Invitae (NVTAQ) Financial Report Summaries

Risks

• Risks related to our business and strategy
• We have had a history of operating losses that have impacted our overall cash flows and we have identified conditions and events that raise substantial doubt about our ability to continue as a going concern. We will need to adjust our operating expenditures to be commensurate with our expected levels of revenue and raise additional capital to finance operations. Our inability to raise additional capital on acceptable terms in the future may limit our ability to maintain an adequate amount of available liquidity and execute our current operating plan.
• We have a large amount of debt. Servicing our debt requires a significant amount of cash, we may not have sufficient cash flow from our business to repay the principal or service our debt, and we may need to refinance all or a significant portion of our debt, and our business, financial condition and results of operations may be materially and adversely affected.
• We expect to continue incurring significant losses, and we may not successfully execute our plan to achieve or sustain profitability.
• Our strategic realignment and the associated headcount reduction have significantly changed our business, resulted in significant expense, may not result in anticipated savings, and has and will continue to disrupt our business.
• We rely on highly skilled personnel in a broad array of disciplines and, if we are unable to hire, retain or motivate these individuals, or maintain our corporate culture, we may not be able to maintain the quality of our services or grow effectively.
• If third-party payers, including managed care organizations, private health insurers and government health plans, do not provide adequate reimbursement for our tests or we are unable to comply with their requirements for reimbursement, our commercial success could be negatively affected.
• We need to scale our infrastructure in advance of demand for our tests and other services, and our failure to generate sufficient demand for our tests and other services would have a negative impact on our business and our ability to attain profitability.
• The global macroeconomic environment could negatively impact our business, our financial position and our results of operations.
• Adverse developments affecting the financial services industry could adversely affect our current and projected business operations and our financial condition and results of operations.
• We maintain our cash at financial institutions in balances that exceed federally insured limits.
• We hold a significant amount of marketable securities in U.S. Treasury notes and U.S. government agency securities.
• We face intense competition, which is likely to intensify further as existing competitors devote additional resources to, and new participants enter, the markets in which we operate. If we cannot compete successfully, we may be unable to increase our revenue or achieve and sustain profitability.
• Security breaches, privacy issues, loss of data and other incidents could compromise sensitive or personal information related to our business or prevent us from accessing critical information and expose us to liability, which could adversely affect our business and our reputation.
• If we are not able to continue to generate substantial demand for our tests, our commercial success will be negatively affected.
• Our success will depend on our ability to use rapidly changing genetic data to interpret test results accurately and consistently, and our failure to do so would have an adverse effect on our operating results and business, harm our reputation and could result in substantial liabilities that exceed our resources.
• Our industry is subject to rapidly changing technology and new and increasing amounts of scientific data related to genes and genetic variants and their role in disease. Our failure to develop tests to keep pace with these changes could make us obsolete.
• Our success will depend in part on our ability to generate sales using our internal sales team and through alternative marketing strategies.
• Impairment in the value of our intangible assets has and may in the future have a material adverse effect on our operating results and financial condition.
• We rely on a limited number of suppliers or, in some cases, sole suppliers, for some of our laboratory instruments, materials and services, and we may not be able to find replacements or immediately transition to alternative suppliers.
• We depend on our information technology systems, and any failure of these systems could harm our business.
• If our laboratories or other facilities become inoperable due to disasters, health epidemics or for any other reasons, we will be unable to perform our tests and our business will be harmed.
• Development of new tests is a complex process, and we may be unable to commercialize new tests on a timely basis, or at all.
• Ethical, legal and social concerns related to the use of genetic information could reduce demand for our tests.
• We have acquired businesses and assets that have caused and may in the future cause us to incur debt or significant expense.
• The market for patient data software is competitive, and our business will be adversely affected if we are unable to successfully compete.
• Our international business exposes us to business, regulatory, political, operational, financial and economic risks associated with doing business outside of the United States.
• Our ability to use our net operating loss carryforwards and certain other tax attributes may be limited.
• Risks related to our indebtedness
• The terms of our Senior Secured 2028 Notes will require us to meet certain operating and financial covenants and place restrictions on our operating and financial flexibility. If we raise additional capital through debt financing, the terms of any new debt could further restrict our ability to operate our business.
• We may not have the ability to raise the funds necessary to repurchase our outstanding convertible notes upon a fundamental change or major transaction, as applicable, and the indenture governing our current senior secured notes contains, and our future debt may contain, limitations on our ability to pay cash to repurchase our outstanding convertible notes and other debt.
• The conditional conversion feature of our 2024 Notes, if triggered, may adversely affect our financial condition and operating results.
• Risks related to government regulation
• If the FDA regulates the tests we currently offer as LDTs as medical devices, we could incur substantial costs and our business, financial condition and results of operations could be adversely affected.
• If we fail to comply with federal, state and foreign laboratory licensing requirements, we could lose the ability to perform our tests or experience disruptions to our business.
• Complying with numerous statutes and regulations pertaining to our business is an expensive and time-consuming process, and any failure to comply could result in substantial penalties.
• Healthcare policy changes, including legislation reforming the U.S. healthcare system, may have a material adverse effect on our financial condition, results of operations and cash flows.
• If we use hazardous materials in a manner that causes injury, we could be liable for resulting damages.
• We could be adversely affected by violations of the FCPA and other worldwide anti-bribery laws.
• Risks related to our intellectual property
• A jury found that our Anchored Multiplex PCR, or AMP, chemistry and products using AMP infringe the intellectual property of one of our competitors, and we may be required to redesign the technology, obtain a license, cease using the AMP chemistry altogether and/or pay significant damages, among other consequences, any of which would have a material adverse effect on our business as well as our financial condition and results of operations.
• Litigation or other proceedings or third-party claims of intellectual property infringement or misappropriation will require us to spend significant time and money, and could in the future prevent us from selling our tests or impact our stock price.
• Developments in patent law could have a negative impact on our business.
• Our inability to effectively protect our proprietary technologies, including the confidentiality of our trade secrets, could harm our competitive position.
• We may not be able to enforce our intellectual property rights throughout the world.
• Third parties may assert that our employees or consultants have wrongfully used or disclosed confidential information or misappropriated trade secrets.
• Risks related to being a public company
• If we do not regain compliance with NYSE's listing standards pertaining to a minimum average price per share, NYSE may delist our common stock, which could result in adverse consequences to our company and our common stock's liquidity, and potential events of default under certain of our debt agreements.
• We incur increased costs and demands on management as a result of compliance with laws and regulations applicable to public companies, which could harm our operating results.
• If we are unable to maintain effective internal control over financial reporting, investors may lose confidence in the accuracy and completeness of our reported financial information and the market price of our common stock may be negatively affected.
• New climate reporting rules in California and other jurisdictions could require significant time, attention, and resources from management, and could also lead to increased costs and liabilities.
• Our stock price is volatile, and you may not be able to sell shares of our common stock at or above the price you paid.
• If securities or industry analysts issue an adverse opinion regarding our stock or do not publish research or reports about our company, our stock price and trading volume could decline.
• We have never paid dividends on our capital stock, and we do not anticipate paying dividends in the foreseeable future.
• Anti-takeover provisions in our charter documents and under Delaware law could discourage, delay or prevent a change in control and may affect the trading price of our common stock.
• Our certificate of incorporation designates the Court of Chancery of the State of Delaware as the sole and exclusive forum for certain types of actions and proceedings that may be initiated by our stockholders, which could limit our stockholders’ ability to obtain a favorable judicial forum for disputes with us or our directors, officers or other employees.
• Sales of a substantial number of shares of our common stock in the public market could cause our stock price to fall.