6.5 million for the year ended December 31, 2022.
All of the above contributed to the Company's operating loss of $28.3 million for the year ended December 31, 2024, which included non-cash impairment charges of $4.4 million, non-cash charges of $10.9 million for depreciation and amortization, and $11.9 million for stock-based compensation.
Sales and marketing expenses decreased 26% to $36.3 million for the year ended December 31, 2023 from $49.2 million for the year ended December 31, 2022 due to lower advertising spend, lower employee costs associated with a decrease in headcount, a decrease in the Company's provision for uncollectible accounts, lower commissions, and lower sales meeting and consulting spend.
The Company expects research and development expense to increase in 2025 as we invest in the development of Sherlock's test for CT/NG and other innovative projects. 63 Table of Contents Sales and marketing expenses decreased 15% to $31.0 million for the year ended December 31, 2024 from $36.3 million for the year ended December 31, 2023 primarily due to decreased employee costs associated with a reduction in headcount, and lower advertising and consulting spend.
This product is in its early stages, and initial sales are occurring primarily through distributors and collaborations in the liquid biopsy and sexually transmitted disease markets. Additionally, the Company offers laboratory and bioinformatics services for both genomics and microbiome customers. These services are primarily provided to pharmaceutical, biotech companies, and research institutions.
This product is in its early stages, and initial sales are occurring primarily through distributors and collaborations in the liquid biopsy and sexually transmitted disease markets. Recent Developments Diversigen During the first quarter of 2024, the Company initiated steps to wind down and exit the molecular services business offered by its Diversigen subsidiary.
The Company's working capital increased to $346.9 million at December 31, 2023 from $256.1 million at December 31, 2022. Working capital increased primarily due to the increase in cash and cash equivalents and lower accounts receivable, inventory, and lower accounts payable balances.
The Company's working capital decreased to $299.7 million at December 31, 2024 from $346.9 million at December 31, 2023. The decrease in cash and cash equivalents and working capital is primarily due to the investment in Sapphiros of $30.0 million and the initial payment for the acquisition of Sherlock for $5.0 million.
As a result, all products and services reside under one reporting hierarchy. The Company's product portfolio is broadly divided into diagnostics products and sample management solutions. In January 2024, the Company announced that it is leading the Series B financing and have entered wide-ranging strategic distribution agreements with KKR Sapphiros L.P.
Sapphiros In January 2024, the Company announced that it led the Series B financing and entered into wide-ranging strategic distribution agreements with Sapphiros, a privately held consumer diagnostic portfolio company based in Boston, and certain of its related entities.
General and administrative expenses decreased 15% to $58.2 million for the year ended December 31, 2023 from $68.2 million for the year ended December 31, 2022 largely due a decrease in consulting fees, lower employee costs associated with lower headcount and severance, lower project management fees associated with the $109 million DOD manufacturing expansion contract, and lower sales tax penalties, board of directors fees, legal fees, and recruitment fees.
General and administrative expenses decreased 21% to $46.2 million for the year ended December 31, 2024 from $58.2 million for the year ended December 31, 2023 largely due to lower legal fees relating to the Spectrum litigation (discussed further in Note 15, Commitments and Contingencies, to the consolidated financial statements included herein) and lower employee costs associated with reduced headcount partially offset by increase in non-cash stock compensation expense and transaction expenses associated with the Company's acquisition of Sherlock in December.
The Company's 2022 income tax expense is comprised of U.S. state income taxes of $1.0 million, Canadian withholding taxes paid on the repatriation of Canadian earnings of $1.7 million, and a foreign income tax benefit of $1.2 million associated with the Company's Canadian subsidiary.
For the year ended December 31, 2024, the Company recorded income tax expense of $1.8 million. 2024 income tax expense is comprised of $0.4 million of U.S. federal and state income tax expense, and foreign income tax expense of $1.4 million.
Removed
Recent Developments In 2022, the Company's business consisted of two segments: the “Diagnostics” segment, and the “Molecular Solutions” segment.
Added
This strategic action was largely completed in June 2024. Diversigen contributed $1.7 million and $4.5 million, to revenues during the years ended December 31, 2024 and 2023, respectively. Novosanis During the first quarter of 2024, the Company also made a strategic decision to commence wind-down of its operations at it Novosanis subsidiary located in Belgium.
Removed
In February 2023, the Company announced a corporate restructuring to combine the commercial and innovation teams across two segments, being the "Diagnostics" segment and the "Molecular Solutions" segment, into one business unit with sales, marketing, product development and research teams covering multiple product lines. This change is intended to accelerate innovation, enhance customer experience and result in operational synergies.
Added
The Company intends to continue to sell and manufacture its Colli-Pee® product under the DNAG product line of collection devices. As of December 31, 2024, this strategic plan was largely completed.
Removed
This increase in revenues was primarily driven by higher sales of the Company's OraQuick® In-Home HIV tests in support of the CDC's "Together Take Me Home" HIV self-test program which commenced during the first quarter of 2023, and higher sales of the Company's OraQuick® HIV Self-Test in international markets due to increased adoption of the Company's self-test in several new African countries and due to customer ordering patterns.
Added
Risk Assessment Testing 61 Table of Contents In October 2024, the Company announced the discontinuance of the sales of its risk assessment product line which is expected to be completed in the first half of 2025. Sales of its risk assessment products contributed $8.4 million and $9.7 million to revenues during the years ended December 31, 2024, and 2023, respectively.
Removed
Molecular Sample Management Solutions revenues decreased 14% to $54.3 million for the year ended December 31, 2023 from $63.3 million for the year ended December 31, 2022. Sales of the Company's Molecular Sample Management Solutions are being impacted by macro-economic factors in the market in which the customers operate such as a decline in discretionary consumer spend.
Added
Sherlock Acquisition In December 2024, the Company acquired Sherlock and its subsidiaries. The Sherlock acquisition expands the Company's innovation pipeline with the addition of Sherlock’s molecular diagnostics platform, which is in Phase 3 clinical trials and is expected to provide rapid results with strong sensitivity and specificity in a disposable format that is well-suited for OTC usage.
Removed
Sample Management Solutions revenues are also impacted by customer ordering patterns.
Added
Sherlock has operations in the United States and the United Kingdom.
Removed
The decline in services revenues was largely the result of the loss of two customers in 2022: one customer ceased operations in 2022 and the other deprioritized microbiome studies. These loss of customers is coupled with the completion of certain large clinical trial studies which have not been replaced with new studies.
Added
Sales of the Company's Diagnostics products increased 3% to $75.9 million for the year ended December 31, 2024 from $73.7 million for the year ended December 31, 2023. This increase in revenues is largely due to higher international HIV revenues primarily driven by customer ordering patterns in Africa offset by lower sales into Asia.
Removed
Sales of the Company's COVID-19 Molecular Products collection kits decreased by 97% to $0.3 million for the year ended December 31, 2023 from $9.7 million for the year ended December 31, 2022 due to decline in demand for COVID-19 PCR testing given the availability of rapid antigen tests.
Added
Also contributing to the diagnostic revenue increase is an increase in sales of the Company's HCV domestic product and higher Syphilis revenues.
Removed
This increase in margins was driven by the higher InteliSwab® sales which also generated higher margins due to reduced costs associated with manufacturing efficiencies and a packaging change implemented during the first quarter of 2023 . Also contributing to improved margins is lower product scrap expense.
Added
Offsetting these increases in revenues is a decline in HIV domestic revenue resulting from funding delays or reductions in funding for HIV products and customer ordering patterns. 62 Table of Contents Sample Management Solutions revenues decreased by 6% to $51.0 million for the year ended December 31, 2024 compared to $54.3 million for the year ended December 31, 2023.
Removed
In 2022, the Company incurred high severance expense associated with the Company's former CEO's and general counsel's employment agreements and higher recruitment expense associated with the new CEO search.
Added
Sales of the Company's Sample Management Solutions are being impacted by reduced consumer demand for products in which the Company's genomics collection devices are used, economic pressures, and the overall decline in the microbiome market.
Removed
The overall increase in tax expense is associated with an increase in earnings in both the U.S. and in Canada.
Added
Risk assessment testing revenues decreased 14% to $8.4 million for the year ended December 31, 2024 from $9.7 million for the year ended December 31, 2023 due to the loss of customers to competing products. The Company has announced the discontinuance this product line and expects minimal sales through the first half of 2025 as it fulfills existing customer orders.
Removed
In 2022, the Company repatriated $65.0 million of cash into the United States and incurred $1.7 million of Canadian withholding tax. Further repatriation of cash from Canada into the United States could have additional adverse tax consequences. It is still the Company's intention going forward to continue to permanently reinvest the historical undistributed earnings of the Company's foreign subsidiaries.
Added
Results for the year ended December 31, 2024 also included improved manufacturing overhead absorption largely resulting from reduced salary and benefits due to the reduction of workforce put in place in 2024 and 2023. 2024 also included lower product scrap expense as compared to the prior year.
Removed
Resources The Company's contractual obligations are included in Notes 8 and 13 of its consolidated financial statements.
Added
Offsetting these improvement to margins was lower gross margins generated from product mix primarily driven by the decline in InteliSwab® revenues and the mix of higher international sales of the Company's HIV products. Other non-product revenues which contribute 100% to gross margins also declined for the year ended December 31, 2024.
Removed
Additionally, the Sapphiros agreement entered into during 2024 has an aggregate commitment of up to $30.0 million to be funded by June 2024, contingent on certain terms and conditions being met. $28.3 million of that commitment has been paid within the first two months of 2024.
Added
This overall decrease in spend is partially offset by an increase in severance costs for those employees impacted by the Company's decisions to exit the molecular services business offered by its Diversigen subsidiary and wind-down of operations located in Belgium.
Added
Amortization also decreased as $6.2 million of intangibles were impaired in 2023. These decreases are partially offset by increases in bad debt expense and severance charges related to the discontinuance of the risk assessment product line.
Added
CONSOLIDATED OTHER INCOME Other income for the year ended December 31, 2024 was $12.2 million compared to $23.6 million for the year ended December 31, 2023.
Added
Other income in 2023 also included $2.8 million of guaranteed profit which covered project management costs recognized straight-line over the term of the contract. These amounts included in 2023 other income, which were not repeated in 2024, were partially offset by higher interest income and foreign currency gains for the year ended December 31, 2024 as compared to 2023.
Added
Business Combinations and Contingent Consideration 66 Table of Contents Acquired businesses are accounted for using the acquisition method of accounting, which requires that the purchase price be allocated to the net assets acquired at their respective fair values. Any excess of the purchase price over the estimated fair values of the net assets acquired is recorded as goodwill.
Added
Amounts allocated to contingent consideration are recorded to the balance sheet at the date of acquisition based on their relative fair values. The purchase price allocation requires us to make significant estimates and assumptions, especially at the acquisition date, with respect to intangible assets.
Added
Although we believe the assumptions and estimates we have made are reasonable, they are based in part on historical experience and information obtained from the management of the acquired companies and are inherently uncertain. We account for contingent consideration in accordance with applicable guidance provided within the business combination accounting guidance.
Added
As part of our consideration for the Sherlock acquisition, we are contractually obligated to pay certain consideration resulting from the outcome of future events. Therefore, we are required to update our underlying assumptions each reporting period, based on new developments, and record such contingent consideration liabilities at fair value until the contingency is resolved.
Added
Changes in the fair value of the contingent consideration liabilities are recognized each reporting period and included in our consolidated statements of operations. Our estimates of fair value are based on assumptions we believe to be reasonable, but the assumptions are uncertain and involve significant judgment by management.
Added
Updates to these assumptions could have a significant impact on our results of operations in any given period and any updates to the fair value of the contingent consideration could differ materially from the previous estimates.
Added
Examples of critical estimates used in valuing the intangible asset and contingent consideration include: • future expected cash flows from sales and acquired in-process and research developed technologies; • the probability of meeting the future events; and • discount rates used to determine the present value of estimated future cash flows.
Added
These estimates are inherently uncertain and unpredictable, and if different estimates were used the purchase price for the acquisition could be allocated to the acquired assets and liabilities differently from the allocation that we have made.
Added
In addition, unanticipated events and circumstances may occur, which may affect the accuracy or validity of such estimates, and if such events occur we may be required to record a charge against the value ascribed to an acquired asset or an increase in the amounts recorded for assumed liabilities.

Item 7A. Quantitative and Qualitative Disclosures About Market Risk

Market Risk — interest-rate, FX, commodity exposure

4 edited+0 added−1 removed1 unchanged
Biggest changeA 10% unfavorable change in the Canadian-to-U.S. dollar and Euro-to-U.S. dollar exchange rates would have increased the Company's comprehensive loss by approximately $11.8 million in the year ended December 31, 2023. ITEM 8. Financial Statements and Supplementary Data. Information with respect to this Item is contained in the Company's Consolidated Financial Statements included under Item 15 of this Annual Report.
Biggest changeA 10% unfavorable change in the Canadian-to-U.S. dollar and Euro-to-U.S. dollar exchange rates would have increased the Company's comprehensive loss by approximately $11.3 million as of December 31, 2024.
The Company does not hold any amounts of derivative financial instruments or derivative commodity instruments and, accordingly, has no material derivative risk to report under this Item. As of December 31, 2023, the Company did not have any foreign currency exchange contracts or purchase currency options to hedge local currency cash flows.
The Company does not hold any amounts of derivative financial instruments or derivative commodity instruments and, accordingly, has no material derivative risk to report under this Item. As of December 31, 2024, the Company did not have any foreign currency exchange contracts or purchase currency options to hedge local currency cash flows.
Fluctuations in the exchange rate between the U.S. dollar and these foreign currencies could affect year-to-year comparability of operating results and cash flows. The Company's foreign subsidiaries had net assets, subject to translation, of $117.7 million in U.S. Dollars, which are included in the Company’s consolidated balance sheet as of December 31, 2023.
Fluctuations in the exchange rate between the U.S. dollar and these foreign currencies could affect year-to-year comparability of operating results and cash flows. The Company's foreign subsidiaries had net assets, subject to translation, of $113.4 million in U.S. Dollars, which are included in the Company’s consolidated balance sheet as of December 31, 2024.
Sales denominated in foreign currencies comprised 1.0% of the Company's total revenues for the year ended December 31, 2023. The Company does have foreign currency exchange risk related to its operating subsidiaries in Canada and in Belgium. The principal foreign currencies in which it conducts business are the 66 Table of Contents Canadian dollar and the Euro.
Sales denominated in foreign currencies comprised 3% of the Company's total revenues for the year ended December 31, 2024. The Company does have foreign currency exchange risk related to its operating subsidiaries in Canada and Belgium. The principal foreign currencies in which it conducts business are the Canadian dollar and the Euro.
Removed
ITEM 9. Changes in and Disagreements with Accountants on Accounting and Financial Disclosure. Not applicable.

Other OSUR 10-K year-over-year comparisons