Abcam (ABCM) Risk Analysis

The integrity and protection of our own data, and that of our customers and employees, is critical to our business. The regulatory environment governing information, security and privacy laws is increasingly demanding and continues to evolve. Implementing and maintaining compliance with applicable security and privacy regulations may increase our operating costs and/or adversely impact our ability to market our products and services to customers. Although our computer and communications hardware are protected through physical and software safeguards, they are still vulnerable to fire, storm, flood, power loss, earthquakes, telecommunications failures, physical or software break-ins, software viruses, and similar events. Furthermore, the increase in remote working may also result in additional consumer privacy, IT security, and fraud-related risks. These events could lead to the unauthorized access, disclosure, and use of non-public information. We could be subject to risks caused by misappropriation, misuse, leakage, falsification, system malfunction or intentional or accidental release or provision of access to or loss of information maintained in our information systems and networks and those of our third-party suppliers. The contractors, consultants, business partners, and/or other third parties that we work with may not maintain the same high-quality physical and software safeguards and information and technology systems and controls to prevent cyber security threats that we maintain. Further, these third parties may be vulnerable to breakdown, intrusions, or other damage or interruption from service interruptions, system malfunctions, natural disasters, terrorism, cyberattack, and telecommunication and electrical failures, as well as security breaches from their own inadvertent or intentional actions. For example, in the year ended December 31, 2022, one of our contractors mistakenly posted the application programming interface ("API") credentials of some of Abcam's commercial production and business environments in a public workspace. As a result, there was the potential for an unauthorized third party with knowledge of how to use such API credentials to gain access to sensitive information. While we reported the incident and notified those that could have been affected, we have no evidence to suggest that our systems or any such information was accessed by any unauthorized third party, but we cannot guarantee that such incidents will not have an impact in the future. Furthermore, any companies we acquire may not maintain the same high-quality physical and software safeguards and information and technology systems and controls to prevent cyber security threats that we maintain. There may also be pre-existing cybersecurity incidents or risks that we failed or were unable to discover or identify in the course of performing due diligence investigations of target businesses. In addition, the techniques used by criminal elements to attack computer systems are sophisticated, change frequently and may originate from less regulated and remote areas of the world. As a result, we may not be able to address these techniques proactively or implement adequate preventative measures. We are also reliant on the quality of our training of employees to allow them to spot and appropriately respond to cyber security threats. We have been subject to a number of actual and attempted cyber-attacks such as through phishing scams and require employees to remain vigilant to ensure that such attempts are unsuccessful. Although none of these actual or attempted cyber-attacks has had a material adverse impact on our operations or financial condition, we cannot guarantee that any such incidents will not have such an impact in the future. If our computer systems are compromised, we could be subject to fines, damages, litigation and enforcement actions, customers could curtail or cease using its applications, and we could lose trade secrets, the occurrence of which could harm our business. If we are unable to maintain reliable information technology systems and appropriate controls with respect to global data privacy and security requirements and prevent data breaches, we may suffer regulatory consequences in addition to business consequences. As a global organization, we are subject to data privacy and security laws, regulations, and customer-imposed controls in numerous jurisdictions as a result of having access to and processing confidential, personal and/or sensitive data in the course of our business. There are numerous U.S. federal and state laws and regulations related to the privacy and security of personal information. In particular, regulations promulgated pursuant to the Health Insurance Portability and Accountability Act of 1996 ("HIPAA") establish privacy and security standards that limit the use and disclosure of individually identifiable health information (known as "protected health information") and require the implementation of administrative, physical and technological safeguards to protect the privacy of protected health information and ensure the confidentiality, integrity and availability of electronic protected health information. Determining whether protected health information has been handled in compliance with applicable privacy standards and our contractual obligations can require complex factual and statistical analyses and may be subject to changing interpretation. Although we take measures to protect sensitive data from unauthorized access, use or disclosure, our information technology and infrastructure may be vulnerable to attacks by hackers or viruses or breached due to employee error, malfeasance or other malicious or inadvertent disruptions. Any such breach or interruption could compromise our networks, and the information stored there could be accessed by unauthorized parties, manipulated, publicly disclosed, lost or stolen. Any such access, breach or other loss of information could result in legal claims or proceedings and liability under federal or state laws that protect the privacy of personal information, such as the HIPAA and the Health Information Technology for Economic and Clinical Health Act and may result in regulatory penalties. Notice of breaches must be made to affected individuals, the United States Department of Health and Human Services ("HHS"), and for extensive breaches, notice may need to be made to the media or state Attorneys General. Such a notice could harm our brand and reputation and adversely affect our ability to compete. Additionally, the Gramm-Leach-Bliley Act of 1999 (along with its implementing regulations) (the "GLBA") restricts certain collection, processing, storage, use and disclosure by covered companies of certain personal information, requires notice to individuals of privacy practices and provides individuals with certain rights to prevent the use and disclosure of certain non-public or otherwise legally protected information. The GLBA also imposes requirements regarding the safeguarding and proper destruction of personal information through the issuance of data security standards or guidelines. In addition, many U.S. states in which we operate now or may operate in the future have laws that protect the privacy and security of sensitive and personal information. Certain U.S. state laws may be more stringent or broader in scope, or offer greater individual rights, with respect to sensitive and personal information than federal, international or other state laws, and such laws may differ from each other, which may complicate compliance efforts. For example, the California Consumer Privacy Act of 2018 (the "CCPA"), which went into effect on January 1, 2020, imposes stringent data privacy and security requirements and obligations with respect to the personal information of California residents and households. Among other things, it requires covered companies to provide new disclosures to California consumers and provide such consumers new data protection and privacy rights, including the ability to opt-out of certain sales of personal information. The CCPA provides for civil penalties for violations, as well as a private right of action for certain data breaches that result in the loss of personal information that may increase the likelihood of, and risks associated with, data breach litigation. It remains unclear how various provisions of the CCPA will be interpreted and enforced, and multiple states have enacted or are expected to enact similar laws. The effects of the CCPA and other similar state laws on our business are potentially significant and may require us to modify our data processing practices and policies and to incur costs and expenses in an effort to comply. State laws are changing rapidly, and there is discussion in U.S. Congress of a new federal data protection and privacy law to which we may be subject. In Europe, laws, regulations, and standards in many jurisdictions apply broadly to the collection, use, retention, security, disclosure, transfer and other processing of personal information. For example, in the European Economic Area (the "EEA"), the collection and use of personal data is governed by the provisions of the General Data Protection Regulation (the "GDPR"). The GDPR came into effect in May 2018, superseding the European Union Data Protection Directive and imposing more stringent data privacy and security requirements on companies in relation to the processing of personal data of European Union ("EU") data subjects. The GDPR, together with national legislation, regulations and guidelines of EU member states govern the processing of personal data, impose strict obligations and restrictions on the ability to collect, use, retain, protect, disclose, transfer, and otherwise process personal data. In particular, the GDPR includes obligations and restrictions concerning the consent and rights of individuals to whom the personal data relates; providing detailed disclosures about how personal data is collected and processed (in a concise, intelligible and easily accessible form); demonstrating that an appropriate legal basis is in place or otherwise exists to justify data processing activities; granting rights for data subjects in regard to their personal data (including data access rights, the right to be "forgotten" and the right to data portability); introducing the obligation to notify data protection regulators or supervisory authorities (and in certain cases, affected individuals) of significant data breaches; imposing limitations on retention of personal data; maintaining a record of data processing; and complying with the principle of accountability and the obligation to demonstrate compliance through policies, procedures, training and audit. Fines for certain violations of the GDPR are significant. e.g., up to 4.0% of a company's global annual revenue or €20 million, whichever is greater. Such fines are in addition to any civil litigation claims by customers and data subjects. European data protection authorities may interpret the GDPR and national laws differently and` impose additional requirements, which contributes to the complexity of processing personal data in or from the EEA. Guidance on implementation and compliance practices is often updated or otherwise revised. From January 1, 2021, we are subject to the GDPR and also the UK GDPR, which, together with the amended UK Data Protection Act 2018, retains the GDPR in UK national law. The UK GDPR mirrors the fines under the GDPR, e.g. fines up to the greater of €20.0 million / £17.5 million or 4.0% of global turnover. We are also subject to EU and United Kingdom rules with respect to cross-border transfers of personal data out of the EEA and the United Kingdom, respectively. Recent legal developments in Europe have created complexity and uncertainty regarding transfers of personal data from the EEA and the United Kingdom to the United States. Most recently, on July 16, 2020, the Court of Justice of the European Union ("CJEU") invalidated the EU-US Privacy Shield Framework ("Privacy Shield") under which personal data could be transferred from the EEA to US entities who had self-certified under the Privacy Shield scheme. While the CJEU upheld the adequacy of the standard contractual clauses (a standard form of contract approved by the European Commission as an adequate personal data transfer mechanism, and potential alternative to the Privacy Shield), it made clear that reliance on them alone may not necessarily be sufficient in all circumstances. Use of the standard contractual clauses must now be assessed on a case-by-case basis taking into account the legal regime applicable in the destination country, in particular applicable surveillance laws and rights of individuals and additional measures and/or contractual provisions may need to be put in place. The European Commission has published revised standard contractual clauses for data transfers from the EEA: the revised clauses have been mandatory for relevant transfers since September 27, 2021; existing standard contractual clauses arrangements must be migrated to the revised clauses by December 27, 2022. The United Kingdom's Information Commissioner's Office has published new data transfer standard contracts for transfers from the UK under the UK GDPR. This new documentation will be mandatory for relevant data transfers from September 21, 2022; existing standard contractual clauses arrangements must be migrated to the new documentation by March 21, 2024. Several other countries, such as China and Russia, have also passed laws that require personal data relating to their citizens to be maintained on local servers and impose additional data transfer restrictions, which could increase the cost and complexity of delivering our products and services. We are also reliant on certain manual processes for collecting and processing data, and any failures in these processes or failure to handle the data collected in accordance with relevant regulations could lead to enforcement actions. Complying with all applicable laws, regulations, standards, and obligations relating to data privacy, security and transfers may cause us to incur substantial operational costs or require us to modify our data processing practices and processes. Government enforcement actions can be costly and interrupt the regular operation of our business, and data breaches or violations of data privacy laws can result in significant fines, reputational damage, and civil lawsuits, any of which may adversely affect our business, financial condition and results of operations. We may not be able to respond quickly or effectively to regulatory, legislative, and other developments, and these changes may in turn impair our ability to commercialize our products or increase our cost of doing business. In addition, if our practices are not consistent or viewed as not consistent with legal and regulatory requirements, including changes in laws, regulations and standards or new interpretations or applications of existing laws, regulations, and standards, we may become subject to audits, inquiries, whistleblower complaints, adverse media coverage, investigations, loss of export privileges, severe criminal or civil sanctions or reputational damage. Any of the foregoing could have an adverse effect on our competitive position, business, financial condition, results of operations and prospects.

We depend on standardized procedures and multiple information systems, including our online platform and distribution and Oracle Cloud ERP systems, for our operations, customer service and quality and safety procedures. Furthermore, we rely on information technology systems to process, transmit, store, and protect electronic information, including confidential customer, supplier, employee, or other business information. Through our online platform, we collect and store confidential information that customers provide in order to, among other things, purchase products and services and register on our website. We are currently updating our systems and processes by implementing Oracle Cloud ERP and other software solutions to replace our legacy IT systems, such as Adminsite (an in house developed inventory system tracking sales order processing and finished goods), on a scale reflecting the increased size, scope and complexity of our operations. The process of migrating away from our legacy systems has disrupted and could continue to disrupt our ability to timely and accurately process information. In addition, we are also updating our public websites. Any significant delay, failure, increase in costs of these projects, any issues in transitioning from our legacy systems to new information systems (which have had and could continue to have a negative impact on our ability to upgrade our information systems) or any issues in transitioning from our current public websites to our new public websites, including those that are customer facing, may consequently adversely affect our business, financial condition, and results of operations, see Item 15. "Controls and Procedures". We also utilize other commercially available third-party technology solutions, software, and software systems with some proprietary configurations. We also store data using third-party cloud services. Our information systems and our public websites are subject to damage or interruption from power outages, computer and telecommunications failures, computer viruses, security breaches, vandalism, catastrophic events, natural disasters, terrorist attacks, hackers, and other security issues as well as human error. Given the age and lack of support of some of our legacy systems, these risks may be greater. If our new or legacy information systems or our new or our current public websites are damaged, fail to work properly or otherwise become unavailable, we may incur substantial costs to repair or replace them, including inflation-related costs, and we may experience a loss of critical information, customer disruption and interruptions or delays in our ability to perform essential functions and implement new and innovative services. If the cloud service providers we use were to experience unplanned downtime, delays or other issues delivering data to our information technology systems or our public websites, including due to increased usage as a result of COVID-19 pandemic, it could significantly and adversely impact business operations. A compromise of our information systems or those with which we interact could harm our reputation and expose us to regulatory actions and claims from customers and other persons, any of which could adversely affect our business, financial condition, and results of operations. In addition, we may not have the necessary resources to enhance existing information systems or implement new systems where necessary to handle our increasing volume and/or our changing needs, and as a result we may continue to experience unanticipated delays, complications, and expenses in implementing and integrating our systems. Any interruptions in operations would adversely affect our ability to properly allocate resources and timely deliver our products, which could result in customer dissatisfaction. For example, we implemented a new Oracle Cloud ERP system sales and distribution module, which in the second half of the year ended December 31, 2022 (predominately September and October) interrupted operations and resulted in delays in our ability to ship finished products and collect revenue, and there can be no assurance that we will not encounter such problems in the future. For more information, see Item 5. "Operating and Financial Review and Prospects-Results of Operations" Furthermore, as we currently still rely on certain legacy systems that are no longer supported by the manufacturers, with only a small number of current employees able to maintain these systems. Any failure of these systems could have a significant business impact. The failure to successfully implement and maintain information systems have had and could continue to have an adverse effect on our ability to obtain new business, retain existing business and maintain or increase our sales and profit margins, any of which could adversely affect our business, financial condition and results of operations.

For example, the United States has recently experienced historically high levels of inflation. The annual inflation rate for the United States was approximately 6.5% for the year ended December 31, 2022. Similarly, the United Kingdom has recently experienced historically high levels of inflation. The annual inflation rate for the United Kingdom was approximately 9.2% for the year ended December 31, 2022 As inflation rates continue to increase or persist for a prolonged period of time, it may continue to affect our expenses, including, but not limited to, employee compensation expenses and benefits as well as increased general administrative costs, such as rents and utilities. In the event inflation continues to increase, we may have to consider increasing the prices of our products and services in order to maintain satisfactory margins. Any attempts to offset cost increases with price increases may result in reduced sales, increase customer dissatisfaction, or otherwise harm our reputation. Moreover, to the extent inflation has other adverse effects on the market, it may adversely affect our business, financial condition and results of operations.

We engage in business globally, with 64% and 57% of our catalogue revenue for the years ended December 31, 2021 and 2022, respectively, coming from outside the United States. Global operations subject us to a number of risks, some of which have been and could continue to be exacerbated by the COVID-19 pandemic, as well as international economic, political and labor conditions; currency fluctuations; any unstable banking systems; tax laws (including U.S. taxes on foreign subsidiaries); increased financial accounting and reporting burdens and complexities; unexpected changes in, or impositions of, legislative or regulatory requirements; failure of laws to protect intellectual property rights adequately; inadequate local infrastructure and difficulties in managing and staffing international operations; delays resulting from difficulty in obtaining import or export licenses; limitations on repatriation of funds; tariffs, quotas and other trade barriers and restrictions; transportation delays; operating in locations with a higher incidence of corruption and fraudulent business practices; limitations on our ability to enforce legal rights and remedies with third parties and other factors beyond our control, including terrorism, war (including in light of the continuing conflict between Russia and Ukraine which may divert governmental and other funding from life sciences to the Ukraine military effort), natural disasters, climate change and diseases. Overall demand for our products could be reduced as a result of a global economic recession or political unrest, especially in areas such as healthcare, education and research. In addition, geopolitical conflicts have had an impact on global economic conditions and has led to increased inflationary pressure and rising interest rates, which we expect will lead to an increase in rental payments we owe in connection with certain of our leases as they come up for renewal or rent review, including our headquarters located at Discovery Drive, Cambridge, United Kingdom, the rent for which is up for review during 2023, which may have a negative impact on our financial condition and results of operations. Customers or suppliers may experience cash flow problems, including in light of the COVID-19 pandemic and related response measures, and as a result, customers have and may continue to modify, delay or cancel plans to purchase our products. Any inability of current and/or potential customers to purchase and/or pay for our products due to, among other things, declining economic conditions as a result of inflation, rising interest rates, changes in spending patterns and the effects of governmental initiatives to manage economic conditions may have a negative impact on our financial condition and results of operations. Changes in U.S. social, political (including as a result of the potential U.S. statutory debt limit standoff), regulatory and economic conditions or laws and policies governing banking and healthcare systems and drug prices, foreign trade, manufacturing and development and investment in the territories and countries where we or our customers operate could adversely affect our business and our operating results. The application of laws and regulations implicating global transactions is often unclear and may at times conflict. Compliance with these laws and regulations may involve significant costs or require changes in our business practices that result in reduced revenue and profitability. For example, we may be exposed to any changes in national or international regulations governing the transport of biological products across borders. Non-compliance could also result in fines, damages, criminal sanctions, prohibited business conduct and damage to our reputation. We incur additional legal compliance costs associated with our global operations and could become subject to legal penalties in foreign countries if we do not comply with local laws and regulations, which may be substantially different from those in the United Kingdom or United States. Any such non-compliance, even if prohibited by our internal policies, could have an adverse effect on our business and result in significant fines or penalties.

We engage in business globally, which subjects us to a number of unpredictable or unexpected risks and factors outside our control, including risks associated with public health crises such as epidemics and pandemics, including COVID-19 and its variants which have adversely affected global economies, financial markets and the overall environment in which we do business, and the extent to which it may impact our future results of operations and overall financial performance remains uncertain. The COVID-19 pandemic has adversely affected, and may continue to adversely affect, elements of our business (including elements of our operations, supply chains and distribution systems) as a result of impacts associated with preventive and precautionary measures that we, other businesses, our communities and governments have taken and are taking. Throughout the COVID-19 pandemic, many employers in our primary locations of business, including the United States, United Kingdom, and China, temporarily closed sites and required their employees to work from home if they were able to do so. Further, as the research community began to focus on COVID-19, other types of research were put on hold, which resulted in many of our customers' research labs being forced to temporarily shut down or to operate at reduced capacity. These site closures included some of our customers' labs, which have caused and may continue to cause customers to delay or forego purchases of our products. While many of our customers' labs have reopened, such labs may be required to continue to operate at reduced capacity, and there can be no assurance that our customers will not be subject to further shutdowns or reductions in capacity in the future, which could have a material adverse effect on our business and results of operations. As a substantial majority of our catalogue revenue is purchased for research use only, these shutdowns and reductions in capacity have negatively impacted the global demand for our products, which resulted in slower than expected revenue growth. As the impact of the COVID-19 pandemic remains uncertain, we may continue to experience slower than normal sales activity. In an effort to halt the outbreak of COVID-19, many countries throughout the world, including China, placed significant restrictions on travel, including business travel, closed their borders, imposed prolonged quarantines, and many jurisdictions, such as China, may continue to close borders, impose prolonged quarantines and further restrict travel and business activity, which has impacted and could significantly impact our ability to support our operations and customers, the ability of our employees to get to their workplaces to produce products and provide services, and the availability of materials for production of our products, as well as significantly hinder or increase the costs associated with our products from moving through the supply chain. Despite the roll out of vaccines in many of our countries in which we operate, due to uncertainties to be dictated by the length of time that the COVID-19 pandemic and related disruptions continue, there can be no assurance that our operations will not continue to be adversely impacted. The duration and extent of the impact from the COVID-19 pandemic depends on future developments that cannot be accurately predicted at this time, such as continued vaccine and booster rollouts, impact of vaccine hesitancy, the severity and transmission rate of the virus and variants, and the extent and effectiveness of containment actions and the impact of these and other factors on our employees, customers, suppliers, and partners. Such impact on our business, cash flows and/or financial condition, and results of operations could be material. To the extent the COVID-19 pandemic and associated preventive and precautionary measures adversely affects our business and financial results, it may also have the effect of heightening many of the other risks described in this "Risk Factors" section.

We face significant competition from a diverse and fragmented base of competitors, many of whom focus on specific regions, customers and/or specific product segments. Competitors range from smaller, specialized companies (who may be able to respond more quickly to customers' specific needs), to large multinational companies (who provide a full suite of products to research labs, which may have greater financial, marketing, operational and research and development resources than we do). Such greater resources may allow our competitors to respond more effectively with new, alternative, or emerging technologies. In addition, consolidation trends in the pharmaceutical, biotechnology and diagnostics industries have created concentrated purchasing decisions for some customers, resulting in increased pricing pressure on us. Moreover, customers may believe that consolidated businesses are better able to compete as sole-source vendors and therefore, prefer to purchase from such businesses. New procurement channels, such as e-procurement and aggregators, may prove more attractive to customers through better delivery of products or blocking other channels where we have strength, and a failure by us to sufficiently engage and participate in these channels may lead to a loss of customer relationships. Failure to anticipate and respond to our competitors' actions may impact our future sales and earnings, in particular failure to react to competitors strengthening their brand, marketing or customer experience may negatively impact our ability to attract and retain customers. We are pursuing a number of strategies to maintain and improve our revenue growth, including: -   increase usage of our research use only ("RUO") antibodies and grow sales over time;-   grow our product portfolio and expand within adjacent markets;-   expand our product offering for diagnostic and biopharmaceutical companies;-   enhance our digital platform and online presence;-   strengthen our teams, systems, and infrastructure to support our growth; and -   selectively pursue strategic acquisitions. We may not be able to successfully implement these strategies, and these strategies may not result in the expected growth of our business. Failure to anticipate and respond to our competitors' actions may adversely affect our business, financial condition, and results of operations.

Our operating results could be negatively affected by the loss of revenue from a significant number of our customers. Our sales are widely distributed, and many of our customers typically place smaller value orders in high volumes. We have other customers with whom we maintain close business relationships, working closely to build the specific custom tools they need, which will then become part of our product portfolio. These relationships often present larger commercial opportunities, and our operating results could be adversely affected by the loss of a significant number of these customers, particularly during the product development phase. For the year ended December 31, 2022, no single customer accounted for more than 3% of our revenue. Though we often offer pricing and volume incentives, our customers are generally not obligated to purchase any fixed quantities of products, and they may stop placing orders with us at any time. If a significant number of customers purchase fewer of our products, defer orders, or fail to place additional orders with us for any reason, our sales could decline, and our operating results may not meet our expectations. In addition, if those customers order our products, but fail to pay on time or at all, our liquidity and operating results could be adversely affected. Our contracts generally do not contain minimum purchase requirements, and the majority of our sales are on a purchase order basis. Therefore, our sales are subject to changes in demand from our customers. The level and timing of orders placed by our customers vary for a number of reasons, including individual customer strategies, the introduction of new technologies, the desire of our customers to reduce their exposure to any single supplier and general economic conditions. If we are unable to anticipate and respond to the demands of our customers, if we have an inadequate supply of products, insufficient capacity in our sites or if we experience any disruptions to our supply chain or distribution network, we may lose customers. Alternatively, we may have excess inventory or excess capacity, and either of these factors may have a material adverse effect on our business, financial condition, and results of operations. Though we do generate a portion of our sales from long-term contracts, the majority of these contracts are non-exclusive and do not require a minimum purchase volume. This makes it difficult to estimate our customers' demand for our products and our critical material and component needs. In addition, though we believe customers in our markets display a significant amount of loyalty to a particular product, we may not be able to renew a contract on favorable pricing terms if our competitors reduce their prices in order to procure business, or if a customer insists that we lower the price charged under the contract being renewed in order to retain the contract. In addition, if we enter into a contract with a customer on unfavorable terms, it may harm our ability to negotiate our future contracts with that customer or with other customers. The loss of sales obtained through long-term contracts, or the reduced profitability of such sales could adversely affect our business, financial position and results of operations.

Sales of a substantial number of our ADSs in the public market, or the perception in the market that the holders of a large number of ADSs intend to sell, could reduce the market price of our ADSs. As of December 31, 2022, we had 229,309,701 ordinary shares (including those represented by ADSs) outstanding. All of our ADSs are freely tradable without restriction under the Securities Act, except for any of our ADSs that may be held by our directors, executive officers and other affiliates, as that term is defined in the Securities Act, which will be control or restricted securities under the Securities Act. Control or restricted securities may not be sold in the public market unless the sale is registered under the Securities Act or an exemption from registration is available. In the future, we may also issue additional securities if we need to raise capital or make acquisitions, which could constitute a material portion of our then-issued and outstanding ADSs.

We believe that maintaining and enhancing our brand and reputation are of significant importance to the success of our business. We work to set a very high standard for the quality of our products and our ethical business practices, and we believe that this has been crucial to our success. We have employed and will continue to employ different types of consumer experience and interaction touchpoints designed to gauge consumer satisfaction with our products, including our customer website, e-sales and digital marketing, and we also engage in rigorous product validation in order to continue to improve our product quality. We cannot guarantee, however, that these activities will be successful or that we will be able to continue to maintain our brand and reputation as we expect. For example, in the year ended December 31, 2022, we implemented a new branding approach: "progress happens together," which includes articles and podcasts that are dedicated to bringing scientists together by telling their stories, highlighting the importance of teamwork and collaboration among scientists, and other scientific customer experiences. We cannot guarantee that our new branding approach will be successful or that we will be able to continue to maintain our brand and reputation as we expect. If our brand strength deteriorates, or if our brand is no longer associated with high-quality products, it could lead to fewer publication citations for our products, which could in turn further weaken our brand recognition and reputation. Customers often choose the most-cited brand or product, and if another brand were to overtake ours in frequency of citations, our business could be adversely affected. In addition, our competitors may increase the intensity of their consumer interactions or customer feedback processes, which may force us to increase our advertising spend to engage with our customer base and maintain brand and reputational awareness. Our ability to attract and retain customers is also influenced by our prominence in search engines. Any changes to our prominence in search engines, whether as a result of revised algorithms, improved search engine optimization by our competitors or failure to respond to changes in online activity may negatively impact our brand and reputation or to convert customer interactions into sales. In addition, any negative publicity relating to our products or services, regardless of its veracity, could harm our brand and the perception of our brand in the market. With an increasing global focus on ethical business practices and good corporate behavior, and with such issues directly influencing consumer behavior, any failure to achieve or maintain the levels of corporate governance, social and environmental impact and corporate behaviors expected of us, including demonstrating dedication to the benefits of diversity, could negatively impact our brand and reputation. If our brand is harmed, we may not be able to gain new customers or continue to maintain positive relationships with our customers, and our business, prospects, financial condition, and results of operations could be materially and adversely affected. Part of our growth strategy is to increase direct customer interactions in multiple countries. Failure to anticipate and react to particular geographic requirements and sensitivities may have a negative impact on our brand and reputation, which may result in a decrease in sales or sales growth in such countries, which may adversely affect our business, prospects, financial condition and results of operations.