MERIDIAN BIOSCIENCE, INC.

INDEX TO ANNUAL REPORT

ON FORM10-K

NOTE ABOUT FORWARD-LOOKING STATEMENTS

This Annual Report on Form10-K contains forward-looking statements. Thereport includes estimates, projections, statements relating to our business plans, objectives, and expected operating results that are “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995, provides a safe harbor from civil litigation for forward-looking statements accompanied by meaningful cautionary statements. Except for historical information, this report contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, which1934. Forward-looking statements may beappear throughout this report, including the following sections: “Business” (Part I, Item 1 of this Form 10-K), “Risk Factors” (Part I, Item 1A of this Form 10-K), and “Management’s Discussion and Analysis of Financial Condition and Results of Operations” (Part II, Item 7 of this Form 10-K). These forward-looking statements generally are identified by the words such as “estimates”, “anticipates”, “projects”, “plans”, “seeks”, “may”, “will”, “expects”, “intends”, “believes”, “should”“believe,” “project,” “expect,” “anticipate,” “estimate,” “intend,” “strategy,” “future,” “opportunity,” “plan,” “may,” “should,” “will,” “would,” “will be,” “will continue,” “will likely result,” and similar expressions or the negative versions thereof and which also may be identified by their context. Allexpressions. Forward-looking statements that address operating performance or events or developments that Meridian expects or anticipates will occur in the future, including, but not limited to, statements relating to per share diluted earnings and revenue, are forward-looking statements. Such statements, whether expressed or implied, are based uponon current expectations and assumptions that are subject to risks and uncertainties that may cause actual results to differ materially. We describe risks and uncertainties that could cause actual results and events to differ materially in “Risk Factors,” “Management’s Discussion and Analysis of the CompanyFinancial Condition and Results of Operations,” “Quantitative and Qualitative Disclosures about Market Risk” (Part II, Item 7A of this Form 10-K) and elsewhere in this Form 10-K. Readers are cautioned not to place undue reliance on forward-looking statements, which speak only as of the date they are made. Specifically, Meridian’s forward-looking statements are, and will be, based on management’s then-current views and assumptions regarding future events and operating performance. Meridian assumesWe undertake no obligation to publicly update or revise publicly any forward-looking statements, even if experience or future changes make it clear that any projected results expressed or implied therein will not be realized. These statements are subject to various risks, uncertainties and other factors that could cause actual results to differ materially, including, without limitation, the following: Meridian’s operating results, financial condition and continued growth depends, in part, on its ability to introduce into the marketplace enhancements of existing products or new products that incorporate technological advances, meet customer requirements and respond to products developed by Meridian’s competition, its ability to effectively sell such products and its ability to successfully expand and effectively manage increased sales and marketing operations. While Meridian has introduced a number of internally developed products, there can be no assurance that it will be successful in the future in introducing such products on a timely basis or in protecting its intellectual property, and unexpected or costly manufacturing costs associated with the ramp upwhether because of new products could cause actual results to differ from expectations. Meridian relies on proprietary, patented and licensed technologies. As such,information, future events, the Company’s ability to protect its intellectual property rights, as well as the potential for intellectual property litigation, would impact its results. Ongoing

consolidations of reference laboratories and formation of multi-hospital alliances may cause adverse changes to pricing and distribution. Recessionary pressures on the economy and the markets in which our customers operate, as well as adverse trends in buying patterns from customers, can change expected results. Costs and difficulties in complying with laws and regulations, including those administered by the United States Food and Drug Administration, can result in unanticipated expenses and delays and interruptions to the sale of new and existing products, as can the uncertainty of regulatory approvals and the regulatory process. The international scope of Meridian’s operations, including changes in the relative strengthnovel coronavirus (“COVID-19”) pandemic, or weakness of the U.S. dollar and general economic conditions in foreign countries, can impact results and make them difficult to predict. One of Meridian’s growth strategies is the acquisition of companies and product lines. There can be no assurance that additional acquisitions will be consummated or that, if consummated, will be successful and the acquired businesses will be successfully integrated into Meridian’s operations. There may be risks that acquisitions may disrupt operations and may pose potential difficulties in employee retention, and there may be additional risks with respect to Meridian’s ability to recognize the benefits of acquisitions, including potential synergies and cost savings or the failure of acquisitions to achieve their plans and objectives. Meridian cannot predict the outcome of goodwill impairment testing and the impact of possible goodwill impairments on Meridian’s earnings and financial results. Meridian cannot predict the possible impact of U.S. health care legislation enacted in 2010 – the Patient Protection and Affordable Care Act, as amended by the Health Care and Education Reconciliation Act – and any modification or repeal of any of the provisions thereof initiated by Congress or the presidential administration, and any similar initiatives in other countries on its results of operations. Efforts to reduce the U.S. federal deficit, the outcome of tax reform legislation, breaches of Meridian’s information technology systems and natural disasters and other events could have a materially adverse effect on Meridian’s results of operations and revenues. We have identified a material weakness in our internal control over financial reporting that, if not properly corrected, could materially adversely affect our operations and result in material misstatements in our financial statements. In addition to the factors described in this paragraph, as well as those factors identified from time to time in our filings with the Securities and Exchange Commission, Part I, Item 1A Risk Factors of this Annual Report on Form10-K contains a list and description of uncertainties, risks and other matters that may affect the Company. Readers should carefully review these forward-looking statements and risk factors and not place undue reliance on our forward-looking statements.otherwise.

Unless the context requires otherwise, references in this Annual Report onForm 10-K (“Form 10-K”) to “Meridian,” “we,” “us,” “our,” “Company,” or “our company” refer to Meridian Bioscience, Inc. and its subsidiaries.

In the discussion that follows, all dollarsdollar amounts and sharesshare amounts are in thousands (both tables and text), except per share data.

This Annual Report on Form10-K refers to trademarks such as TRU FLUAlethia^®, BreathID^®, BreathTek^®, Curian^®, HpSA^®, ImmunoCard^®, ImmunoCard STAT!^®, MyTaqLeadCare^™®, SensiFAST^™MyTaq™, PREMIER^®, revogene^® and LeadCare^®SensiFAST™, which are protected under applicable intellectual property laws and are our property. Solely for convenience, our trademarks and tradenames referred to in this Form10-K may appear without the^® or^™ symbols, but such references are not intended to indicate in any way that we will not assert, to the fullest extent under applicable law, our rights to these trademarks and tradenames. Our molecular diagnostic test platform formerly known under the tradenames illumigene and illumipro, has been rebranded under the tradename Alethia. References to Alethia throughout this Form 10-K refer to our molecular diagnostic tests and instrumentation formerly marketed and sold under the illumigene and illumipro brands. Such references are not intended to indicate, in any way, that we will not assert, to the fullest extent permitted by law, our rights to our trademarks.

WEBSITE AND SOCIAL MEDIA DISCLOSURE

We use our website (www.meridianbioscience.com) and our corporate Facebook, Instagram, LinkedIn, Twitter, Vimeo and YouTube accounts as channels of distribution of company information. The information we post through these channels may be deemed material. Accordingly, investors should monitor these channels, in addition to following our press releases, Securities and Exchange Commission (“SEC”) filings and public conference calls and webcasts. The contents of our website and social media channels are not, however, a part of this report.

MARKET AND INDUSTRY INFORMATION

Market data used throughout this Form 10-K is based on management’s knowledge of the industry and good faith estimates of management. All of management’s estimates presented herein are based on industry sources, including analyst reports and management’s knowledge. We also relied, to the extent available, upon management’s review of independent industry surveys and publications prepared by a number of sources and other publicly available information. We are responsible for all of the disclosures in this Form 10-K and while we believe that each of the publications, studies and surveys used throughout this Form 10-K are prepared by reputable sources, we have not independently verified market and industry data from third-party sources.

All of the market data used in this Form 10-K involves a number of assumptions and limitations, and you are cautioned not to give undue weight to such estimates. While we believe the estimated market position, market opportunity and market size information included in this Form 10-K is generally reliable, such information, which in part is derived from management’s estimates and beliefs, is inherently uncertain and imprecise and has not been verified by any independent source. Projections, assumptions and estimates of our future performance and the future performance of the industry in which we operate are subject to a high degree of uncertainty and risk due to a variety of factors, including those described in “Item 1A. Risk Factors” of Part I of this Form 10-K and elsewhere in this Form 10-K. These and other factors could cause results to differ materially from those expressed in our estimates and beliefs and in the estimates prepared by independent parties.

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PART I.

ITEM 1.

BUSINESS

Overview

Meridian is a fully-integrated life science company with principal businesses inin: (i) the development, manufacture, sale and distribution of diagnostic testtesting systems and kits, primarily for certain gastrointestinal viral,and respiratory and parasitic infectious diseases, and elevated blood lead levels; and (ii) the manufacture and distribution of bulk antigens, antibodies, PCR/qPCRimmunoassay blocking reagents, nucleotides, competent cells,specialized Polymerase Chain Reaction (“PCR”) master mixes, and bioresearch reagents used by researchers and other diagnostic manufacturers. The Company was incorporatedtest manufacturers and researchers in Ohio in 1976. Our principal corporate offices are located near Cincinnati, Ohio, USA.

During March 2016, we acquired all of the outstanding common stock of Magellan Biosciences, Inc.,immunological and its wholly-owned subsidiary Magellan Diagnostics, Inc. (collectively, “Magellan”), which is now reported as part of our Diagnostics operating segment. Headquartered near Boston, Massachusetts, Magellan is a leading manufacturer of products cleared by the Food & Drug Administration (“FDA”)molecular tests for thepoint-of-care testing of capillary blood to diagnose lead poisoning in childrenhuman, animal, plant and adults. Further details of the Magellan acquisition are set forth in Note 2 of the accompanying Consolidated Financial Statements.environmental applications.

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Our website iswww.meridianbioscience.com. We make available our Annual Reports on Form10-K, Quarterly Reports on Form10-Q, Current Reports on Form8-K, Proxy Statements and any amendments thereto, free of charge through this website, as soon as reasonably practicable after such material has been electronically filed with or furnished to the Securities and Exchange Commission (“SEC”). These reports may also be read and copied at the SEC’s public reference room at 100 F Street, N.E., Washington, DC 20549, phone number1-800-732-0330.SEC. The SEC maintains an internet site containing these filings and other information regarding Meridian atwww.sec.gov. The information on our website is not and should not be considered part of this AnnualForm 10-K.

Pending Merger

On July 7, 2022, the Company entered into an Agreement and Plan of Merger (as it may be amended, supplemented or otherwise modified from time to time, the “Merger Agreement”) with SD Biosensor, Inc., a corporation with limited liability organized under the laws of the Republic of Korea (“SDB”), Columbus Holding Company, a Delaware corporation (“Parent”), and Madeira Acquisition Corp., an Ohio corporation and a direct wholly owned subsidiary of Parent (“Merger Sub”). Meridian is informed that SJL Partners, LLC (“SJL”) is currently the sole shareholder of Parent, and SDB together with SJL will be the sole shareholders of Parent as of the closing of the Merger. Pursuant to the Merger Agreement, Merger Sub will merge with and into Meridian (the “Merger”), with Meridian surviving the Merger as a direct wholly owned subsidiary of Parent. Consummation of the Merger is subject to customary closing conditions, including, without limitation: (i) the absence of certain legal impediments; and (ii) the condition that no Specified Outcome, as such term is defined in the Merger Agreement, related to the DOJ LeadCare legal matter (which is described in the section entitled “Legal Matter Relating to LeadCare Product Line” of Item 3. “Legal Proceedings”) has occurred or is reasonably likely to occur.

On November 21, 2022, the parties received clearance from the Committee on Foreign Investment in the United States with respect to the Merger and the transactions contemplated by the Merger Agreement.

The foregoing description of the Merger Agreement and the transactions contemplated thereby does not purport to be complete and is subject to, and qualified in its entirety by reference to, the full text of the Merger Agreement, which is attached as an exhibit to our Current Report on Form10-K. 8-K filed with the SEC on July 7, 2022.

Reportable Segments

Our reportable segments are Diagnostics and Life Science, both of which are headquartered in Cincinnati, Ohio. Detailed information related to theWe describe these reportable segments can be found in the followingthis “Business” section and in other locations withinin this Annual Report on Form10-K:report:

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Diagnostics Segment

Overview of Products and Markets

Our primaryPrior to the onset of the COVID-19 pandemic early in 2020, our largest source of net revenues iswas clinical diagnostic products, withhistorically representing approximately two-thirds of our consolidated net revenues. However, primarily due to the effects of the COVID-19 pandemic, which led to the growth in our Life Science segment, our Diagnostics segment providing 71%provided 47% of consolidated net revenues for fiscal 2017. Third-party2022, following 40% of consolidated net revenues for this segment were approximately $144,000, $145,000 and $146,000 for fiscal 2017, 2016 and 2015, respectively. As of September 30, 2017, our Diagnostics segment had approximately 420 employees in seven countries.2021.

Our clinical diagnostic products provide accuracy, simplicity and speed; enable early diagnosis and treatment of common, acute medical conditions; and provide for better patient outcomes at reduced costs. We target diagnostics for disease states thatthat: (i) are conditions where rapid diagnosis impacts patient outcomes; (ii) have opportunistic demographic and disease profiles; (iii) are underserved by current diagnostic products; and/or (iv) have difficult sample handling requirements (e.g., stool). This approach has allowed us to establish significantmeaningful market share in our target disease states.

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Our clinical diagnostic products span a broad menu of testing platformsstates, gastrointestinal and technologies,respiratory illnesses, and also include transport media that store and preserve specimen samples from patient collection to laboratory testing. Our testing platforms include:

Our clinical diagnostic products are used principally in the detection of infectious diseases caused by various bacteria, viruses, parasites and pathogens, including most notably the following general areas:

Our clinical diagnostics products also include Magellan’s LeadCare brand of tests for quantitative determination of blood lead levels.

Our product portfolio includes over 140approximately 200 diagnostic tests and transport media, and is marketed to acute care hospitals, reference laboratories, outpatient clinics and physician office laboratories in over 70 countries around the world.

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We continue to investOur diagnostic assay research and development programs are focused on menu expansion for our Curian and Revogene instrument platforms, with disease targets in the gastrointestinal and respiratory areas, as well as next generation blood-chemistry testing. Currently pending clearance at the U.S. Food and Drug Administration (“FDA”) is a 510(k) application for our Curian EHEC Shiga Toxin assay. Our current new product development forpipeline includes gastrointestinal and respiratory multi-plex assays on our molecular testingRevogene instrument platform, and this platform now has nine commercialized tests spanning hospital acquired infections, women’s health, respiratory, sexually transmitted diseases,C. difficile combo common antigen and tropical diseases. As of September 30, 2017,Toxins A and B, on ourillumigene Malaria test has been placed in nearly 150 accounts in the EMEA region (i.e., Europe, Middle East and Africa) for use as a screening test for travelers returning to Europe from endemic areas in Africa. Our efforts to develop market channels in the endemic areas of Africa continue, as we work to convince policy-makers of the advantages of a more accurate molecular test to assist in efforts to eradicate malaria.

We believe that ourillumigene system has been well-accepted in our global markets. We now have nearly 1,650 customer account placements. Of these account placements, approximately 1,375 accounts have completed evaluations and validations and are regularly purchasing product, with the balance of our account placements being in some stage of product evaluation and/or validation. Of our account placements, Curian instrument platform. In addition, we have nearly 600 accountsother assays on both platforms moving through our upstream marketing assessment processes that are regularly purchasing, evaluating and/expected to add to the development pipeline. For our BreathID platform, we are actively looking at the feasibility of combining Urea and Citrica into a single sachet or validating two or more assays.

Our currentpouch. We are also pursuing opportunities to complement our internal research and development pipeline for immunoassay products includes a new instrumentprograms by securing rights to finished diagnostics tests that utilizes fluorescent chemistrywe can immediately commercialize.

The April 2020 acquisition of Exalenz Bioscience Ltd. (“Exalenz”) and has colorimetric capabilities. This new platform is being branded under the “Curian” name. DuringBreathID system, along with the first half of fiscal 2018, we expect to submit a 510(k) to the FDA for one or more of our existing rapid immunoassay tests using the colorimetric capabilitiesJuly 2021 acquisition of the Curian instrument. DuringBreathTek business, strengthened our position in H. pylori testing, as these products provide an alternative testing approach versus stool antigen testing.

Market Trends

Despite the second halfeffects of fiscal 2018,the COVID-19 pandemic and the intense focus on SARS-CoV-2 testing, we expect to submit a 510(k) tobelieve the FDA for our first fluorescent assay, a combinationC.difficile common antigen (GDH) and toxin (A/B) test. Looking forward into fiscal 2019 and 2020, we expect to develop additional rapid immunoassay tests using the Curian fluorescent chemistry.

Market Trends

The global market for infectious disease tests continues to expand as new disease states are identified, new therapies become available, and worldwide standards of living and access to health care improve. More importantly, within this market, thereThere is a continuing shift from conventional testing which requires highly trained personnel and lengthy turnaround times for test results, to more technologically advanced testing, which can be performed by less highly trained personnel and completed in minutes or hours.

The increasinggrowing global pressures to contain total health care costs have accelerated the increased use of diagnostic testing. With rapid and accurate diagnoses of infectious diseases, physicians can pinpoint appropriate therapies quickly, leading to faster recovery, shorter hospital stays and lower overall treatment cost. Integrated Delivery Networks (“IDNs”) and Accountable Care Organizations (“ACOs”) in our U.S. market have the goal of increasing the efficiency of health care delivery, reducing spending and improving clinical outcomes. We believe our product portfolio positions us competitively with IDNs ACOs and health care systems that are transitioning fromfee-for-service compensation models to value basedvalue-based reimbursement. OurC. difficile, Group BStreptococcus, Group AStreptococcus andH. pylori products are all examples of how a highly accurate diagnostic test on the front end can mitigate or reduce down-stream costs for antibiotic use, symptom-relieving drugs and hospital stays.

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We also continue to see aggregation of buying power in our U.S. market via multi-hospital group purchasing organizations (“GPOs”) and IDNs, consolidation among reference laboratories, hospital laboratories being operated by large reference laboratories, and acquisition of physician practices by hospitals, health systems andfor-profit specialty health care companies. We utilize multi-year supply agreements to secure our business where we deem appropriate.

Cost containment pressures have also affected health care systems outside the U.S., particularly in Europe, where the health care systems are generallygovernment-run. The level of government budget deficits can have an adverse effect on the amount of government health care spend.

Sales, Marketing and Distribution

Our Diagnostics segment’ssegment relies on direct sales personnel and independent distribution network consists of the following for each of the broad geographic regions we serve:

United States

In the U.S., our sales and distribution network consists ofnetworks. We have a direct sales force complemented by independent distributors. Thein two countries, covering the United States (“U.S.”) and certain major markets in the EMEA region (i.e., in Europe, the Middle East and Africa). We also use of independent distributors allowseither in a complementary manner with our direct sales force (e.g., the U.S.) or solely to supply our products to reach any size health care facilityend-users. We have two independent distribution customers and also provides our customers the option to purchase our products directly from Meridian or through an authorized distributor. Two independent distributors accounted for 10% or morea reference laboratory customer that together comprised 29% of consolidatedDiagnostics segment net revenues in fiscal 2017, 20162022, with each contributing between 8% and 2015: Cardinal Healthcare Corporation and Thermo Fisher Scientific. Our revenues from Cardinal were approximately $23,000, $20,000 and $29,000 during fiscal 2017, 2016 and 2015, respectively. Our revenues from Thermo Fisher were approximately $18,000, $20,000 and $25,000 during fiscal 2017, 2016 and 2015, respectively.

EMEA

In EMEA, our sales and distribution network consists of direct sales forces in Belgium, France, Holland and Italy, and independent distributors in other European countries, Africa and the Middle East. We have implemented a direct sales presence in Germany and the U.K. for ourillumigene products, and utilize independent distributors for our immunoassay products. We maintain a distribution center near Milan, Italy.

ROW

With the exception of Australia, where we utilize a direct sales force, we utilize independent distributors throughout the rest11% of the world (“ROW”).

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Competition

Our major competitors in molecular diagnostics are Cepheid (a Danaher business) and Becton Dickinson, whoboth of which have systems with multiple-assay menus. We also face competition in molecular diagnostics, but to a lesser degree, from companies such as Abbott (former Alere business) and Quidel, who have a limited commercial menu and tend to compete strictly on price. We believe that our molecular platform offers a number of competitive features:

Our major competitors in rapid immunoassay diagnostics are primarily Alere and Quidel. Over the last twoQuidelOrtho. In recent years, companies such as BioMerieuxbioMerieux have captured market share in our foodbornegastrointestinal category via its BioFire multi-plex panel tests. However, oversince their introduction to the last several months,market, payors have raised concerns over reimbursement levels relative to clinical utility. utility, particularly for panels with 12 or more targets. Our major competitors in rapid immunoassay diagnostics are primarily Abbott (former Alere business) and QuidelOrtho.

For blood lead testing, we believe we have the onlyFDA-cleared, CLIA-waivedpoint-of-care test available commercially. Other blood lead testing systems in use, marketed by our competitors, include Graphite Furnace Atomic Absorption Spectroscopy, which requires a highly-skilledhighly skilled technician and larger laboratory space to operate, in addition to not being portable or suitable forpoint-of-care use. We believe that with the breadth and depth of our product portfolio, we are well positioned for the clinical laboratory.

Research and Development

Our Diagnostics segment’s research and development organizationpersonnel are organized into three pre-clinical teams: immunoassay, PCR-based molecular and blood-chemistry. We have a separate team responsible for infectious disease products is located at our corporate headquarters in Newtown, Ohio, a suburbexecution of Cincinnati, and has expertise in biochemistry, immunology, mycology, bacteriology, virology, parasitology, and molecular biology. Our Magellan business has a dedicated research and development team in Billerica, Massachusetts. Research and development expenses for the Diagnostics segment for fiscal 2017, 2016 and 2015 were approximately $13,000, $11,000 and $10,000, respectively.clinical trials across all three pre-clinical programs. Our research and development activities are focused on new product and new technology development, new applications for our existing technologies, and improvements to existing products.products, including assay-menu expansion. Research and development efforts may occurin-house or with collaborative partners. We believe that new product development is a key source for sustaining revenue growth. The products within ourillumigene Revogene and Alethia molecular platform,platforms, H. pylori product family and blood lead testing family were developed solelyin-house, or substantially so. See “Operating Expenses” section within MD&A on page 39.in-house.

Manufacturing

Our diagnostics products are manufactured at four principal sites in Billerica, Massachusetts (blood-chemistry); Cincinnati, Ohio (immunoassays and molecular tests); Modi’in, Israel, (urea breath tests for H. pylori); and Quebec City, Quebec, Canada (molecular tests). Our immunoassay and molecular assay products require the production of highly specialized reagents, primers and enzymes.enzymes, and our BreathID and BreathTek products require the production of urea in pharmaceutical-grade form. We produce substantially allthe vast majority of our own immunoassay requirements. PrimersReagents, primers and enzymes for ourillumigene Revogene molecular assay products, primers for our Alethia molecular assay products, and urea for our BreathID and BreathTek systems are purchased from outside vendors. Our blood lead testing products require the production of electrical chemical sensors, which we manufacture using critical raw materials purchased from outside vendors. We believe that we have sufficient manufacturing and sourcing capacity for anticipated growth over the next several years.

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Intellectual Property, Patents and Licenses

We own or license U.S. and foreign patents, most of which are for selectedselect products manufactured by our Diagnostics segment. These patents are used in our manufacturing processes for selectedselect products (method(e.g., method patents) or may relate to the design of the test device technology format (design(e.g., design patents). In the absence of patent protection, we may be vulnerable to competitors who successfully replicate our production and manufacturing technologies and processes. Our employees are required to sign confidentiality andnon-disclosure agreements designed to protect our proprietary products.

The patents forapplicable to ourillumigene Alethia products, which represented 17%3%, 20%4% and 21%7% of consolidated net revenues for fiscal 2017, 20162022, 2021 and 2015,2020, respectively, arewere licensed from a third party, Eiken Chemical Co., Ltd., under anon-exclusive license agreement, with the last remaining U.S. patent having expired during the year ended September 30, 2022.

The patents for the Revogene platform and expire between 2020related products acquired as part of the GenePOC business are either wholly owned or licensed from two third parties, Laval University and 2022.The Regents of California, under an exclusive license agreement. These patents wereare issued in the U.S., European CommunityUnion (“EU”) and other countries. The term of our exclusive license agreement and the related patents currently runs until the last patent expires in 2022, atthrough June 15, 2034, after which point we will be free to practice the patents without any restriction or royalty obligation. In September 2021, the U.S. Patent and Trademark Office granted to Meridian Bioscience Canada, Inc. (a wholly owned subsidiary) and Laval University a patent for our current Revogene test device and its microfluidic use in our Revogene instrument.

The patents for the BreathID system and related urea breath test for H. pylori are either wholly owned or licensed from a third party, Oridion Medical 1987 Ltd., under an exclusive, royalty free, license agreement. The licensed and wholly owned patents are issued in the U.S., EU, Israel, Japan, Australia and China. The wholly owned patents have varying expiration dates, with the last being in 2033.

The patents for our stool antigen H. pylori products, owned by us and which represented 14%approximately 5%, 15%7% and 14%9% of consolidated net revenues for fiscal 2017, 20162022, 2021 and 2015,2020, respectively, expired in May 2016 in the U.S. and in May 2017 in countries outside the U.S. We expectAs a result, competition with respect to our stool antigen H. pylori products to increase in the near future, as we currently market the onlyFDA-cleared tests to detectH. pylori antigen in stool samples in the U.S. market. Such competition may have an adverse impact onhas increased, adversely impacting our selling prices for these products, and/or our ability to retain business at prices acceptable to us,us. To mitigate certain of the pricing and consequently, adversely affectvolume pressures we face within the gastrointestinal product category, we have: (i) operated under a strategic collaboration agreement with DiaSorin to sell H. pylori tests; (ii) adjusted selling prices to secure volume; and (iii) upon FDA clearance in March 2020, launched Curian HpSA, our future results of operationsfirst assay on the Curian platform, which we expect will help protect our existing customer base using lateral flow tests. We also expect the BreathID and liquidity, including revenues and gross profit. In orderBreathTek products to defend against competition, our product development pipeline includes multiple new product initiatives for the detection ofH. pylori, including drug resistance.mitigate competitive pressures, as these products provide an alternative to stool antigen testing. We are unable to provide assurances that we will be successful with any competition defense strategy or that any competition defense strategy will prevent an adverse effect on our future results of operations andand/or liquidity, including net revenues and gross profit.

Government Regulation

Our diagnostic products are regulated by the FDA as “devices” pursuant to the Federal Food, Drug, and Cosmetic Act (“FDCA”). Under the FDCA, medical devices are classified into one of three classes (i.e., Class I, II or III). While exempt Class I and Class II products do not require FDA review, non-exempt Class I and Class II devices are not expressly approved by the FDA, but, instead, are “cleared” for marketing.marketing (i.e., these products require FDA review prior to marketing clearance). Class III devices generally must receive“pre-market “pre-market approval” (“PMA”) from the FDA as to safety and effectiveness. Our diagnostics manufacturing facilities in Cincinnati and Billerica are subject to periodic inspection by the FDA. See “Lead Testing Matters” beginning on page 3032 within MD&A for discussion regarding the FDA’s inspection of our Billerica facility.

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Each of the diagnostic products currently marketed by usMeridian in the United StatesU.S. has been cleared, approved or authorized for use by the FDA or are exempt from such requirements. The majority of such products have been cleared by the FDA pursuant to its 510(k) premarket review process, whereas our BreathTek product has been approved under the 510(k) clearanceFDA’s PMA process. In the case of our Revogene SARS-CoV-2 test, it has not been FDA cleared or approved but rather has been authorized by the FDA for emergency use under its Emergency Use Authorization (“EUA”) process, ornoting that there will likely be modifications to the regulatory requirements related to these tests in the near future when the EUA is exempt from such requirements.revoked. We believe that most but not all, products under development will be classified as Class I or II medical devices and, in the case of most of our Class I and all Class II devices, will be eligible for 510(k) clearance; however, we can make no assurances in this regard. Our urea breath test for H. pylori on the BreathID system was cleared as a Class I medical device since the urea drug component was approved by the FDA separately via the New Drug Application (“NDA”) process. Our urea breath test for H. pylori on the BreathTek system was approved by the FDA via the PMA process in 2012. Following receipt of EUA on November 9, 2021 for our original SARS-CoV-2 test, our Omicron variant enhanced SARS-CoV-2 test on the Revogene platform was submitted to the FDA under its EUA program on March 29, 2022, with EUA being granted on July 27, 2022.

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Sales of our diagnostic products in foreign countries are subject to foreign government regulation, which is similar to that of the FDA.

Our Cincinnati manufacturing facility isDiagnostics segment facilities are certified to ISO 13485:2012, and our Magellan facility in Billerica, Massachusetts is certified to ISO 13485:2003.13485.

Medical Device Tax

As more fully discussed in the accompanying MD&A, the Company was subject to the medical device tax established as part of the U.S. health care reform legislation through December 31, 2015. Upon expiration of the tax’stwo-year moratorium, which is currently scheduled for December 31, 2017, the Company would become subject to the tax once again. We are unable to predict any future legislative changes or developments related to this moratorium or excise tax.

Seasonal Factors and Sporadic Outbreaks

Our principal business is the sale ofFollowing a broad range of clinical diagnostic test kits for common gastrointestinal, viral, upper respiratory and parasitic infectious diseases, and elevated blood lead levels. Certain infectious diseases may be seasonal in nature, while others may be associated with sporadic outbreaks, such as foodborne illnesses or pandemics such as the H1N1 influenza outbreak during fiscal 2009. While we believe that the breadthfive-year transition period, sales of our diagnostic product lines reducesproducts in the EU are subject to new regulations under the In Vitro Diagnostics Regulation of 2017 (“IVDR”) beginning in May 2022. IVDR replaces the previous IVD Regulation (98/79/EC). In October 2021, the European Commission submitted a proposal to the European Parliament that would move back the May 2022 implementation date for diagnostic tests that are currently CE Marked to dates ranging from May 2022 (for Class A products) to May 2027 (for Class B products), depending on the risk classification of the diagnostic test. We have completed an assessment of needed remediation activities to comply with IVDR and also determined that infections subject to seasonality and sporadic outbreaks will cause significant variability in diagnostic revenues, we can make no assurance that revenuesseveral products will not be impacted period over period by such factors.sellable under IVDR. The net revenues associated with these products are not expected to be material. New diagnostic products launched after May 2022 are required to comply with IVDR.

Life Science Segment

Overview of Products and Markets

Our Life Science segment focuses on the development, manufacture, saledevelops, manufactures, sells and distribution ofdistributes bulk antigens, antibodies, PCR/qPCRimmunoassay blocking reagents, specialized PCR master mixes, isothermal reagents, enzymes, nucleotides, competent cells and bioresearch reagents used predominantly by researchers,agri-bioin vitro device (“IVD”) manufacturing companies, and other diagnostic manufacturing companies. Third-party revenues for this segment were approximately $57,000, $51,000to a lesser degree, by researchers and $49,000 for fiscal 2017, 2016non-human clinical customers such as veterinary, food and 2015, respectively. As of September 30, 2017, our Life Science segment had approximately 220 employees in seven countries.

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Most ofenvironmental. The COVID-19 pandemic has provided the revenuesopportunity for our Life Science segment currently come fromto showcase the manufacture, salebreadth of its reagent products across not only SARS-CoV-2 testing platforms (molecular, rapid antigen and distribution of bulk antigens, antibodies, PCR/qPCR reagents, nucleotides, competent cellsserology), but also RNA and bioresearch reagents used by researchers and other diagnostic manufacturing companies focused on the development of immunoassay andDNA based molecular assay tests. Approximately 72%tests for nearly any infectious disease. For fiscal 2022, approximately 87% of Life Science segment net revenues arewere generated from the industrial market, defined as diagnostic manufacturers and the agriculture industry. This continuesIVD manufacturers. Further, as it relates to be an increasing focusour Life Science segment net revenues, a significant number of our BiolineLife Science segment customers now use our molecular components business, which historically focused onreagents in multiple tests, including non-COVID-19 related tests, therefore making it increasingly difficult to accurately estimate the academic/research market that comprisesportion of molecular reagent sales related specifically to COVID-19. As a result, we are no longer reporting the remaining 28%portion of Life Science revenues.segment net revenues related to COVID-19. Such net revenues were identified and reported throughout fiscal 2021 and fiscal 2020, totaling approximately $111,900 and $71,500, respectively. We utilizeengage direct sales teams in key countries such as the U.S., the United Kingdom (“U.K.”), France, Germany, France, AustraliaChina and Singapore. We have added distribution capabilities to our Singapore sales and business development office to increase our presence and our revenue opportunities in Asia for both molecular and immunoassay components. Additionally, in order to further pursue revenue opportunities in Asia, and China in particular, during fiscal 2017 we established a wholly foreign owned enterprise (“WFOE”) location in Beijing, China, after having operated a representative office there since fiscal 2015. The WFOE employs a business development staff and imports product for sales to customers in China. We utilize a network of distributors in other major countries.Australia. During fiscal 2017, 17%2022, 28% of third-partynet revenues for this segment were from two diagnosticIVD manufacturing customers.

Products such as antibodies, antigens and reagentsOur Life Science segment products are marketed primarily to diagnosticIVD manufacturing customers as a source of raw materials for their immunoassay products,human clinical diagnostics tests, or as an outsourced step in their manufacturing processes. For example, we supply a number of major diagnostic manufacturers with proteins used to detect hepatitis A virus and rubella virus. These products are typically sold in bulk quantities, and may also be custom-designed for a particular manufacturer’s requirements. Sales efforts are focused on multi-year supply arrangements in order to provide stability in volumes and pricing. We believe this benefits both us andIndependent distributors market our customers.

Molecularmolecular biology products such as PCR/qPCR reagents, nucleotides and competent cells are marketed to academic/research and industrial customers. TheseOur products are used in measuringdetecting DNA and RNA in clinicalhuman, animal, plant and agriculturalenvironmental applications. These reagents improve the purity, yield and speed of PCR reactions. Products such as MyTaq and SensiFAST are examples of this type of PCR/qPCR reagent.

Market Trends

As certainMajor IVD manufacturing customers often have global markets become increasingly accessiblefootprints, where we are supplying reagents to us, most notablyspecific manufacturing sites around the world. IVD manufacturers in specific countries of the Asia-Pacific region geographic expansion continues(e.g., China) are increasing their efforts in the development and manufacturing of infectious disease tests. We intend to be a significant strategy foruse the breadth of our Life Science segment, along with furtherproduct portfolio, particularly molecular reagents, to continue to increase the penetration into industrial markets withof our molecular component products.products in IVD manufacturing customers’ tests.

Competition

The market for bulk biomedical reagents is highly competitive. Important competitive factors includewith respect to product quality, price, customer service and reputation. We faceOur competitors, many of whichsuch as Thermo Fisher, often have greater financial, research and development, sales and marketing, and manufacturing resources, and where sole-source supply arrangements do not exist.resources. Customers also may choose to manufacture their biomedical reagentsin-house rather than purchase from outside vendors such as Meridian.

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The academic/research market is highly fragmented. Individual purchases are typically of small quantities. The breadth of product offerings, quality, price and service, includingon-line capabilities and technical resources, are important factors to building customer loyalty and repeat purchases.

Research and Development

ResearchOur research and development expensesactivities for ourthe Life Science segment focus on molecular reagents for eachuse in PCR and isothermal chemistries in detecting both DNA and RNA. Our new product development programs are progressing through sample-specific (e.g., blood, saliva, urine, stool, and plant) mixes in both air-dryable and lyophilization-ready forms, and isothermal reagents in both air-dryable and lyophilization-ready forms. We also have enzyme development programs that meet the EU Registration, Evaluation, Authorization, and Restriction of fiscal 2017, 2016 and 2015 were approximately $3,000. The primary focus of this research and development organization is development of new molecular reagent products.Chemicals regulation. See “Operating Expenses” section within MD&A on page 39.36 within MD&A. Additionally, through our recent EUPROTEIN, Inc. (“EUPROTEIN”) and Estel Biosciences, Inc. (“Estel”) transactions in April 2022 and October 2022, respectively, we have expanded our immunological research and development capabilities. See the following notes of the Consolidated Financial Statements for further discussion of these transactions: (i) Note 4, “Business Combinations” for EUPROTEIN, and Note 18, “Subsequent Event” for Estel.

Manufacturing and Government Regulation

Our Life Science U.S.segment facilities are ISO 9001:200813485 certified, and our Bioline facilities in the U.K. and Germany are ISO 13485:2012 certified. Additionally, where appropriate, our Life Science segment facilities comply with Regulation EC 1069:2009.

Acquisitions

Acquisitions have played an important role in the growth of our businesses. Our acquisition objectives include, among other things: (i) enhancing product offerings; (ii) improving product distribution capabilities; (iii) providing access to new markets; and/or (iv) providing access to key biologicals or new technologies that lead to new products. Although we cannot provide assurance that we will consummate additional acquisitions in the future, nor can we provide assurance that any acquisitions will accomplish these objectives, we expect that the potential for acquisitions will continue to provide opportunities for revenue and earnings growth in the future.

As previously noted in the Overview section, during March 2016, we acquired all of the outstanding common stock of Magellan. Details of the Magellan acquisition are set forth in Note 2 of the accompanying Consolidated Financial Statements.1069.

International Markets

International markets are an important source of net revenues and future growth opportunities for both of our reportable segments. For both reportable segments combined, net revenues from customers located outside of the AmericasU.S. and its territories approximated $59,000$170,000 or 29%51% of consolidated fiscal 20172022 net revenues, $52,000$173,000 or 26%55% of consolidated fiscal 20162021 net revenues, and $49,000$122,000 or 25%48% of consolidated 2020 net revenues. Since the outbreak of the COVID-19 pandemic in fiscal 2015 revenues. We2020 and throughout fiscal 2021 and 2022, a significantly higher percentage of our Life Science segment’s net revenues have been generated from international markets, and we expect to continue to look to internationalkey European and Asian markets as a source of revenue growthgrowth. For the Life Science segment, we also continue to focus resources on IVD manufacturing customers in China, India, Japan and Korea. To date, we have not experienced any adverse effects from the trade tensions between the U.S. and China, but we cannot be sure that we will not experience any adverse effects in the future.

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Fluctuations in foreign currency exchange rates sincein fiscal 20162022 compared to fiscal 2021 had an approximate $1,200$5,200 unfavorable impact on fiscal 2017consolidated 2022 net revenues; $400$1,700 within the Diagnostics segment and $800$3,500 within the Life Science segment. This compares toyear-to-year currency exchange rates having an approximate $1,700 unfavorable$9,200 favorable impact on consolidated net revenues in fiscal 2016; $7002021; $1,300 within the Diagnostics segment and $1,000$7,900 within the Life Science segment. Due to natural hedge relationships with expenses, both cost of salesIn fiscal 2020, the unfavorable effect on net revenues totaled $1,250; $150 within the Diagnostics segment and operating expenses,$1,100 within the overall impact of exchange rate fluctuations on operating income was not significant during fiscal 2017, 2016 or 2015.Life Science segment.

Environmental

We are in compliance with applicable portions of the federal and state hazardous waste regulations and have never been a party to any environmental proceeding.

Human Capital

As of September 30, 2022, our Diagnostics segment had approximately 515 employees in eight countries, our Life Science segment had approximately 210 employees in six countries, and Corporate and Shared Services had approximately 45 employees, all in the U.S. Approximately 57% of our employees are women. In addition, of our U.S. based employees, which represents approximately 65% of our total worldwide workforce, approximately 25% are ethnically diverse.

Below is additional demographic information about our current employee base as of September 30, 2022.

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We believe that developing a diverse, equitable and inclusive culture is critical to continuing to attract and retain the top talent necessary to deliver on our growth strategy. As such, we continue to invest in the creation of a work environment where our employees can feel inspired to deliver their workplace best every day. We continue to expand our Human Resources Information System (“HRIS”) and other systems to track key human capital metrics, including workforce demographics, diversity, turnover, engagement, and training data.

Diversity, Equity and Inclusion

In 2020, we initiated the “One Meridian Inclusion Diversity and Equity Team,” which is comprised of a group of employees around the world and led by Dr. Lourdes Weltzien, Executive Vice President, Life Science, and Melissa McCarey, Vice President, Global Human Resources. Consistent with its mission statement, this team is providing topical programs throughout the year, in an effort to promote awareness so we can encourage and support an environment in which all employees feel included and empowered to achieve their best.

Compensation and Benefits

We strive to provide pay, benefits, and services that are competitive to market and create incentives to attract and retain employees globally. Our compensation packages include market-competitive pay, cash bonuses, health care and retirement benefits, paid time off, and family leave, among others, depending upon locale. We are focused on pay equity globally and are striving to close the gap in pay among similar roles and responsibilities in certain locations within our organization, after accounting for legitimate business factors that can explain differences, such as performance, time at grade level, and tenure. We intend to conduct market surveys every two years to assess market compensation levels from a total compensation perspective. We also continue to advance transparency in our pay and representation data by complying with all applicable statutory filing requirements.

Communication and Engagement

We strongly believe that Meridian’s success depends on employees understanding how their work contributes to the Company’s overall strategy. To this end, we utilize a variety of channels to facilitate open and direct communication, including: (i) One Meridian Company-wide intranet; (ii) quarterly CEO update videos; (iii) open forums or town hall meetings with executives; (iv) regular ongoing update communications; and (v) employee engagement surveys.

Health, Wellness and Safety

We are committed to the safety of our employees and communities, and safety in our operations, our product development activities and our supplier partnerships. Our ultimate goal is to achieve zero serious injuries through continued investment in, and focus on, our core safety programs and injury-reduction initiatives. We provide access to a variety of innovative, flexible, and convenient health and wellness tools.

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ITEM 1A.

RISK FACTORS

In addition to the other information set forth in this report, you should carefully consider the following factors, which could materially affect our business, financial condition, cash flows and/or future results. Any one of these factors could cause our actual results to vary materially from recent results or from anticipated future results. The risks described below are not the only risks facing our company. Additional risks and uncertainties not currently known to us, or that we currently deem to be immaterial, also may materially adversely affect our business, financial condition and/or operating results.

Risk Factors Summary

Risks Affecting GrowthRelated to Our Strategy

Risks Related to our Intellectual Property

Risks Related to our Operations

Risks Related to Legal, Regulatory and International Matters

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Risks Related to Our Common Stock

General Risk Factors

Risks Related to Our Strategy

If the Merger contemplated by the Merger Agreement does not occur, it could have a material adverse effect on our business, results of operations, financial condition and stock price.

On July 7, 2022, we entered into the Merger Agreement noted above within the “Pending Merger” section of Item 1. “Business.” Completion of the proposed Merger is subject to the satisfaction of various conditions. There is no assurance that all of the various conditions will be satisfied, or that the Merger will be completed within the expected timeframe, or at all. The proposed Merger gives rise to inherent risks that include:

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Our financial condition, results of operations and cash flows could be adversely affected by outbreaks of disease, such as the COVID-19 pandemic.

Any outbreak of contagious diseases, such as COVID-19, or other adverse public health developments, could have material and adverse effects on our business operations. Such adverse effects could include diversion or prioritization of health care resources away from the conduct of diagnostic testing, disruptions of or restrictions on the ability of laboratories to process our tests, and delays or difficulties with respect to patients accessing our tests, including those resulting from an inability to travel as a result of quarantines or other restrictions resulting from such outbreaks. As COVID-19 continues to affect individuals and businesses around the globe, we may experience disruptions that could severely impact our business, including:

In addition, the continued spread of COVID-19 globally could adversely affect our manufacturing and supply chains. Parts of our direct and indirect supply chains are located overseas, including in China, and may accordingly be subject to disruption. Additionally, our results of operations could be adversely affected to the extent that COVID-19 or any other epidemic harms our business or the economy in general either domestically or in any other region in which we do business. The extent to which COVID-19 affects our operations will depend on future developments, which are highly uncertain and cannot be predicted with confidence, including the duration of the outbreak, new information that may emerge concerning the severity of COVID-19, and the actions to contain COVID-19 or treat its impact, among others, which could have an adverse effect on our business, results of operations and financial condition. Over the course of the COVID-19 pandemic, we have generally seen a slowing of our assay instrument placements and sales of related test kits, as diagnostic testing sites turned their attention to critical care testing. We are unable to predict when expected sales volume levels for our instruments and related test kits will return. Also, as a result of the COVID-19 pandemic, certain clinical trials related to our products which were underway or scheduled to begin were temporarily placed on hold. Such delays have impacted our timing for filing applications for product clearances with the FDA, as well as related timing of FDA clearances of such filings. Additionally, the COVID-19 pandemic slowed efforts to expand our product portfolio through acquisition opportunities, impacting the speed with which we are able to bring additional products to market.

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Net revenues for our Diagnostics segment may be impacted by our reliance upon large customers in North America, seasonal factors and sporadic outbreaks, and changing diagnostic market conditions.

Key Distributors

Our Diagnostics segment’s net revenues from sales through three customers, including two key distributors, were approximately 29%, 33% and 32% of the Diagnostics segment’s total net revenues for 2022, 2021 and 2020, respectively, or approximately 13%, 13% and 15%, respectively, of each year’s consolidated net revenues. The loss of any one of these customers could negatively impact our net revenues and results of operations unless suitable alternatives were timely found or in the case of distributor customers, lost sales to one distributor were absorbed by another distributor. Finding a suitable alternative on satisfactory terms may pose challenges in our industry’s competitive environment. As an alternative, we could expand our efforts to distribute and market our products directly. This alternative, however, would require substantial investment in additional sales, marketing and logistics resources, including hiring additional sales and customer service personnel, which would significantly increase our future selling, general and administrative expenses.

In addition, buying patterns of these customers may fluctuate from quarter to quarter, potentially leading to uneven concentration levels on a quarterly basis.

Seasonal Factors and Sporadic Outbreaks

Our principal business is the sale of a broad range of diagnostic test kits for common gastrointestinal and respiratory infectious diseases, and elevated blood lead levels. Certain infectious diseases may be seasonal in nature, while others may be associated with sporadic outbreaks, such as foodborne illnesses or pandemics such as an influenza outbreak or the COVID-19 pandemic. While we believe that the breadth of our Diagnostics segment product lines normally reduces the risk that infections subject to seasonality and sporadic outbreaks will cause significant variability in Diagnostics segment net revenues, the COVID-19 pandemic has had a significant adverse impact on our Diagnostics segment net revenues since it began in fiscal 2020. Accordingly, we can make no assurance that net revenues will not be negatively impacted period over period by such factors.

Changing Diagnostic Market Conditions

Changes in the U.S. health care delivery system have resulted in consolidation among reference laboratories, hospital laboratories being operated by large reference laboratories, and the formation of multi-hospital alliances, reducing the number of institutional customers for diagnostic test products. Consolidation in the U.S. health care industry has also led to the creation of GPOs and IDNs that aggregate buying power for hospital groups and put pressure on our selling prices. Due to such consolidation, we may not be able to enter into and/or sustain contractual or other marketing or distribution arrangements on a satisfactory commercial basis with institutional customers, GPOs and/or IDNs, which could adversely affect our results of operations.

Net revenues for our Life Science segment may be impacted by customer concentrations and buying patterns.

Our Life Science segment’s net revenues from three diagnostic manufacturing customers were 31%, 20% and 24% of the Life Science segment’s total net revenues for 2022, 2021 and 2020, respectively. Sales to these three diagnostic manufacturing customers comprised 17%, 12% and 13% of consolidated net revenues for 2022, 2021 and 2020, respectively. In addition, in excess of 10% of the Life Science segment’s total net revenues has historically been concentrated among a number of other significant customers. Any significant alteration of buying patterns from these customers resulting from the decline in COVID-19 related demand, or otherwise, could adversely affect our period over period net revenues and results of operations.

Intense competition could adversely affect our profitability and operating results.

The markets for our products and services are characterized by substantial competition and rapid change. Hundreds of companies around the world supply diagnostic tests and immunoassay and molecular reagents. These companies range from multinational health care entities, for which diagnostics is one line of business, to small start-up companies. Many of our competitors have significantly greater financial, technical, manufacturing and marketing resources than we do. We cannot provide assurance that our products and services will be able to compete successfully with the products and services of our competitors.

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We expect to continue facing increased competition resulting from the expiration of our H. pylori patents.

The patents for our stool antigen H. pylori products, owned by us, expired in May 2016 in the U.S. and in May 2017 in countries outside the U.S. As a result, competition with respect to our stool antigen H. pylori products, products which currently represent approximately 5% of our total net revenues has increased, adversely impacting our selling prices for these products, and/or our ability to retain business at prices acceptable to us. To mitigate certain of the pricing and volume pressures we face within the gastrointestinal product category, we have: (i) operated under a strategic collaboration agreement with DiaSorin to sell H. pylori tests; (ii) adjusted selling prices to secure volume; and (iii) upon FDA clearance in March 2020, launched Curian HpSA, our first assay on the Curian platform, which we expect will help protect our existing customer base using lateral flow tests. We also expect the BreathID and BreathTek products to mitigate competitive pressures, as these systems provide an alternative to stool antigen testing. We are unable to provide assurances that we will be successful with any strategy or that any strategy will prevent an adverse effect on our future results of operations and liquidity, including net revenues and gross profit.

Risks Related to Our Intellectual Property

We may be unable to protect or obtain adequate patent protection for intellectual property that we utilize or intend to utilize.

In developing and manufacturing our products, we employ a variety of proprietary and patented technologies. In addition, we have licensed, and expect to continue to license, various complementary technologies and methods from academic institutions and public and private companies. We cannot provide assurance that the technologies that we own or license provide protection from competitive threats or from challenges to our intellectual property. In addition, we cannot provide assurances that we will be successful in obtaining and retaining licenses, or proprietary or patented technologies, in the future.

Product infringement claims by other companies could result in costly disputes and could limit our ability to sell our products.

Litigation over intellectual property rights is prevalent in the life science and diagnostic industries. As the market for diagnostics continues to grow and the number of participants in the market increases, we may increasingly be subject to patent infringement claims. It is possible that a third party may claim infringement against us. If found to infringe, we may attempt to obtain a license to such intellectual property; however, we may be unable to do so on favorable terms, or at all. Additionally, if our products are found to infringe on third-party intellectual property, we may be required to pay damages for past infringement and lose the ability to sell certain products, causing our revenues to decrease. Any substantial loss resulting from such a claim could have a material adverse effect on our profitability, and the damage to our reputation in the industry could have a material adverse effect on our future results of operations and liquidity, including net revenues and gross profit.

Risks Related to Our Operations

We may be unable to develop new products or acquire products on favorable terms.

The medical diagnostic and life science industries are characterized by ongoing technological developments and changing customer requirements. As such, our results of operations and continued growth depend, in part, on our ability in a timely manner to develop or acquire rights to, and successfully introduce into the marketplace, enhancements of existing products and services, or new products and services that incorporate technological advances, meet customer requirements, and/or respond to products developed by our competition. We cannot provide any assurance that we will be successful in developing or acquiring such rights to products and services on a timely basis, or that such products and services will adequately address the changing needs of the marketplace, either of which could adversely affect our results of operations.

In addition, we must regularly allocate considerable resources to research and development of new or acquired products, services and technologies.technologies, and protecting intellectual property. The research and development process generally takes a significant amount of time from research to product launch. This process is conducted in various stages. During each stage, there is a risk that we will not achieve our goals on a timely basis, or at all, and we may have to abandon a productproject in which we have invested substantial resources.

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We may be unable to successfully integrate operations or to achieve expected cost savings from acquisitions we make.

One of our growth strategies is the acquisition of companies and/or products. Although additional acquisitions of companies and products may enhance the opportunity to increase net earnings over time, such acquisitions could result in greater administrative burdens, increased exposure to the uncertainties inherent in marketing new products, financial risks of additional operating costs, disrupted operations, challenges in employee retention, and increased risk of asset impairments if future net revenues and cash flows are deficient. The principal benefits expected to result from any acquisitions we make will not be achieved fully unless we are able to successfully integrate the operations of the acquired entities with our operations and realize the anticipated synergies, cost savings and growth opportunities from integrating these businesses into our existing businesses. We cannot provide assurance that we will be able to identify and complete additional acquisitions on terms we consider favorable or that, if completed, will be successfully integrated into our operations. Furthermore, we cannot predict the outcome of goodwill impairment testing and the impact of goodwill impairments on the Company’s net earnings and financial results.

Revenues for our Diagnostics segment may be impacted by our reliance upon two key distributors in North America, seasonal factors and sporadic outbreaks, and changing diagnostic market conditions.

Key Distributors

Our Diagnostics segment’s revenues from sales through two U.S. distributors were 29% and 27%, respectively, of the Diagnostics segment’s total revenues, or 21% and 20%, respectively, of our consolidated revenues, for fiscal 2017 and fiscal 2016. These parties distribute our products and other laboratory products toend-user customers. The loss of either of these distributors could negatively impact our revenues and results of operations unless suitable alternatives were timely foundoperations.

The effective tax rate of the Company may be negatively impacted by changes in the mix of earnings as well as future changes to tax laws in global jurisdictions in which we operate.

We are subject to income taxes in the U.S. and various other global jurisdictions. Our effective tax rate could be adversely affected by changes in the mix of earnings by jurisdiction and the valuation of deferred tax assets and liabilities. Recently, the current U.S. presidential administration committed to tax reform, and if enacted, the impact could be material to our tax provision and value of deferred tax assets and liabilities. We recognize deferred tax assets and liabilities based on the differences between the consolidated financial statement carrying amounts and the tax basis of assets and liabilities. Significant judgment is required in determining our provision for income taxes. We regularly review our deferred tax assets for recoverability and establish a valuation allowance if it is more likely than not that some portion or lost salesall of a deferred tax asset will not be realized. If we are unable to one distributor were absorbed by another distributor. Findinggenerate sufficient future taxable income, if there is a suitable alternative on satisfactory terms may pose challengesmaterial change in the actual effective tax rates, or if there is a change to the time period within which the underlying temporary differences become taxable or deductible, we could be required to increase our valuation allowance against our deferred tax assets, which could result in a material increase in our industry’s competitive environment. As an alternative, weeffective tax rate.

Changes in tax laws or tax rulings could expandhave a material impact on our effortseffective tax rate. Many countries in the EU, as well as several other countries and organizations such as the Organization for Economic Cooperation and Development, are actively considering changes to distribute and market our products directly. This alternative, however, would require substantial investment in additional sales, marketing and logistics resources, including hiring additional sales and customer service personnel, which would significantlyexisting tax laws. Certain proposals could include recommendations that could increase our future selling, generaltax obligations in those countries where we do business. Any changes in the taxation of our activities in such jurisdictions may result in a material increase in our effective tax rate.

Significant interruptions in production at our principal manufacturing facilities and/or third-party manufacturing facilities would adversely affect our business and administrative expenses.operating results.

Products and services manufactured at facilities we own or lease comprise a majority of our net revenues. Our global supply of these products and services is dependent on the uninterrupted and efficient operation of these facilities. In addition, buying patterns of these two distributors may fluctuate from quarter to quarter, potentially leading to uneven concentration levelswe currently rely on a quarterly basis.

Seasonal Factors and Sporadic Outbreaks

Our principal business is the salesmall number of a broad range of diagnostic test kits for common gastrointestinal, viral, upper respiratory and parasitic infectious diseases, and elevated blood lead levels. Certain infectious diseases may be seasonal in nature, while others may be associated with sporadic outbreaks, such as foodborne illnesses or pandemics such as H1N1 influenza. While we believe that the breadththird-party manufacturers to produce certain of our diagnostic products and product lines reduces the risk that infections subjectcomponents. The operations of our facilities or these third-party manufacturing facilities could be adversely affected by power failures, or natural or other disasters such as earthquakes, floods, tornadoes or terrorist threats. Although we carry insurance to seasonality and sporadic outbreaks will cause significant variability in diagnostic revenues, weprotect against certain business interruptions at our facilities, there can makebe no assurance that revenuessuch coverage will not be negatively impacted period over period byadequate or that such factors.

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Changing Diagnostic Market ConditionsWe depend on sole-source suppliers for certain critical raw materials, components and finished products. A supply interruption could adversely affect our business.

ChangesRaw Materials and Components

Our diagnostic products are made from a wide variety of raw materials that are biological or chemical in nature, and that generally are available from multiple sources of supply. We sole-source certain raw materials and components, which makes it time consuming and costly to switch raw materials and components in FDA-cleared products. If certain suppliers fail to supply required raw materials or components, we will need to secure other sources which may require us to conduct additional development and testing and obtain regulatory approval. These activities require significant time and resources, and there is no assurance that new sources will be secured or regulatory approvals, if necessary, will be obtained.

We utilize third-party manufacturers for certain of our instrumentation. One third party manufactures our proprietary Alethia Incubator/Reader (instrument), a component of our Alethia molecular system, and an additional third party manufactures our Curian instrument. These instruments are manufactured exclusively for Meridian according to our specifications. While other manufacturers for these types of instruments are available, we source each instrument solely from one manufacturer to limit the costs involved in clearing the system for marketing in the U.S. health care delivery system have resulted in consolidation among reference laboratories, hospital laboratories being operated by large reference laboratories,If these third-party manufacturers fail to supply us with instruments, we will need to secure another manufacturer, and the formation of multi-hospital alliances, reducing the number of institutional customers for diagnostic test products. Consolidationit may take as long as 12 months to transfer instrument manufacturing. An interruption in the U.S. health care industry has also led to the creationmanufacturing of group purchasing organizations (“GPOs”) and integrated delivery networks (“IDNs”) that aggregate buying power for hospital groups and put pressurethese instruments could have a material adverse effect on our selling prices. Dueresults of operations.

Additionally, one third party manufactures a certain reagent for use with our Alethia assays. While alternative suppliers exist, we elect to such consolidation,utilize this third party exclusively in order to maintain consistency in our materials, which is critical in complying with FDA regulatory requirements. An interruption in the manufacturing of these reagents could have a material adverse effect on our results of operations.

Finished Products

We outsource the manufacturing for certain finished diagnostic products to third parties. A disruption in the supply of these finished products could have a material adverse effect on our business until we find another supplier or bring manufacturing in-house.

Activities undertaken by Meridian to reduce the risk of these sole-supplier arrangements include maintaining adequate inventory levels, supplier qualification procedures, supplier audits, site visits, and frequent communication. Additionally, we have identified potential alternate suppliers.

Our ability to meet future customer demand for selected products is dependent upon our ability to successfully manage our manufacturing capacity and supply chains.

To manage our anticipated future growth effectively, it may become necessary for us to enhance our manufacturing and supply chain capabilities, infrastructure and operations, information technology infrastructure, and financial and accounting systems and controls. Organizational growth and scale-up of operations could strain our existing managerial, operational, financial, and other resources. If our management is unable to effectively prepare for our expected future growth, our expenses may increase more than anticipated, our net revenues could grow more slowly than expected, and we may not be able to enter intoachieve our commercialization, profitability, or product development goals. Our failure to effectively implement the necessary processes and procedures and otherwise prepare for our anticipated growth could have a material adverse effect on our future consolidated financial condition and results of operations.

The Russia / Ukraine war (the “War”) that developed during the second quarter of fiscal year 2022 also could disrupt our supply chains. While to date this War has not caused us to experience any material negative impacts on our business, financial condition, or results of operations, we are unable to estimate the extent to which, if at all, the war could hurt our supply chains. The evolving nature of the War, related international sanctions, other potential government actions, and economic consequences of the War, including incurring higher costs to source materials due to inflation or otherwise, are factors that could disrupt supply chains throughout the world, including potentially the supply chains on which our business relies. If the War either directly or indirectly disrupts our supply chains and we are unable to mitigate such disruption, the War could have a material adverse effect on our future consolidated financial condition and results of operations.

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Increased prices for, poor quality of, or extended inability to source raw materials or services used in our products, and supply chain disruptions, could adversely affect profitability.

Our profitability is affected by the prices of the raw materials used in the manufacture of our products. These prices fluctuate based on a number of factors beyond our control, including changes in supply and demand, general economic conditions, labor costs, fuel-related delivery costs, competition, import duties, tariffs, currency exchange rates, and, in some cases, government regulation. Significant increases in the prices of raw materials, services and transportation costs, similar to the inflationary increases we have experienced since the second half of fiscal 2021, that cannot be recovered through increases in the price of our products and/or sustain contractual oroffset by savings in other marketing or distribution arrangements on a satisfactory commercial basis with institutional customers, GPOs and IDNs, whichareas, could adversely affect our results of operations.operations and cash flows.

We cannot guarantee that the prices we are paying for raw materials today will continue in the future, or that the marketplace will continue to support current prices for our products, or that such prices can be adjusted to fully or partially offset raw material price increases in the future. Any increases in prices resulting from a tightening supply of these or other commodities could adversely affect our profitability. We do not engage in hedging transactions for raw material purchases, but we do enter into some fixed-price supply contracts.

Our dependency upon regular deliveries of supplies and the quality of those supplies upon delivery from particular suppliers means that interruptions, stoppages, or deterioration of quality in such deliveries could adversely affect our operations until arrangements with alternate suppliers could be made. Several of the raw materials used in the manufacture of our products currently are procured from a single source. In some cases, we also outsource certain services to suppliers, including but not limited to, engineering, assembly, shipping, and commissioning services. If a supplier were unable to deliver these materials or services, or if the quality of these materials or services declined, for an extended period of time as a result of financial difficulties, catastrophic events affecting their facilities, or other factors, including recent supply chain disruptions we have experienced, or if we were unable to negotiate acceptable terms for the supply of materials or services with these suppliers, our business could be adversely affected by health care reform legislation.

Third-party payersaffected. We may not be able to find acceptable alternatives, and any such alternatives could result in increased costs. Extended inability to source a necessary raw material or service could cause us to cease manufacturing one or more products for medical products and services, including state, federal and foreign governments, are increasingly concerned about escalating health care costs and can indirectly affect the pricing or the relative attractivenessa period of our products by regulating the maximum amount of reimbursement they will provide for diagnostic testing services. Following years of increasing pressure, during 2010 the U.S. government enacted comprehensive health care reform with the enactment of the Patient Protection and Affordable Care Act, as amended by the Health Care and Education Reconciliation Act, which makes changes that are expected to significantly impact the pharmaceutical and medical device industries. The Protecting Access to Medicare Act of 2014 will require applicable laboratories to report all private payor reimbursement rates and the volumes for each test they perform. Although a final rule has yet to be published, the statute requires that Medicare establish reimbursement rates based on the weighted median of private insurance reimbursement rates effective January 1, 2017. The new Medicare rates would be subject to a maximum reduction of 10% a year for the initial three year period and a maximum of 15% a year for the subsequent three year period. There is no limit on the amount of potential rate increases. As a result, some of our customers in the United States may experience lower Medicare reimbursement rates for our products, which may adversely affect our business, financial condition and results of operations. Although to date, we have not seen any significant effect on the reimbursement rates for our products, if reimbursement amounts for diagnostic testing services are decreased in the future, such decreases may reduce the amount that will be reimbursed to hospitals or physicians for such services and consequently, could place constraints on the levels of overall pricing,time, which could have a material effect on our revenues and/also lead to loss of customers, as well as reputational, competitive, or results of operations.

In addition, as more fully discussed in the accompanying MD&A, the Company was subject to a 2.3% medical device tax established as part of the U.S. health care reform legislation through December 31, 2015. Upon expiration of the tax’stwo-year moratorium, which is currently scheduled for December 31, 2017, the Company would become subject to the tax once again. We are unable to predict any future legislative changes or developments related to this moratorium or excise tax.

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Additional state and federal health care reform measures may be adopted in the future, any ofbusiness harm, which could have a material adverse effect on our ability to successfully commercialize our products and on our industry in general. For example, the United States government has in the past considered, is currently considering and may in the future consider, health care policies and proposals intended to curb rising health care costs, including those that could significantly affect both private and public reimbursement for health care services. Further, state and local governments, as well as a number of foreign governments, are also considering or have adopted similar types of policies. Future significant changes in the health care system in the United States or elsewhere, and current uncertainty about whether and how changes may be implemented, could have a negative impact on the demand for our products. We are unable to predict whether health care policies, including policies stemming from legislation or regulations affecting our business, may be proposed or enacted in the future, what effect such policies would have on our business, or the effect that ongoing uncertainty about these matters will have on the purchasing decisions of our customers.

Efforts to reduce the U.S. federal deficit could adversely affect our results of operations.

As part of the Budget Control Act passed in August 2011 to extend the federal debt limit and reduce government spending, $1.2 trillion in automatic spending cuts (known as sequestration) were implemented in 2013. The sequestration requires a 2% cut in Medicare payments for all services, including our diagnostic tests, which, due to subsequent legislative amendments to the statute, will remain in effect through 2024 unless Congressional action is otherwise taken. Government research funding has also been reduced as a result of the sequestration. On January 2, 2013, the American Taxpayer Relief Act of 2012 also was signed into law, which, among other things, further reduces Medicare payments to providers such as hospitals, imaging centers and cancer treatment centers, and increases the statute of limitations period for the government to recover overpayments to providers from three to five years.

Such reductions in government health care spending or research funding could result in reduced demand for our products or additional pricing pressure. Further, there is ongoing uncertainty regarding the federal budget and federal spending levels, including the possible impacts of a failure to increase the “debt ceiling.” Any U.S. government default on its debt could have broad macroeconomic effects that could, among other things, raise our borrowing costs. Any future shutdown of the federal government or failure to enact annual appropriations could also have a material adverse impact on our business.

Revenues for our Life Science segment may be impacted by customer concentrations and buying patterns.

Our Life Science segment’s revenues from sales of purified antigens and reagents to two diagnostic manufacturing customers were 17% and 18% of the Life Science segment’s total revenues for fiscal 2017 and fiscal 2016, respectively; and 5% of our consolidated revenues for each of fiscal 2017 and fiscal 2016. Our Life Science segment has five other significant customers who purchase antigens, antibodies and reagents, which together comprised 10% and 7% of the segment’s total revenues for fiscal 2017 and fiscal 2016, respectively. Any significant alteration of buying patterns from these customers could adversely affect our period over period revenuesfinancial condition, and results of operations.

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Intense competition could adversely affect our profitability.

The markets for our products and services are characterized by substantial competition and rapid change. Hundreds of companies around the world supply diagnostic tests and immunoassay and molecular reagents. These companies range from multinational health care entities, for which diagnostics is one line of business, to smallstart-up companies. Many of our competitors have significantly greater financial, technical, manufacturing and marketing resources than we do. We cannot provide assurance that our products and services will be able to compete successfully with the products and services of our competitors.

We expect to face increased competition resulting from expiration of our H. pylori patents.

The patents for ourH. pylori products, owned by us, expired in May 2016 in the U.S. and in May 2017 in countries outside the U.S. We expect competition with respect to ourH. pylori products to increase in the near future, as we currently market the onlyFDA-cleared tests to detectH. pylori antigen in stool samples in the U.S. market. At present, we are aware of two companies that have commenced clinical trials ofH. pylori products in the U.S., one of which is DiaSorin Inc. (see Item 3. “Legal Proceedings”). Such competition may have an adverse impact on our selling prices for these products, or our ability to retain business at prices acceptable to us, and consequently, adversely affect our future results of operations and liquidity, including revenues and gross profit. In order to mitigate any loss in revenues, among other things, we are researching and experimenting with new products and attempting to secure significant customers under long-term contracts. We are unable to provide assurances that we will be successful with any mitigation strategy or that any mitigation strategy will prevent an adverse effect on our future results of operations and liquidity, including revenues and gross profit.

See Item 3. “Legal Proceedings” for a discussion of the status of certain litigation related to our intellectual property.

We depend on international revenues, and our financial results may be adversely impacted by foreign currency, regulatory or other developments affecting international markets.

We sell products and services into approximately 70 countries. Approximately 29% and 26% of our net revenues for fiscal 2017 and 2016, respectively, were attributable to markets outside of the Americas. For fiscal 2017, approximately 15% of our consolidated revenues were transacted in currencies other than the U.S. dollar. We are subject to the risks associated with fluctuations in the exchange rates for the Australian dollar, British pound, Chinese yuan, Euro and Singapore dollar to the U.S. dollar. We are also subject to other risks associated with international operations, including longer customer payment cycles, tariff regulations, requirements for export licenses, instability of foreign governments, and governmental requirements with respect to the importation and distribution of medical devices and immunodiagnostic and molecular biology reagents, all of which may vary by country.

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Risks Affecting our Manufacturing OperationsRelated to Legal, Regulatory and International Matters

We are subject to comprehensive regulation, and our ability to earn profits may be restricted by these regulations.

Medical device diagnostics is a highly regulated industry. We cannot provide assurance that we will be able to obtain necessary governmental clearances or approvals, or timely clearances or approvals, to market future products in the United StatesU.S. and other countries. Costs and difficulties in complying with laws and regulations administered by the U.S. Food and Drug Administration,FDA, the U.S. Department of Agriculture, the U.S. Department of Commerce, the U.S. Drug Enforcement Agency, the Centers for Disease Control and Prevention (“CDC”), or other regulators can result in unanticipated expenses and delays, and interruptions to the sale of new and existing products.

Regulatory approval can be a lengthy, expensive and uncertain process, making the timing and costscost of approvals difficult to predict. The failureFailure to comply with these regulations can result in delays in obtaining authorization to sell products, seizure or recall of products, suspension or revocation of authority to manufacture or sell products, and other civil or criminal sanctions.

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If we or our third-party vendors fail to comply with FDA regulations relating to the manufacturing of our products or any component part, we may be subject to fines, injunctions and penalties, and our ability to commercially distribute and sell our products may be negatively impacted.

Our diagnostics manufacturing facilities, and the manufacturing facilities of any of our third-party diagnostic component manufacturers or critical suppliers, are required to comply with the FDA’s Quality System Regulation (“QSR”), which sets forth minimum standards for the procedures, execution and documentation of the design, testing, production, control, quality assurance, labeling, packaging, sterilization, storage, and shipping of the products we sell.sell, and related regulations, including Medical Device Reporting (“MDR”) regulations regarding reporting of certain malfunctions and adverse events potentially associated with our products. The FDA may evaluate our compliance with the QSR, MDR and other regulations, among other ways, through periodic announced or unannounced inspections which could disrupt our operations and interrupt our manufacturing. If in conducting an inspection of our manufacturing facilities, or the manufacturing facilities of any of our third-party component manufacturers or critical suppliers, an FDA investigator observes conditions or practices believed to violate the QSR, the investigator may document their observations on a Form FDA 483 that is issued at the conclusion of the inspection. A manufacturer that receives an FDA 483 may respond in writing and explain any corrective actions taken in response to the inspectional observations. The FDA will typically review the facility’s written response and mayre-inspect to determine the facility’s compliance with the QSR and other applicable regulatory requirements. Failure to take adequate and timely corrective actions to remedy objectionable conditions listed on an FDA 483 could result in the FDA taking administrative or enforcement actions. Among these may be the FDA’s issuance of a Warning Letter to a manufacturer, which informs it that the FDA considers the observed violations to be of “regulatory significance” that, if not corrected, could result in further enforcement action.

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FDA enforcement actions, which include seizure, injunction, and criminal prosecution, and civil penalties, could result in total or partial suspension of a facility’s production and/or distribution, product recalls, fines, suspension of the FDA’s review of product applications, and/or the FDA’s issuance of adverse publicity. Thus, an adverse inspection could force a shutdown of our manufacturing operations or a recall of our products. Adverse inspections could also delay FDA approval of our products and could have an adverse effect on our production, salesnet revenues and profitability.

We and any of our third-party vendors may also encounter other problems during manufacturing including failure to follow specific protocols and procedures, equipment malfunction, and environmental factors, any of which could delay or impede our ability to meet demand. The manufacture of our product also subjects us to risks that could harm our business, including problems relating to our facilities and errors in manufacturing components that could negatively affect the efficacy or safety of our products or cause delays in shipment of our products. Any interruption or delay in the manufacture of the product, or any of its components, could impair our ability to meet the demand of our customers and cause them to cancel orders or switch to competitive products, which could, therefore, have a material adverse effect on our business, consolidated financial condition and results of operations.

On June 29, 2017,As described in Item 3. “Legal Proceedings”, on April 17, 2018, the FDA,Company’s wholly owned subsidiary Magellan received a subpoena from the U.S. Department of Justice (“DOJ”) regarding its LeadCare product line. The subpoena outlined documents to be produced, and the Company is cooperating with the DOJ in this matter. The Company maintains rigorous policies and procedures to promote compliance with applicable regulatory agencies and requirements and is working with the DOJ to promptly respond to the subpoena, including responding to additional information requests that have followed receipt of the subpoena in April 2018. The Company has executed tolling agreements to extend the statute of limitations. In March and April 2021, DOJ issued two subpoenas, both to former employees of Magellan, calling for witnesses to testify before a federal grand jury related to this matter. In September and October 2021, DOJ issued additional subpoenas to individuals seeking testimony and documents in connection with its recent Safety Notificationongoing investigation. It is the Company’s understanding that multiple witnesses have testified before the federal grand jury and the DOJ’s investigation is ongoing. Discussions continue with the DOJ to explore resolution of the matter. As of September 30, 2022, in accordance with applicable accounting guidance, the Company believes a loss is probable in the DOJ LeadCare legal matter and has accrued $10,000 as an estimate of the cost to resolve the DOJ LeadCare legal matter, which is reflected in litigation and select legal costs within the Consolidated Statement of Operations for the year ended September 30, 2022. The Company cannot predict when the investigation will be resolved or the outcome of the investigation, and the ultimate resolution of the DOJ LeadCare legal matter may exceed the amount accrued at September 30, 2022 and could be material to the Company. Expense for attorneys’ fees related to this matter totaling $3,510, $2,803 and $2,035 is included within the Consolidated Statements of Operations for the years ended September 30, 2022, 2021 and 2020, respectively.

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Magellan submitted 510(k) applications in December 2018, seeking to reinstate venous blood sample-types for its LeadCare II, LeadCare Plus and LeadCare Ultra testing systems. In the second fiscal quarter of 2019, the FDA informed Magellan that each of these 510(k) applications had been put on Additional Information hold. On July 15, 2019, we provided responses to the FDA’s requests for Additional Information. These 510(k) applications have since expired and are no longer under FDA review. Further, while Magellan’s leadLeadCare testing systems remain cleared for venousmarketing by the FDA and permitted for use with capillary blood samples, the FDA advised that it has commissioned a third-party study of the Company’s LeadCare testing systems using both venous and capillary blood samples. According to the FDA, the results of the field study will be used in conjunction with other information to determine whether further action by the FDA or the CDC is necessary to protect the public health. The Company intends to fully cooperate with the FDA or CDC on any follow-up based on the third-party study.

During October 2019, the FDA performed a follow-up inspection of Magellan’s manufacturing facility. The FDA issued itsfive Form FDA 483 to Magellan. This was followed byobservations. On March 18, 2020, we participated in a regulatory meeting with the FDA issuingat the FDA’s request to further discuss the Form FDA 483 observations and our remediation efforts. Since the inspection, we have submitted a number of written responses to the FDA regarding the five Form FDA 483 observations issued in the October 2019 inspection, and have worked diligently to execute a remediation plan. During October 2020, the FDA issued Establishment Inspection Reports which closed out the inspections from June 2017 and October 2019 under 21 C.F.R.20.64(d)(3).

During June 2021, the FDA performed an inspection of Magellan’s manufacturing facility. As a result of this inspection, the FDA issued one Form 483 observation. On August 3, 2021, FDA sent Magellan a close-out letter for the Warning Letter relatedthat FDA issued to the matterMagellan on October 23, 2017. While we remain committedThe FDA’s close-out letter notified Magellan that FDA has completed an evaluation of Magellan’s corrective actions in response to strengtheningFDA’s Warning Letter, and based on FDA’s evaluation, Magellan has addressed the issues identified in the Warning Letter. FDA’s close-out letter also stated that future FDA inspections of Magellan and regulatory activities will further assess the adequacy and sustainability of Magellan’s quality systemcorrections.

We incur costs and ensuring that all aspectsdemands upon management as a result of complying with the system arelaws and regulations affecting public companies in full compliance, we can provide no assurance that our remediation efforts will be successfulthe U.S., and failure to a degree acceptable by the FDA. See a more detailed discussion of this matter within MD&A on page 30.

Significant interruptions in production at our principal manufacturing facilities and/or third-party manufacturing facilities would adversely affectcomply with these laws could harm our business and operating results.

Products and services manufactured at facilities we own or lease comprised a majoritythe price of our revenues. Our global supply of these productscommon stock.

As a public company listed in the U.S., we incur significant legal, accounting and services is dependent on the uninterrupted and efficient operation of these facilities.other expenses. In addition, changing laws, regulations and standards relating to corporate governance and public disclosure, including regulations implemented by the SEC, the Public Company Accounting Oversight Board (“PCAOB”) and the NASDAQ Global Select Market, may increase our legal and financial compliance costs and/or make some activities more time consuming. These laws, regulations and standards are subject to varying interpretations and, as a result, their application in practice may evolve over time as new guidance is provided by regulatory and governing bodies. We intend to invest resources to comply with evolving laws, regulations and standards, and this investment may result in increased general and administrative expenses and a diversion of management’s time and attention from revenue-generating activities to compliance activities. If we currently rely on a small number of third-party manufacturersfail to produce certain ofcomply with new laws, regulations and standards, regulatory authorities may initiate legal proceedings against us, and our diagnostic products and product components. The operations of our facilities or these third-party manufacturing facilitiesbusiness may be harmed.

We could be adversely affected by power failures,health care reform legislation.

Third-party payers for medical products and services, including state, federal and foreign governments, are increasingly concerned about escalating health care costs and can indirectly affect the pricing or natural or other disasters, suchthe relative attractiveness of our products by regulating the maximum amount of reimbursement they will provide for diagnostic testing services. Following years of increasing pressure, during 2010 the U.S. government enacted comprehensive health care reform with the enactment of the Patient Protection and Affordable Care Act, as earthquakes, floods, tornadoes or terrorist threats. Although we carryamended by the Health Care and Education Reconciliation Act, which made changes that significantly impact the pharmaceutical and medical device industries. The Protecting Access to Medicare Act of 2014 requires applicable laboratories to report all private payor reimbursement rates and the volumes for each test they perform. The statute requires that Medicare establish reimbursement rates based on the weighted median of private insurance reimbursement rates effective January 1, 2017. The new Medicare rates would be subject to protect against certain business interruptions ata maximum reduction of 10% a year for the initial three-year period and a maximum of 15% a year for the subsequent three-year period. There is no limit on the amount of potential rate increases. As a result, some of our facilities, there can be no assurance that such coverage will be adequate or that such coverage will continue to remain available on acceptable terms, if at all. Any significant interruptioncustomers in the Company’s or a third-party supplier’s manufacturing capabilities could materially andU.S. may experience lower Medicare reimbursement rates for our products, which may adversely affect our operating results.

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Additional state and federal health care reform measures may be adopted in the future, any of which could have a material adverse effect on our ability to successfully commercialize our products and on our industry in general. For example, the U.S. government has in the past considered, is currently considering, and may in the future consider, health care policies and proposals intended to curb rising health care costs, including those that could significantly affect both private and public reimbursement for health care services. Further, state and local governments, as well as a number of foreign governments, are also considering or have adopted similar types of policies. Future significant changes in the health care system in the U.S. or elsewhere, and current uncertainty about whether and how changes may be implemented, could have a negative impact on the demand for our products. We dependare unable to predict whether health care policies, including policies stemming from legislation or regulations affecting our business, may be proposed or enacted in the future, what effect such policies would have on sole-source suppliers for certain critical raw materials, components and finished products. A supply interruptionour business, or the effect that ongoing uncertainty about these matters will have on the purchasing decisions of our customers.

Efforts to reduce the U.S. federal deficit could adversely affect our business.results of operations.

Raw Materials and Components

Our diagnosticAny reductions in government health care spending or research funding in an effort to reduce the U.S. federal deficit could result in reduced demand for our products are made from a wide variety of raw materials that are biological or chemical in nature, and that generally are available from multiple sources of supply. We sole-source certain raw materials and components, which make it time consuming and costly to switch raw materials and components inFDA-cleared products. If certain suppliers fail to supply required raw materials or components, we will need to secure other sources which may require us to conduct additional development and testing and obtain regulatory approval. These activities require significant time and resources, andpricing pressure. Further, there is no assuranceongoing uncertainty regarding the federal budget and federal spending levels, including the possible impacts of a failure to increase the “debt ceiling.” Any U.S. government default on its debt could have broad macroeconomic effects that new sources will be securedcould, among other things, raise our borrowing costs. Any future shutdown of the federal government or regulatory approvals, if necessary, will be obtained.failure to enact annual appropriations could also have a material adverse impact on our consolidated financial condition, and results of operations.

We utilize third-party manufacturers for our instrumentation. One third party manufactures our proprietaryillumipro-10 Incubator/Reader (instrument), a component of ourillumigene molecular system,Global market, political, environmental, and a separate third party manufactures our proprietary LeadCare instruments. These instruments are manufactured exclusively for Meridian accordingeconomic conditions, including those related to our specifications. While other manufacturers for these types of instruments are available, we source solely from one manufacturer to limit the costs involved in clearing the system for marketing in the United States. If these third-party manufacturers fail to supply us with instruments, we will need to secure another manufacturer, and it may take as long as 12 months to transfer instrument manufacturing. An interruption in the manufacturing of these instrumentsfinancial markets, could have a material adverse effect on our operating results.results, financial condition, and liquidity.

Additionally, one third party manufacturesOur business is sensitive to changes in general economic, political and environmental conditions, both inside and outside the U.S. Conditions such as the following, among others, may create additional risk to our results of operations: (i) continuing uncertainties in the eurozone; (ii) the effects of climate change regulation; (iii) the global effects of the ongoing COVID-19 pandemic, including the Emergency Temporary Standard (“ETS”) COVID-19 workplace vaccination and testing mandate from the Occupational Safety and Health Administration (“OSHA”); (iv) unanticipated implications from the voluntary exit of the U.K. from the EU; and (v) uncertainties in China and emerging markets.

Instability in the global economy and financial markets can adversely affect our business in several ways, including limiting our customers’ ability to obtain sufficient credit or pay for our products within the terms of sale. Competition could further intensify among the manufacturers and distributors with whom we compete for volume and market share, resulting in lower net revenue due to steeper discounts and product mix-down. In particular, if certain key or sole suppliers were to become capacity constrained or insolvent, it could result in a certain reagentreduction or interruption in supplies or a significant increase in the price of supplies.

The U.K. left the EU on January 31, 2020. While all EU rules and laws continued to apply to the U.K. through the transition period, which ended December 31, 2020, the U.K. and the EU reached a free trade agreement on December 24, 2020, which was ratified on April 28, 2021 and went into effect on May 1, 2021. The agreement includes regulatory and customs cooperation mechanisms, as well as provisions supporting open and fair competition. Under the trade agreement, the U.K. is free to set its own trade policy and can negotiate with other countries that do not currently have free trade deals with the EU. Although the full impact of the trade agreement is uncertain, it is possible that the recent changes to the trading relationship between the U.K. and the EU due to the trade agreement could result in increased cost of goods imported into and exported from the U.K., which may decrease the profitability of our operations. Additional currency volatility could drive a weaker British pound, which could increase the cost of goods imported into the U.K. and may decrease the profitability of our operations. A weaker British pound versus the U.S. dollar may also cause local currency results of our operations to be translated into fewer U.S. dollars during a reporting period. Given the lack of comparable precedent, it is unclear what financial, trade, regulatory and legal implications the trade agreement will have on our business; however, Brexit and its related effects could potentially have an adverse impact on our consolidated financial condition, and results of operations.

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We depend on international net revenues, and our operating results may be adversely impacted by foreign currency, regulatory or other developments affecting international markets.

We sell products and services into approximately 70 countries. For fiscal 2022, approximately one-third of our consolidated net revenues were transacted in currencies other than the U.S. dollar. We are subject to the risks associated with fluctuations in the exchange rates for use withthe Australian dollar, British pound, Canadian dollar, Chinese yuan, Euro, and New Israeli shekel. In addition, we have manufacturing operations, suppliers, and employees located outside the U.S. Since ourillumigene assays. While alternative suppliers exist, growth strategy depends in part on our ability to further penetrate markets outside the U.S., we electexpect to utilize this third party exclusivelycontinue to increase our revenue and presence outside the U.S., including in orderemerging markets.

Our international business is subject to maintain consistencyrisks that are often encountered in our materials, which is critical in complying with FDA regulatory requirements. An non-U.S. operations, including:

Such risks may be more likely or pronounced in emerging markets, where our operations may be subject to greater uncertainty due to increased volatility associated with the developing nature of their economic, legal, and governmental systems.

If we are unable to successfully manage the risks associated with expanding our global business or to adequately manage operational fluctuations, it could have a material adverse effectadversely affect our business, consolidated financial condition, or results of operations.

New tariffs and other trade measures could adversely affect our operating results.

The current U.S. administration has expressed strong concerns about imports from countries that it perceives as engaging in unfair trade practices, and it is possible the administration could impose import duties or other restrictions on products, components or raw materials sourced from those countries, which may include countries from which we import components or raw materials. We are currently not aware of any new import duties imposed on our operating results.

Finished Products

We outsource the manufacturing for certain finished diagnostic products to third parties. A disruption in the supply of these finished productsproducts. Any such new import duties or restrictions could have a material adverse effect on our business, untilresults of operations or financial condition. Moreover, these new tariffs, or other changes in U.S. trade policy, could trigger retaliatory actions by affected countries. Certain foreign governments have instituted or are considering imposing trade sanctions on certain U.S. goods.

Other foreign governments are considering the imposition of sanctions that will deny U.S. companies access to critical raw materials. A “trade war” of this nature or other governmental actions related to tariffs or international trade agreements or policies has the potential to adversely impact demand for our products, our costs, customers, manufacturers, suppliers and/or the economic environments in which we find another supplier or bring manufacturingin-house.

Fouroperate and, thus may adversely impact our businesses. In addition, there may be changes to existing trade agreements, like the North American Free Trade Agreement (“NAFTA”) and its anticipated successor agreement, the U.S.-Mexico-Canada Agreement (“USMCA”), which is still subject to approval by the U.S., Mexico and Canada, greater restrictions on free trade generally, and significant increases in tariffs on goods imported into the U.S., particularly tariffs on products manufactured exclusively for us by two separatein Mexico, among other possible changes. It remains unclear what the U.S. administration or foreign governments will or will not do with respect to tariffs, NAFTA, USMCA or other international trade agreements and independent companies accounted for 11%, 12%policies. Any changes to NAFTA (or subsequent trade agreements) could impact our operations in countries where we manufacture or sell products, or source components or materials, which could adversely affect our business and 15%results of consolidated revenues in fiscal 2017, 2016 and 2015, respectively. Meridian owns all rights and title to the FDA 510(k) clearances for these products.

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Activities undertaken by Meridian to reduce the risk of these sole-supplier arrangements include maintaining adequate inventory levels, supplier qualification procedures, supplier audits, site visits and frequent communication. Additionally, we have identified potential alternate suppliers.

Risks Related to Intellectual Property and Product Liability

We may be unable to protect or obtain proprietary rights that we utilize or intend to utilize.

In developing and manufacturing our products, we employ a variety of proprietary and patented technologies. In addition, we have licensed, and expect to continue to license, various complementary technologies and methods from academic institutions and public and private companies. We cannot provide assurance that the technologies that we own or license provide protection from competitive threats or from challenges to our intellectual property. In addition, we cannot provide assurances that we will be successful in obtaining and retaining licenses or proprietary or patented technologies in the future.

See Item 3. “Legal Proceedings” for a discussion of the status of certain litigation related to our intellectual property.

Product infringement claims by other companies could result in costly disputes and could limit our ability to sell our products.

Litigation over intellectual property rights is prevalent in the diagnostic industry. As the market for diagnostics continues to grow and the number of participants in the market increases, we may increasingly be subject to patent infringement claims. It is possible that a third party may claim infringement against us. If found to infringe, we may attempt to obtain a license to such intellectual property; however, we may be unable to do so on favorable terms, or at all. Additionally, if our products are found to infringe on third-party intellectual property, we may be required to pay damages for past infringement and lose the ability to sell certain products, causing our revenues to decrease. Any substantial loss resulting from such a claim could have a material adverse effect on our profitability, and the damage to our reputation in the industry could have a material adverse effect on our business.

If product liability lawsuits are successfully brought against us, we may incur substantial liabilities and may have to limit or cease sales of our products.

The testing, manufacturing and marketing of medical diagnostic products involves an inherent risk of product liability claims. If we cannot successfully defend ourselves against product liability claims, we may incur substantial liabilities or be required to limit or cease sales of our products. We currently carry product liability insurance at a level we believe is commercially reasonable, although there is no assurance that it will be adequate to cover claims that may arise. In certain customer contracts, we indemnify third parties for certain product liability claims related to our products. These indemnification obligations may cause us to pay significant sums of money for claims that are covered by these indemnifications. In addition, a defect in the design or manufacture of our products could have a material adverse effect on our reputation in the industry and subject us to claims of liability for injury and otherwise. Any substantial underinsured loss resulting from such a claim could have a material adverse effect on our profitability, and the damage to our reputation in the industry could have a material adverse effect on our business.

Risks Related to Our Common Stock

- 23 -The market price of our common stock may be volatile and fluctuate significantly, which could result in substantial losses for stockholders and subject us to litigation.

Other Risks Affecting Our BusinessThe market price of our common stock may be subject to significant fluctuations due to numerous factors, including but not limited to the risks described in this “Risk Factors” section. In addition, the stock market in general, the NASDAQ Global Market and the market for diagnostics companies in particular may experience a loss of investor confidence. A loss of investor confidence may result in extreme price and volume fluctuations in our common stock that are unrelated or disproportionate to the operating performance of our business, financial condition or results of operations. These broad market and industry factors may materially harm the market price of our common stock and expose us to securities class-action litigation. Class-action litigation, even if unsuccessful, could be costly to defend and divert management’s attention and resources, which could further materially harm our consolidated financial condition and results of operations.

Our business could be negatively affected if we are unable to attract, hireimpacted as a result of shareholder activism, an unsolicited takeover proposal or a proxy contest.

In recent years, proxy contests and retain key personnel.

Our future success depends on our continued ability to attract, hire and retain highly qualified personnel, including our executive officers and scientific, technical, sales and marketing employees, and their ability to manage growth successfully.other forms of stockholder activism have been directed against numerous public companies. If such key employees were to leave and we were unable to obtain adequate replacements, our operating results could be adversely affected.

Our bank credit agreements impose restrictionsa proxy contest or an unsolicited takeover proposal is made with respect to our operations.

Our bank credit agreements contain a number of financial covenants that require us, to meet certain financial ratios and tests. If we fail to comply with the obligations in the credit agreements, we would be in default under the credit agreements. If an event of default is not cured or waived, it could result in acceleration of any indebtedness under our credit agreements, which could have a material adverse effect on our business. At September 30, 2017, we have approximately $55,000 outstanding on a five-year term loan entered into in connection with the Magellan acquisition and no borrowings are outstanding under our $30,000 bank revolving credit facility.

We face risks related to global economic conditions.

We currently generate significant operating cash flows, which combined with access to the credit markets, provides us with discretionary funding capacity for research and development and other strategic activities. However, as an enterprise with global operations and markets, our operations and financial performance are in part dependent upon global economic conditions, and we could be negatively impacted by a global, regional or national economic crisis, including sovereign riskincur significant costs in the event of deterioration in the credit worthiness of or a default by local governments. We are particularly susceptible to the economic conditions in countries where government-sponsored health care systems are the primary payers for health care, including those countries within the European Union that are reducing their public expenditures in an effort to achieve cost savings. The uncertainty in global economic conditions poses a risk to the overall economy that could impact demand fordefending our products, as well as our ability to manage normal commercial relationships with our customers, suppliers and creditors, including financial institutions. As such, if global economic conditions deteriorate significantly, our business could be negatively impacted, including such areas as reduced demand for our products from a slow-down in the general economy, supplier or customer disruptions resulting from tighter credit markets, and/or temporary interruptions in our ability to conductday-to-day transactions through our financial intermediaries involving the payment to or collection of funds from our customers, vendors and suppliers. Whileto-date such factors have not had a significant negative impact on our results or operations, we continue to monitor and plan for the potential impact of these global economic factors.

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Following its June 23, 2016 vote to leave the European Union (commonly referred to as “Brexit”), on March 29, 2017, the United Kingdom invoked Article 50 of the Lisbon Treaty; thus formally commencing the process of exiting the European Union. While the impact of Brexit remains uncertain, the resulting immediate changes in foreign currency exchange rates have had a limited overall impact due to natural hedging. However, any predicted deterioration in the United Kingdom and European economic outlook maycompany, which would have an adverse effect on revenue growth, butour financial results. Shareholder activists may also seek to involve themselves in the extent of such effect cannot yet be quantified. In the longer term, it is possible that we will be directly impacted in a number of key areas including the hiringgovernance, strategic direction and retention of qualified staff, regulatory affairs, manufacturing and logistics. We are closely monitoring the Brexit developments in order to determine, quantify and proactively address changes as they become clear. Despite the Brexit developments, we do not expect macroeconomic conditions to have a significant impact on our liquidity needs, financial condition or results of operations although no assurances can be made in this regard. We intend to continue to fund our working capital requirements and dividends from current cash flows from operating activities and cash on hand. If needed, we also have an additional source of liquidity through our $30,000 bank revolving credit facility. Our liquidity needs may change if overall economic conditions worsen and/or liquidity and credit within the financial markets tightens for an extended period of time, and such conditions impact the collectibility of our customer accounts receivable or impact credit terms withcompany. Such proposals may disrupt our vendors, or disruptbusiness and divert the supply of raw materials and services.

Breachesattention of our information technology systems could have a material adverse effect on our operations.

We rely on information technology systems to process, transmitmanagement and store electronic information in ourday-to-day operations. The secure processing, maintenanceemployees, and transmission of this information is criticalany perceived uncertainties as to our operations. Like many multinational corporations, our information technology systems may be subjected to computer viruses or other malicious codes, unauthorized access attempts, and cyber- or phishing-attacks. We also store certain information with third parties that could be subject to these types of attacks. Anyfuture direction resulting from such breach could compromise our networks, and the information stored therein could be accessed, publicly disclosed, lost or stolen. Such attacksa situation could result in our intellectual property and other confidential information being lost or stolen, disruption of our operations, and other negative consequences, such as increased costs for security measures or remediation costs, and diversion of management attention. Any such access, disclosure or otherthe loss of information could result in legal claims or proceedings, liability under laws that protect the privacy of personal information, regulatory penalties, disruption ofpotential business opportunities, be exploited by our operations, damagecompetitors, cause concern to our reputation and/current or cause a loss of confidence in our productspotential customers, and services,make it more difficult to attract and retain qualified personnel and business partners, all of which could adversely affect our business revenuesbusiness. In addition, actions of activist stockholders may cause significant fluctuations in our stock price based on temporary or speculative market perceptions or other factors that do not necessarily reflect the underlying fundamentals and competitive position. While we will continueprospects of our business.

The authority of our board to implement additional protective measures to reduce the risk of and detect cyber incidents, cyber-attacks are becoming more sophisticated and frequent,issue preferred stock and the techniques used in such attacks change rapidly. There can be no assurances that our protective measures will prevent attacks that could have a significant impact on our business.

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Natural disasters, war and other events could adversely affect our future revenues and operating income.

Natural disasters (including pandemics), war, terrorism, labor disruptions and international conflicts, and actions taken by the United States and other governments or by our customers or suppliers in response to such events, could cause significant economic disruption and political and social instability in the United States and in areas outsideeffects of the United States in which we operate. These events could result in decreased demand for our products, adversely affect our manufacturing and distribution capabilities, or increase the costs for, or cause interruptions in, the supplycertain provisions of materials from our suppliers.

Risks Related to Our Common Stock

We have identified a material weakness in our internal control over financial reporting that, if not properly corrected, could materially adversely affect our operations and result in material misstatements in our financial statements.

As described in “Item 9A. Controls and Procedures,” we have concluded that our internal control over financial reporting was ineffective as of September 30, 2017 because a material weakness existed in our internal control over financial reporting. If we are unable to remediate our material weakness in a timely manner, weOhio corporation law may be unable to provide holders of our securities with required financial information in a timely and reliable manner and we may incorrectly report financial information. Either of these events could have a material adverse effect on our operations, investor, supplier and customer confidence in our reported financial information and/or the trading price of our common stock.

Additional stock issuance authorizations.discourage takeover bids.

Our board of directors has the authority to issue up to 1,000one million shares of undesignated preferred stock and to determine the rights, preferences, privileges and restrictions, including voting rights, of such shares without any future vote or action by the shareholders. The issuance of preferred stock under certain circumstances could have the effect of delaying or preventing a change in control of our company. Ohio corporation law contains provisions that may discourage takeover bids for our company that have not been negotiated with the board of directors. Such provisions could limit the price that investors might be willing to pay in the future for shares of our common stock. In addition, sales of substantial amounts of shares in the public market could adversely affect the market price of our common stock and our ability to raise additional capital at a price favorable to us.

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General Risk Factors

One or more cybersecurity incidents may adversely impact our financial condition, results of operations and reputation.

Our operations involve the use of multiple systems that process, store and transmit sensitive information about our customers, suppliers, employees, financial position, operating results and strategies. We face global cybersecurity risks and threats on a continual and ongoing basis, which include, but are not limited to, attempts to access systems and information, computer viruses, or denial-of-service attacks. These risks and threats range from uncoordinated individual attempts to sophisticated and targeted measures. While we are not aware of any material cyber-attacks or breaches of our systems to date, we have and continue to implement measures to safeguard our systems and information and mitigate potential risks, including employee training around phishing, malware and other cyber risks, but there is no assurance that such actions will be sufficient to prevent cyber-attacks or security breaches that manipulate or improperly use our systems, compromise sensitive information, destroy or corrupt data, or otherwise disrupt our operations. The occurrence of such events, including breaches of our security measures or those of our third-party service providers, could negatively impact our reputation and our competitive position and could result in litigation with third parties, regulatory action, loss of business due to disruption of operations and/or reputational damage, potential liability and increased remediation and protection costs, any of which could have a material adverse effect on our consolidated financial condition and results of operations. In an effort to mitigate the financial impact such an attack might have on the Company, we maintain cyber liability insurance coverage. However, such coverage may be insufficient to cover the full impact of a cyber-attack. Additionally, as cybersecurity risks become more sophisticated, we may need to increase our investments in security measures which could have a material adverse effect on our consolidated financial condition and results of operations.

Our business could be negatively affected if we are unable to attract, hire and retain key personnel.

Our future success depends on our continued ability to attract, hire and retain highly qualified personnel, including our executive officers and scientific, technical, sales and marketing employees, and their ability to manage growth successfully. If such key employees were to leave and we were unable to obtain adequate replacements, our results of operations could be adversely affected.

Our bank credit agreement imposes restrictions with respect to our operations, which could adversely impact our business.

Our bank credit agreement contains a number of financial covenants that require us to meet certain financial ratios and tests. If we fail to comply with the obligations in the credit agreement, we would be in default under the credit agreement. If an event of default is not cured or waived, it could result in acceleration of any indebtedness under our credit agreement, which could have a material adverse effect on our business. At September 30, 2022, we had $25,000 outstanding on a $200,000 bank revolving credit facility.

ITEM 1B.

UNRESOLVED STAFF COMMENTS

None.

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ITEM 2.

PROPERTIES

Our corporate offices Diagnostics manufacturing facility, and Diagnostics research and development facility are located in five buildings totaling approximately 120,000 square feet on 10 acres of land in the Village of Newtown, a suburb of Cincinnati, Ohio. These propertiesOur Newtown campus includes sites for diagnostic test manufacturing and distribution, immunoassay research and development and administrative functions. Our Newtown campus also includes a new facility where we are owned by us. Magellan’s operations are headquartered in an approximately 32,000 square foot leased facilityexpanding and automating our Revogene diagnostic test device manufacturing. We also have diagnostic test manufacturing and distribution sites in Billerica, Massachusetts (blood-chemistry), Modi’in, Israel (BreathID and BreathTek urea breath testing systems), and Quebec City, Quebec, Canada (Revogene diagnostic test device and instrument manufacturing). Our sites in which it conducts manufacturing,Billerica, Modi’in and Quebec City also include research and development sales, and administrative activities.functions. We also operate a Diagnostics sales and distribution center near Milan, Italy, in an approximately 18,000 square foot building. This facility is owned by our wholly-owned Italian subsidiary, Meridian Bioscience Europe s.r.l. We also rent officeand space in Paris, FranceManasquan, New Jersey to house BreathID technical service andBraine-l’Alleud, Belgium for sales and administrative repair functions.

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Our Life Science operations are conducted in several facilities in Memphis, Tennessee; Boca Raton, Florida; Taunton, Massachusetts;North Brunswick, New Jersey; London, England; Luckenwalde, Germany; Sydney, Australia; Singapore; and Beijing, China. Our facilityManufacturing of molecular reagents occurs in our London and Luckenwalde sites. Manufacturing of immunoassay reagents occurs in our Memphis Tennessee consists of two buildings totaling approximately 44,000 square feet and is owned by us. Our leased facility in Boca Raton Florida contains approximately 7,500 square feet of manufacturing space. Following are details ofsites. Our sites in London and North Brunswick also include our other Life Science facilities, all of which are leased: Taunton – approximately 10,000 square feet of sales and warehouse space; London – approximately 21,000 square feet of sales, warehouse, distribution,primary research and development manufacturing and administrative office space; Luckenwalde –approximately 10,000 square feet of sales, warehouse and manufacturing space; Sydney – approximately 5,000 square feet of sales, warehouse, research and development, and manufacturing space; Singapore – approximately 2,000 square feet of sales and business development space; Beijing – less than 1,000 square feet of sales and business development space.functions.

ITEM 3.

LEGAL PROCEEDINGS

We are a party to various litigation matters that we believe are in the normal course of business.business, including matters related to the previously discussed pending merger. Aside from the matters discussed below, the ultimate resolution of these matters is not expected to have a material adverse effect on our consolidated financial position, results of operations or cash flows, and no material provision has been made in the accompanying Consolidated Financial Statements for these matters.

Legal Matter Relating to LeadCare Product Line

On MayApril 17, 2017, Meridian2018, the Company’s wholly owned subsidiary Magellan received a subpoena from the U.S. Department of Justice (“DOJ”) regarding its LeadCare product line. The subpoena outlined documents to be produced, and the Company is cooperating with the DOJ in this matter. The Company maintains rigorous policies and procedures to promote compliance with applicable regulatory agencies and requirements and is working with the DOJ to promptly respond to the subpoena, including responding to additional information requests that have followed receipt of the subpoena in April 2018. The Company has executed tolling agreements to extend the statute of limitations. In March and April 2021, DOJ issued two subpoenas, both to former employees of Magellan, calling for witnesses to testify before a federal grand jury related to this matter. In September and October 2021, DOJ issued additional subpoenas to individuals seeking testimony and documents in connection with its ongoing investigation. It is the Company’s understanding that multiple witnesses have testified before the federal grand jury and the DOJ’s investigation is ongoing. Discussions continue with the DOJ to explore resolution of the matter. As of September 30, 2022, in accordance with applicable accounting guidance, the Company believes a loss is probable in the DOJ LeadCare legal matter and has accrued $10,000 as an estimate of the cost to resolve the DOJ LeadCare legal matter, which is reflected in litigation and select legal costs within the Consolidated Statement of Operations for the year ended September 30, 2022. The Company cannot predict when the investigation will be resolved or the outcome of the investigation, and the ultimate resolution of the DOJ LeadCare legal matter may exceed the amount accrued at September 30, 2022 and could be material to the Company. Expense for attorneys’ fees related to this matter totaling $3,510, $2,803 and $2,035 is included within the Consolidated Statements of Operations for the years ended September 30, 2022, 2021 and 2020, respectively. See “Lead Testing Matters” beginning on page 32 within MD&A.

Litigation Relating to the Merger

On September 9, 2022, a purported shareholder of the Company filed a complaintan action against the Company and the members of the Company’s board of directors in the United States District Court for the Southern District of Ohio, Western Division (Cincinnati) naming DiaSorinNew York, captioned Warren v. Meridian Bioscience Inc. (“DiaSorin”, No. 1:22-cv-07727 (S.D.N.Y.) as. This was followed by four other substantively similar actions also brought by purported shareholders against the Company and the members of the Company’s board of directors. These were Stein v. Meridian Bioscience Inc., No. 1:22-cv-07814 (S.D.N.Y.), filed on September 13, 2022; Coffman v. Meridian Bioscience Inc., No. 1:22-cv-07984 (S.D.N.Y.), filed on September 19, 2022; Morgan v. Meridian Bioscience Inc., No. 1:22-cv-08057 (S.D.N.Y.), filed on September 21, 2022; and Scott v. Meridian Bioscience Inc., No. 1:22-cv-08114 (S.D.N.Y.), filed on September 22, 2022. Plaintiffs in each case generally alleged that the proxy statements filed by Meridian with the U.S. Securities and Exchange Commission on August 25, 2022 and September 8, 2022 in connection with the Merger misrepresented and/or omitted certain material information and asserted violations of Sections 14(a) and 20(a) of the Securities Exchange Act of 1934. Among other relief, the plaintiffs in each case sought injunctive relief, including directing Meridian to disclose the allegedly omitted material information, enjoining the completion of the Merger, rescinding the Merger in the event it is consummated, and awarding rescissory damages. While Meridian believed that the actions were without merit, on September 30, 2022, Meridian voluntarily filed a defendant. Meridian’s complaint alleges DiaSorin has breached the 2010 Co-Development and License Agreement (the “Agreement”) between it and Meridian relatingForm 8-K that made certain supplemental disclosures related to the co-development of certain tests and diagnostic products, pursuant to which Meridian disclosed certain trade secrets and proprietary information. The lawsuit underlying Meridian’s complaint alleges

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ITEM 4.

MINE SAFETY DISCLOSURES

Not applicable.

PART II.

ITEM 5.

MARKET FOR REGISTRANT’S COMMON

EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES

Refer to “Forward-Looking Statements” following the Index in front of this Form10-K and Item 1A “Risk Factors” on Pages 15 through 26 of this Annual Report.Market Information

“Common Stock Information”Our common stock trades on the inside back coverNASDAQ Global Select Market under the symbol VIVO.

Holders of our Common Stock

As of September 30, 2022, there were approximately 490 holders of record and approximately 23,850 beneficial owners of our common shares.

Dividends

During 2019, the Company suspended the payment of a quarterly cash dividend as part of the Annual Report to Shareholders for fiscal 2017 and “Quarterly Financial Data (Unaudited)” relating to our dividends in Note 10 toCompany’s regular evaluation of its capital allocation, with the Consolidated Financial Statements are incorporated herein by reference. Except as may otherwise be prohibited by applicable law, there are no restrictions on cash dividend payments.

Following the release of results for the fiscal 2017 first quarter, the board of directors reduced the fiscal 2017 indicated annual cash dividend rate to $0.50 per share (down from $0.80 per share)action taken in order to align it with the stated policy guidelines of the payout ratiodeploy cash into new product development activities and to range between 75%preserve capital resources and 85% of each fiscal year’s net earnings. This indicated annual rate represents 75% of fiscal 2017’snon-GAAP diluted earnings per share. Theliquidity for general corporate purposes. Any declaration and amount of dividends will be determined by the board of directors in its discretion based upon its evaluation of earnings, cash flow requirements, and future business developments and opportunities, including

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acquisitions. At its meeting on November 8, 2017,and any other factors the board of directors announced a continuationdetermines are relevant to its evaluation. At this time, we do not expect to resume paying cash dividends.

Stock Total Return Performance

The graph below compares the cumulative 5-Year total return realized by shareholders on Meridian Bioscience, Inc.’s common stock relative to the cumulative total returns of the $0.50 indicated annual dividend rate per share for fiscal 2018. We paid dividendsNASDAQ Composite index and a customized peer group comprised of $0.575 per sharethe following ten companies:

Bio-Rad Laboratories, Inc., Bio-Techne Corporation, bioMerieux S.A., DiaSorin S.p.a., Hologic, Inc., Myriad Genetics, Inc., OraSure Technologies, Inc., Qiagen N.V., QuidelOrtho Corporation, and Trinity Biotech Plc.

An investment of $100 (with reinvestment of all dividends) is assumed to have been made in fiscal 2017,our common stock, in the index and $0.80 per share in eachthe peer group (including reinvestment of fiscal 2016 and fiscal 2015.

As ofdividends) on September 30, 2017, there were approximately 675 holders of record and approximately 15,200 beneficial owners of our common shares.its relative performance is tracked through September 30, 2022.

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ITEM 6.

SELECTED FINANCIAL DATAINTENTIONALLY OMITTED

Incorporated by reference from inside front cover of the Annual Report to Shareholders for 2017.

ITEM 7.

MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL

CONDITION AND RESULTS OF OPERATIONS

Refer to “Forward-Looking“Note About Forward-Looking Statements” following the Index in front of this Form10-K and Item 1A “Risk Factors” on Pages 15pages 12 through 2625 of this Annual Report.

In the discussion that follows, all dollar amounts are in thousands (both tables and text), except per share data.

Results of Operations:

Fourth Quarter

Net earnings for the fourth quarter of fiscal 2017 increased 4% to $5,726, or $0.13 per diluted share, from net earnings for the fourth quarter of fiscal 2016 of $5,491, or $0.13 per diluted share. The fiscal 2017 fourth quarter results include $762 of costs associated with the transition to our new CEO, announced October 10, 2017, and litigation costs associated with protecting certain intellectual property (collectively, “CEO transition and IP defense costs”) (impact on net earnings of $495, or $0.01 per diluted share). The fiscal 2016 fourth quarter results included $677 of costs associated with the restructuring of our sales and marketing leadership (impact on net earnings of $431, or $0.01 per diluted share). Consolidated revenues for the fourth quarter of fiscal 2017 totaled $49,697, an increase of 6% compared to the fourth quarter of fiscal 2016; increasing 5% on a constant-currency basis.

Showing positive signs of stabilization and a return to revenue growth in the Americas geographic region, revenues for the Diagnostics segment for the fourth quarter of fiscal 2017 increased 3% compared to the fourth quarter of fiscal 2016 (increasing 2% on a constant-currency basis), comprised of a 5% decrease in molecular assay products and a 6% increase in immunoassay andpoint-of-care lead testing products. With a 9% increase in its molecular components business and an 18% increase in its immunoassay components business, revenues

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for our Life Science segment increased 14%The purpose of Management’s Discussion and Analysis is to provide an understanding of the financial condition, changes in consolidated financial condition and results of operations of Meridian Bioscience, Inc. (“Meridian”, the fourth quarter of fiscal 2017 compared to the fourth quarter of fiscal 2016. On a constant-currency basis, revenues for our Life Science Segment increased 13%“Company”, “We”).

The fourth quarter revenues reflect improvement This discussion should be read in our immunoassay product lines, most notably in the foodborne andH. pylori product families, being partially offset by decreased revenues in Magellan’s lead testing systems with venous blood samples. OurC. difficile business overall shows signs of stabilization and as a result, has also contributed to stabilization in ourillumigene molecular business. Both Life Science units performed well, reflecting the strength of new products and growth in the Asia-Pacific region.

Fiscal Year

Net earnings for fiscal 2017 decreased 33% to $21,557, or $0.51 per diluted share, from net earnings for fiscal 2016 of $32,229, or $0.76 per diluted share. Fiscal 2017 results include (i) $762 of CEO transition and IP defense costs; and (ii) a $6,628 impairment charge against Magellan goodwill (combined impact on net earnings of $7,123, or $0.17 per diluted share). Fiscal 2016 results include $677 of costs associatedconjunction with the restructuring of our salesConsolidated Financial Statements and marketing leadership and $1,481 of costs associated with our acquisition activities (combined impact on net earnings of $1,664, or $0.04 per diluted share). Consolidated revenues increased 2% to $200,771 for fiscal 2017 compared to fiscal 2016; increasing 3% on a constant-currency basis.

In fiscal 2017, revenues for the Diagnostics segment decreased 1% compared to fiscal 2016 (also 1% on a constant-currency basis). This decrease is comprised of a 13% decrease in molecular assay products and a 3% increase in immunoassay and lead testing products, including an $8,027 increase in Magellan revenues resulting from only six months of Meridian ownership during the comparable fiscal 2016 period. With an 8% increase in its molecular components business and a 15% increase in its immunoassay components business, revenues of our Life Science segment increased 12% during fiscal 2017 compared to fiscal 2016; increasing 14% on a constant-currency basis.

Magellan FDA Activities and Goodwill Impairment Charge

On May 17, 2017, the FDA issued a field safety notice advising customers to discontinue use of Magellan’s lead testing systems with venous blood samples. This field safety notice was followed by product recall notices on May 25^th and June 5^th. Magellan’s lead testing systems are capable of processing both capillary and venous blood samples. Magellan’s LeadCare Plus and LeadCare Ultra systems, which account for approximately 10% of Magellan’s annual revenues, are used predominantly with venous blood samples. Magellan’s LeadCare and LeadCare II systems are predominantly used with capillary blood samples.

Subsequent to the issuances of these field safety and product recall notices, the FDA completed an inspection of Magellan’s quality system, and issued its Form 483, Inspectional Observations, on June 29, 2017, which was expectedly followed by a Warning Letter issued on October 23, 2017. The Warning Letter requires periodic reporting on our remediation progress.

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As a result of these matters, we expect to experience delays in reinstating venous blood sample testing on our LeadCare products, as well as in obtaining 510(k) clearance for new Magellan products. We also expect delays in obtaining export certifications for Magellan products during the remediation period. In light of these factors and their impacts, during our third fiscal quarter, it was determined that a potential impairment of goodwill recorded in connection with the acquisition of Magellan had occurred (i.e., a “triggering event”). With the assistance of an independent valuation firm, Magellan’s fair value was calculated via both market (comparable company) and income (discounted cash flows) approaches. Based upon these approaches, it was determined that the carrying value of the Magellan reporting unit did, in fact, exceed its fair value. As a result, an impairment charge of $6,628, on both a pre-tax and after-tax basis, was recorded during the third quarter and is reflected as a separate operating expense line item within the accompanying Consolidated Statement of Operations for the year ended September 30, 2017. Given all of the factors considered, we do not anticipate, at this time, any further goodwill impairment charge from the Magellan acquisition.

This impairment charge does not impact our cash flow, our dividend or our bank covenants. Our outlook for Magellan’s LeadCare II testing volume continues to be healthy. In the time period since the FDA released its Safety Notification (which pertained to venous blood lead testing performed on the systems produced by Magellan), 374 new LeadCare II systems utilizing capillary blood samples have been placed in physician offices and clinics, contributing to the total number of LeadCare II placements increasing approximately 15% during fiscal 2017. These placements and ongoing placements of LeadCare IIpoint-of-care systems and related capillary blood testing are expected to drive revenue growth in 2018 and beyond.

The matters giving rise to the FDA Safety Notification occurred at Magellan prior to Meridian’s acquisition of Magellan. Meridian is committed to working diligently to strengthen Magellan’s quality system and to address the observations noted in the Form FDA 483 with the highest sense of urgency. However, we can provide no assurance that our remediation efforts will be successful to a degree acceptable by the FDA within our contemplated time frame.notes. It should be noted that the FDA has statedterms revenue and/or revenues are utilized throughout the Management’s Discussion and Analysis of Financial Condition and Results of Operations (“MD&A”) to indicate net revenue and/or net revenues. In addition, throughout the MD&A, we refer to certain product tradenames and trademarks, which are protected under applicable intellectual property laws and are our property. Solely for convenience, these tradenames and trademarks are referred to without the ^® or ™ symbols, but such references are not intended to indicate in any way that all LeadCare blood lead testing systems can be used with capillary blood samples,we will not assert, to the predominant sample type used by physicians testing at thepoint-of-care. We believepoint-of-care lead testing is critical to addressing elevated lead levels among children and adults across the globe, as testing at thepoint-of-care improves compliance and facilitates patient education and intervention.

Beyond the impactfullest extent of the impairment charge, revenues from LeadCare Pluslaw, our rights to these tradenames and Ultra, which utilize primarily venous blood samples, have decreased approximately $200 since receipt of the May 17^th field safety notice. Remediation costs in fiscal 2017 associated with the matter were approximately $500 pre-tax, resulting in a total impact of less than $0.01 on diluted earnings per share for the year. Remediation costs in fiscal 2018 are expected to be approximately $600 pre-tax, or less than $0.01 impact on diluted earnings per share. Remediation costs relate primarily to professional fees for regulatory consultants and periodic quality system audits. In the

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course of remediation, Magellan may encounter additional matters that warrant notifications to the FDA and/or customers regarding the use of its products. At this time, we do not believe that any such notifications would impact the ability to use the LeadCare systems with capillary blood samples. In addition, at this time, we do not believe that there is any further impact on our results of operations or financial condition.

USE OFNON-GAAP MEASURES

We have supplemented our reported GAAP financial information with information on net earnings, basic earnings per share and diluted earnings per share excluding the effects of CEO transition and IP defense costs (fiscal 2017), the impairment charge against Magellan goodwill (fiscal 2017), sales & marketing leadership reorganization costs (fiscal 2016) and acquisition-related costs (fiscal 2016), each of which is anon-GAAP measure, as well as reconciliations to amounts reported under U.S. Generally Accepted Accounting Principles. We believe that this information is useful to those who read our financial statements and evaluate our operating results because:

Thesenon-GAAP measures may be different fromnon-GAAP measures used by other companies. In addition, thesenon-GAAP measures are not based on any comprehensive set of accounting rules or principles.Non-GAAP measures have limitations, in that they do not reflect all amounts associated with our results as determined in accordance with U.S. GAAP. Therefore, these measures should only be used to evaluate our results in conjunction with corresponding GAAP measures.

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REVENUE OVERVIEW

Below are analyses of the Company’s revenue, provided for each of the following:

Revenue Overview- By Reportable Segment & Geographic RegionSegments

Our reportable segments are Diagnostics and Life Science. The Diagnostics segment consists of manufacturing operations for infectious disease diagnostic products in Cincinnati, OhioOhio; Quebec City, Canada; and as a result of the acquisition of Magellan,Modi’in, Israel; and manufacturing operations for blood chemistry products detecting elevated lead levels in blood in Billerica, Massachusetts (near Boston). These diagnostic test products are sold and distributed in the countries comprising North Central and SouthLatin America (the “Americas”); Europe, Middle East and Africa (“EMEA”); and other countries outside of the Americas and EMEA (rest of the world, or “ROW”). The Life Science segment consists of manufacturing operations in Memphis, Tennessee; Boca Raton, Florida; London, England; and Luckenwalde, Germany; and Sydney, Australia,Germany, and the sale and distribution of bulk antigens, antibodies, PCR/qPCRimmunoassay blocking reagents, specialized Polymerase Chain Reaction (“PCR”) master mixes, isothermal mixes, enzymes, nucleotides, competent cells, and bioresearch reagents domestically and abroad, including a sales and business development andfacility, with outsourced distribution facilitiescapabilities, in Singapore and Beijing, China to further pursue growing revenue opportunities in Asia.

Recent Developments

Agreement and Plan of Merger

On July 7, 2022, the Company entered into an Agreement and Plan of Merger (as it may be amended, supplemented or otherwise modified from time to time, the “Merger Agreement”) with SD Biosensor, Inc., a corporation with limited liability organized under the laws of the Republic of Korea (“SDB”), Columbus Holding Company, a Delaware corporation (“Parent”), and Madeira Acquisition Corp., an Ohio corporation and a direct wholly owned subsidiary of Parent (“Merger Sub”). Meridian is informed that SJL Partners, LLC (“SJL”) is currently the sole shareholder of Parent, and SDB together with SJL will be the sole shareholders of Parent as of the closing of the Merger. Pursuant to the Merger Agreement, Merger Sub will merge with and into Meridian (the “Merger”), with Meridian surviving the Merger as a direct wholly owned subsidiary of Parent.

At the effective time of the proposed Merger (the “Effective Time”), each share of common stock, no par value per share, of the Company issued and outstanding as of immediately prior to the Effective Time (other than dissenting shares or shares of the Company’s common stock held by the Company as treasury stock or owned by SDB, Merger Sub or any subsidiary of the Company or SDB) will be cancelled and cease to exist and automatically convert into the right to receive cash in an amount equal to $34.00, without interest (the “Merger Consideration”).

Consummation of the Merger is subject to customary closing conditions, including, without limitation: (i) the absence of certain legal impediments; and (ii) the condition that no Specified Outcome, as such term is defined in the Merger Agreement, related to the DOJ LeadCare legal matter (which is described in the section entitled “Legal Matter Relating to LeadCare Product Line” of Item 3. “Legal Proceedings”) has occurred or is reasonably likely to occur.

On November 21, 2022, the parties received clearance from the Committee on Foreign Investment in the United States with respect to the Merger and the transactions contemplated by the Merger Agreement.

The Merger Agreement contains certain termination rights for the Company and SDB. In addition to the foregoing termination right, and subject to certain limitations: (i) the Company or SDB may terminate the Merger Agreement if the Merger is not consummated by January 6, 2023; and (ii) the Company and SDB may mutually agree to terminate the Merger Agreement.

The foregoing description of the Merger Agreement and the transactions contemplated thereby does not purport to be complete and is subject to, and qualified in its entirety by reference to, the full text of the Merger Agreement, which is attached as an exhibit to our Current Report on Form 8-K filed with the SEC on July 7, 2022.

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The Company incurred transaction related costs of approximately $6,800 in the year ended September 30, 2022 related to the Merger, which is recorded in acquisition and transaction related costs in the Consolidated Statements of Operations.

Impact of COVID-19 Pandemic

Starting in the latter half of fiscal 2020 and continuing to the date of this filing, the ongoing COVID-19 pandemic has had both positive and negative effects on our business.

Our Life Science segment’s products were well positioned to respond to in vitro device (“IVD”) manufacturers’ increased demand for reagents used in the manufacture of molecular, rapid antigen and serology tests. Consequently, through the end of the second quarter of fiscal 2022, our Life Science segment consistently delivered significantly higher levels of net revenues and operating income than those achieved prior to the COVID-19 pandemic, with the peak to date in such levels occurring during the second quarter of fiscal 2022. This revenue peak has been followed by a significant decrease in such net revenue levels during the fiscal 2022 third and fourth quarters, reflecting the softening in demand for COVID-19 related reagents during the second half of our fiscal year.

Our Diagnostics segment, on the other hand, has generally been negatively impacted by health systems’ increased focus on COVID-19 testing over traditional infectious disease testing. The impacts of the COVID-19 pandemic are most dramatically evident in the 34% year-over-year decline in revenues from respiratory illness assays in fiscal 2021, following flat year-over-year revenue levels experienced in fiscal 2020. Reflecting what we believe to be a continuation of a return to pre-pandemic activity levels, during fiscal 2022, net revenues from our respiratory illness assays were 51% higher than fiscal 2021, a marked improvement over the aforementioned 34% decline in fiscal 2021.

Despite these recent COVID-19 pandemic related trends, due to the many uncertainties surrounding the COVID-19 pandemic, we can provide no assurances with respect to our views of the longevity or severity of the positive or negative impacts to our consolidated financial condition of the ongoing COVID-19 pandemic.

Employee Safety

While the majority of our employee base has returned to working on-site at our facilities, we have implemented a hybrid work-from-home program for certain personnel whose on-site presence has been deemed to be non-essential. We also continue to utilize enhanced cleaning and sanitizing procedures, and provide additional personal hygiene supplies at all our sites. We have implemented policies for employees to adhere to Centers for Disease Control and Prevention (“CDC”) guidelines on social distancing, and similar guidelines by authorities outside the U.S. To date, we have been able to manufacture and distribute products globally, and all our sites have continued to operate with little, if any, impact on shipments to customers. As the COVID-19 pandemic continues, along with continuing governmental restrictions which vary by locale and jurisdiction, there is an increased risk of employee absenteeism, which could materially impact our operations at one or more sites. To date, the steps we have taken, including our work-from-home processes, have not materially impacted the Company’s financial reporting systems, internal controls over financial reporting or disclosure controls.

Supply Chains

Supply chains supporting our products have generally remained intact, providing access to sufficient inventory of the key materials needed for manufacturing. While we have experienced extended lead times for certain select raw materials, delays and allocations for raw materials have to date been limited and have not had a material impact on our results of operations. From time to time, we identify alternative suppliers to address the risk of a current supplier’s inability to deliver materials in volumes sufficient to meet our manufacturing needs; or we may choose to purchase certain materials in bulk volumes where we have supply chain scarcity concerns. It remains possible that we may experience some sort of interruption to our supply chains, and such an interruption could materially affect our ability to timely manufacture and distribute our products and unfavorably impact our results of operations.

Since the second half of fiscal 2021, we have experienced input cost inflation, including materials, labor and transportation costs. Pricing actions and supply chain productivity initiatives have mitigated and are expected to continue to mitigate some of these inflationary pressures, but we may not be successful in fully offsetting these incremental costs, which could have an impact on the Company’s results of operations and cash flows in the future.

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Product Development and Clinical Trials

Our Diagnostics segment’s new product development programs are continuing to progress at a slower pace than normal, due in part to the prevalence of certain infectious diseases having been lower than normal during the COVID-19 pandemic. These matters continue to impact our timing for filing applications for product clearances with the U.S. Food and Drug Administration (“FDA”), as well as related timing of FDA clearances of such filings. Additionally, the ongoing COVID-19 pandemic has slowed and could continue to slow down our efforts to expand our product portfolio, impacting the speed with which we are able to bring additional products to market.

Product Demand

Our Life Science segment manufactures, markets and sells a number of molecular and immunological reagents to IVD customers, including those who are making both molecular and immunoassay COVID-19 tests. While there have been quarter-to-quarter fluctuations in demand throughout the COVID-19 pandemic, from late in the second quarter of fiscal 2020 through the second quarter of fiscal 2022, we generally experienced unprecedented demand for certain of our molecular reagents (e.g., ribonucleic acid (“RNA”) master mixes and nucleotides). While we expect demand to continue to exceed pre-COVID-19 pandemic levels, the significant decline in COVID-19 related demand experienced during the third and fourth quarters of fiscal 2022 is expected to continue into fiscal 2023. These expectations will certainly be impacted by infection rates and the responses to such levels of infection varying by country based on their individual COVID-19 case statistics, potential seasonality of infection rates and vaccine programs. Furthermore, a significant number of our Life Science segment customers now use our molecular reagents in multiple tests, including non-COVID-19 related tests. This development makes it increasingly difficult to accurately estimate the portion of molecular reagent sales related specifically to COVID-19. As a result, we are no longer reporting the portion of Life Science segment net revenues related to COVID-19. Such net revenues were identified and reported throughout fiscal 2021 and fiscal 2020, totaling approximately $111,900 and $71,500, respectively.

Our Diagnostics segment manufactures, markets and sells a number of molecular, immunoassay, blood chemistry and urea breath tests for various infectious diseases and blood-lead levels. Sales volumes for a number of these assays have been adversely affected by the COVID-19 pandemic over the past two fiscal years, as such assays are often used in non-critical care settings; however, we have seen indications of a return to more normal pre-pandemic levels. The COVID-19 pandemic also has depressed instrument orders and placements for our BreathID, Curian and Revogene platforms. Order activity for our Revogene platform was affected by the delay in obtaining emergency use authorization (“EUA”) for our SARS-CoV-2 assay, as customers took a “wait and see” approach throughout our entire EUA application process. We received the EUA on November 9, 2021, but did not begin to ship product at that time, as our SARS-CoV-2 assay required enhancement to detect the Omicron variants of the COVID-19 infection. We completed validation of these changes during the second quarter of fiscal 2022 and submitted the required information to the FDA. The FDA also requested the completion of additional clinical studies, which we completed and submitted. On July 28, 2022 notification was received from the FDA that it has re-authorized the EUA for the Revogene SARS-CoV-2 assay. As such, we began shipping this product in October 2022. Despite the situation encountered with our EUA application for the SARS-CoV-2 assay, and the delay in shipment due to the Omicron variant related enhancements, we proceeded with the process of increasing our capacity to produce these tests, as well as other tests on the Revogene platform, at our facilities in Quebec and Cincinnati. Specifically, we have: (i) added a second production line at our Quebec manufacturing facility; (ii) installed a production line in a leased facility near our corporate headquarters in Cincinnati; and (iii) are in the process of installing an additional production line in the Cincinnati leased facility. With a gross cost of approximately $17,700 through September 30, 2022, we expect these expansion efforts to be completed during calendar 2022 at a total gross cost of approximately $22,600, which is expected to be partially offset by the monies received under the National Institutes of Health Rapid Acceleration of Diagnostics (“RADx”) initiative grant entered into on February 1, 2021, and as amended on January 25, 2022, $2,750 of which had been received and used to offset the above gross cost as of September 30, 2022 (see Note 14, “National Institutes of Health Contracts” of the Consolidated Financial Statements for further discussion).

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Lead Testing Matters

On September 1, 2021, the Company’s wholly owned subsidiary Magellan announced the expansion of the Class I voluntary recall of its LeadCare test kits for the detection of lead in blood, which it had initiated in May 2021 after identifying an issue in certain manufactured lots of its LeadCare test kits. As a result of the identified issue, impacted test kit lots could potentially underestimate blood lead levels when processing patient blood samples. Although it was initially believed that the root cause of the issue related to the plastic containers used for the treatment reagent, additional studies have indicated that the root cause related to the third-party-sourced cardboard trays that held the treatment reagent containers. Upon correction of the identified supplier issue, shipment of product resumed during the second quarter of fiscal 2022. The Company continues to work closely with the FDA in its execution of the recall activities, which has included Magellan notifying customers and distributors affected by the recall and providing instructions for the return of impacted test kits. Of the $5,100 estimated and accrued as of September 30, 2021 to cover the estimated costs of the recall, it was estimated at September 30, 2022 that the remaining costs of the recall exceeded the amount accrued, and as a result, an adjustment was made to the product recall reserve. The effect of this adjustment is reflected in product recall costs (adjustment) within the Consolidated Statement of Operations for the year ended September 30, 2022, and results in approximately $430 of remaining accrued product recall costs reflected in the Consolidated Balance Sheet as of September 30, 2022. Anticipated recall-related costs primarily include temporary labor costs, product replacement and/or refund costs, mailing/shipping costs, attorneys’ fees and other miscellaneous costs.

As described in Item 3. “Legal Proceedings”, on April 17, 2018, the Company’s wholly owned subsidiary Magellan received a subpoena from the U.S. Department of Justice (“DOJ”) regarding its LeadCare product line. The subpoena outlined documents to be produced, and the Company is cooperating with the DOJ in this matter. The Company maintains rigorous policies and procedures to promote compliance with applicable regulatory agencies and requirements and is working with the DOJ to promptly respond to the subpoena, including responding to additional information requests that have followed receipt of the subpoena in April 2018. The Company has executed tolling agreements to extend the statute of limitations. In March and April 2021, DOJ issued two subpoenas, both to former employees of Magellan, calling for witnesses to testify before a federal grand jury related to this matter. In September and October 2021, DOJ issued additional subpoenas to individuals seeking testimony and documents in connection with its ongoing investigation. It is the Company’s understanding that multiple witnesses have testified before the federal grand jury and the DOJ’s investigation is ongoing. Discussions continue with the DOJ to explore resolution of the matter. As of September 30, 2022, in accordance with applicable accounting guidance, the Company believes a loss is probable in the DOJ LeadCare legal matter and has accrued $10,000 as an estimate of the cost to resolve the DOJ LeadCare legal matter, which is reflected in litigation and select legal costs within the Consolidated Statement of Operations for the year ended September 30, 2022. The Company cannot predict when the investigation will be resolved or the outcome of the investigation, and the ultimate resolution of the DOJ LeadCare legal matter may exceed the amount accrued at September 30, 2022 and could be material to the Company. Expense for attorneys’ fees related to this matter totaling $3,510, $2,803 and $2,035 is included within the Consolidated Statements of Operations for the years ended September 30, 2022, 2021 and 2020, respectively.

Magellan submitted 510(k) applications in December 2018, seeking to reinstate venous blood sample-types for its LeadCare II, LeadCare Plus and LeadCare Ultra testing systems. In the second fiscal quarter of 2019, the FDA informed Magellan that each of these 510(k) applications had been put on Additional Information hold. On July 15, 2019, we provided responses to the FDA’s requests for Additional Information. These 510(k) applications have since expired and are no longer under FDA review. Further, while Magellan’s LeadCare testing systems remain cleared for marketing by the FDA and permitted for use with capillary blood samples, the FDA advised that it has commissioned a third-party study of the Company’s LeadCare testing systems using both venous and capillary blood samples. According to the FDA, the results of the field study will be used in conjunction with other information to determine whether further action by the FDA or the CDC is necessary to protect the public health. The Company intends to fully cooperate with the FDA or CDC on any follow-up based on the third-party study.

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During October 2019, the FDA performed a follow-up inspection of Magellan’s manufacturing facility. The FDA issued five Form FDA 483 observations. On March 18, 2020, we participated in a regulatory meeting with the FDA at the FDA’s request to further discuss the Form FDA 483 observations and our remediation efforts. Since the inspection, we have submitted a number of written responses to the FDA regarding the five Form FDA 483 observations issued in the October 2019 inspection, and have worked diligently to execute a remediation plan. During October 2020, the FDA issued Establishment Inspection Reports which closed out the inspections from June 2017 and October 2019 under 21 C.F.R.20.64(d)(3).

During June 2021, the FDA performed an inspection of Magellan’s manufacturing facility. As a result of this inspection, the FDA issued one Form 483 observation. On August 3, 2021, FDA sent Magellan a close-out letter for the Warning Letter that FDA issued to Magellan on October 23, 2017. FDA’s close-out letter notified Magellan that FDA has completed an evaluation of Magellan’s corrective actions in response to FDA’s Warning Letter, and based on FDA’s evaluation, Magellan has addressed the issues identified in the Warning Letter. FDA’s close-out letter also stated that future FDA inspections of Magellan and regulatory activities will further assess the adequacy and sustainability of Magellan’s corrections.

Results of Operations

Fourth Quarter

Net earnings for the fourth quarter of fiscal 2022 decreased 14% to $5,705, or $0.13 per diluted share, from net earnings for the fourth quarter of fiscal 2021 of $6,657, or $0.15 per diluted share. The level of net earnings in the fourth quarter of fiscal 2022 results primarily from the decline in net revenues and operating income in our Life Science segment, stemming from the continued softening in demand for COVID-19 related reagents during the quarter. As it relates to our Life Science segment net revenues, a significant number of our Life Science segment customers now use our molecular reagents in multiple tests, including non-COVID-19 related tests. This development makes it increasingly difficult to accurately estimate the portion of molecular reagent sales related specifically to COVID-19. As a result, we are no longer reporting the portion of Life Science segment net revenues related to COVID-19. Such net revenues were identified and reported throughout fiscal 2021 and totaled approximately $23,300 in the fourth quarter of fiscal 2021. By contrast, the fourth quarter of fiscal 2021 was adversely affected by approximately $5,600, or $0.10 per diluted share, of LeadCare product recall expenses and a $4,596, or $0.08 per diluted share, upward adjustment to the fair value of acquisition consideration related to the acquisition of the business of GenePOC, Inc. (“GenePOC”) (i.e., incremental expense), offsetting the impact of higher net revenues and resulting gross profit.

Consolidated net revenues for the fourth quarter of fiscal 2022 totaled $65,675, a decrease of 14% compared to the fourth quarter of fiscal 2021.

Net revenues from the Diagnostics segment for the fourth quarter of fiscal 2022 increased 14% to $39,187, compared to the fourth quarter of fiscal 2021, comprised of a 22% increase in non-molecular assay products, partially offset by a 27% decrease in molecular assay products. Non-molecular assay product sales include the addition of sales of the BreathTek product, which was acquired July 31, 2021. The fourth quarter of fiscal 2022 represents the sixth consecutive quarter our Diagnostics segment has shown positive revenue growth versus the same quarter in the prior fiscal year. Our Diagnostics segment generated a $122 operating loss for the fourth quarter of fiscal 2022, compared to an operating loss of $11,680 in the fourth quarter of fiscal 2021, largely due to the fiscal 2021 fourth quarter including $5,600 of LeadCare product recall expenses and $4,596 upward adjustment to the fair value of acquisition consideration related to the acquisition of the business of GenePOC (i.e., incremental expense) (see Note 3, “Fair Value Measurements” of the Consolidated Financial Statements).

With a 53% decrease in net revenues from molecular reagents products and an 8% decrease in net revenues from immunological reagents products, net revenues for our Life Science segment decreased 37% to $26,488 during the fourth quarter of fiscal 2022 compared to the fourth quarter of fiscal 2021. Our Life Science segment generated $10,064 of operating income, or a margin of 38%, for the fourth quarter of fiscal 2022, a decrease of $13,118 from $23,182, or a margin of 55%, achieved in the fourth quarter of fiscal 2021, primarily due to the decrease in net revenues and associated gross profit margins, resulting in large part from the immunological reagent products representing a higher percentage of net revenues, as described in the respective sections below.

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Fiscal Year

Net earnings for fiscal 2022 decreased 41% to $42,459, or $0.96 per diluted share, from net earnings for fiscal 2021 of $71,407, or $1.62 per diluted share. The level of net earnings in fiscal 2022 reflects primarily: (i) the overall increase in operating expenses described in the Operating Expenses section below; and (ii) the decrease in gross profit margins resulting from immunological reagent products representing a higher percentage of both Life Science segment and total consolidated net revenues in the fiscal 2022 period, compared to higher margin molecular reagent products in the fiscal 2021 period. As previously noted, we are no longer reporting the portion of Life Science segment net revenues related to COVID-19, noting that such net revenues totaled approximately $111,900 in fiscal 2021.

Consolidated net revenues for fiscal 2022 totaled $333,018, an increase of 5% compared to fiscal 2021.

Diagnostics segment net revenues increased 22% to $155,903 in fiscal 2022, comprised of a 27% increase in non-molecular assay products including the addition of sales of the BreathTek product, which was acquired July 31, 2021, partially offset by a 5% decrease in molecular assay products. Our Diagnostics segment generated operating income of $2,982 in fiscal 2022, compared to an operating loss of $7,280 in fiscal 2021. This year over year improvement in operating income resulted primarily from the combined effects of: (i) the Diagnostics segment’s increase in net revenues; and (ii) fiscal 2021 including $5,600 of LeadCare product recall expenses. These factors contributing to the improvement in operating margin were partially offset by the effect of lower gross profit margins and increase in operating expenses described in the respective sections below.

With a 30% decrease in net revenues from molecular reagents products and a 43% increase in net revenues from immunological reagents products, including COVID-19 related products, net revenues for our Life Science segment decreased 7% to $177,115 during fiscal 2022 compared to fiscal 2021. Our Life Science segment generated $86,040 of operating income in fiscal 2022, a decrease of $28,974 from fiscal 2021, primarily due to the decrease in net revenues and gross profit margins, resulting from the aforementioned mix of products sold, and the increase in operating expenses, as described in the respective sections below.

REVENUE OVERVIEW

Below are analyses of the Company’s net revenues, by reportable segment, provided for each of the following:

- By Geographic Region

- By Product Platform/Type

Revenue Overview – By Reportable Segment & Geographic Region

Revenues for the Diagnostics segment, in the normal course of business, may be affected from quarteryear to quarteryear by buying patterns of major distributors and reference laboratories, seasonality and the severity of seasonal diseases and outbreaks (including the ongoing COVID-19 pandemic), and foreign currency exchange rates. Revenues for the Life Science segment, in the normal course of business, may be affected from quarteryear to quarteryear by buying patterns of major IVD manufacturing customers, severity of disease outbreaks (specifically the ongoing COVID-19 pandemic), and foreign currency exchange rates. We believe that the overall breadth of our product lines serves to reduce the variability in consolidated revenues due to these factors.

Revenues for each of our segments and the geographic regions therein are shown below.

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See Note 2, “Revenue Overview- By Product Platform/Type

The revenues generated by each of our reportable segments result primarily from the saleRecognition” of the following segment-specific categories of products:

Diagnostics

Life Science

RevenuesConsolidated Financial Statements for each product platform/type, as well as its relative percentage of segment revenues, are shown below.detailed revenue disaggregation information.

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Following is a discussion of the net revenues generated by each of these product platforms/types:types and/or disease states:

Diagnostics Segment Products

Molecular Assay ProductsThe Diagnostics segment’s overall 22% growth in net revenues during fiscal 2022 primarily results from the combined effects of the following:

During fiscal 2017,

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Life Science Segment Products

During fiscal 2017,2022, net revenues from ourfor the Life Science segment increased 12%, withdecreased 7% from fiscal 2021. While the level of net revenues from molecular component sales increasing 8% compared toduring fiscal 2016 and2022 reflects the significant decline in demand for COVID-19 related reagents during the last half of fiscal year 2022, such level of net revenues from immunoassay component sales increasing 15%. Life Science segmentsignificantly outpaced the net revenues increased 5%generated in fiscal 2016, with revenues from2020 (partial pandemic) and fiscal 2019 (pre-pandemic) as follows:

Fiscal 2020

Increased 34% in total; 17% for molecular component sales remaining flat compared to fiscal 2015reagents and revenues from immunoassay component sales increasing 8%. Our58% for immunological reagents

Fiscal 2019

Increased 175% in total; 295% for molecular components business’ growth was negatively impacted by the movement in currency exchange rates since fiscal 2016, with revenues increasing 12% on a constant-currency basis over fiscal 2016. During fiscal 2017, our Life Science segment continued to benefit from (i) increased revenues in the steadily-expanding tropical disease product family, with sales of such products doubling to approximately $2,200 in fiscal 2017;reagents and (ii) increased revenue from sales into China, with such sales totaling approximately $5,900 during fiscal 2017 (approximately $1,000 in the molecular components business and $4,900 in the immunoassay components business) – representing an approximate 44% increase over fiscal 2016. New products, including EPIK^™ miRNA Select, JetSeq^™, and SensiFast^™Lyo-Ready, also contributed to the increase, withincremental year-over-year revenue growth of approximately $700.108% for immunological reagents

Foreign Currency

Fluctuations in foreign currency exchange rates sincein fiscal 20162022 compared to fiscal 2021 had an approximate $1,200$5,200 unfavorable impact on fiscal 20172022 consolidated net revenues; $400$1,700 within the Diagnostics segment and $800$3,500 within the Life Science segment. This compares toyear-to-year currency exchange rates having an approximate $1,700 unfavorable$9,200 favorable impact on consolidated net revenues in fiscal 2016; $7002021; $1,300 within the Diagnostics segment and $1,000$7,900 within the Life Science segment. Due to natural hedge relationships with expenses, both cost of sales and operating expenses, the overall impact of exchange rate fluctuations on net earnings was not significant during fiscal 2017, 2016 or 2015.

Significant Customers

Revenue concentrations related to certain customers within our Diagnostics and Life Science segments are set forth in Note 815, “Reportable Segments and Major Concentration Data” of the accompanying Consolidated Financial Statements.

Gross Profit:

Overall gross profit margins during fiscal 2022 have been unfavorably impacted by a decline in net revenues from our Life Science segment’s molecular reagent products, which are some of our highest margin products. During fiscal 2022, approximately 28% of consolidated net revenues related to sales of molecular reagent products, compared to approximately 41% during fiscal 2021, which included the peak of the COVID-19 pandemic.

Additionally, overall gross profit margins in fiscal 2022 have been unfavorably impacted in our Diagnostics segment by the previously discussed LeadCare product recall (see “Lead Testing Matters” above) and production capacity ramp-up costs at our Cincinnati and Quebec Revogene manufacturing facilities.

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Medical Device Tax

On January 1, 2013, the medical device tax established as part of the U.S. health care reform legislation became effective,Operating Expenses—Segment Detail and as a result, the Company made its first required tax deposit near the end of January 2013. During fiscal 2017, 2016 and 2015, the Company recorded approximately $0, $500 and $1,900, respectively, of medical device tax expense, which is reflected as a component of cost of sales in the accompanying Consolidated Statements of Operations. During December 2015, the Consolidations Appropriations Act of 2016 imposed atwo-year moratorium on this excise tax effective January 1, 2016. This moratorium expires December 31, 2017, and we are unable to predict any future legislative changes or developments related to this moratorium or excise tax.

Gross Profit:Corporate

The overall gross profit margin decrease

Operating expenses in fiscal 2022 increased $25,851 to $133,965. Major components of this increase were as follows: