Sotera Health (SHC) risk factors, FY2025 10-K

Risks Related to the Company

1. 01We may be subject to evolving changes in environmental, health and safety regulations, which may negatively impact our business
2. 02Safety risks associated with the use, storage, transportation and disposal of potentially hazardous materials, such as EO and Co-60, may result in accidents or liabilities that materially affect our results of operationsNew
3. 03Potential health risks associated with the use of EO may subject us to future liability claims and associated adverse effects22% rewritten
4. 04We are currently defending certain litigation, and we are likely to be subject to additional litigation in the future
5. 05Allegations of our failure to properly perform our services may expose us to potential product liability claims, recalls, penalties and reputational harm or could otherwise cause a material adverse effect on our business
6. 06Safety risks associated with the transportation of potentially hazardous materials, such as EO and Co-60, may result in accidents or liabilities that materially affect our results of operations
7. 07Industry trends could impact the demand for our products and services and could have a material adverse effect on our business
8. 08Our business is highly competitive, and if we fail to compete successfully, our business, prospects, financial condition or results of operations may be materially adversely affected
9. 09The price of our input costs, including labor, raw materials and energy, are subject to inflation and other market risks and our ability to pass through increases in our input costs is highly dependent on market conditions
10. 10We may be adversely affected by global and regional economic and political instability50% rewritten
11. 11If we are unable to increase capacity at existing facilities and build new facilities in a timely and cost-effective manner, we may not achieve our expected revenue growth or profitability or such revenue growth and profitability, if any, could be delayed
12. 12We depend upon our ability to attract and retain highly skilled employees. If we fail to attract and retain the talent required for our business, our operations could be adversely affected and our business could be materially harmed
13. 13We occupy many of our facilities under long-term leases, and we may be unable to renew our leases at the end of their terms
14. 14We conduct sales and distribution operations on a worldwide basis and are subject to a variety of risks associated with doing business outside the United States
15. 15We are subject to significant regulatory oversight of our import and export operations due to the nature of some of our product offerings50% rewritten
16. 16these permits and licenses could delay or prevent us from fulfilling our obligations to our customers or suppliers, which could harm our business, financial condition or results of operationsNew
17. 17Severe health events or environmental events, including impacts from climate change, and natural disasters, could have material adverse effects on our business, financial condition and results of operations
18. 18Our business may be subject to system interruptions, cybersecurity incidents and unauthorized data disclosures
19. 19We may be incorporating AI technologies into our products, services and processes, which may present business, compliance and reputational risksNew
20. 20Part of our growth strategy is to pursue strategic transactions, including acquisitions, which subjects us to risks that could harm our business and we may not be able to find suitable acquisition targets or integrate strategic acquisitions successfully into our existing business
21. 21Our internal control over financial reporting may not be effective and our independent registered public accounting firm may not be able to certify as to their effectiveness, which could have a significant and adverse effect on our business and reputation
22. 22We rely on intellectual property rights to maintain our competitive position and third parties have claimed in the past, and may claim in the future, that we infringe or misappropriate their intellectual property rights
23. 23We are subject to complex and rapidly evolving data privacy and security laws and regulations, and any ineffective compliance efforts with such laws and regulations may adversely impact our business
24. 24We have a history of net losses and may not maintain profitability in future periods49% rewritten
25. 25We may incur impairment charges on our goodwill and other intangible assets with indefinite lives as well as other long-lived assets and intangible assets with definite lives, which could adversely affect our business, financial condition or results of operations
26. 26Unionization efforts and labor regulations could materially increase our costs or limit our flexibility33% rewritten
27. 27Our business is subject to a variety of laws involving the cannabis industry, many of which are unsettled and still developing and which could subject us to claims or otherwise harm our business49% rewritten
28. 28Government or private civil antitrust actions could harm our business, prospects, financial condition or results of operations
29. 29We may have greater than anticipated tax liabilities, which could harm our business, revenue and financial results

Risks Related to Our Indebtedness and Liquidity

1. 30As of December 31, 2025, our total indebtedness was approximately $2,169.5 million, all of which is indebtedness of our subsidiary Sotera Health Holdings, LLC (“SHH”) that is guaranteed by the Company and certain of our other subsidiariesNew
2. 31defined below) that governs the Secured Notes (as defined below) (together the “Combined Senior Secured Credit Facilities”). If new indebtedness is added to our current debt levels, the related risks that we now face could intensifyNew
3. 32The agreements governing our debt, including the Secured Notes, contain various covenants that impose restrictions on us and limit our flexibility in operating our business52% rewritten
4. 33Our cash flows may not be sufficient to service our indebtedness, and if we are unable to satisfy our obligations under our indebtedness, we may be required to seek other financing alternatives, which may not be successful
5. 34A lowering or withdrawal of the ratings assigned to our debt by rating agencies may increase our future borrowing costs and reduce our access to capital
6. 35SHH is a holding company, and therefore its ability to make any required payment on our credit agreements depends upon the ability of its subsidiaries to pay it dividends or to advance it funds

Risks Related to Ownership of Our Common Stock

1. 36The market and trading volume of our common stock may be volatile, and you could lose all or part of your investment
2. 37The future issuance of additional common stock in connection with our incentive plans, acquisitions or otherwise will dilute all other stockholdings21% rewritten
3. 38Future offerings of debt or equity securities by us may adversely affect the market price of our common stock
4. 39A sale of a substantial number of shares of our common stock, or the perception that such sales might occur, may cause the price of our common stock to decline22% rewritten
5. 40Any sales of securities by any of our stockholders described above could have a material adverse effect on the market price of our common stock
6. 41The interests of our Sponsors may differ from the interests of other stockholders of the Company36% rewritten
7. 42Certain of our stockholders have the right to engage or invest in the same or similar businesses as us
8. 43Anti-takeover provisions in our Amended and Restated Certificate of Incorporation, Amended and Restated Bylaws and the Stockholders Agreement, as well as Delaware law, could discourage a change in control of our company or a change in our management
9. 44Our Amended and Restated Certificate of Incorporation designates specific courts as the exclusive forum for certain litigation that may be initiated by our stockholders, which could limit our stockholders’ abilities to obtain a favorable judicial forum for disputes with us or our directors, officers or employees
10. 45We do not anticipate paying any dividends on our common stock in the foreseeable future, and, consequently, our stockholders’ ability to achieve a return on their investment depends on appreciation in the price of our common stock