What changed in this filing

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Item 1. Business

2026-02-27 compared with 2025-02-28 · 718 added, 674 removed, 1494 unchanged (48% of the section changed)

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Our laboratory services business includes technical laboratory and testing services and professional interpretation of laboratory results by licensed physicians.

Our therapeutic development business is focused on developing drug candidates for treating a broad range of cancers using a novel nanoencapsulation and targeted therapy platform designed to improve the therapeutic window and pharmacokinetic profile, or PK profile, of new and existing cancer drugs.

Our therapeutic development business is focused on developing product candidates for treating a broad range of cancers using a novel nanoencapsulation and targeted therapy platform designed to improve the therapeutic window and pharmacokinetic profile, or PK profile, of new and existing cancer drugs.

Mission and Vision

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Our Laboratory Services Business

We have broad testing capabilities with a testing and testing services menu that is scalable and affordable to our customers.

We have broad testing capabilities with a testing services menu that is scalable and affordable for our customers.

Our testing services include:

Comprehensive anatomic pathology testing services, including gastrointestinal pathology, dermatopathology, urologic pathology, breast pathology, neuropathology, and hematopathology.

These services are supported by our expansive geographic presence with Clinical Laboratory Improvement Amendments of 1988, or CLIA, licensed laboratories in the United States.

These services are supported by our expansive geographic presence with the Clinical Laboratory Improvement Amendments of 1988, or CLIA, licensed laboratories in the United States.

We have also made significant investment in digital pathology using artificial intelligence, or AI, technology, which allows us to digitize specimen slides instead of the traditional method of microscopy.

Precision diagnostics testing services, including next-generation sequencing, or NGS, tests for biopharma research and clinical tests for rare disease, hereditary cancer, reproductive health, and many other disease subtypes.

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and consultations in hematopathology and surgical pathology.

We also offer testing services to pharmaceutical or biotech companies, contract research organizations, or CROs, or sponsored testing programs, which we call BioPharma services.

We also offer testing services and licensing to pharmaceutical or biotech companies, contract research organizations, or CROs, or sponsored testing programs, which we call BioPharma services.

Picture is a patient-centric telemedicine platform that prioritizes patient convenience and education, giving consumers the power to initiate testing and access to clinical support.

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Our Laboratory Services Technology Platform

Our proprietary technology platform for our laboratory services business includes proprietary gene probes, data suppression and comparison algorithms, adaptive learning software, and proprietary laboratory information management systems.

This platform provides a broad test menu, the ability to rapidly develop and launch new tests, customizable test offerings, lower cost per test, and high efficiency.

As an example, this technology platform allowed us to rapidly respond to the 2019 novel coronavirus disease, or COVID-19, pandemic and scale our business to provide COVID-19 tests with reliable results and rapid turnaround time in a way that surpassed even our largest competitors.

We are proud that through this effort we supplied approximately 19.4 million COVID-19 tests from 2020 through 2023.

Our proprietary technology platform for our laboratory services business includes proprietary gene probes, data suppression and comparison algorithms, AI learning software, and proprietary laboratory information management systems.

Additionally, we have developed our own image management system, which was created to address the growing demand for custom features necessitated by our high daily case throughput, to support all lines of business and to enable the deployment and integration of AI tools to assist pathologists in their diagnoses.

These platforms provide a broad test menu, the ability to rapidly develop and launch new tests, customizable test offerings, lower cost per test, and high efficiency.

Our Therapeutic Development Business - Fulgent Pharma

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Nano-drug delivery, or nanoencapsulation, refers to a technology where active pharmaceuticals are encapsulated within miniature capsules to protect and control the release of these pharmaceuticals in a targeted manner.

Unlike other nano drug delivery materials such as Human Serum Albumin, which is only soluble in water, our nano-drug delivery materials used for our drug candidates in development are soluble not only in water, but also in various organic solvents, as well as capable of hot melt mixing with active pharmaceutical ingredients, or APIs.

We believe these advantages will allow us to generate a much broader range of drug candidate formulations, particularly amorphous drug candidate formulations, which can be used for both intravenous, or IV, and oral formulations with a goal to improve the PK profile, as well as safety and efficacy, for encapsulated drugs and therapeutics.

The goal of our nano-drug delivery platform is to develop drug candidates to treat various diseases for which we believe the current standard of care is inadequate or may be improved.

The target markets for these drug candidates are large and well-established, as shown in the figures below:

Unlike other nano drug delivery materials such as Human Serum Albumin, which is only soluble in water, our nano-drug delivery materials used for our product candidates in development are soluble not only in water, but also in various organic solvents, as well as capable of hot melt mixing with active pharmaceutical ingredients, or APIs.

We believe these advantages will allow us to generate a much broader range of product candidate formulations, particularly amorphous product candidate formulations, which can be used for both intravenous, or IV, and oral formulations with a goal to improve the PK profile, as well as safety and efficacy, for encapsulated drugs and therapeutics.

The goal of our nano-drug delivery platform is to develop product candidates to treat various diseases for which we believe the current standard of care is inadequate or may be improved.

The target markets for these product candidates are large and well-established, as shown in the figures below:

opportunity shown

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Head & Neck, or H&N, market opportunity for both 2 nd line and 3 rd line therapy

Ampullary market opportunity for 2 nd line therapy

Non-small-cell lung cancer, or NSCLC

Our current research and development progress for certain of our candidates and assets is shown in the pipeline chart below.

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(i) Insurance;

(ii) Institutional, including hospitals, medical institutions, other laboratories, governmental bodies, payors, municipalities, and large corporations;

(ii) Institutional, including hospitals, medical institutions, other laboratories, governmental bodies, and large corporations;

and (iii) Patients who pay directly.

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Laboratory Services Sales and Marketing

Our sales and marketing force for our laboratory services business currently consists of internal teams of sales and marketing professionals, respectively, with deep experience in our industry, as well as a network of primarily U.S.

Our sales and marketing force for our laboratory services business currently consists of internal teams of sales and marketing professionals with deep experience in our industry, as well as a network of primarily U.S.

field-based sales representatives who are knowledgeable about our tests and testing services.

Historically, we have significantly relied on organic growth and word-of-mouth among our customers to generate interest in our tests, which we believe demonstrates the value of our offerings.

In recent years, we have invested significant time and capital to strengthen our sales and marketing efforts, including increasing the size and restructuring the organization of our internal team, re-focusing our initiatives and strategies, and increasing the overall scope of our marketing activities.

Historically, we have relied significantly on organic growth and word-of-mouth among our customers to generate interest in our tests, which we believe demonstrates the value of our offerings.

In recent years, we have invested significant time and capital to strengthen our sales and marketing efforts, including increasing the size of and restructuring the organization of our internal team, re-focusing our initiatives and strategies, and increasing the overall scope of our marketing activities.

On a regular basis, we continue to evaluate the need to grow the size of our sales team and marketing resources.

Laboratory Services Research and Development

We have assembled a highly qualified team with expertise in a number of fields important to our business, such as bioinformatics, genetics, software engineering, laboratory management, drug development, and sales and marketing.

We have assembled a highly-qualified team with expertise in a number of fields important to our business, such as bioinformatics, genetics, software engineering, AI R&D engineering, and laboratory management.

This team conducts all of our research and development activities related to our laboratory services business, including efforts to develop and curate our expansive library of genetic information and further expand our testing and testing services technology platform.

We were pleased with the launch of our Ultra Rapid Whole Genome Sequencing service in 2025.

Fulgent Pharma-Pre-Clinical Studies and Clinical Trials

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We began enrollment of a Phase 2, randomized, multi-center, open-label trial of FID-007 in patients with recurrent or metastatic H&N squamous cell carcinoma at various sites in the United States in the second quarter of 2024.

Up to 46 patients will be randomly

assigned (1:1) to one of two treatment arms:

Up to 46 patients will be randomly assigned (1:1) to one of two treatment arms:

FID-007 (75 mg/m2) plus cetuximab or Arm B:

FID-007 (125 mg/m2) plus cetuximab.

We expect to complete the trial by early 2026.

We currently anticipate releasing preliminary data for this trial in or around June 2025 and final results in or around June 2026.

Assuming favorable results, we plan to investigate FID-007 in a Phase 3 registrational clinical trial in patients diagnosed with H&N squamous cell carcinoma, and potentially seek regulatory approval in the United States through the 505(b)(2) pathway, which may shorten the clinical trial process and accelerate potential commercialization.

FID-022 and ADC Pre-Clinical Development

We are also continuing to engage in other clinical and preclinical development utilizing our nano-drug delivery platform.

In our preclinical studies, we observed our second drug candidate, FID-022, nanoencapsulated SN38, to have superior efficacy over irinotecan in various xenograft cancer models, including colon, bile duct, ovarian, and pancreatic cancers, with no significant unexpected toxicity observed in both rat and monkey Good Laboratory Practice, or GLP, toxicity studies.

We plan to next evaluate FID-022 in a Phase 1/1b clinical trial in patients diagnosed with these cancers.

The IND for this trial was cleared by the FDA in January 2025.

In connection with this trial, we plan to enroll 42 patients at sites located in the United States and to begin dosing patients for this trial in mid-2025.

In addition, we have also made a significant advancement in development of antibody drug conjugates, or ADCs, using our novel patented linker and payload platform technology.

In preclinical studies, we observed our ADC to have better efficacy over different tumors with a broad range of target antigens expression level compared with some of the best ADC benchmarks on the market in preclinical studies.

In the meantime, ADCs honing to novel targets using our novel platform technology are also being prepared with the goal of generating leading candidates for clinical studies.

We have completed the patient enrollment and expect to complete the trial by early 2026.

We released the preliminary data for this trial based on 39 randomized patients at the European Society for Medical Oncology, or ESMO, in October 2025 and we anticipate announcing our interim findings for this trial in June 2026 and expect a full data readout by the second half of 2027.

Assuming favorable results, we plan to investigate FID-007 in a Phase 3 registrational clinical trial in patients diagnosed with H&N squamous cell carcinoma to initiate as early as the first half of 2027, and to potentially seek regulatory approval in the United States through the 505(b)(2) pathway, which may shorten the clinical trial process and accelerate potential commercialization.

FID-022 Phase 1/1b Clinical Trial

We are also currently conducting a Phase 1/1b clinical trial to evaluate the safety and tolerability of our second product candidate, FID-022 (nanoencapsulated SN38).

In our pre-clinical studies, we observed FID-022 to have superior efficacy over irinotecan in various xenograft cancer models, including colon, bile duct, ovarian, and pancreatic cancers, with no significant unexpected toxicity observed in either rat or monkey Good Laboratory Practice, or GLP, toxicity studies.

We have completed the first dose level of FID-022 in December 2025, and the second dose level was completed in January 2026.

We commenced dosing of the third dose level in February 2026.

Our goal is to determine a maximum tolerated dose within the next year.

We plan to enroll 42 patients at sites located in the United States for this Phase 1/1b trial.

ADC Pre-Clinical Development

We have also made a significant advancement in development of antibody drug conjugates, or ADCs, using our novel patented linker and payload platform technology.

In pre-clinical studies, we observed our ADC to have better efficacy over different tumors with a broad range of target antigens expression level when compared to some of the best ADC benchmarks also under evaluation in pre-clinical studies.

ADCs honing to novel targets using our platform technology are also being prepared with the goal of generating additional lead candidates for clinical studies.

Our Suppliers

We rely on a limited number of suppliers for certain laboratory substances used in the chemical reactions incorporated into our tests and testing services, which we refer to as reagents, as well as for the sequencers and various other equipment and materials we use in our laboratory operations.

We rely on a limited number of suppliers for certain laboratory substances used in the chemical reactions incorporated in our tests and testing services, which we refer to as reagents, as well as for the sequencers and various other equipment and materials we use in our laboratory operations.

In particular, we rely on Illumina Inc., or Illumina, as the sole supplier of the next generation sequencers and associated reagents we use to perform our genetic tests and as the sole provider of maintenance and repair services for these sequencers;

on Roche Holdings AG for certain laboratory equipment, supplies, and services for our immunohistochemistry services;

on Beckman Coulter Diagnostics for certain laboratory equipment, supplies, and services for our flow cytometry tests and testing services;

on Leica Biosystems for an automated digital scanning solution to scale up digital pathology operations;

and on Abbott Laboratories for certain laboratory equipment, supplies, and services for our FISH tests and testing services.

Additionally, our therapeutic development business relies on ANP Technologies, Inc.

for certain laboratory services, equipment, tools, and drug intermediates in connection with our research and development efforts.

While there are several sequencer suppliers that we believe could replace Illumina, and while we believe that we have sufficient alternative suppliers for our other needs, our laboratory operations or therapeutic development efforts could be interrupted if we encounter delays or difficulties in connection with securing these supplies, services, reagents, sequencers, other equipment, materials, or maintenance and repair services, which could occur for a variety of reasons, including if we need a replacement or temporary substitute for any of our limited or sole suppliers and are not able to locate and make arrangements with an acceptable replacement or temporary substitute.

Our competitors for our laboratory services business include dozens of companies focused on pathology, genetic, and diagnostic testing services, including specialty and reference laboratories that offer traditional single-gene and multi-gene tests and other diagnostic test providers.

The competitors in our laboratory services business include dozens of companies focused on pathology, genetic, and diagnostic testing services, including specialty and reference laboratories that offer traditional single-gene and multi-gene tests and other diagnostic test providers.

Principal competitors include companies such as Ambry Genetics Corporation, a subsidiary of Tempus AI, Inc.;

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GeneDx Holdings Corp.;

Guardant Health, Inc.;

Laboratory Corporation of America Holdings;

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Instances where potential competitors are aligned with key suppliers or are themselves suppliers could provide these potential competitors with significant advantages.

Further, hospitals, research institutions,

and eventually individual physicians and other practitioners may also seek to perform at their own facilities the type of genetic or diagnostic testing we would otherwise perform for them.

Further, hospitals, research institutions, and eventually individual physicians and other practitioners may also seek to perform at their own facilities the type of genetic or diagnostic testing we would otherwise perform for them.

In this regard, continued development of, and potential associated relative decreases in the cost of, equipment, reagents, and other materials and databases and genetic data interpretation services may enable broader direct participation in genetic testing and analysis and drive down the use of third-party testing companies such as ours.

Moreover, cost decreases and increased direct participation, as well as cost-saving initiatives on the part of government entities and other insurance payors could intensify the downward pressure on the price for genetic analysis and interpretation generally.

Moreover, the clinical diagnostic testing field continues to undergo significant consolidation, permitting larger clinical laboratory service providers to increase cost efficiencies and service levels and potentially resulting in more intense competition.

The development and commercialization of new drug candidates is highly competitive.

The development and commercialization of new product candidates is highly competitive.

Our competitors include drug delivery platform companies and 505(b)(2) drug developers in the cancer therapeutics area.

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larger customer bases;

more expansive brand recognition;

greater brand recognition;

established manufacturing capabilities and facilities;

deeper market penetration;

substantially greater financial, technological, research and development resources and selling and marketing capabilities;

and considerably more experience dealing with insurance payors.

As a result, they may be able to respond more quickly to changes in customer requirements or preferences, develop faster and better advancements for their technologies, product candidates and tests, create and implement more successful strategies for the promotion and sale of their tests, obtain more favorable results from insurance payors regarding coverage and reimbursement for their offerings, adopt more aggressive pricing policies for their tests, secure supplies from vendors on more favorable terms, or devote substantially more resources to infrastructure and systems development.

substantially greater financial, technological, research and development resources and selling and marketing capabilities and considerably more experience dealing with insurance payors.

As a result, they may be able to respond more quickly to changes in customer requirements or preferences, develop faster and better advancements for their technologies, product candidates and tests, create and implement more successful strategies for the promotion and sale of their tests, obtain more favorable results from insurance payors regarding coverage and reimbursement for their offerings, adopt more aggressive pricing policies for their tests, secure supplies from vendors on more favorable terms or devote substantially more resources to infrastructure and systems development than us.

In addition, competitors may be acquired by, receive investments from, or enter into other commercial relationships with larger, well-established, and well-financed companies.

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Intellectual Property

Intellectual property is essential to our strategy and capturing the value of research output.

Intellectual property is essential to our strategy and in capturing the value of research output.

We rely on a combination of registered and unregistered intellectual property rights, including trade secrets, certain licenses, patents, trademarks, and customary contractual protections, to protect our core technology and intellectual property.

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We also seek to preserve the integrity and confidentiality of our proprietary technology and processes by maintaining physical security of our premises and physical and electronic security of our information technology systems.

Further, we seek to obtain and maintain patent rights intended to cover the technologies incorporated into, or used to produce, our drug candidates, the compositions of matter of our drug candidates and their methods of use and manufacture, as well as other inventions that are important to our business.

Further, we seek to obtain and maintain patent rights intended to cover the technologies incorporated into, or used to produce, our product candidates, the compositions of matter of our product candidates and their methods of use and manufacture, as well as other inventions that are important to our business.

The patent families comprising our patent portfolio are primarily focused on our nano-drug delivery platform technology, including FID-007 and FID-022 and other candidates we may develop, for delivery of water insoluble or poorly soluble drugs for treatments of disease conditions, including cancer.

Worldwide, we own or exclusively in-license over 20 issued or allowed patents and over 10 active patent applications as of December 31, 2025.

This includes eight issued or allowed U.S.

Patents in these patent families are expected to expire by 2034, and patent applications in these patent families, if granted, are expected to expire as far out as 2044, subject to any patent term disclaimers, adjustments, or extensions.

Patents and/or patent applications in these families are active in multiple jurisdictions, including the United States, Australia, Canada, China, European Patent Organization, Germany, New Zealand, Japan, and Switzerland.

This includes nine issued or allowed U.S.

Patents in these patent families are expected to expire by 2034, and patent applications in these patent families,

if granted, are expected to expire as far out as 2045, subject to any patent term disclaimers, adjustments, or extensions.

Patents and/or patent applications in these families are active in multiple jurisdictions, including the United States, Australia, Canada, The People’s Republic of China, or the PRC or China, the European Patent Organization, Germany, New Zealand, Japan, and Switzerland.

In addition to these owned and exclusively licensed patents and active patent applications, we also license patents on a non-exclusive and/or territory-restricted basis.

In particular, as of December 31, 2024, we own or exclusively in-license 18 issued patents and five patent applications relating to FID-007 and related

formulations.

In particular, as of December 31, 2025, we own over 20 issued patents and about 10 patent applications relating to FID-007 and related formulations.

United States and foreign patents (Canada, China, Germany, France, United Kingdom, Japan, Australia, and New Zealand) were granted in these families, and these patents are expected to expire by 2034, absent any patent term extension.

Individual patent terms extend for varying periods of time, depending upon the date of filing of the patent application, the date of patent issuance, and the legal term of patents in the countries in which they are obtained.

We also rely on in-licensing opportunities to develop, strengthen, and maintain our proprietary position in the fields targeted by our drug candidates, including FID-007 and FID-022.

In June 2017, we entered into an exclusive license agreement with ANP Technologies, Inc., or ANP, as amended on December 28, 2017, and May 1, 2024.

Under the agreement, ANP granted us ownership of certain patents and patent applications, and an exclusive, worldwide, perpetual, irrevocable, and sublicensable license to certain rights in patents and patent applications under which we may develop and commercialize FID-007 and FID-022 and related formulations for human therapeutic, prophylactic, and diagnostic uses.

We do not currently have any obligations to pay royalties pursuant to the terms of the ANP License Agreement.

The ANP License Agreement term expires upon the date of expiration or the invalidation of the last of the patents licensed to us unless terminated earlier under its terms.

The ANP License Agreement provides ANP the right to terminate for an uncured breach by us, or if we are insolvent, the subject of a bankruptcy proceeding, or potentially other reasons.

We may terminate the ANP License Agreement at any time on 90 days’ notice.

Additionally, the ANP License Agreement provides that ANP will be responsible for preparing, filing, prosecuting and maintaining all of the licensed patents at ANP’s expense.

If ANP decides that it is not interested in prosecuting or maintaining a particular licensed patent, it will notify us in writing, we will have the right to assume such responsibilities at our own cost and expense.

We may also grant a sublicense provided that the sublicensee agrees to (i) be bound by the terms of the ANP License Agreement;

(ii) in the event the sublicensee initiates a proceeding to challenge the enforceability of any licensed patent, ANP may terminate the sublicense agreement;

(iii) the ANP License Agreement controls in the event that there is any inconsistency with the sublicense agreement;

and (iv) the sublicensee will submit quarterly reports to ANP consistent with the reporting provisions in the ANP License Agreement.

Individual patent terms extend for varying periods of time depending upon the date of filing of the patent application, the date of patent issuance, and the legal term of patents in the countries in which they were obtained.

Previously, in June 2017, we entered into an exclusive license agreement with ANP Technologies, Inc., or ANP, as amended on December 28, 2017, and May 1, 2024.

Under the agreement, ANP granted us ownership of certain patents and patent applications, and an exclusive, worldwide, perpetual, irrevocable, and sub-licensable license to certain rights in patents and patent applications under which we may develop and commercialize FID-007 and FID-022 and related formulations for human therapeutic, prophylactic, and diagnostic uses.

In July 2025, we completed an acquisition of 100% of the outstanding equity of ANP and all rights on multiple proprietary product platforms.

This acquisition enables us to secure full ownership of the patents we previously licensed from ANP to develop, strengthen, and maintain our proprietary position in the fields targeted by our product candidates, including FID-007 and FID-022, which are currently in clinical studies.

This acquisition further enables us to secure ownership of technology improvements made by ANP, including improvements on nano-drug delivery platform technology.

As of December 31, 2025, we submitted at least five patent applications related to FID-022, and at least three patent applications related to ADC, that, if granted, are expected to expire as far out as 2045.

We also own registered and unregistered trademark and service mark rights under applicable U.S.

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As we operate clinical laboratories in the United States, we are required to hold certain federal licenses, certifications, and permits to conduct our business.

Clinical Laboratory Improvement Amendments, or CLIA, establishes quality standards for all laboratory testing to ensure the accuracy, reliability and timeliness of patient test results.

Our laboratories located in California, Texas, Georgia, Massachusetts, and Arizona are CLIA-certified and are accredited by the College of American Pathologists, or CAP, and the Centers for Medicare & Medicaid Services, or CMS.

CLIA establishes quality standards for all laboratory testing to ensure the accuracy, reliability and timeliness of patient test results.

Our laboratories located in California, Texas, Georgia, Massachusetts, and Arizona are CLIA-certified by the Centers for Medicare & Medicaid Services, or CMS, and are accredited by the College of American Pathologists, or CAP.

CLIA requires that we hold certificates for each of our laboratories applicable to the categories of testing that each laboratory performs and that we comply with various standards with respect to personnel qualifications, facility administration, proficiency testing, quality control and assurance, and inspections.

Each of our laboratories must obtain a certificate from CMS, the agency that enforces CLIA, and CLIA compliance and certification are prerequisites to be eligible to bill government payors and many private payors for our tests.

Each of our laboratories must obtain a certificate from CMS, the agency that enforces CLIA.

CLIA compliance and certification are prerequisites to be eligible to bill government payors and many private payors for our tests.

Each CLIA certificate is valid for two years from the date of issuance.

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criminal penalties;

exclusion from the Medicare and Medicaid programs;

and significant adverse publicity.

exclusion from the Medicare and Medicaid programs and significant adverse publicity.

In addition, we elect to participate in the accreditation program of CAP.

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An inspection by CAP is performed in lieu of inspection by CMS for CAP-accredited laboratories.

Because we are accredited by the CAP Laboratory Accreditation Program, we are deemed to also comply with CLIA.

Because we are accredited by CAP, we are deemed to also comply with CLIA.

State and Foreign Clinical Laboratory Licensure

Our clinical laboratories are required to maintain certain state laboratory licenses.

State laws establish standards for day-to-day operations of our laboratories, including requirements with respect to the training and skills required of personnel, quality control, and

proficiency testing requirements.

If our clinical laboratories are out of compliance with the applicable state regulations, state agencies may suspend, restrict, or revoke our license to operate our clinical laboratories, assess substantial civil money penalties, or impose specific corrective action plans.

State laws establish standards for day-to-day operations of our laboratories, including requirements with respect to the training and skills of personnel, quality control, and proficiency testing.

corrective action plans.

Any such actions could materially affect our business.

Currently, we maintain good standing with all state authorities.

Currently, we maintain good standing with all applicable state authorities.

Additionally, certain states may require licensure for out-of-state laboratories that accept specimens originated from those states.

Our Texas laboratory currently holds the out-of-state licenses from New York, California, Maryland, Pennsylvania, and Rhode Island to perform testing on specimens from these states, and our California laboratory holds the required out-of-state laboratory licenses from New York, Maryland, Pennsylvania, and Rhode Island in order to perform testing on specimens from these states.

Our Australian laboratory is also subject to Australian regulatory requirements.

Our Texas laboratory currently holds out-of-state licenses from New York, California, Maryland, Pennsylvania, and Rhode Island to perform testing on specimens from these states, and our California laboratory holds the required out-of-state laboratory licenses from New York, Maryland, Pennsylvania, and Rhode Island in order to perform testing on specimens from these states.

Our laboratory located in Australia is also subject to Australian regulatory requirements.

Other states may adopt similar licensure requirements in the future, which could require us to modify, delay, or discontinue our operations in such jurisdictions.

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FDA Oversight of Our Tests and Testing Services

The tests and testing services that we offer may be considered medical devices.

Pursuant to its authority under the Federal Food, Drug, and Cosmetic Act, or FDC Act, the FDA has jurisdiction over medical devices, which are defined to include, among other things, in vitro diagnostic products, or IVDs, used for clinical purposes.

The laws and regulations governing the marketing of IVDs are evolving, are extremely complex, and in many instances there are no significant regulatory or judicial interpretations of these laws and regulations.

The FDA regulates, among other things, the research, testing, manufacturing, safety, labeling, storage, recordkeeping, premarket clearance or approval, marketing and promotion, and sales and distribution of medical devices in the United States to ensure that medical products distributed domestically are safe and effective for their intended uses.

In addition, the FDA regulates the import and export of medical devices.

Many of the instruments, reagents, kits, or other consumable products used within our laboratories are regulated as medical devices and therefore must comply with FDA quality system regulations and certain other device requirements.

The FDA regulates, among other things, the research, testing, manufacturing, safety, labeling, storage, recordkeeping, premarket clearance or approval, marketing and promotion, and sales and distribution of medical devices in the United States to ensure that medical products, including IVDs, distributed domestically are safe and effective for their intended uses.

IVDs are defined in the FDA’s implementing regulations as devices intended for use in the collection, preparation, and examination of specimens taken from the human body.

In addition, the FDA regulates the import and export of medical devices and IVDs.

Many of the instruments, reagents, kits, and other consumable products used within our laboratories are regulated as medical devices and therefore must comply with FDA quality system regulations and certain other device requirements.

We have policies and procedures in place to ensure that we source such materials from suppliers that are in compliance with any applicable medical device regulatory requirements.

We believe our tests fall within the definition of laboratory developed tests, or LDTs.

LDTs, which are a subset of IVDs that are intended for clinical use and are designed, manufactured, and used within a single laboratory.

Although the FDA has statutory authority to assure that medical devices, including IVDs, are safe and effective for their intended uses, the FDA had historically exercised enforcement discretion and not enforced applicable provisions of the FDC Act and regulations with respect to LDTs.

However, in May 2024, the FDA issued a final rule aimed at regulating LDTs under the current medical device framework and phasing out its existing enforcement discretion policy for this category of diagnostic tests;

the final rule became effective on July 5, 2024.

The LDT enforcement policy phase-out process will occur in gradual stages over a total period of four years, with pre-market approval applications for high-risk tests to be submitted by the 3.5-year mark.

Moderate-risk and low-risks tests are expected to be in compliance at the four-year mark, although FDA has stated that, if premarket submissions are pending review, it will continue to exercise enforcement discretion with respect to those tests.

The FDA’s final rule is complex and, concurrently, the agency announced several exceptions from the requirement to comply with full medical device regulatory controls, depending upon the specific nature of the LDT and the clinical laboratory that is offering such LDT for use by health care providers.

Importantly, under the agency’s transition plan, LDTs that were marketed prior to the official publication date of the final rule (May 6, 2024) are considered to be “currently marketed” tests.

“Currently marketed” tests will become subject to many of the device regulatory controls but are exempted from the premarket review and FDA authorization requirements, unless or until significant modifications are made to such “currently marketed” tests.

Similarly, the FDA has created a partial enforcement discretion policy for tests approved by the New York Department of Health’s Clinical Laboratory Evaluation Program, whereby such tests also do not need to undergo FDA premarket review but must come into compliance with all other device general controls in a staggered fashion between 2025 and 2027.

We have begun the process of evaluating the final rule’s potential impact on our tests, our operations, and our business more generally.

Publication of the LDT final rule prompted the American Clinical Laboratory Association, or ACLA, and one of its members, on May 29, 2024, as well as the Association for Molecular Pathology, or AMP, and one of its members, on August 19, 2024, to file

complaints against the FDA in the Eastern District of Texas and the Southern District of Texas, respectively.

Both complaints allege that the agency does not have authority to promulgate the LDT final rule and seek to vacate the FDA’s action;

We believe all of our tests that have been commercialized in the United States fall within the definition of laboratory developed tests, or LDTs.

LDTs are diagnostic tests that are intended for clinical use and are designed, manufactured, and used within a single laboratory.

The FDA had historically exercised enforcement discretion and not enforced the FDC Act and its medical device regulations with respect to LDTs, which the agency asserted were effectively a subset of IVDs.

However, as LDTs increased in complexity over recent decades, the FDA took a risk-based approach to their regulation, while Congress also signaled interest in clarifying the regulatory landscape for LDTs as stakeholders across the spectrum expressed a need for regulatory certainty and clear operating guidelines.

Following several years of inaction by Congress on this issue, in May 2024, the FDA issued a final rule aimed at regulating LDTs under the medical device framework and phasing out its longstanding enforcement discretion policy for this category of diagnostic tests;

the final rule became effective on July 5, 2024 and was expected to begin entering into force against non-exempt “LDT manufacturers” in May 2025.

Following issuance of the LDT final rule, the American Clinical Laboratory Association, or ACLA, and one of its members, as well as the Association for Molecular Pathology, or AMP, and one of its members, filed complaints against the FDA in the Eastern District of Texas and the Southern District of Texas, respectively.

Both complaints alleged that the agency did not have authority to promulgate the LDT final rule and sought to vacate the FDA’s action.

The two cases were subsequently consolidated into a single action pending in the Eastern District of Texas.

Briefing is ongoing in the consolidated case and the outcome is uncertain.

The ongoing litigation could potentially affect the FDA’s plans to implement these new LDT requirements, making the implementation timeline somewhat uncertain although no preliminary injunction has been issued to date.

Accordingly, the agency has continued its implementation efforts by actively providing guidance and training to clinical laboratories on how to comply with medical device general controls.

Following the November 2024 federal elections, it is unclear whether the incoming Trump Administration will continue to defend the FDA’s rulemaking action in the consolidated litigation in Texas or if it will take steps to rescind or modify the LDT final rule.

Affected stakeholders also continue to press for a comprehensive legislative solution to create a harmonized paradigm for oversight of LDTs by both the FDA and CMS, instead of implementation of the FDA’s final rule, which may be disruptive to the industry and to patient access to certain diagnostic tests.

However, this FDA rulemaking was initiated after years of failed congressional attempts to harmonize the regulatory paradigms applicable to LDTs and other IVDs, making it unclear whether any legislative efforts would be successful going forward.

The outcome of the November 2024 elections on the composition of the 2025-2026 Congress, with transition of both the Senate and House to Republican control, also creates uncertainties for the diagnostic industry.

Even though we presently commercialize our tests as LDTs, the FDA may disagree that our currently marketed tests are within the scope of its LDT criteria, or tests we develop may in the future become subject to more onerous regulation by the FDA.

Depending upon the characteristics and regulatory status of each individual test, we could in the future be required to obtain premarket clearance for our tests under Section 510(k) of the FDC Act or approval of a pre-market approval application, or PMA.

The process for submitting a 510(k) premarket notification and receiving FDA clearance usually takes from three to twelve months, but it can take significantly longer, and clearance is never guaranteed.

On March 31, 2025, the U.S.

District Court for the Eastern District of Texas vacated the final rule in its entirety and remanded the matter to the FDA, holding that the rule exceeded the agency’s authority under the FDC Act.

The agency did not appeal the district court’s decision.

As a result, the phase-in deadlines established by the rule are no longer operative, and in September 2025 the FDA implemented the court’s vacatur of the final rule with a formal public notice.

FDA court’s decision removes the regulatory burden that the final rule would have imposed on laboratories such as ours had it been upheld.

However, uncertainty remains regarding the future of federal oversight in this area, as Congress could

enact new legislation establishing a statutory framework for regulating all IVDs, including LDTs.

Affected stakeholders continue to press for a comprehensive legislative solution to create a harmonized paradigm for oversight of LDTs by both the FDA and CMS.

Even though we presently commercialize our tests as LDTs, the FDA may disagree that our currently marketed tests are within the scope of its LDT criteria or the definition recognized by the ACLA vs.

FDA decision.

Should any of our diagnostic tests be determined to be IVDs rather than non-device laboratory-developed tests, we could in the future be required to obtain pre-market clearance under Section 510(k) of the FDC Act or approval of a pre-market approval application, or PMA, depending upon the characteristics and regulatory status of each individual test.

The process for submitting a 510(k) pre-market notification and receiving FDA clearance usually takes from three to twelve months, but it can take significantly longer and clearance is never guaranteed.

The process for submitting and obtaining FDA approval of a PMA generally takes from one to three years, or even longer, and approval is not guaranteed.

PMA approval typically requires extensive clinical data and can be significantly longer, more expensive and more uncertain than the 510(k) clearance process.

If premarket review is required for some or all of our tests, whether currently marketed or developed in the future, the FDA could require that we stop selling our tests and testing services pending clearance or approval and conduct clinical testing prior to making submissions to FDA to obtain premarket clearance or approval.

The FDA could also require that we label our tests as investigational or limit the labeling claims we are permitted to make.

If pre-market review is required for some or all of our tests, should they be determined to fall outside of the LDT criteria, the FDA could require that we stop selling the tests pending clearance or approval and conduct clinical testing prior to making submissions to FDA to obtain pre-market clearance or approval for such IVDs.

The FDA could also require that we label such IVDs as investigational or limit the labeling claims we are permitted to make.

The FDA enforces its medical device requirements by various means, including inspection and market surveillance.

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and criminal prosecution.

Failure to comply with any applicable FDA requirements could trigger a range of enforcement actions by the FDA, including warning letters, civil monetary penalties, fines, injunctions, criminal prosecution, consent decrees, repairs, replacements, refunds, recalls or seizures of products, operating restrictions, partial suspension or total shutdown of operations and denial of or challenges to applications for clearance or approval, as well as significant adverse publicity.

Failure to comply with any applicable FDA requirements for medical devices and IVDs could trigger a range of enforcement actions by the FDA, including warning letters, civil monetary penalties, fines, injunctions, criminal prosecution, consent decrees, repairs, replacements, refunds, recalls or seizures of products, operating restrictions, partial suspension or total shutdown of operations and denial of or challenges to applications for clearance or approval, as well as significant adverse publicity.

Foreign Regulation of Diagnostic Medical Devices

Medical devices, including IVD products, are subject to extensive regulation, such as premarket review, marketing authorization, or certification, by regulatory agencies or notified bodies in other countries.

Regulatory requirements and approval or certification processes are not harmonized and vary from one country to another, and international regulators and notified bodies are not bound by the findings of the FDA.

Medical devices, including IVD products, are subject to extensive regulation, such as pre-market review, marketing authorization, or certification by regulatory agencies or notified bodies in other countries.

Regulatory requirements and approval or certification processes are not harmonized, and vary from one country to another.

International regulators and notified bodies are not bound by the findings of the FDA.

The IVDR (as defined and described below) has introduced an enhanced level of EU regulatory oversight for diagnostic tests developed as LDTs, and Fulgent’s commercial laboratory in California may be considered a health institution in the context of the IVDR because it provides testing for EU citizens.

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According to the IVD Directive, EU Member States have presumed compliance with these essential requirements for devices that are in conformity with the relevant national standards transposing the harmonized standards, such as ISO 13485:2016, the quality system standard for medical device manufacturers.

IVD medical devices, other than devices for performance evaluation, must bear the CE mark of conformity when they are placed on the European market.

IVD medical devices, other than devices for performance evaluation, must bear the CE mark, which stands for European Conformity, of conformity when they are placed on the European market.

The CE mark is a declaration by the manufacturer that the product meets all the appropriate provisions of the applicable legislation implementing the relevant European Directive.

As a general rule, the manufacturer must follow the EU declaration of conformity procedure to obtain or apply a CE mark.

The advertising and promotion of medical devices is also subject to general principles set forth by EU directives, which establish that devices that are CE marked may only be marketed and advertised in

the EU in accordance with their intended purpose.

The advertising and promotion of medical devices is also subject to general principles set forth by EU directives which establish that devices that are CE marked may only be marketed and advertised in the EU in accordance with their intended purpose.

Specific requirements defined at the EU Member State level may vary between jurisdictions and may limit or restrict a manufacturer’s promotional communications with healthcare professionals.

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Unlike the IVD Directive, the IVDR has binding legal force throughout every Member State.

The major goal of the IVDR was to standardize diagnostic procedures within the EU, increase reliability of diagnostic analysis and enhance patient safety.

The major goal of the IVDR is to standardize diagnostic procedures within the EU, increase reliability of diagnostic analysis and enhance patient safety.

Under the IVDR as enacted by the European Commission, or EC, IVDs are subject to additional legal requirements.

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Under the IVDR and subsequent amendments, IVDs already certified under the IVD Directive by a Notified Body may remain on the market until December 31, 2027, and IVDs certified under the IVD Directive without the involvement of a Notified Body may be placed on, or remain in, the market for up to two additional years (until December 31, 2029) depending on the classification of the IVD.

Nonetheless, the manufacturers of such devices must comply with specific requirements in the IVDR according to the timelines established, but ultimately, such products, as with all new IVDs, will have to undergo the IVDR’s conformity assessment procedures.

Nonetheless, the manufacturers

of such devices must comply with specific requirements in the IVDR according to the timelines established, but ultimately, such products, as with all new IVDs, will have to undergo the IVDR’s conformity assessment procedures.

Notified Bodies are entities accredited by an EU Member State to independently assess whether a product to be placed on the market meets certain preordained standards and that manufacturing facilities and records comply with applicable requirements such as International Organization for Standardization, or ISO, standards such as ISO 13485 and ISO 27001.

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The EC has designated 13 Notified Bodies to perform conformity assessments under the IVDR.

MedTech Europe has issued guidance relating to the IVDR in several areas, e.g., clinical benefit, technical documentation, state of art, accessories, and EUDAMED.

On December 5, 2023, the European Commission adopted Implementing Regulation (EU) 2023/2713 designating five EU Reference Laboratories covering the following types of high-risk, class D IVDs:

MedTech Europe has issued guidance relating to the IVDR in several areas, e.g., clinical benefit, technical documentation, state of art, accessories, and EUDAMED, or European Database on Medical Devices.

In December 2023, the European Commission adopted Implementing Regulation (EU) 2023/2713 designating five EU Reference Laboratories covering the following types of high-risk, class D IVDs:

hepatitis and retroviruses;

herpesviruses;

herpes viruses;

bacterial agents;

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The designated EU Reference Laboratories are responsible for verifying performance of IVDs in accordance with common specifications, batch testing of class D IVDs, collaborating with Notified Bodies to develop best practices for IVD conformity assessments, and providing scientific and technical assistance on the implementation of the IVDR.

We believe that LDTs produced outside of the EU and involving samples obtained from EU citizens must fully comply with the IVDR and accordingly, we are working towards ISO 13485 compliance and preparing certain of our tests for conformity assessments by a designated Notified Body.

We have made initial submissions to our Notified Body and expect to receive CE marking under the IVDR for certain of our tests in the future, subject to ongoing review and auditing by the regulatory agency.

If we are not able to obtain and maintain regulatory compliance, we may not be permitted to market our laboratory services in the EU and/or may become subject to enforcement by EU Competent Authorities, bodies with authority to act on behalf of the government of the applicable EU Member State to ensure that the requirements of the regulation are met.

Most recently, on December 6, 2025, the European Commission released a proposal to amend the IVDR with the goal of simplifying the applicable rules, reducing the administrative burden on manufacturers, and enhancing the predictability and cost-effectiveness of the certification procedure while maintaining a high level of public health protections for EU patients and consumers.

We believe that LDTs produced outside of the EU and involving samples obtained from EU citizens must fully comply with the IVDR and accordingly, we are in full compliance with ISO 13485 standards and submitted certain of our tests for conformity assessments by a designated Notified Body.

In July 2025, we announced that we had received CE certification under the IVDR for our germline NGS, system, which includes FulgentExome and Fulgent Pipeline Manager, or PLM.

If we are not able to obtain and maintain regulatory compliance for such CE-marked test products, we may not be permitted to market our laboratory services in the EU and/or may become subject to enforcement by EU Competent Authorities, bodies with authority to act on behalf of the government of the applicable EU Member State to ensure that the applicable regulatory requirements are met.

Our tests also may become subject to other foreign premarket review, compliance, and regulatory approval regimes applicable to IVDs as we continue to expand and offer our services internationally.

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The FTC has very broad enforcement authority, and failure to abide by the substantive requirements of the FTC Act and other consumer protection laws can result in administrative or judicial penalties, including civil penalties, injunctions affecting the manner in which we would be able to market services or products in the future, or criminal prosecution.

Further, as medical devices under the FDA’s LDT Final Rule, certain of our tests will become subject to the device labeling requirements that presently apply to other FDA-regulated IVD products, which prohibit the distribution of false or misleading labels or promotional labeling for such products.

Enforcement actions by the FDA may include, among other things, the issuance of untitled or warning letters, injunctions, and civil or criminal penalties.

In addition, when marketing our diagnostic tests to clinical laboratories and medical institutions outside of the United States (including our operations in Australia), we are subject to foreign regulatory requirements governing promotional statements and IVD labeling.

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Many insurance payors do not have a set reimbursement rate for this miscellaneous code.

Prior to performing a test, we may negotiate the reimbursement rate with the payor if the benefits investigation has determined the test to be medically necessary, and the payor has issued prior authorization.

After we file the claim, we may also need to resubmit documentation or appeal a denial.

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We do not believe that any of our tests meet the current definition of ADLT.

We, therefore, must report private payor rates for our tests every three years.

Therefore, we must report private payor rates for our tests every three years.

Laboratories that fail to report the required payment information may be subject to substantial civil monetary penalties.

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Since December 2019, Congress has passed a series of laws to modify PAMA’s statutory requirements related to the data reporting period and phase-in of payment reductions under the CLFS for CDLTs that are not ADLTs.

Most recently, on September 26, 2024, Section 221 of the Continuing Appropriations and Extensions Act, 2025, was passed, and it delayed data reporting requirements for CDLTs that are not ADLTs as well as the phase-in of payment reductions.

The next data reporting period for CDLTs that are not ADLTs will be January 1, 2026 through March 31, 2026, and will be based on the original data collection period of January 1, 2019 through June 30, 2019.

After this data reporting period, the three-year data reporting cycle for these tests will resume (e.g., 2028, 2031, etc.).

Most recently, on February 3, 2026, Section 6226 of the Continuing Appropriations Act, 2026, further delayed the data reporting requirements for CDLTs that are not ADLTs as well as the phase-in of payment reductions.

The next data reporting period will be from May 1, 2026, through July 31, 2026, and will be based on an updated data collection period of January 1, 2025 through June 30, 2025.

The same series of laws modified the phase-in of payment reductions resulting from private payor rate implementation so that a zero percent reduction limit was applied for calendar years, or CYs, 2021 through 2025, as compared to the payment amounts for a test the preceding year.

The Further Continuing Appropriations and Other Extensions Act of 2025 further applied a zero percent

reduction limit for CY 2025.

Consequently, payment may not be reduced by more than 15 percent per year for CYs 2026 through 2028 as compared to the payment amount established for a test the prior year.

HRSA Audits and Investigations

Under Section 6226 of the Continuing Appropriations Act, 2026, a 0% payment reduction will be applied until January 30, 2027, so that the fee schedule amount for a CDLT that is not an ADLT may not be reduced compared to the payment amount for that test in CY 2026.

From January 1, 2027 through December 31, 2028, payment may not be reduced by more than 15% percent per year compared to the payment amount established for a test the preceding year.

HRSA Audit and Investigation

In March 2020, the Coronavirus Aid, Relief, and Economic Security Act, or CARES Act, was enacted, providing for reimbursement to healthcare providers for COVID-19 tests provided to uninsured individuals through a program administered by HRSA.

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The Company recorded approximately $548.9 million of reimbursements from HRSA under the Uninsured Program during the years ended December 31, 2022, 2021, and 2020.

Similar to other laboratories in the industry, the Company is currently being audited by HRSA with respect to its reimbursement for COVID-19 tests furnished to patients believed to be uninsured.

The Company is fully cooperating and working with HRSA’s auditors to resolve any issues, including any reimbursed amounts that may need to be returned to HRSA.

There is uncertainty with respect to the methodology HRSA will use and whether and how they will extrapolate audit results.

Similar to other laboratories in the industry, the Company responded to an audit inquiry from HRSA with respect to its reimbursement for COVID-19 tests furnished to patients believed to be uninsured.

The Company fully cooperated with HRSA’s auditors and provided all requested information.

There is uncertainty with respect to the methodology HRSA will use and whether or how HRSA will extrapolate audit results.

As of the date of this Annual Report, the Company has not received any final audit results from HRSA for this audit and has not received any further requests for information in connection with this audit from HRSA.

The Company has also received a Civil Investigative Demand, or CID, issued by the U.S.

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We are fully cooperating with the DOJ in connection with this CID.

See “Contingencies” in Note 8, Debt, Commitments and Contingencies to the Consolidated Financial Statements, and the paragraphs under the heading entitled “Failure to comply with government laws and regulations related to submission of claims for our services could result in significant monetary damages and penalties and exclusion from the Medicare and Medicaid programs and corresponding foreign reimbursement programs.

See “Contingencies” in Note 8, Debt, Commitments and Contingencies to our consolidated financial statements, and the paragraphs under the heading entitled “Failure to comply with government laws and regulations related to submission of claims for our services could result in significant monetary damages and penalties and exclusion from the Medicare and Medicaid programs and corresponding foreign reimbursement programs.

We are also subject to governmental audits and investigations that could result in material refunds or settlement.

Our business, prospects and financial condition may be adversely affected as the result of the current HRSA Audit and CIDs.” included in Item 1A “Risk Factors” of this Annual Report.

Our business, prospects and financial condition may be adversely affected as the result of the HRSA Audit and CIDs.” included in Item 1A “Risk Factors” of this Annual Report.

Rules and Regulations Applicable to Our Pharmaceutical Research and Development Activities

We engage in research and development activities, including pharmaceutical research and development activities through our wholly owned subsidiary, Fulgent Pharma.

Development of therapeutic products is subject to extensive regulation by the FDA and other regulatory agencies.

Development of therapeutic products is subject to extensive regulation by the FDA and

other regulatory agencies.

In particular, government authorities in the United States at the federal, state, and local levels and in other countries regulate, among other things, the research, development, testing, manufacture, quality control, approval, labeling, packaging, storage, record-keeping, promotion, advertising, distribution, post-approval monitoring and reporting, marketing and export and import of therapeutic products.

Generally, therapeutic products require government authorization before they may be clinically tested and commercially marketed for human therapeutic use in the United States and other countries.

The precise regulatory requirements with which we will have to comply are undergoing periodic revisions and refinement.

The precise regulatory requirements with which we will have to comply undergo periodic revisions and refinement.

In the United States, the FDA regulates drugs under the FDC Act and its implementing regulations.

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• the submission to the FDA of an investigational new drug application, or IND, which must become effective before clinical trials may commence;

• performance of adequate and well-controlled clinical trials according to good clinical practices, or GCPs, to establish the safety and efficacy of the drug candidate for its intended use(s);

• performance of adequate and well-controlled clinical trials according to good clinical practices, or GCPs, to establish the safety and efficacy of the product candidate for its intended use(s);

• the submission of a New Drug Application, or NDA, to the FDA;

• satisfactory completion of an FDA inspection of the manufacturing facility or facilities at which the drug candidate is produced to assess readiness for commercial manufacturing and conformance to the manufacturing-related elements of the application, to conduct a data integrity audit, and to assess compliance with current Good Manufacturing Practices, or cGMPs, to assure that the facilities, methods, and controls are adequate;

• satisfactory completion of an FDA inspection of the manufacturing facility or facilities at which the product candidate is produced to assess readiness for commercial manufacturing and conformance to the manufacturing-related elements of the application, to conduct a data integrity audit, and to assess compliance with current Good Manufacturing Practices, or cGMPs, to assure that the facilities, methods, and controls are adequate;

• the FDA’s review and approval of the NDA.

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These trials are used to gain additional experience from the treatment of patients in the intended therapeutic indication.

In certain instances, FDA may mandate the performance of “Phase 4” clinical trials as a condition of approval of an NDA.

Progress reports detailing the results of the clinical trials, among other information, must be submitted at least annually to the FDA, and written IND safety reports must be submitted to the FDA and the investigators for serious and unexpected suspected adverse events, findings from other studies suggesting a significant risk to humans exposed to the investigational drug, findings from animal or in vitro testing that suggest a significant risk for human subjects, and any clinically important increase in the rate of a serious suspected adverse reaction over that listed in the protocol or investigator brochure.

Congress also recently amended the FDC Act, in order to require sponsors of a Phase 3 clinical trial, or other “pivotal study” of a new drug to support marketing authorization (or pivotal trials of medical devices), to design and submit a diversity action plan for such clinical trial.

The action plan must include the sponsor’s diversity goals for enrollment, as well as a rationale for the goals and a description of how the sponsor will meet them.

Sponsors must submit a diversity action plan to the FDA by the time the sponsor submits the relevant clinical trial protocol to the agency for review.

The FDA may grant a waiver for some or all of the requirements for a diversity action plan.

It is unknown at this time how the diversity action plan may affect Phase 3 trial planning and timing or what specific information FDA will expect in such plans, but if the FDA objects to a sponsor’s diversity action plan or otherwise requires significant changes to be made, it could delay initiation of the relevant clinical trial.

In certain instances, the FDA may mandate the performance of “Phase 4” clinical trials as a condition of approval of an NDA.

Progress reports detailing the results of the clinical trials, among other information, must be submitted at least annually to the FDA.

Written IND safety reports must be submitted to the FDA and the investigators for serious and unexpected suspected adverse events, findings from other studies suggesting a significant risk to humans exposed to the investigational drug, findings from animal or in vitro testing that suggest a significant risk for human subjects, and any clinically important increase in the rate of a serious suspected adverse reaction over that listed in the protocol or investigator brochure.

Congress also amended the FDC Act in 2022 to require sponsors of a Phase 3 clinical trial, or other “pivotal study” of a new drug to support marketing authorization (or pivotal trials of medical devices), to design and submit a diversity action plan for such clinical trial.

However, President Trump issued executive orders, or EOs, in January 2025 that rescinded previous EOs mandating affirmative action and Diversity, Equity and Inclusion for federal contractors, effectively ending mandatory diversity action plans.

In addition, an IRB on behalf of each institution that is participating in the clinical trial must conduct a continuing review and reapprove the trial at least annually.

Information about certain clinical trials, including details of the protocol and eventually study results, also must be submitted within specific timeframes to the National Institutes of Health, or NIH, for public dissemination on the ClinicalTrials.gov data registry.

Information related to the investigational product, patient population, phase of investigation, study sites and investigators, and other aspects of the clinical trial is made public as part of the registration of

the clinical trial.

Information about certain clinical trials, including details of the protocol and eventually study results, must also be submitted within specific timeframes to the National Institutes of Health, or NIH, for public dissemination on the ClinicalTrials.gov data registry.

Sponsors are also obligated to disclose the results of their clinical trials after completion.

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The FDA or the sponsor may suspend clinical trials at any time on various grounds, including a finding that the research subjects or patients are being exposed to an unacceptable health risk.

Similarly, an IRB can suspend or terminate approval of a clinical trial at its institution if the clinical trial is not being conducted in accordance with the IRB’s requirements, or if the drug candidate has been associated with unexpected serious harm to patients.

Similarly, an IRB can suspend or terminate approval of a clinical trial at its institution if the clinical trial is not being conducted in accordance with the IRB’s requirements, or if the product candidate has been associated with unexpected serious harm to patients.

Additionally, some clinical trials are overseen by an independent group of qualified experts organized by the clinical trial sponsor, known as a data safety monitoring board or committee.

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The resubmitted application is also subject to review before the FDA accepts it for filing.

The FDA must make a decision on accepting an NDA for filing within 60 days of receipt and inform the sponsor by the 74th day after the FDA’s receipt of the submission whether an application is sufficiently complete to permit substantive review.

The FDA must make a decision on accepting an NDA for filing within 60 days of receipt and inform the

sponsor by the 74th day after the FDA’s receipt of the submission whether an application is sufficiently complete to permit substantive review.

Once the submission is accepted for filing, the FDA begins an in-depth review of the NDA.

Under the goals and policies agreed to by the FDA under PDUFA, the FDA has 10 months from the filing date, to complete its review of a new molecular-entity, or NME, NDA and respond to the applicant, and six months from the filing date of an NME NDA designated for priority review.

Under the goals and policies agreed to by the FDA under PDUFA, the FDA has 10 months from the filing date, to complete its review of a new molecular-entity, or NME, NDA and respond to the applicant six months from the filing date of an NME NDA designated for priority review.

For non-NME NDAs, such as our current and, potentially, future product candidates, the review goals are 10 months from the date of receipt for a standard application and six months from the date of receipt for a priority submission.

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Additionally, the FDA may refer applications for novel drug products or drug products that present difficult questions of safety or efficacy to an advisory committee, typically a panel that includes clinicians and other independent scientific experts, for review, evaluation and a recommendation as to whether the application should be approved and under what conditions, if any.

The FDA is not bound by recommendations of an advisory committee, but it considers such recommendations when making final agency decisions on marketing approval.

The FDA is not bound by recommendations of an advisory committee, but it considers such recommendations when making final decisions on marketing approval.

The FDA likely will reanalyze the clinical trial data, which could result in extensive discussions between the FDA and the applicant during the review process.

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The REMS plan could include medication guides, physician communication plans, assessment plans and/or elements to assure safe use, such as restricted distribution methods, patient registries or other risk minimization tools.

The FDA determines the requirement for a REMS, as well as the specific REMS provisions, on a case-by-case basis.

The FDA determines the requirement of a REMS, as well as the specific REMS provisions, on a case-by-case basis.

If the FDA concludes a REMS plan is needed, the sponsor of the NDA must submit a proposed REMS.

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The Complete Response Letter may require additional pivotal Phase 3 clinical trial(s) and/or other significant and time-consuming requirements related to clinical data, non-clinical data or manufacturing processes, among others.

In September 2025, the FDA began publishing Complete Response Letters soon after issuing them to the respective sponsors, breaking with long standing agency tradition of publishing Complete Response Letters with approval documentation only after the product is approved.

If a Complete Response Letter is issued, the applicant may choose either to resubmit the NDA, addressing all of the deficiencies identified in the letter, or to withdraw the application.

If and when all deficiencies have been addressed to the FDA’s satisfaction in a resubmitted NDA, the FDA will issue an approval letter.

The FDA has committed to reviewing such resubmissions in response to an issued Complete Response Letter in either two or six months, depending on the type of information included.

The FDA has committed to reviewing such resubmissions in response to an issued Complete Response

Letter in either two or six months, depending on the type of information included.

Even if such data and information are submitted, however, the FDA may ultimately decide that the NDA does not satisfy the regulatory criteria for approval.

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Moreover, if there are any modifications to the product, including changes in indications, labeling, or manufacturing processes or facilities, the applicant may be required to submit and obtain FDA approval of a new NDA or an NDA supplement, which may require the applicant to develop additional data or conduct additional non-clinical studies and clinical trials.

In particular, securing

FDA approval for new indications is similar to the process for approval of the original indication and requires, among other things, submitting data from adequate and well-controlled clinical trials to demonstrate the product’s safety and efficacy in the new indication.

In particular, securing FDA approval for new indications is similar to the process for approval of the original indication and requires, among other things, submitting data from adequate and well-controlled clinical trials to demonstrate the product’s safety and efficacy in the new indication.

Even if such trials are conducted, the FDA may not approve any expansion of the labeled indications for use in a timely fashion, or at all.

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The FDA is authorized to designate certain drug products for expedited development or review if they are intended to address an unmet medical need in the treatment of a serious or life-threatening disease or condition.

These programs include fast-track designation, breakthrough therapy designation, and priority review designation.

These programs include fast-track designation, breakthrough therapy designation, priority review designation, and the Commissioner’s National Priority Voucher pilot program.

To be eligible for a fast-track designation, the FDA must determine, based on the request of a sponsor, that a product is intended to treat a serious or life-threatening disease or condition and demonstrates the potential to address an unmet medical need by providing a therapy where none exists or a therapy that may be potentially superior to an existing therapy based on efficacy or safety factors.

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When a marketing application is submitted with a request for priority review, the FDA determines on a case-by-case basis whether the proposed drug represents a significant improvement in treatment, prevention or diagnosis of disease when compared with other available therapies.

Significant improvement may be illustrated by

evidence of increased effectiveness in the treatment of a condition, elimination or substantial reduction of a treatment-limiting drug reaction, documented enhancement of patient compliance that may lead to improvement in serious outcomes, or evidence of safety and effectiveness in a new subpopulation.

Significant improvement may be illustrated by evidence of increased effectiveness in the treatment of a condition, elimination or substantial reduction of a treatment-limiting drug reaction, documented enhancement of patient compliance that may lead to improvement in serious outcomes, or evidence of safety and effectiveness in a new subpopulation.

A priority review designation is intended to direct overall attention and resources to the evaluation of such applications, and to shorten the FDA’s goal for taking action on a marketing application from 10 months to six months from the date of filing for an NME NDA, or from 10 months to six months from the date of receipt for a non-NME NDA.

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The FDA must take certain actions with respect to breakthrough therapies, such as holding timely meetings with and providing advice to the product sponsor, intended to expedite the development and review of an application for approval of a breakthrough therapy.

In 2025, the FDA created a new voucher program called the Commissioner’s National Priority Voucher, or CNPV, with the goal of radically expediting the drug and biological product review and approval process.

The agency may award a CNPV to a company or a specific product candidate that demonstrates alignment with certain national health priorities.

The FDA aims to take action on a marketing application for which a CNPV is used within one to two months after the filing date.

Even if a product qualifies for one or more of these programs, the FDA may later decide that the product no longer meets the conditions for qualification or decide that the time period for FDA review or approval will not be shortened.

Fast-track designation, priority review, and breakthrough therapy designation do not change the standards for approval but may expedite the development or approval process.

None of these programs change the standards for approval but may expedite the development or approval process.

Accelerated Approval Pathway

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The FDA may also grant accelerated approval for such a drug when the product has an effect on an intermediate clinical endpoint that can be measured earlier than an effect on irreversible morbidity or mortality, or IMM, which is reasonably likely to predict an effect on IMM or other clinical benefit, taking into account the severity, rarity, or prevalence of the condition and the availability or lack of alternative treatments or on the basis of an effect on a clinical endpoint other than survival or irreversible morbidity.

As a condition of approval, the FDA may require that a sponsor of a drug receiving accelerated approval perform adequate and well-controlled post-marketing clinical trials to verify and describe the predicted effect on IMM or other clinical endpoint, and the product may be subject to expedited withdrawal procedures.

endpoint, and the product may be subject to expedited withdrawal procedures.

If the FDA concludes that a drug shown to be effective can be safely used only if distribution or use is restricted, it will require such post-marketing restrictions, as it deems necessary to assure safe use of the product.

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The accelerated approval pathway is usually contingent on a sponsor’s agreement to conduct, diligently, additional post-approval confirmatory studies to verify and describe the drug’s clinical benefit.

As a result, a drug candidate approved on this basis is subject to rigorous post-marketing compliance requirements, including the completion of Phase 4 or post-approval clinical trials to confirm the effect on the clinical endpoint.

As a result, a product candidate approved on this basis is subject to rigorous post-marketing compliance requirements, including the completion of Phase 4 or post-approval clinical trials to confirm the effect on the clinical endpoint.

In addition, as part of the Consolidated Appropriations Act for 2023, Congress provided the FDA additional statutory authority to mitigate potential risks to patients from continued marketing of ineffective drugs previously granted accelerated approval.

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Failure to conduct required post-approval studies, or to confirm the predicted clinical benefit of the product during post-marketing studies, allows the FDA to withdraw approval of the drug.

Congress also recently amended the law to give the FDA the option of using

expedited procedures to withdraw product approval if the sponsor’s confirmatory trial fails to verify the claimed clinical benefits of the product.

Congress also amended the law to give the FDA the option of using expedited procedures to withdraw product approval if the sponsor’s confirmatory trial fails to verify the claimed clinical benefits of the product.

All promotional materials for products approved for marketing under the accelerated approval program are subject to prior review by the FDA.

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Instead, in support of such applications, a generic manufacturer must rely on the non-clinical and clinical testing conducted for a drug product previously approved under an NDA, known as the reference listed drug, or RLD.

Unlike the ANDA pathway, which does not allow applicants to submit new clinical data other than bioavailability or bioequivalence data, the 505(b)(2) regulatory pathway does not preclude the possibility that a follow-on applicant would need to conduct additional clinical trials or nonclinical studies to demonstrate safety or effectiveness of the proposed change(s) being made to a previously approved drug.

Unlike the ANDA pathway, which does not allow applicants to submit new clinical data other than bioavailability or bioequivalence data, the 505(b)(2) regulatory pathway does not preclude the possibility that a follow-on applicant would need to conduct additional clinical trials or non-clinical studies to demonstrate safety or effectiveness of the proposed change(s) being made to a previously approved drug.

In order for an ANDA to be approved, the FDA must find that the generic version is identical to the RLD with respect to the active ingredients, the route of administration, the dosage form, the strength of the drug and the conditions of use of the drug.

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Physicians and pharmacists consider a therapeutic equivalent generic drug to be fully substitutable for the RLD.

In addition, by operation of certain state laws and numerous health insurance programs, the FDA’s designation of therapeutic equivalence often results in substitution of the generic drug without the knowledge or consent of either the prescribing physician or patient.

In addition, by operation of certain state laws and numerous health insurance programs, the FDA’s designation of therapeutic

equivalence often results in substitution of the generic drug without the knowledge or consent of either the prescribing physician or patient.

As part of the NDA review and approval process, applicants are required to list with the FDA each patent that has claims that cover the applicant’s product or method of therapeutic use.

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Moreover, to the extent that the Section 505(b)(2) NDA applicant is relying on studies conducted for an already approved product, the applicant also is required to certify to the FDA concerning any patents listed for the NDA-approved product in the Orange Book to the same extent that an ANDA applicant would.

If the follow-on applicant does not challenge the innovator’s listed patents, FDA will not approve the ANDA or 505(b)(2) application until all the listed patents claiming the referenced product have expired.

If the follow-on applicant does not challenge the innovator’s listed patents, the FDA will not approve the ANDA or 505(b)(2) application until all the listed patents claiming the referenced product have expired.

A certification that the new product will not infringe the already approved product’s listed patents, or that such patents are invalid, is called a Paragraph IV certification.

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For the purposes of this provision, an NCE is a drug that contains no active moiety that has previously been approved by the FDA in any other NDA.

An active moiety is the molecule or ion responsible for the physiological or pharmacological action of the drug

An active moiety is the molecule or ion responsible for the physiological or pharmacological action of the drug substance.

In cases where such NCE exclusivity has been granted, an ANDA or 505(b)(2) NDA may not be filed with the FDA until the expiration of five years unless the submission is accompanied by a Paragraph IV certification, in which case the applicant may submit its application four years following the original product approval.

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The length of the patent term extension is related to the length of time the drug or medical device is under regulatory review while the patent is in force.

The restoration period granted on a patent covering a new FDA-regulated medical product is typically one-half the time between the date a clinical investigation on human beings is begun and the submission date of an application for premarket approval of the product, plus the time between the submission date of an application for approval of the product and the ultimate approval date.

product, plus the time between the submission date of an application for approval of the product and the ultimate approval date.

Patent term restoration cannot be used to extend the remaining term of a patent past a total of 14 years from the product’s approval date.

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Rules and Regulations Relating to Companion or Complementary Diagnostics

The success of one or more of our drug candidates may depend, in part, on the development and commercialization of either a companion diagnostic or a complementary diagnostic.

The success of one or more of our product candidates may depend, in part, on the development and commercialization of either a companion diagnostic or a complementary diagnostic.

Companion diagnostics and complementary diagnostics can identify patients who are most likely to benefit from a particular drug;

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Companion diagnostics and complementary diagnostics are regulated as medical devices by the FDA.

The level of risk associated with a new diagnostic test combined with available controls to mitigate risk determines whether a companion diagnostic device requires PMA approval from the FDA or if it can be cleared by the agency through the 510(k) premarket notification process based on a showing of substantial equivalence to a commercially available device.

The level of risk associated with a new diagnostic test combined with available controls to mitigate risk determines whether a companion diagnostic device requires PMA approval from the FDA or if it can be cleared by the agency through the 510(k) pre-market notification process based on a showing of substantial equivalence to a commercially available device.

For a novel drug for which a companion diagnostic device is essential for the safe and effective use of the product, the companion diagnostic device should be developed and PMA-approved or 510(k)-cleared contemporaneously with the FDA’s approval of the drug.

The use of the companion diagnostic device will be stipulated in the labeling of the drug, and vice versa.

Recently, FDA issued a proposed rule to reclassify certain nucleic acid-based test systems indicated for use with a corresponding approved oncology therapeutic product from Class III (PMA) into Class II, subject to premarket notification with special controls.

The proposal is based in part on the history of safe and effective use of several FDA-approved oncology therapeutic nucleic acid-based test systems for their intended uses.

This change, if finalized in 2026, will decrease the regulatory burden on industry because manufacturers of these kinds of IVDs will no longer have to submit a PMA and receive FDA approval before marketing the test.

Rules and Regulations Relating to Coverage, Pricing, and Reimbursement for Prescription Pharmaceutical Products

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However, Part D prescription drug formularies must include drugs within each therapeutic category and class of covered Part D drugs, though not necessarily all the drugs in each category or class.

Any formulary used by a Part D prescription drug plan must be developed and reviewed by a pharmacy and therapeutic committee.

Any formulary used by a Part D prescription drug plan must be developed and reviewed by a pharmacy and therapeutic

Government payment for some of the costs of prescription drugs may increase demand for products that receive marketing approval in the future.

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Pharmaceutical manufacturers, their vendors, and the federal agency responsible for administering the 340B program, HRSA, have been actively challenging various aspects of the program and litigation is pending in multiple jurisdictions.

The outcome of such lawsuits, as well as potential legislative changes enacted by Congress or programmatic changes implemented at HRSA by the incoming Trump Administration, may impact the 340B program in the future.

The outcome of such ongoing lawsuits, as well as potential legislative changes enacted by Congress or programmatic changes implemented at HRSA by the Trump Administration, may impact the 340B program in the future.

Moreover, there has been heightened governmental scrutiny over the manner in which manufacturers set prices for their marketed products, which has resulted in several Congressional inquiries and proposed and enacted federal and state legislation designed to, among other things, bring more transparency to product pricing, review the relationship between pricing and manufacturer patient programs, and reform government program reimbursement methodologies for drug products.

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This calculation is made on a drug product by drug product basis and the amount of the rebate owed to the federal government is directly dependent on the volume of a drug product that is paid for by Medicare Parts B or D.

Additionally, starting for payment year 2026, CMS is negotiating drug prices annually for a select number of single source Part D drugs without generic competition.

CMS will also negotiate drug prices for a select number of Part B drugs starting for payment year 2028.

Additionally, CMS is negotiating drug prices annually for a select number of single source Part D drugs without generic competition.

CMS is also negotiating drug prices for a select number of Part B drugs starting for payment year 2028.

If a drug product is selected by CMS for negotiation, it is expected that the revenue generated from such drug will decrease.

CMS has begun to implement these new authorities, entering into the first set of agreements with pharmaceutical manufacturers to conduct price negotiations in October 2023 and ultimately announcing the first round of negotiated prices for the first 10 drugs in August 2024;

those negotiated “maximum fair prices” will be effective as of January 1, 2026 (payment year 2026).

CMS is currently engaged in its second selection process and is expected to publish the next 15 drugs selected for negotiation in February 2025.

CMS has begun to implement these new authorities, announcing the first round of negotiated prices for the first 10 drugs in August 2024, which became effective as of January 1, 2026 (payment year 2026).

The second round of negotiated prices for 15 drug products was announced in November 2025.

However, the IRA’s impact on the pharmaceutical industry in the United States remains uncertain, in part because multiple large pharmaceutical companies and other stakeholders (e.g., the U.S.

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Those lawsuits are currently ongoing.

Separately, the Trump Administration announced the creation of a government website called TrumpRx, which will allow consumers to purchase certain prescription drugs at reduced prices as negotiated between the drug manufacturers and the administration.

As of January 2026, the Trump Administration secured deals with 15 major drug manufacturers to offer certain drugs at most-favored-nation prices.

At the state level, legislatures have increasingly passed legislation and implemented regulations designed to control pharmaceutical product pricing, including price or patient reimbursement constraints, discounts, restrictions on certain product access and marketing cost disclosure and transparency measures.

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Significant efforts to change the PBM industry as it currently exists in the United States may affect the entire pharmaceutical supply chain and the business of other stakeholders, including pharmaceutical product developers like us.

The “One Big Beautiful Bill Act,” or OBBBA, which was signed by President Trump in 2025 is expected to reduce enrollment in Medicaid and state insurance exchanges enacted under the ACA, limiting access to insurance coverage for certain populations.

A resulting decrease in the number of insured individuals could also affect coverage of and reimbursement for our products.

As noted above, the marketability of any products for which we receive regulatory approval for commercial sale may suffer if the government and insurance payors fail to provide adequate coverage and reimbursement.

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A covered entity or business associate is liable for civil monetary penalties for a violation that is based on an act or omission of any of its agents, including a downstream business associate, as determined according to the federal common law of agency.

Penalties for failure to comply with a requirement of HIPAA and HITECH vary significantly depending on the failure and include civil monetary penalties of up to approximately $2.1 million per violation of the same requirement per calendar year (as of August 8, 2024, subject to annual inflation adjustments).

Penalties for failure to comply with a requirement of HIPAA and HITECH vary significantly depending on the failure and include civil monetary penalties of up to approximately $2.1 million per violation of the same requirement per calendar year (as of January 2026, subject to annual inflation adjustments).

A single breach incident may violate multiple requirements, resulting in potential penalties in excess of $2.1 million.

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and in some instances, we have agreed to indemnify our covered entity clients if we breach our obligations with respect to these laws and regulations and/or in the event of a reportable breach of PHI.

State Health Information Privacy Laws

The HIPAA privacy, security, and breach notification regulations establish a uniform federal “floor” but do not supersede state laws that are more stringent or that provide individuals with greater rights with respect to the privacy or security of, and access to, their records containing PHI, or insofar as such state laws apply to personal information that is broader in scope than PHI, as defined under HIPAA.

The compliance requirements of these laws, including additional breach reporting requirements, and the penalties for violation vary widely, and new privacy and security laws in this area are evolving.

For example, several states, such as California, have implemented comprehensive privacy laws and regulations.

For example, several states, such as California and Washington, have implemented comprehensive health privacy laws and regulations.

The California Confidentiality of Medical Information Act, or CMIA, imposes restrictive requirements regulating the use and disclosure of health information and other personally identifiable information.

In addition to fines and penalties imposed upon violators, some of these state laws also afford private rights of action to individuals who believe their personal information has been misused.

California’s patient privacy laws, for example, provide for penalties of up to $250,000 and permit injured parties to sue for damages.

Washington’s My Health My Data Act broadly defines consumer health data, places restrictions on processing consumer health data, provides consumers with certain rights with respect to their health data, and creates a private right of action to allow individuals to sue for violations of the law.

The California Consumer Privacy Act, or CCPA, and the California Privacy Rights Act, or CPRA, set forth a privacy framework for covered businesses by creating an expanded definition of personal information, establishing data privacy rights for California consumers and employees, imposing special rules on the collection of consumer data from minors, and creating a new and potentially severe statutory damages framework for businesses that violate the CCPA and/or fail to implement reasonable security procedures and practices to prevent data breaches.

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The CPPA has the power to levy fines and bring other enforcement actions and is in the process of implementing further regulations that could have operational impacts.

In addition to California, 18 other states have passed similar privacy laws, including Colorado, Connecticut, Delaware, Florida, Indiana, Iowa, Kentucky, Maryland, Montana, Nebraska, New Hampshire, New Jersey, Oregon, Rhode Island, Tennessee, Texas, Utah, and Virginia.

In addition to California, a growing number of other states have passed or are considering similar privacy laws.

There are also several federal privacy proposals under consideration in Congress, and other states may introduce privacy legislation for consideration in 2026.

These various privacy laws could impact our operations or that of our collaborators and business partners and impose new regulatory requirements and increase costs of compliance.

Many states have also implemented genetic testing and privacy laws imposing specific patient consent requirements and requirements for protecting test results.

The interplay of federal and state laws may be subject to varying interpretations by courts and government agencies, creating complex compliance issues for us and our clients and potentially exposing us to additional expense, adverse publicity, and legal and regulatory liability.

Further, as regulatory focus on privacy issues continues to increase, and laws and regulations concerning the protection of personal information expand and become more complex, these potential risks to our business could intensify.

In addition, the interpretation and application of consumer, health-related, and data protection laws are often uncertain, contradictory, and in flux.

For example, increasing concerns about health information privacy have recently prompted the federal government to issue guidance, taking a newly expansive view of the scope of the laws and regulations that they enforce.

The applicability and requirements of these laws and penalties for violations vary widely.

Failure to maintain compliance, or changes in state or federal laws regarding privacy or security, could result in civil and/or criminal penalties and damages and could have a material adverse effect on our business.

Information Blocking Rules

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In May 2020, ONC released the final Information Blocking Rule to implement the interoperability and patient access provisions of the 21st Century Cures Act, which took effect in 2021.

We need to continually engage in ongoing reviews of all potential practices that could be considered likely to interfere with access, exchange, or use of electronic health information, as those practices are prohibited by the Information Blocking Rule unless one of the exceptions outlined in the Information Blocking Rule applies.

Among other things, the Information Blocking

Rule requires us to provide patients with on-demand access to laboratory test results.

We continue to engage in ongoing reviews of all potential practices that could be considered likely to interfere with access, exchange, or use of electronic health information, as those practices are prohibited by the Information Blocking Rule unless one of the exceptions outlined in the Information Blocking Rule applies.

Among other things, the Information Blocking Rule requires us to provide patients with on-demand access to laboratory test results.

These requirements can be inconsistent with our obligations under state law and/or medical or ethical standards.

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Health care providers, including laboratories, are subject to “disincentives” for violations of the Information Blocking Rule.

HHS and ONC released a final rule establishing disincentives for health care providers that have committed information blocking on June 24, 2024, potentially affecting certain providers’ eligibility in the Medicare Promoting Interoperability Program and Medicare Shared Savings Program.

HHS indicated it may establish additional health care provider disincentives in future rulemaking.

Foreign Laws and Other Laws

HHS and ONC released a final rule establishing disincentives for health care providers that have

committed information blocking on June 24, 2024.

In September 2025, HHS, together with OIG and ONC, announced plans to increase enforcement of violations of the information blocking rules.

Foreign Privacy Laws

We are also subject to foreign privacy laws in the jurisdictions in which we sell our tests, and collect patient samples.

The interpretation, application, and interplay of consumer and health-related data protection laws in the United States, Australia, Europe, and elsewhere are often uncertain, contradictory, and in flux.

The interpretation, application, and interplay of consumer and health-related data protection laws in the United States, Australia, Asia, Canada, Europe, and elsewhere are often uncertain, contradictory, and in flux.

For example, the Privacy Act 1988 applies to personal data in Australia.

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In addition, privacy regulations differ widely from country to country and are enforced by individual country data protection authorities, which have power to enforce privacy regulations.

Various data protection authorities have issued fines in the millions of euros for violations of privacy laws.

Many states have also implemented genetic testing and privacy laws imposing specific patient consent requirements and requirements for protecting test results.

In addition, the interpretation and application of consumer, health-related, and data protection laws are often uncertain, contradictory, and in flux.

The applicability and requirements of these laws and penalties for violations vary widely.

Various data protection authorities have issued fines in the millions of dollars for violations of privacy laws.

Artificial Intelligence

In many activities, including operational use of Artificial Intelligence, or AI, tools, we are subject to emerging regulations and guidelines.

In December 2023, the European Commission, the Council, and the Parliament agreed on the provisional rules that will comprise the European Union’s Artificial Intelligence Act, the AI Act.

This comprehensive EU AI Regulation is broad in scope, defines high-risk AI activities, and seeks to prohibit certain AI uses.

AI is increasingly shaping industries worldwide, including life sciences and health care.

AI innovation introduces risks and challenges that could impact our business.

AI algorithms may be flawed;

datasets may be insufficient or biased, and ineffective AI development or deployment could lead to compliance violations, cybersecurity risks, and other adverse consequences.

Potential risks include breaches of confidentiality and privacy obligations, noncompliance with emerging laws and regulations, threats to intellectual property rights, including not only the leakage of our proprietary information but also the risk that AI-generated outputs may infringe third-party intellectual property rights or be deficient or inaccurate;

and the misuse of confidential, proprietary, or personally identifiable information, including PHI.

In the United States, all 50 states and territories have introduced AI legislation, and more than 30 states already regulate AI.

These legislative initiatives in the United States include active or proposed legislation to regulate AI and its use in healthcare, including in California, Georgia, Massachusetts, and Texas, where we conduct operations.

Generally, such regulations aim to protect individuals such as consumers, employees, and/or job applicants from bias, discrimination, and invasion of privacy and to promote transparency with respect to use of AI by companies.

The European Union’ s Artificial Intelligence Act, or the AI Act, which entered into force on August 1, 2024, and will be fully effective later this year, is broad in scope, defines high-risk AI activities, and seeks to prohibit certain AI uses.

The AI Act will potentially regulate entities that intend to utilize AI applications in the EU.

Anticipated range of fines for entities that are found to violate the AI Act may reach up to EUR 35 million or up to 7% of the Company’s total worldwide annual turnover for the preceding financial year, whichever is higher.

In the United States, more than thirty states regulate AI, or are considering proposed legislation that would regulate AI, including California, Georgia, Massachusetts, and Texas, where we conduct operations.

Additionally, the FTC recently published guidance for companies selling genetic testing products on securing DNA data and outlined enforcement priorities, anticipating close monitoring of genetic testing companies’ use of AI, including DNA algorithms.

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and reminds companies to prepare notices regarding their collection, use, and disclosure of genetic information and to consider affirmative express consent requirements.

Other Applicable Privacy Laws

Numerous other federal, state, and foreign laws, including consumer protection laws and regulations, govern the collection, dissemination, use, access to, confidentiality, and security of patient health information.

In addition, Congress and some states are

considering new laws and regulations that further and more broadly protect the privacy and security of medical records or health information.

With the recent increase in publicity regarding data breaches resulting in improper dissemination of consumer information, all 50 states have passed laws regulating the actions that a business must take if it experiences a data breach, as defined by state law, including, in certain instances, prompt disclosure within a specified amount of time to affected individuals.

In addition, Congress and some states are considering new laws and regulations that further and more broadly protect the privacy and security of medical records or health information.

With the increase in publicity regarding data breaches resulting in improper dissemination of consumer information, all 50 states have passed laws regulating the actions that a business must undertake if it experiences a data breach, as defined by state law, including, in certain instances, prompt disclosure within a specified amount of time to affected individuals.

Congress has also been considering similar federal legislation relating to data privacy and data protection.

The FTC and states’ Attorneys General have also brought enforcement actions and prosecuted some data breach cases as unfair and/or deceptive acts or practices under the FTC Act and comparable state laws.

In addition to data breach notification laws, some states have enacted statutes and rules requiring businesses to reasonably protect certain types of personal information they hold or to otherwise comply with certain specified data security requirements for personal information.

In addition to data breach notification laws, some states have enacted statutes and rules requiring

businesses to reasonably protect certain types of personal information they hold or to otherwise comply with certain specified data security requirements for personal information.

We intend to continue to comprehensively protect all personal information and to comply with applicable laws regarding the protection of such information.

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In addition, data protection authorities of the different European Union member states may interpret the GDPR differently, and guidance on implementation and compliance practices is often updated or otherwise revised, which adds to the complexity of processing personal data in the European Union.

In addition to the GDPR, other countries have enacted data protection legislation, which increase the complexity of doing international business and transferring sensitive personal information from those countries to the United States.

In addition to the GDPR, the United States and certain other countries have enacted various data protection legislation or directives, which further increase the complexity of cross-border data transfers and of doing international business and transferring sensitive personal information from those countries to the United States or from the United States to certain other countries.

The privacy and security of PHI and personally identifiable information stored, maintained, received, or transmitted, including electronically, including genetic data, is subject to significant regulation in the United States and abroad.

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Healthcare Fraud and Abuse Laws Applicable to our Business

In the United States, we must comply with various fraud and abuse laws, and we are subject to regulation by various federal, state, and local authorities, including CMS, other divisions of HHS (such as the Office of Inspector General of the Department of Health and Human Services, or OIG), the DOJ, individual U.S.

In the United States, we must comply with various fraud and abuse laws, and we are subject to regulation by various federal, state, and local authorities, including CMS, other divisions of HHS (such as the Office of Inspector General for the Department of Health and Human Services, or OIG), the DOJ, individual U.S.

Attorney’s Offices within the DOJ, and state and local governments.

We also may be subject to foreign fraud and abuse laws in the European Union, Australia, Canada, Japan, Taiwan, and other foreign countries as a result of the sale of our diagnostic testing services to health care providers, medical institutions, and clinical laboratories located in such jurisdictions.

We also may be subject to foreign fraud and abuse laws in the European Union, Australia, Canada, Japan, Taiwan, and other foreign countries because we market or sell our diagnostic testing services to health care providers, medical institutions, and clinical laboratories located in those jurisdictions.

Anti-Kickback and Fraud Statutes

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Although full compliance with the statutory exceptions or regulatory safe harbors ensures against prosecution under the federal Anti-Kickback Statute, the failure of a transaction or arrangement to fit within a specific statutory exception or regulatory safe harbor does not necessarily mean that the transaction or arrangement is illegal or that prosecution under the Anti-Kickback Statute will be pursued.

Furthermore, a person or entity does not need to have actual knowledge of the statute or specific intent to violate it in order to have committed a violation.

Furthermore, a person or entity does not need to have actual knowledge of the statute or specific intent to violate it to have committed a violation.

Penalties for violations of the Anti-Kickback Statute are severe and include imprisonment, criminal fines, civil monetary penalties, and exclusion from participation in federal healthcare programs.

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Many states also have anti-kickback statutes, some of which may apply regardless of payor type.

In addition, in October 2018, the Eliminating Kickbacks in Recovery Act of 2018, or EKRA, was enacted as part of the Substance Use-Disorder Prevention that Promotes Opioid Recovery and Treatment for Patients and Communities Act.

EKRA is an all-payor anti-kickback law that makes it a criminal offense to pay any remuneration to induce referrals to, or in exchange for, patients using the services of a recovery home, a substance use clinical treatment facility, or laboratory.

In addition, the Eliminating Kickbacks in Recovery Act of 2018, or EKRA, is an all-payor anti-kickback law that makes it a criminal offense to pay any remuneration to induce referrals to, or in exchange for, patients using the services of a recovery home, a substance use clinical treatment facility, or laboratory.

However, unlike the federal Anti-Kickback Statute, EKRA is not limited to services covered by federal or state healthcare programs but applies more broadly to services covered by “healthcare benefit programs,” including commercial insurers.

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There are also U.S.

federal laws related to healthcare fraud and false statements relating to healthcare matters.

The healthcare fraud statute prohibits, among other things, knowingly and willfully executing a scheme to defraud any healthcare benefit program, including private payors.

A violation of this statute is a felony and may result in fines, imprisonment or exclusion from government payor programs such as Medicare and Medicaid programs.

federal laws related to criminal healthcare fraud and false statements relating to healthcare matters.

The healthcare fraud statute prohibits, among other things, knowingly and willfully executing a scheme to defraud any healthcare benefit program, including commercial insurers.

A violation of this statute is a felony and may result in fines, imprisonment or exclusion from government healthcare programs such as Medicare and Medicaid.

The false statements statute prohibits knowingly and willfully falsifying, concealing, or covering up a material fact or making any materially false, fictitious, or fraudulent statement in connection with the delivery of or payment for healthcare benefits, items or services.

Similar to the federal Anti-Kickback Statute, a person or entity does not need to have actual knowledge of the statute or specific intent to violate it in order to have committed a violation.

A violation of this statute is also a felony and may result in fines, imprisonment or exclusion from government payor programs.

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Efforts to ensure that our internal operations and business arrangements with foreign clinical laboratories and other third parties comply with applicable laws and regulations will involve substantial costs.

Any action brought against us or against our international employees, customers, or commercial partners for alleged violations of foreign laws or regulations, even if we successfully defend against such an action, could cause us to incur significant legal expenses and divert our management’s attention from the operation of our business.

Any action brought against us or against our international employees, customers, or commercial partners for alleged violations of foreign laws or regulations can result in significant penalties, and even if we successfully defend against such an action, can cause us to incur significant legal expenses and divert our management’s attention from the operation of our business.

False Claims Act

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The qui tam provisions of the False Claims Act allow a private individual to bring an action under the False Claims Act on behalf of the federal government and permit such an individual to share in any amounts paid by the entity to the government in fines or settlement.

In addition, providers and suppliers must report and return any overpayments received from the

Medicare and Medicaid programs within 60 days of identification.

In addition, providers and suppliers must report and return any overpayments received from the Medicare and Medicaid programs within 60 days of identification.

Failure to identify and return such overpayments exposes the provider or supplier to False Claims Act liability.

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In addition, various states have enacted false claim laws analogous to the federal False Claims Act, although many of these state laws apply where a claim is submitted to any insurance payor and not merely a government payor program.

We have also received a CID issued by the DOJ pursuant to the False Claims Act related to its investigation of allegations of medically unnecessary laboratory testing, improper billing for laboratory testing, and remuneration received or provided in violation of the Anti-Kickback Statute and the Stark Law.

We have received a CID issued by the DOJ pursuant to the False Claims Act related to its investigation of allegations of medically unnecessary laboratory testing, improper billing for laboratory testing, and remuneration received or provided in violation of the Anti-Kickback Statute and the Stark Law.

Among other things, this CID requests information and records relating to certain of the Company’s customers named in this CID.

We are cooperating with the DOJ in connection with this CID.

See Note 8, Debt, Commitments and Contingencies to the Consolidated Financial Statements,

Certain of our executive officers and employees have also received CIDs relating to these matters.

We are fully cooperating with the DOJ in connection with these CIDs.

See Note 8, Debt, Commitments and Contingencies to our consolidated financial statements.

Civil Monetary Penalties Law

The federal Civil Monetary Penalties Law, or the CMP Law, prohibits, among other things, (1) the offering or transfer of remuneration to a Medicare or Medicaid beneficiary if the person knows or should know it is likely to influence the beneficiary’s selection of a particular provider, practitioner, or supplier of services reimbursable by Medicare or Medicaid, unless an exception applies;

(2) employing or contracting with an individual or entity that the provider knows or should know is excluded from participation in a federal health care program;

(2) employing or contracting with an individual or entity that the provider knows or should know is excluded from participation in a federal healthcare program;

(3) billing for services requested by an unlicensed physician or an excluded provider;

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We are also subject to the U.S.

federal law directed at “self-referrals,” commonly known as the “Stark Law,” which prohibits a physician from making referrals for certain designated health services, including laboratory services, that are covered by the Medicare program, to an entity with which the physician or an immediate family member has a direct or indirect financial relationship, unless an exception applies.

federal law directed at “self-referrals,” commonly known as the “Stark Law,” which prohibits a physician from making referrals for certain designated health services, including clinical laboratory services, that are covered by the Medicare program, to an entity with which the physician or an immediate family member has a direct or indirect financial relationship, unless an exception applies.

Violation of the Stark Law results in a denial of payment for any services provided pursuant to a prohibited referral.

A physician or entity that engages in a scheme to circumvent the Stark Law’s referral prohibition may be subject to substantial fines for each such arrangement or scheme.

In addition, any person who presents or causes to be presented a claim to the Medicare program in violation of the Stark Law is subject to substantial civil monetary penalties of an assessment of up to three times the amount claimed and possible exclusion from participation in federal health care programs.

In addition, any person who presents or causes to be presented a claim to the Medicare program in violation of the Stark Law is subject to an assessment of up to three times the amount claimed, substantial per-claim penalties, and possible exclusion from participation in government healthcare programs.

The Stark Law also prohibits state receipt of federal Medicaid matching funds for services furnished pursuant to a prohibited referral, but this provision of the Stark Law has not been implemented by regulations.

The Stark Law is a strict liability statute, meaning that a physician’s financial relationship with a laboratory must meet an exception under the Stark Law, or the referrals are prohibited.

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Many states, including California, have comparable laws that are not limited to Medicare referrals.

Physician Sunshine Laws Applicable to our Business

Physician Payment Sunshine and Anti-Gift Laws Applicable to our Business

Physician Payments Sunshine Act imposes reporting requirements on manufacturers of certain devices, drugs, and biologics for certain payments and transfers of value by them (and in some cases their distributors) to physicians, teaching hospitals, and certain advanced non-physician health care practitioners, as well as ownership and investment interests held by physicians and their immediate family members.

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Because we manufacture our own LDTs solely for use by or within our own laboratory, we believe we are exempt from these reporting requirements.

We may become subject to such reporting requirements under the terms of current CMS regulations, however, if the FDA requires us to obtain premarket authorization for our tests as medical devices (whether because the agency determines that one or more of the tests do not fall within the scope of the agency’s existing LDT definition or because of its recently issued final rule to exercise authority over LDTs as medical devices) or Congress enacts legislative reforms to the federal oversight of LDTs to subject them to FDA regulation and/or the reporting requirements of the Sunshine Act.

It is presently unknown how CMS will respond to the recently finalized FDA policy change to effectively render all LDTs medical device products under federal law, and whether or when it will assert that the Sunshine Act’s reporting requirements will begin to apply to the manufacturers of such LDTs.

Given that litigation is ongoing between members of the clinical laboratory industry and FDA/HHS in relation to the May 2024 LDT final rule, it may be many months or even years before we have clarity on the applicability of state and federal Sunshine Act laws to our business.

Certain states also require medical device manufacturers to maintain compliance programs and/or be licensed as manufacturers or distributors by a state professional board or health department.

Because the FDA’s now-in-effect final rule renders a clinical laboratory like ours a “medical device manufacturer,” we have begun the process of evaluating whether and to what extent those kinds of medical device-specific state requirements may be applicable to our operations.

We may become subject to such reporting requirements under the terms of current CMS regulations, however, if the FDA requires us to obtain pre-market authorization for our tests as medical devices because the agency determines that one or more of the tests do not fall within the scope of the agency’s existing LDT definition or if Congress enacts legislative reforms to the federal oversight of LDTs to subject them to FDA regulation and/or the reporting requirements of the Sunshine Act.

Many EU member states have adopted specific anti-gift statutes that further limit commercial practices for medical devices, including IVD medical devices, in particular, vis-à-vis health care professionals and organizations.

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Certain countries also mandate implementation of commercial compliance programs.

We also may become subject to these requirements, as well as applicable state Sunshine Acts, if any therapeutic products currently in development are successfully approved by FDA, commercialized in the United States, and become eligible for reimbursement under a federal healthcare program such as Medicare or Medicaid.

We also may become subject to these requirements, as well as applicable state-level Sunshine Acts for payments or gifts made to physicians, if any therapeutic products currently in development are successfully approved by FDA, commercialized in the United States, and become eligible for reimbursement under a federal healthcare program such as Medicare or Medicaid.

Anti-Bribery Laws Applicable to our Business

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Prohibitions on the Corporate Practice of Medicine

Numerous states have enacted laws prohibiting business corporations, such as ours, from practicing medicine and employing or engaging physicians to practice medicine, generally referred to as the prohibition against the corporate practice of medicine.

Numerous states have enacted laws prohibiting business corporations, such as ours, from practicing medicine and directly employing or engaging physicians to practice medicine, generally referred to as the prohibition against the corporate practice of medicine.

These laws are designed to prevent interference in the medical decision-making process by anyone who is not a licensed physician.

For example, California’s Medical Board has indicated that determining the appropriate diagnostic tests for a particular condition and taking responsibility for the ultimate overall care of a patient, including providing treatment options available to the patient, would constitute the unlicensed practice of medicine if performed by an unlicensed person.

Although we have structured our management services arrangements with our affiliated professional corporations to comply with applicable state corporate practice of medicine laws, violation of these corporate practice of medicine laws may result in civil or criminal fines, as well as sanctions imposed against the business corporation and/or the professional through licensure proceedings.

In recent years, a number of states have enacted or considered legislation aimed at further regulating the relationships between business corporations and licensed physicians.

Additionally, violation of these corporate practice of medicine laws may result in civil or criminal fines, as well as sanctions imposed against the business corporation and/or the professional through licensure proceedings.

Environmental and Other Regulatory Requirements Applicable to Our U.S.

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As a result, we could be held liable for damages and fines if our, or others’, business operations or other actions result in contamination of the environment or personal injury due to exposure to hazardous materials.

Our costs for complying with these laws and regulations cannot be estimated or predicted and depends on a number of factors, including the amount and nature of waste we produce, which depends in part on the number of tests we perform, and the terms we negotiate with our waste disposal vendors.

Our costs for complying with these laws and regulations cannot be estimated or predicted and depend on a number of factors, including the amount and nature of waste we produce, which depends, in part, on the number of tests we perform, and the terms we negotiate with our waste disposal vendors.

Our operations are also subject to extensive requirements established by the U.S.

Occupational Safety and Health Administration relating to workplace safety for healthcare employees, including requirements to develop and implement programs to protect workers from exposure to bloodborne pathogens by preventing or minimizing any exposure through needlestick or similar penetrating injuries.

Occupational Safety and Health Administration relating to workplace safety for laboratory and for healthcare employees, including requirements to develop and implement programs to protect workers from exposure to bloodborne pathogens by preventing or minimizing any exposure through needlestick or similar penetrating injuries.

Sustainability

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We strive to incorporate climate-related risk assessments as part of our leadership team’s regular agenda.

Our Board provides general oversight of energy management, climate risk and opportunities, strategy, and performance.

The Board, through our sustainability working group, provides additional oversight on climate-related projects, goals, and related opportunities.

Our board of directors provides general oversight of energy management, climate risk and opportunities, strategy, and performance.

The board of directors, through our sustainability working group, provides additional oversight on climate-related projects, goals, and related opportunities.

Employees and Human Capital Resources

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As of December 31, 2025, we had 1,315 (U.S.

and international) full-time employees for our laboratory services business, engaged in precision diagnostic and anatomic pathology testing, BioPharma services, software engineering, laboratory management, sales and marketing, and corporate and administrative activities, and we have 19 (U.S.-based) full-time employees engaged in research and development for our therapeutic development business.

and international) full-time employees for our laboratory services business, engaged in precision diagnostic and anatomic pathology testing, BioPharma services, software engineering, laboratory management, sales and marketing, and corporate and administrative activities, and we have 29 (U.S.-based) full-time employees engaged in anatomic pathology testing, research and development, and corporate and administrative activities for our therapeutic development business.

We offer a comprehensive compensation program that is designed to attract and reward talented individuals who possess the skills necessary to support our business objectives, assist in the achievement of our strategic goals and create long-term value for our stockholders.

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401(k) investment plans with Company matching;

tax-advantaged savings accounts;

paid time off and leaves of absence;

and wellness programs.

We provide added work-life balance to our employees through hybrid work arrangements.

tax-advantaged savings accounts, paid time off, leaves of absence and wellness programs.

None of our employees are represented by a labor union or covered by collective bargaining agreements, and we believe our overall relationship with our employees is good.

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Directors and Executive Officers

Chairman of the Board of Directors and Chief Executive Officer

Chairperson of the Board of Directors and Chief Executive Officer

Chief Financial Officer

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In an effort to recruit the best talent pool and to encourage the professional and personal development of every employee, we offer reimbursement for qualified educational expenses and successful completion of undergraduate, graduate, post-graduate, professional training, and licensure courses from accredited colleges, universities, and professional organizations.

In the past several years, employees have applied for a variety of courses, including Stanford Center for Professional Development, Google Project Management Courses, Clinical Genetic Molecular Biologist Scientist (CGMBS) Training Program, and Bachelor’s Degrees.

In the past several years, employees have applied for a variety of courses, including the Cisco Certified Network Associate certificate at Stanford Center for Professional Development, Google Project Management, Clinical Genetic Molecular Biologist Scientist Training Program, American Society for Clinical Pathology Board of Certificate programs, Certified Genetic Counselor credential program, and Bachelor’s degrees.

We also provide mandatory training courses that we believe are important to our culture, corporate goals, our business and the continued development of our employees, on a variety of topics, including discrimination, harassment, HIPAA, insider trading, privacy, anti-corruption and anti-bribery, internally and/or through third-party providers.

In 2025, we conducted a recurrent employee feedback survey and utilized the survey results to enhance employee engagement, implement various improvements to extend continuous learning opportunities and refine our benefit plans for 2026.

In 2024, the Training & Development team hosted a series of training sessions for team members, covering key topics such as “The Art of Giving and Receiving Feedback:

3 Part Series” and “Time Management Training:

3 Part Series”.

In 2025, the Training & Development team hosted a series of training sessions for team members, covering key topics such as “Leadership & Influence:

Manager or Leader?”, “Performance Management”, “Peer to Supervisor Transition”, “Developing

Emotional Intelligence”, “Servant Leadership”, “Critical Thinking”, “Work life Balance”, “Lean Six Sigma”, “Unconscious Bias”, and “Supervisor-in Training.”

Workplace Safety and Health

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We are the holding company of our subsidiaries, including primarily Fulgent Therapeutics LLC, which was initially formed in June 2011.

On September 30, 2016, Fulgent Therapeutics LLC became our wholly owned subsidiary in a transaction we refer to as the Reorganization, in which the holders of all equity interests in Fulgent Therapeutics LLC immediately prior to the Reorganization became all of our stockholders immediately following the Reorganization.

On September 30, 2016, Fulgent Therapeutics LLC became our wholly owned subsidiary in a transaction we refer to as the Reorganization, in which the holders of all equity interests in Fulgent Therapeutics LLC immediately prior to the Reorganization became our stockholders immediately following the Reorganization.

Our headquarters are located at 4399 Santa Anita Avenue, El Monte, California 91731.

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Cybersecurity Risks

• Actual or attempted security incidents or breaches, loss of data, or other disruptions could expose us to material liability and materially and adversely affect our business, financial condition, and our reputation.

Business and Strategy Risks

• Our results of operations may fluctuate significantly from period to period and can be difficult to predict.

• We have a history of losses, and we may not be able to sustain profitability.

• We have a history of losses, and we may not be able to regain or sustain profitability.

• We may not be successful in our efforts to integrate any acquired businesses and technologies, and this may adversely affect our business and results of operations.

We may incur unexpected liabilities as a result of our acquisitions.

• If our laboratory facilities become inoperable, if we are forced to vacate a facility, or if we are unable to obtain additional laboratory space as and when needed, we would be unable to perform our tests and our business would be harmed.

• We depend on our information technology systems and any material failure of these systems, due to hardware or software malfunctions, delays in operation, and/or material failures to implement new or enhanced systems or cybersecurity breaches, could materially harm our business.

We may incur liabilities as a result of our acquisitions, including liabilities not reflected or contemplated in the financial statements of these acquired businesses.

• Our mix of customers fluctuates from period to period, and our revenue is often concentrated among a single large customer or a small number of larger customers, and the loss of or a reduction in sales to these customers could materially harm our business and results of operations.

• If any of our laboratory facilities become inoperable or inaccessible, if we are forced to vacate a facility, or if we are unable to obtain additional laboratory space as and when needed, we may be unable to perform our tests or maintain desired turnaround times, and our business and results of operations could be harmed.

• We depend on our information technology systems, and any material failure of these systems, due to hardware or software malfunctions, delays in operation, material failures to implement new or enhanced systems and/or cybersecurity breaches or attacks, could materially harm our business.

• Any inability to obtain additional capital when needed and on acceptable terms may limit our ability to execute our business plans, and our liquidity needs could be materially affected by market fluctuations and general economic conditions.

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• Our ability to achieve or sustain profitability also depends on our collection of payment for the tests we deliver, which we may not be able to do successfully.

• Failure to comply with government laws and regulations related to submission of claims for our services could result in significant monetary damages and penalties and exclusion from the Medicare and Medicaid programs and corresponding foreign reimbursement programs.

We are also subject to governmental audits and investigations, such as the current HRSA Audit and CIDs, that could result in material refunds or settlements.

Our business, prospects and financial condition may be adversely affected as the result of the current HRSA Audit and CIDs.

• Failure to comply with government laws and regulations related to submission of claims for our tests and testing services could result in significant monetary damages and penalties and exclusion from the Medicare and Medicaid programs and corresponding foreign reimbursement programs.

We are also subject to governmental audits and investigations, such as the HRSA Audit and CIDs, that could result in material refunds or settlements.

Our business, prospects, and financial condition may be adversely affected as the result of the HRSA Audit and CIDs.

Regulatory Risks

• Any changes in laws, regulations or the enforcement discretion of the FDA with respect to the marketing of diagnostic products, or violations of laws or regulations by us, could materially and adversely affect our business, prospects, results of operations or financial condition.

• Any changes in federal laws, regulations or enforcement policies with respect to the marketing of clinical laboratory tests, or violations of laws or regulations by us, could materially and adversely affect our business, prospects, results of operations or financial condition.

• If we fail to comply with applicable federal, state, local and foreign laboratory licensing requirements, we could lose the ability to perform our tests and experience material disruptions to our business.

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Complying with the numerous statutes and regulations pertaining to our business is expensive and time-consuming, and any failure by us, our consultants or commercial partners to comply could result in substantial and material penalties.

• We may be required to modify our business practices, pay fines, incur significant expenses, or experience losses due to litigation or governmental investigations as a result of voluntary disclosure processes.

Risk Related to the Development of Drug Candidates

• Our drug candidates are in early stages of development and may fail or suffer delays that materially and adversely affect their future commercial viability.

• Any drug candidate that we may attempt to develop, manufacture, or market in the United States will be subject to extensive regulation by the FDA, including regulations relating to development, preclinical testing, performance of clinical trials, manufacturing, and post-approval commercialization and will be subject to extensive regulations outside of the United States.

• We have and may again be required to modify our business practices, pay fines, incur significant expenses, or experience losses due to litigation, governmental investigations, or as a result of voluntary disclosure processes.

Risks Related to the Development of Product Candidates

• Our product candidates are in early stages of development and may fail or suffer delays that materially and adversely affect their future commercial viability.

• Any product candidate that we may attempt to develop, manufacture, or market in the United States will be subject to extensive regulation by the FDA, including regulations relating to development, non-clinical testing, performance of clinical trials, manufacturing, and post-approval commercialization and will also be subject to extensive regulations outside of the United States.

Satisfaction of these and other regulatory requirements is costly, time-consuming, uncertain, and subject to unanticipated delays.

The time required to obtain FDA approval, and any other required approvals for pharmaceutical products, including any accelerated approval, is unpredictable but typically requires years to several years and may never be obtained.

The time required to obtain FDA approval, and any other required approvals for pharmaceutical products, including accelerated approval, is unpredictable but typically requires up to several years and may never be obtained.

Intellectual Property Risks

• If we are unable to obtain and maintain patent protection for any drug candidate we develop, our competitors could develop and commercialize products or technology similar to ours, and our ability to successfully commercialize any drug candidate we may develop, and our technology, may be adversely affected.

• We rely on trade secret protection, non-disclosure agreements, and invention assignment agreements to protect our proprietary information, which may not be effective.

• Litigation or other proceedings or third-party claims of intellectual property infringement or misappropriation could require us to spend significant time and money and prevent us from selling our tests or developing drug candidates.

• If we are unable to obtain and maintain patent protection for any product candidate we develop, our competitors could develop and commercialize products or technology similar to ours, and our ability to successfully commercialize any product candidate we may develop, and our technology, may be adversely affected.

• We rely on trade secret protection, non-disclosure agreements, and invention assignment agreements to protect our proprietary information, which may not ultimately be effective.

• We may be subject to claims challenging the inventorship of our patents and other intellectual property.

• Developments in patent law could have a negative impact on our business.

• Obtaining and maintaining our patent protection depends on compliance with various procedural, document submission, fee payment, and other requirements imposed by government patent agencies, and our patent protection could be reduced or eliminated for non-compliance with these requirements.

• Our future issued patents covering drug candidates we develop could be found invalid or unenforceable if challenged in court or before administrative bodies in the United States or abroad.

• Patent terms may be inadequate to protect our competitive position on our products and services for an adequate amount of time.

• If we do not obtain patent term extension and/or data exclusivity for any drug candidate that we may develop, our business may be materially harmed.

• Obtaining and maintaining our patent protection depends on compliance with various procedures, document submission, fee payment, and other requirements imposed by government patent agencies, and our patent protection could be reduced or eliminated for non-compliance with these requirements.

• Our future issued patents covering product candidates we develop could be found invalid or unenforceable if challenged in court or before administrative bodies in the United States or abroad.

• Patent terms may be inadequate to protect the competitive position of our products and services for an adequate amount of time.

• If we do not obtain patent term extension and/or data exclusivity for any product candidate that we may develop, our business may be materially harmed.

• We may not be able to enforce our intellectual property rights outside the United States.

• Third parties may assert that our employees or consultants have wrongfully used or disclosed confidential information or misappropriated trade secrets.

• If we fail to comply with our obligations under license or technology agreements with third parties, we could lose license rights that are important to our business.

If our third-party licensors fail to comply with the terms of our license arrangements, we may be forced to engage in litigation to protect our rights, which may not be successful.

Common Stock Risks

• An active, liquid trading market for our common stock may not be sustained, which could make it difficult for stockholders to sell their shares of our common stock.

• The price of our common stock may be volatile, and you could lose all or part of your investment.

• The price of our common stock may be volatile, and stockholders could lose all or part of their investment.

• Future issuances of our common stock or rights to purchase our common stock, including pursuant to our equity incentive plan, could result in additional dilution to the percentage ownership of our stockholders and could cause the price of our common stock to fall.

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Cybersecurity Risks

Actual or attempted security incidents or breaches, loss of data, or other disruptions could expose us to material liability and materially and adversely affect our business, financial condition, and our reputation.

In the ordinary course of our business, we generate, collect, and store sensitive data, including personal health information, or PHI;

personally identifiable information;

intellectual property;

and proprietary and other business-critical information, such as research and development data, commercial data, and other business and financial information.

We manage and maintain the data we generate and collect and store data utilizing a combination of on-site systems and managed data center systems.

We also communicate sensitive patient data when we deliver reports summarizing test results to our customers, which we deliver via our online encrypted web portal, encrypted email, or fax, or overnight courier.

intellectual property and proprietary and other business-critical information, such as research and development data, commercial data, and other business and financial information.

We manage, maintain, collect, and store data utilizing a combination of on-site systems and cloud systems.

The secure processing, storage, maintenance, and transmission of this information is vital to our operations and business strategy, and we devote significant resources to protecting the confidentiality and integrity of this information.

While we perform regular audits of our information systems security, we cannot audit our vendors, suppliers, and customers’ systems in the same way and cannot monitor containment or the spread of malware on those systems, with a potential resulting impact on our systems.

On occasion, we do encounter attempted security incidents.

To date, these incidents have not materially affected our business.

While we are not currently aware of any cyber breaches, attacks, malicious software, or hardware that would materially and adversely affect our business, such security incident could be present in any of our or our subsidiaries’ systems or in the systems of our suppliers, customers, vendors, or contractors.

While we are not currently aware of any cyber breaches, attacks, malicious software, or hardware that would materially and adversely affect our business, such a security incident could be present in any of our or our subsidiaries’ systems or in the systems of our suppliers, customers, vendors, or contractors.

When discovered, these incidents could cause us to suffer a material data breach.

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Our results of operations have experienced fluctuations from period to period, which we expect may continue in the future.

These fluctuations can occur because of a variety of factors, including, among others, the amount and timing of sales of our tests and testing services, the prices we charge for our tests and testing services, customer or payor mix, general price degradation for our tests and testing services or other competitive factors, the rate and timing of our billings and collections, our ability to obtain reimbursement for our tests from insurance payors, our ability to maintain a broad and flexible testing menu, the timing and amount of our commitments and other payments, and exchange rate fluctuations, as well as the other risk factors discussed in this report.

These fluctuations can occur because of a variety of factors, including, among others, the amount and timing of sales of our tests and testing services;

the prices we charge for our tests and testing services;

customer or payor mix;

whether large customers continue to order our tests;

general price degradation for our tests and testing services or other competitive factors;

the rate and timing of our billings and collections;

weather conditions;

our ability to obtain reimbursement for our tests from insurance payors;

our ability to maintain a broad and flexible testing menu;

the timing and amount of our commitments and other payments;

and exchange rate fluctuations, as well as the other risk factors discussed in this report.

Our results have been, and may in the future be, impacted by events that may not recur regularly, in the same amounts or at all in the future.

For instance, in 2020, we developed and began offering a series of COVID-19 tests.

We experienced substantial revenue growth in 2020 and 2021 due primarily to the sales of, and growing demand, for these COVID-19 tests, but we have seen a decrease in our COVID-19 revenue in recent years due to the decline in prevalence of COVID-19.

The fluctuations in our operating results may render period-to-period comparisons less meaningful, and investors should not rely on the results of any one period as an indicator of future performance.

These fluctuations in our operating results could cause our performance in any particular period to fall below the expectations of securities analysts or investors or guidance we have provided to the public, which could negatively affect the price of our common stock.

We have a history of losses, and we may not be able to sustain profitability.

We have a history of losses.

Although we achieved profitability for the year ended December 31, 2022, we were not profitable for the years ended December 31, 2023 and 2024, and we may not again be profitable in any future periods.

We have a history of losses, and we may not be able to regain or sustain profitability.

We have a history of losses, and we may not again be profitable in any future periods.

Further, our revenue levels may not grow at historical rates or at all.

We may incur additional losses in the future.

While we experienced significant profitability in connection with the sale of our COVID-19 tests in previous years, the demand for these tests has declined and, currently, we do not expect future material revenue from the sale of our COVID-19 tests and testing services.

Even if there is a reoccurrence of demand for our COVID-19 tests or other substantial revenue growth, we may be unable to again manage our resources to effectively respond to this demand such that our revenues would again materially increase.

Any losses would have an

adverse effect on our stockholders’ equity and working capital, which could negatively impact our operations and your investment in the Company.

A failure to sustain or grow our revenue levels and to maintain profitability may negatively affect our business, financial condition, results of operations and cash flows, and the market price of our common stock may decline or continue to decline.

Any losses would have an adverse effect on our stockholders’ equity and working capital, which could negatively impact our operations and stockholders’ investment in our company.

A failure to sustain or grow our revenue levels or to regain profitability may negatively affect our business, financial condition, results of operations, cash flows, and the market price of our common stock.

We may not be successful in our efforts to integrate any acquired businesses and technologies, and this may adversely affect our business and results of operations.

We may incur unexpected liabilities as a result of our acquisitions.

We may incur liabilities as a result of our acquisitions, including liabilities not reflected or contemplated in the financial statements of these acquired businesses.

Our ability to integrate any organizations or technology that we may acquire is subject to a number of risks, including the following:

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• failure to realize the expected synergies of the acquired business;

• failure of an acquired business to perform as originally expected;

• possible impairment of relationships with employees and clients as a result of any integration of new businesses and management personnel;

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• reductions in future operating results as a result of the amortization of intangible assets.

In particular, we have based our revenue projections on the timely and successful completion of the Bako Diagnostics and StrataDx acquisitions (which is subject to the risks discussed above), and on these businesses performing as expected following closing.

If we are unable to successfully integrate these businesses, for the reasons above or for any reason, our expectations and projections concerning these businesses could ultimately be wrong.

Acquisitions are also accompanied by the risk that obligations and liabilities of an acquired business may not be adequately reflected in the historical financial statements of that business and the risk that historical financial statements may be based on assumptions, which are incorrect or inconsistent with our assumptions or approach to accounting policies.

The acquisition and integration of businesses may not be managed effectively, and any failure to manage the integration process could lead to disruptions in the overall activities of the Company, a loss of clients and revenue, and increased expenses.

Further, integration of an acquired business or technology could involve significant difficulties and could require management and capital resources that otherwise would be available for ongoing development of our existing business or pursuit of other opportunities.

We may also acquire contingent liabilities in connection with the acquisitions of a business, which may be material, and any estimates we might make regarding any acquired contingent liabilities and the likelihood that these liabilities will materialize could differ materially from the liabilities actually incurred.

Further, the acquisition and integration of businesses may not be managed effectively, and any failure to manage the integration process could lead to disruptions in our overall activities, a loss of clients and revenue, and increased expenses.

These circumstances could materially harm our business, results of operations, and prospects.

We have previously and may again in the future acquire businesses or assets, form joint ventures, make investments in other companies or technologies, or establish other strategic relationships, any of which could harm our operating results or dilute our stockholders’ ownership.

We have previously acquired, and may again in the future acquire, businesses or assets, form joint ventures, make investments in other companies and technologies, or establish other strategic relationships, any of which could harm our operating results or dilute our stockholders’ ownership.

These transactions may be subject to federal and state anti-trust laws and regulations, and any failure to comply, or alleged failure to comply, with these laws and regulations, may adversely affect our business, operating results and prospects.

As part of our business strategy, we have previously and may again in the future pursue acquisitions of complementary businesses or assets (such as our acquisitions of Cytometry Specialist, Inc.

As part of our business strategy, we have previously and may again in the future pursue acquisitions of complementary businesses or assets (such as our acquisitions of Cytometry Specialist, Inc., or CSI;

Fulgent Pharma;

and Symphony Buyer, Inc., or Inform Diagnostics), investments in other companies (such as our investment in Helio Health), technology licensing arrangements, joint ventures, or other strategic relationships.

Symphony Buyer, Inc., or Inform Diagnostics;

and ANP), investments in other companies (such as our investment in Helio Health), technology licensing arrangements, joint ventures, or other strategic relationships.

As an organization, we have relatively limited experience with respect to acquisitions, investments, or the formation of strategic relationships or joint ventures.

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and we may not realize the anticipated benefits of any acquisition, investment, or joint venture as needed to recoup our costs.

To finance any acquisitions, investments, joint ventures, or other strategic relationships, we may seek to raise additional funds through securities offerings, credit facilities, asset sales or collaborations, or licensing arrangements.

To the extent these financing transactions call for the issuance of shares of our capital stock, our existing stockholder would experience dilution in their relative ownership of shares of our capital stock.

Each of these methods of fundraising is subject to a variety of risks, including those discussed below under “Any inability to obtain additional capital when needed and on acceptable terms may limit our ability to execute our business plans, and our liquidity needs could be materially affected by market fluctuations and general economic conditions.” Further, additional funds from capital-raising transactions may not be available when needed, on acceptable terms or at all.

Any inability to fund any acquisitions, investments, or strategic relationships we pursue could cause us to forfeit opportunities we believe are promising or valuable, which could harm our prospects.

To the extent these financing transactions call for the issuance of shares of our capital stock, our existing stockholders would experience dilution in their relative ownership of shares of our capital stock.

If we raise funds by issuing equity securities, our stockholders may experience substantial dilution.” Further, additional funds from capital-raising transactions may not be available when needed, on acceptable terms or at all.

Any inability to fund any acquisitions, investments, or strategic relationships we pursue could cause us to forfeit opportunities we believe are promising or

valuable and that could harm our prospects.

If we raise funds by issuing equity securities, our stockholders may experience substantial dilution.

Our consummation of future acquisitions may encounter scrutiny under federal and state antitrust laws.

For example, our future acquisitions may be subject to notification under the Hart-Scott Rodino Antitrust Improvements Act of 1976 and to a waiting period and possible review by the DOJ and the FTC.

Any delays, injunctions, conditions or modifications by any of these federal agencies could have a negative effect on us and result in the abandonment of all or part of otherwise attractive acquisition opportunities.

Any acquisitions we may currently have in progress, including in our acquisition of Dermatopathology Experts, LLC (a.k.a.

StrataDx) and of certain assets of Bako Pathology Holdings, Inc.

and its affiliates (a.k.a.

Bako Diagnostics), are subject to a number of closing conditions, which may not occur or be fulfilled.

We may ultimately fail to close acquisitions in progress as of the date of this Annual Report, or these acquisitions may close later than we expect.

Our acquisitions of laboratory and healthcare regulated entities and businesses, such as our anticipated acquisition of StrataDx and of certain assets of Bako Diagnostics, are subject to review by various state regulatory agencies and entities, and our consummation of future acquisitions may be delayed and may further encounter scrutiny under federal and state antitrust laws.

In particular, our future acquisitions may be subject to notification under the Hart-Scott Rodino Antitrust Improvements Act of 1976 and to a waiting period and possible review by the DOJ and the FTC or additional waiting periods mandated by various state regulatory agencies.

Any delays, injunctions, conditions or modifications by any of these federal or state agencies could have a negative effect on us and result in the abandonment of all or part of these acquisitions or otherwise attractive acquisition opportunities.

In recent years, a number of states have also adopted health care transaction review laws aimed at increased transparency and health care market oversight.

When triggered, these laws require significant time and resources, which could further delay future acquisitions.

There can be no assurance as to the cost, scope or impact on our business, results of operations, financial condition or prospects of the actions that may be required to obtain regulatory approvals.

Further, even following completion of an acquisition, applicable government agencies may disagree with our interpretation of these complicated statutes and regulations.

Further, even following completion of an acquisition, applicable government agencies may disagree with our interpretation of complicated applicable statutes and regulations.

These disagreements, violations, or alleged violations could result in significant civil or criminal penalties and/or equitable actions not in our favor.

Any such circumstances, violations or alleged violations could have a material adverse effect on our business and substantially diminish the synergies and other advantages which we expect from such acquisition.

Our mix of customers fluctuates from period to period, and our revenue is often concentrated among only a small number of customers, and the loss of or a reduction in sales to any of our customers could materially harm our business.

The composition and concentration of our customer base often fluctuates from period to period, and in certain prior periods, a small number of customers accounted for a significant portion of our revenue.

When customers who, to our knowledge, are under common control or otherwise affiliated with each other are aggregated, one of our customers contributed $62.6 million or 22% of our total revenue during the year ended December 31, 2024.

We continue to see significant concentration in a single large customer.

For this customer and for customers generally, tests are purchased on a test-by-test basis and not pursuant to any long-term purchasing arrangements.

Any such circumstances, delayed closings, failures to close acquisitions in progress, violations, or alleged violations could have a material adverse effect on our business and substantially diminish the synergies and other advantages which we expect from such acquisition.

Our mix of customers fluctuates from period to period, and our revenue is often concentrated among a single large customer or a small number of customers, and the loss of or a reduction in sales to these customers could materially harm our business and results of operations.

The composition and concentration of our customer base often fluctuates from period to period, and in certain prior periods, a small number of customers, or a single large customer has accounted for a significant portion of our revenue.

When customers who, to our knowledge, are under common control or otherwise affiliated with each other are aggregated, one of our laboratory customers contributed $70.8 million or 22% of our total revenue during the year ended December 31, 2025.

We continue to see significant concentration in this single large customer.

For this laboratory customer, and for our customers generally, tests are purchased on a test-by-test basis and not pursuant to any long-term purchasing arrangements.

As a result, any or all of our customers, including affiliated customers or customers under common control who purchase large quantities of tests, could decide at any time to decrease, delay, or discontinue their orders from us, which could adversely affect our revenue.

We believe some of these fluctuations in customer demand may be attributable, in part, to the nature of our business.

Our traditional laboratory and testing services customers can experience significant volatility in their testing demand from period to period in the ordinary course of their operations and certain of these customers are experiencing significant financial distress.

Demand fluctuations, particularly for any large customers, often have a significant impact on our period-to-period performance regardless of their cause.

For instance, during 2023 and 2024, several projects for our BioPharma services clients were scaled back or terminated.

We began to see lower than anticipated testing volume from this large customer in the fourth quarter of 2025, and going forward, we expect reduced revenues from this large laboratory customer in 2026 (particularly through the second quarter of 2026) as this customer begins performing certain tests and testing services internally, rather than purchasing these tests and testing services from us.

We believe we may be able to offset, or partially offset, this decrease in revenues from this laboratory customer through the development of existing customers, or by capturing new customers (including through the Bako Diagnostics and Strata Dx acquisitions), but these efforts may not be successful.

Our traditional laboratory and testing services customers can also experience significant volatility in their testing demand from period to period in the ordinary course of their operations or in periods of distress.

As an example, during 2023 and 2024, several projects for our BioPharma services clients were scaled back or terminated;

and during 2024 and 2025, some of our laboratory services customers went into bankruptcy.

This was primarily due to those clients experiencing significant financial distress, undergoing restructuring, shifting their focus, reacting to changing market dynamics, or concluding large clinical trials.

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Wade , the recent political climate and state court decisions, there is uncertainty regarding the potential regulatory treatment of embryos, which may cause demand for IVF, or other assisted reproductive technologies, to decline or to decline in certain jurisdictions.

Further, if our laboratory customers decided to perform certain testing services internally, our business and results of operations could be materially and adversely harmed.

Our ability to maintain or increase sales to our existing customers depends on a variety of factors, including the other risk factors discussed in this report, many of which are beyond our control.

We believe some of these fluctuations in customer demand may be attributable, in part, to the nature of our business.

Demand fluctuations, particularly for any large customers, often have a significant impact on our period-to-period performance regardless of their cause.

Our ability to maintain or increase sales to our existing customers also depends on a variety of factors, including the other risk factors discussed in this report, many of which are beyond our control.

Because of these and other factors, sales to any of our customers, including any key, affiliated, or commonly controlled customers, may not continue in the amounts or at the rates as they have in the past, and such sales may never reach or exceed historical levels in any future period.

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We operate our businesses in very competitive and evolving fields.

While we believe that we compare favorably to these competitors, some of our competitors may have technical, competitive, or other advantages over us for the development of technologies and processes or greater experience in particular diagnostics or therapeutic development areas, and consolidation among pharmaceutical, diagnostic, and biotechnology companies can enhance these advantages.

While we believe that we compare favorably to these competitors, some of our competitors may have technical, competitive, marketing, or other advantages over us for the development of technologies and processes or greater experience in particular diagnostics or therapeutic development areas, and consolidation among pharmaceutical, diagnostic, and biotechnology companies can enhance these advantages.

More specifically, many of our competitors have longer operating histories, larger customer bases, larger research and development staffs, more expansive brand recognition, established manufacturing capabilities and facilities, deeper market penetration, substantially greater financial, technological, and research and development resources and selling and marketing capabilities with established sales forces;

and considerably more experience dealing with insurance payors.

As a result, they may be able to respond more quickly to changes in customer requirements or preferences, develop faster and better advancements for their technologies, product candidates and tests, create and implement more successful strategies for the promotion and sale of their tests, obtain more favorable results from insurance payors regarding coverage and reimbursement for their offerings, adopt more aggressive pricing policies for their tests, secure supplies from vendors on more favorable terms or devote substantially more resources to infrastructure and systems development.

In addition, competitors may be acquired by, receive investments from, or enter into other

commercial relationships with larger, well-established and well-financed companies, which may result in even more resources being concentrated among our competitors.

and considerably more leverage and experience dealing with insurance payors.

As a result, they may be able to respond more quickly to changes in customer requirements or preferences;

develop faster and better advancements for their technologies, product candidates, and tests;

create and implement more successful strategies for the promotion and sale of their tests;

obtain more favorable results from insurance payors regarding coverage and reimbursement for their offerings;

adopt more aggressive pricing policies for their tests;

secure supplies from vendors on more favorable terms;

or devote substantially more resources to infrastructure and systems development.

In addition, competitors may be acquired by, receive investments from, or enter into other commercial relationships with larger, well-established and well-financed companies, which may result in even more resources being concentrated among our competitors.

Smaller or early-stage companies may also prove to be significant competitors, particularly through collaborative arrangements with large and established companies.

Our laboratory services competitors include dozens of companies focused on pathology, genetic, and diagnostic testing services, including specialty and reference laboratories that offer traditional single-gene and multi-gene tests.

As such, we face intense competition from other life science, biotechnology, pharmaceutical, research and development, and diagnostic companies.

As such, we face intense competition from other life science, biotechnology, pharmaceutical, research and development, laboratory, and diagnostic companies.

This competition is subject to rapid change, could be significantly affected by new product or testing introductions, and may intensify further in the future.

With respect to our research and development business, these competitors also compete with us in recruiting and retaining top qualified scientific and management personnel and establishing clinical trial sites and patient registration for clinical trials, as well as in acquiring technologies complementary to, or necessary for, our programs.

Our commercial opportunities could be reduced or eliminated if our competitors develop and commercialize products that are safer, more effective, less expensive, more convenient or easier to administer, or have fewer or less severe effects than any products that we may develop.

Our competitors also may obtain FDA, European Medicines Agency, or EMA, or other regulatory approval for their products more rapidly than we may obtain approval for our products, which could result in our competitors establishing a strong market position before we are able to enter the market.

Even if our drug candidates achieve marketing approval, they may be priced at a significant premium over competitive products if any have been approved by then.

The key competitive factors affecting the success of our drug candidates are likely to be their efficacy, safety, and availability of reimbursement, and drugs or drug candidates may compare more favorably than our drug candidates.

With respect to our Fulgent Pharma research and development business, these competitors also compete with us in recruiting and retaining top qualified scientific and management personnel and establishing clinical trial sites and patient registration for clinical trials, as well as in acquiring technologies complementary to, or necessary for, our programs.

Commercial opportunities for our product candidates could be reduced or eliminated if our competitors develop and commercialize products that are safer, more effective, less expensive, more convenient or easier to administer, or have fewer or less severe side effects than any products or product candidates that we may develop.

Our competitors also may obtain FDA, European Medicines Agency, or EMA, or other regulatory approval for their products more rapidly than we may obtain approval for our products or product candidates, which could result in our competitors establishing a strong market position before we are able to enter the market.

Even if our product candidates achieve marketing approval, they may be priced at a significant premium over competitive products if any have been approved by then.

The key competitive factors affecting the success of our product candidates are likely to be their efficacy, safety, and availability of reimbursement, and products or product candidates may compare more favorably than our product candidates.

We may not be able to compete effectively against competitive organizations.

If we are unable to compete effectively, this could have a material adverse effect on our business and results of operations.

If our laboratory facilities become inoperable, if we are forced to vacate a facility, or if we are unable to obtain additional laboratory space as and when needed, we would be unable to perform our tests, and our business would be harmed.

If any of our laboratory facilities become inoperable, if we are forced to vacate a facility, or if we are unable to obtain additional laboratory space as and when needed, we may be unable to perform our tests, maintain desired turnaround times and our business and results of operations could be harmed.

We perform our tests at our CLIA-certified laboratories in El Monte, California;

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In addition, if we are unable to continue to obtain expedited delivery services on commercially reasonable terms, our operating results may be materially and adversely affected.

We depend on our information technology systems and any material failure of these systems, due to hardware or software malfunctions, delays in operation, and/or material failures to implement new or enhanced systems or cybersecurity breaches, could materially harm our business.

We depend on our information technology systems, and any material failure of these systems, due to hardware or software malfunctions, delays in operation, material failures to implement new or enhanced systems and/or cybersecurity breaches or attacks, could materially harm our business.

We depend on information technology and telecommunications systems for significant elements of our operations, such as our laboratory information management systems, including test validation, specimen tracking and quality control;

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Additionally, if and as our business grows, we will need to continually improve and expand the scope of our technology systems in order to maintain their adequacy for the scale of our operations.

Any failure to make such improvements or any significant delay in the planned implementation of new or enhanced systems could render our systems obsolete or inadequate, in which case our service to our customers and our other business activities could suffer, and we could be more vulnerable to electronic breaches from outside sources.

Any failure to make such improvements or any significant delay in the planned implementation of new or enhanced systems could render our systems obsolete or inadequate, in which case our service to our customers and our other business activities could materially suffer, and we could be more vulnerable to electronic breaches from outside sources.

If our computer systems are compromised, we could be subject to significant fines, damages, reputational harm, litigation, and enforcement actions, and we could lose trade secrets, the occurrence of any of which could materially harm our business, in addition to possibly requiring substantial and material expenditures of resources to remedy.

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on Roche Holdings AG for certain laboratory equipment, supplies and services for our immunohistochemistry services;

on Beckman Coulter Diagnostics for certain laboratory equipment, supplies and services for our flow cytometry tests and testing services;

on Leica Biosystems for an automated digital scanning solution to scale up the digital pathology operations;

and on Abbott Laboratories for certain laboratory equipment, supplies and services for our FISH tests and testing services.

Additionally, our therapeutic development business relies on ANP Technologies, Inc.

for certain laboratory services, equipment, tools, and drug intermediates in connection with our research and development efforts.

We do not have long-term agreements with most of our suppliers and, as a result, they could cease supplying these materials and equipment generally to us at any time due to an inability to reach agreement with us on supply terms, disruptions in their operations, a determination to pursue other activities or lines of business, or they could fail to provide us with sufficient quantities of materials that meet our specifications, among other reasons.

These suppliers may also be affected by natural disasters such as extreme weather events, fires or flooding (which may be exacerbated as a result of climate change), pandemics and health events, and disruptions of the global supply chain.

While there are several sequencer suppliers that we believe could replace Illumina, and while we believe that we have sufficient alternative suppliers for our other needs,

transitioning to a new supplier or locating a temporary substitute, if any are available, would be time-consuming and expensive, could result in interruptions in or otherwise affect the performance specifications of our laboratory operations or could require that we revalidate our tests.

While there are several sequencer suppliers that we believe could replace Illumina, and while we believe that we have sufficient alternative suppliers for our other needs, transitioning to a new supplier or locating a temporary substitute, if any are available, would be time-consuming and expensive, could result in interruptions in or otherwise affect the performance specifications of our laboratory operations or could require that we revalidate our tests.

In addition, the use of equipment or materials provided by a replacement supplier could require us to alter our laboratory operations and procedures.

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The loss of any member of our senior management team could adversely affect our business.

Our success depends in large part on the skill, experience, and performance of our executive management team and others in key leadership positions, especially Ming Hsieh, our founder, Chief Executive Officer and Chairman of our board of directors;

Paul Kim, our Chief Financial Officer;

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The continued efforts of these persons will be critical to us as we continue to develop our technologies and focus on growing our business.

If we lose one or more of these key executives, we could experience difficulties maintaining our operations, including our ability to compete effectively, advance our technologies, develop new tests, and implement our business strategies.

All of our executives and employees, including Messrs.

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Reputational risk, including as a result of negative publicity, is inherent in our business.

Negative publicity can result from actual or alleged conduct in a number of areas, including legal and regulatory compliance, corporate governance, litigation, inadequate protection of health information, illegal or unauthorized acts taken by third parties that supply products or services to us, and the conduct of our employees or agents.

In particular, COVID-19 and access to fertility services have been politically controversial topics, and our provision of COVID-19 testing and related services has subjected us to negative publicity and we may again be subject to negative publicity in connection with our testing services provided to fertility clinics or provided in support of assisted reproductive technology.

Negative publicity can result from actual or alleged conduct in a number of areas, including legal and regulatory compliance, professional liability, malpractice, corporate governance, litigation, inadequate protection of health information, illegal or unauthorized acts taken by third parties that supply products or services to us, and the conduct of our employees or agents.

In particular, access to fertility services has been a politically controversial topic, and we may again be subject to negative publicity in connection with our testing services provided to fertility clinics or provided in support of assisted reproductive technology.

Negative publicity can damage our reputation and business even if these statements about us are untrue.

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We may not be successful in developing and marketing new tests or testing services, which could negatively impact our performance and prospects.

We believe our future success will depend in part on our ability to continue to expand our test and testing service offerings and develop and sell new tests and testing services and on our ability to expand our presence in new and existing markets, including our

presence in the molecular diagnostic and cancer testing markets.

We may not be successful in launching or marketing any new tests we may develop;

We believe our future success will depend in part on our ability to continue to expand our test, diagnostic and testing service offerings and to develop and sell new tests, diagnostic services and testing services and on our ability to expand our presence in new and existing markets, including our presence in the molecular diagnostic and cancer testing markets.

We may not be successful in launching or marketing any new tests or services we may develop;

in expanding into any new or existing markets;

and, even if we are successful, the demand for our tests or testing services could decrease or may not continue to increase at historical rates.

Development of new tests and testing services is time-consuming and costly, as development and marketing of new tests and testing services often requires us to conduct research and development activities regarding the new tests and to further scale our laboratory processes and infrastructure to be able to analyze increasing amounts of more diverse data.

Further, we may be unable to discover or develop and launch new tests or testing services for a variety of reasons, including failure of any proposed test to perform as expected, lack of validation or reference data for the test, or failure to demonstrate the utility of the test.

and, even if we are successful, the demand for our tests, diagnostic or testing services could decrease or may not continue to increase at historical rates.

Development of new tests, diagnostic and testing services is time-consuming and costly, as development and marketing of new tests, diagnostic and testing services often requires us to conduct research and development activities regarding the new tests, diagnostic and testing services and to further scale our laboratory processes and infrastructure to be able to analyze increasing amounts of more diverse data.

Further, we may be unable to discover or develop and launch new tests, diagnostic or testing services for a variety of reasons, including failure of any proposed test to perform as expected, lack of validation or reference data for the test, or failure to demonstrate the utility of the test.

Any new test we are able to discover and develop may not be launched in a timely manner, meet applicable regulatory standards, successfully compete with other technologies and available tests, avoid infringing the proprietary rights of others, achieve coverage and adequate reimbursement from insurance payors, be capable of performance at commercial levels and at reasonable costs, be successfully marketed, or achieve sufficient market acceptance for us to recoup our time and capital investment in the development of the test.

Any failure to successfully develop, market, and sell new tests or testing services could negatively impact our ability to attract and retain customers, our revenue, and prospects.

The development and use of AI presents risks and challenges that can impact our business, including by posing security risks to our confidential information, proprietary information, and personal data and could give rise to legal and/or regulatory actions, damage our reputation, or otherwise materially harm our business.

Our development and use of AI presents risks and challenges that can impact our business, including by posing security risks to our confidential information, proprietary information, and personal data and could give rise to legal and/or regulatory actions, damage our reputation, or otherwise materially harm our business.

AI is increasingly being used in the biopharmaceutical, pharmaceutical, technology, and consumer health industries.

We evaluate different AI technologies and identify areas where we can apply AI to improve our operations.

We have developed and incorporated AI technology in certain of our products and services, including for digital pathology.

Issues relating to the use of new and evolving technologies such as AI, machine learning, generative AI, and large language models, may cause us to experience perceived or actual brand or reputational harm, technical harm, competitive harm, legal liability, cybersecurity risks, privacy risks, compliance risks, security risks, ethical issues, and new or enhanced governmental or regulatory scrutiny, and we may incur additional costs to resolve such issues.

Litigation or government regulation related to the use of AI may also adversely impact our ability to develop and offer products that use AI, as well as increase the cost and complexity of doing so.

We have developed and incorporated AI technology in certain of our testing and services, including for digital pathology.

and we may incur additional costs to resolve such issues.

Litigation or government regulation related to the use of AI may also adversely impact our ability to develop and offer tests and services that use AI, as well as increase the cost and complexity of doing so.

In addition, uncertainties regarding developing legal and regulatory requirements and standards may require significant resources to modify and maintain business practices to comply with U.S.

laws concerning the use of AI, the nature of which cannot be determined at this time.

In addition, the European Union recently passed the Artificial Intelligence Act, whose regulations will be developed over the coming year and, in the United States, the recent Executive Order concerning AI may result in extensive new federal rule-making.

In addition, the European Union’s AI Act entered into force in August 2024 and, with some exceptions, will be fully effective by August of 2026, and in the United States, the 2023 Executive Order concerning AI influences federal rule-making applicable regulations.

Further, market demand and acceptance of AI technologies are uncertain, and we may be unsuccessful in our product development efforts.

As necessary, we plan to develop policies governing the use of AI to encourage appropriate use of AI by our employees, contractors, and authorized agents and that our assets, including intellectual property, competitive information, personal information we may collect or process, and customer information, are protected.

As necessary, we have developed policies governing the use of AI to encourage appropriate use of AI by our employees, contractors, and authorized agents and that our assets, including intellectual property, competitive information, personal information we may collect or process, and customer information, are protected.

Any failure by our personnel, contractors, or other agents to adhere to any policies that we may establish could violate confidentiality obligations or applicable laws and regulations, jeopardize our intellectual property rights, cause or contribute to unlawful discrimination, or result in the misuse of personally identifiable information or the injection of malware into our systems, any of which could have a material adverse effect on our business, results of operations, and financial condition.

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• compliance with the laws and regulations of multiple jurisdictions, which may be conflicting or subject to increasing stringency or other changes, including privacy and data protection regulations, tax laws, tariffs, employment laws, healthcare regulatory requirements, and other related approvals, including permitting and licensing requirements;

• logistics associated with the shipment of blood or other tissue specimens, including infrastructure conditions, transportation delays, and the impact of United States and local laws and regulations, such as export and import permit requirements or restrictions, tariffs, or other charges and other trade barriers, all of which involve increased risk related to

the trade policies of the current administration, which may threaten existing and proposed trade agreements and impose more restrictive U.S.

export-import regulations that impact our business;

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• natural disasters;

political and economic instability, including wars, terrorism and political unrest, such as conflicts in the Ukraine and the Middle East and tensions between China and Taiwan;

political and economic instability, including wars, terrorism and political unrest, such as conflicts in Ukraine and the Middle East and tensions between China and Taiwan;

outbreak of disease;

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Although we believe this joint venture could result in expanded long-term opportunities to address the genetic testing market in Asia, this belief could turn out to be wrong, and we may never realize these or any other benefits we anticipate from our joint venture.

Moreover, any joint venture we may seek to establish may never produce sufficient revenue for us to recover our capital and other investments in the joint venture, and we could become subject to liabilities based on our involvement in the joint venture’s operations.

Moreover, any joint venture we may seek to establish may never produce sufficient revenue for us to recover our capital and other investments in the joint venture, and we could become subject to

liabilities based on our involvement in the joint venture’s operations.

The materialization of any of these risks could materially harm our performance and prospects.

If we are sued for product or professional liability, we could face substantial liabilities that exceed our resources.

We could face substantial liabilities that exceed our resources for litigation relating to product or professional liability.

Our business depends on our ability to provide reliable and accurate test results, including tests that incorporate rapidly evolving information about the role of genes and gene variants in disease and clinically relevant outcomes associated with these variants or pathology services and testing that often rely on human interpretation.

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This is particularly true for our pathology testing services.

Errors, such as failures to detect genomic variants with high accuracy, or mistakes, such as failures to completely and correctly identify the significance of gene variants, abnormal cells or to detect disease, could subject us to product liability or professional liability claims.

Any such claim against us could result in substantial damages and be costly and time-consuming to defend.

Although we maintain liability insurance, including for errors and omissions, our insurance may not fully protect us from the financial impact of defending against these types of claims or any judgments, fines, or settlement costs arising out of any such claims.

Additionally, any liability claim brought against us, with or without merit, could increase our insurance rates or prevent us from securing adequate insurance coverage in the future.

Moreover, any liability lawsuit could damage our reputation or force us to suspend sales of our tests.

Errors, such as failures to detect genomic variants with high accuracy, or mistakes, such as failures to completely and correctly identify the significance of gene variants, abnormal cells or to detect disease, subject us to product liability and professional liability claims.

These claims against us could result in substantial damages that materially and adversely affect our results of operations and are costly and time-consuming to defend.

Although we maintain liability insurance, including for errors and omissions, our insurance may not fully protect us from a material and adverse financial impact arising out of defending against these types of claims or any judgments, fines, or settlement costs arising out of any such claims.

As an example, we recorded an accrual of $14.5 million in connection with the settlement of a professional liability matter further described in Note 8, Debt, Commitments and Contingencies of our consolidated financial statements included in this Annual Report for which we may receive partial coverage from our liability insurance, subject to customary retentions, exclusions and limits.

Any liability claim brought against us, with or without merit, could materially increase our insurance rates or prevent us from securing adequate insurance coverage in the future.

Moreover, any liability lawsuit could materially damage our reputation or force us to suspend sales of our tests.

The occurrence of any of these events could have a material adverse effect on our business, reputation, and results of operations.

Fulgent Pharma’s business involves the testing of new drugs on patients in clinical trials and will continue to involve the additional testing of drugs on patients in the future.

Fulgent Pharma’s business involves the testing of our product candidates on patients in clinical trials and will continue to involve the additional testing of our product candidates on patients in the future.

Our involvement in the clinical trials and development process creates a risk of liability for personal injury to or death of patients, particularly those with life-threatening illnesses, resulting from adverse reactions to the drugs administered during testing or after product launch, respectively.

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In addition, insurance coverage is increasingly expensive and difficult to obtain.

Inability to obtain or maintain sufficient insurance coverage at an acceptable cost or to otherwise protect against potential product or other legal or administrative liability claims could prevent or inhibit customer relationships, the clinical development, commercial production, and sale of any of our products and drug candidates, which could adversely affect our business.

Inability to obtain or maintain sufficient insurance coverage at an acceptable cost or to otherwise protect against potential product or other legal or administrative liability claims could prevent or inhibit customer relationships, the clinical development, commercial production, and sale of any of our product candidates, which could materially and adversely affect our business.

Any inability to obtain additional capital when needed and on acceptable terms may limit our ability to execute our business plans, and our liquidity needs could be materially affected by market fluctuations and general economic conditions.

If we raise funds by issuing equity securities, our stockholders may experience substantial dilution.

We expect our capital expenditures and operating expenses to increase over the next several years as we seek to expand our infrastructure, other commercial operations, and research and development activities.

As of December 31, 2025, we had cash, cash equivalents, and marketable securities of approximately $705.5 million.

We may seek to fund future cash needs through securities offerings, credit facilities, or other debt financings, asset sales, collaborations, or licensing arrangements.

Additional funding may not be available to us when needed, on acceptable terms or at all.

For example, the COVID-19 pandemic initially caused extreme disruption and volatility in the global capital markets followed by a period of high market demand for life science and diagnostic company equities and then a period of less demand for these equities in 2022, 2023, and 2024.

These circumstances and high volatility in capital markets generally may reduce our ability to access capital and/or adversely affect the stability of the depository institutions maintaining our assets.

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Moreover, we may incur substantial costs in pursuing future capital, including investment banking, legal, and accounting fees, printing and distribution expenses and other similar costs.

If we are unable to secure funding if and when needed and on reasonable terms, we may be forced to delay, reduce the scope of or eliminate one or more sales and marketing initiatives, research and development programs or other growth plans or strategies.

If we are unable to secure funding if and when needed and on reasonable terms, we may be forced to delay, reduce the scope of or eliminate one or more sales and marketing initiatives, research

and development programs or other growth plans or strategies.

In addition, we may be forced to work with a partner on one or more aspects of our tests or market development programs or initiatives, which could lower the economic value to us of these tests, programs or initiatives.

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Inflation has and may again materially and adversely affect us by materially increasing our costs.

In recent years, inflation has increased throughout the United States economy.

Inflation has adversely affected us and may again adversely affect us by materially increasing the costs of clinical trials and research, the development of our tests and drug candidates, administration, and other costs of doing business.

In recent years, inflation has increased throughout the U.S.

Inflation has adversely affected us and may again adversely affect us by materially increasing the costs of clinical trials and research, the development of our tests and product candidates, administration, and other costs of doing business.

We have and may again experience material increases in the prices of labor and other costs of doing business.

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Section 404 of the Sarbanes-Oxley Act requires that we evaluate and determine the effectiveness of our internal control over financial reporting and annually provide a management report on these internal controls.

We have incurred and expect to continue to incur significant expenses and devote substantial management effort toward compliance with the auditor attestation requirements of

Section 404 of the Sarbanes-Oxley Act.

We have incurred and expect to continue to incur significant expenses and devote substantial management effort toward compliance with the auditor attestation requirements of Section 404 of the Sarbanes-Oxley Act.

Although we have implemented systems, processes and controls and performed this evaluation as of the end of 2025, we will need to maintain and enhance these controls if and as we grow.

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The primary objective of our investment activity is to maintain the safety of principal, preserve capital and provide for future liquidity requirements while maximizing yields without significantly increasing risk.

Should any of our investments or marketable securities lose value or have their liquidity impaired, it could materially affect our overall financial condition.

Should any of our investments or marketable securities lose value or have their liquidity impaired, it could materially

affect our overall financial condition.

Additionally, should we choose or are required to sell these securities in the future at a loss, our consolidated operating results or cash flows may be materially and adversely affected.

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We maintain our cash, cash equivalents, and marketable securities with high quality, accredited financial institutions.

However, some of these accounts exceed the Federal Deposit Insurance Corporation, or FDIC, insurance limit of $250,000 and, while we believe the Company is not exposed to significant credit risk due to the financial strength of these depository institutions or investments, if any such depositary institution fails to return our deposits, or if a depository institution is subject to other adverse conditions in the financial or credit markets, this could further impact access to our invested cash or cash equivalents and could adversely impact our operating liquidity and financial performance.

However, some of these accounts exceed the Federal Deposit Insurance Corporation, or FDIC, insurance limit of $250,000 and, while we believe the Company is not exposed to significant credit risk due to the financial strength of these depository institutions or investments, if any such depository institution fails to return our deposits, or if a depository institution is subject to other adverse conditions in the financial or credit markets, this could further impact access to our invested cash or cash equivalents and could adversely impact our operating liquidity and financial performance.

Further, the failure or collapse of one or more of these depository institutions or default on these investments could materially adversely affect our ability to recover these assets and/or materially harm our financial condition.

We have been the subject of a shareholder class action, which was dismissed without prejudice;

and we may be subject to further shareholder litigation in the future;

We have been the subject of a stockholder class action, which was dismissed without prejudice;

and we may be subject to further stockholder litigation in the future;

our costs of defending such litigation, arbitration, and other proceedings and any adverse outcome of such litigation, arbitration, or other proceeding may have a material adverse effect on our business and the results of our operations.

We have been, and may from time to time in the future be, involved in and subject to material litigation and other legal proceedings, including shareholder litigation.

We have been, and may from time to time in the future be, involved in and subject to material litigation and other legal proceedings, including stockholder litigation.

These proceedings may not always resolve in our favor and may materially and adversely affect our business.

While the recent shareholder class action was dismissed, it was dismissed without prejudice, so there is no assurance that another complaint may not be filed in the future.

Regardless of outcome, litigation can have an adverse impact on us due to defense and settlement costs, diversion of management resources, negative publicity, and reputational harm, among other factors.

Political uncertainty may have an adverse impact on our operating performance and results of operations.

General political uncertainty may have an adverse impact on our operating performance and results of operations.

In particular, the United States continues to experience significant political events that cast uncertainty on global financial and economic markets, especially in light of the new administration.

It is presently unclear exactly what actions the new administration in the United States will implement, and if implemented, how these actions may impact the pharmaceutical and diagnostics industries in the United States.

Any actions taken by the new administration may have a negative impact on the United States economies and on our business, financial conditions, and results of operations.

General political uncertainty within the United States and foreign jurisdictions may have an adverse impact on our operating performance and results of operations.

The global economy may be adversely affected by the current or anticipated impact of political uncertainty, including military conflicts, such as the ongoing conflicts between Russia and Ukraine, and Israel and Hamas, terrorism, or other geopolitical events.

Changing regulatory policies resulting from the changing political environment could impact our regulatory and compliance costs and future revenues, all of which could materially and adversely affect our business, financial condition, and operating results.

In particular, the United States continues to experience significant political events that cast uncertainty on global financial and economic markets.

It is presently unclear as to all of the actions the current administration in the United States will implement, and if implemented, how these actions may impact us or how we operate in the United States or the pharmaceutical and diagnostics industries in the United States.

In addition, the current administration may institute significant changes to certain federal regulatory agencies, including the IRS, FDA, DOJ, and SEC, such as reductions in funding levels or restructuring of such agencies that could adversely impact us.

Any actions taken by the current administration, including the many recent executive orders, may have a negative impact on the United States economies and on our business, financial conditions, and results of operations.

Impairment charges relating to our goodwill and intangible assets could negatively affect our financial performance.

We have previously and may again in the future pursue acquisitions of complementary businesses or assets, and we may not realize all the economic benefit from those acquisitions, which could cause an impairment of goodwill or intangibles.

We assess goodwill and indefinite-lived intangibles for impairment at least annually or whenever events or changes in circumstances indicate the carrying value may not be recoverable.

We are pursuing and may again in the future pursue acquisitions of complementary businesses or assets, and we may not realize all the economic benefit from those acquisitions, which could cause an impairment of goodwill or intangibles.

We assess goodwill and indefinite-lived intangible assets for impairment at least annually or whenever events or changes in circumstances indicate the carrying value may not be recoverable.

Events and conditions that could result in an impairment of our goodwill and intangible assets include a decline in our stock price and market capitalization, reduced future cash flow estimates, slower growth rates in industry segments in which we participate, or other factors leading to reduction in expected long-term growth or profitability.

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Accounting principles generally accepted in the United States, or U.S.

GAAP, is subject to interpretation by the Financial Accounting Standards Board, or FASB, the SEC, and various bodies formed to promulgate and interpret appropriate accounting principles.

GAAP, is subject to interpretation and modification by the Financial Accounting Standards Board, or FASB, the SEC, and various bodies formed to promulgate and interpret appropriate accounting principles.

A change in accounting standards or practices can have a significant effect on our reported results and may even affect our reporting of transactions completed before the change is effective.

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If, notwithstanding our efforts to comply with these laws, regulations and standards, we fail to comply, regulatory authorities may initiate legal proceedings against us, and our business may be harmed.

As previously disclosed and as set forth in Note 8 “ Debt, Commitments and Contingencies to the Consolidated Financial Statements ,” we are under investigation by the SEC for certain alleged violations of securities laws.

While we do not believe that any enforcement recommendation is warranted and deny all liability, we have recorded a $1.0 million potential liability with respect to this matter.

The actual amount of liability, if any, may be materially higher than this estimate, as discussions are ongoing and there is no formal settlement or final resolution of this matter at this time.

Further, if we fail to comply with these laws, regulations and standards, it might also be more difficult for us to obtain certain types of insurance, including director and officer liability insurance, and we might be forced to accept reduced policy limits and coverage or incur substantially higher costs to obtain the same or similar coverage.

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federal government may also terminate a contract either “for convenience” (for instance, due to a change in its perceived needs or its desire to consolidate work under another contract) or if a default occurs by failing to perform under the contract.

If the federal government terminates a contract for convenience, we generally would be entitled to recover only our incurred or committed costs, settlement expenses and profit on the work completed prior to termination.

If the federal government terminates a contract for convenience, we generally would be entitled to recover only our incurred or

committed costs, settlement expenses, and profit on the work completed prior to termination.

If the federal government terminates a contract based upon a default, we generally would be denied any recovery for undelivered work, and instead may be liable for excess costs incurred by the federal government in procuring undelivered items from an alternative source and other damages as authorized by law.

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This process may result in us facing significant additional pricing pressure and uncertainty and incurring additional costs.

Further, to the extent our performance under a contract does not meet a government agency’s expectations, the customer might seek to terminate the contract prior to its scheduled expiration date, provide a negative assessment of our performance to government-maintained contractor past-performance data repositories, fail to award us additional business under existing contracts or otherwise, and direct future business to our competitors, suspend or debar from contracting with the federal government or any significant agency, including the VA.

Further, to the extent our performance under a contract does not meet a government agency’s expectations, the customer might seek to terminate the contract prior to its scheduled expiration date, provide a negative assessment of our performance to government-maintained contractor past-performance data repositories, fail to award us additional business under existing contracts or otherwise, direct future business to our competitors, or suspend or debar us from contracting with the federal government or any significant agency, including the VA.

These various uncertainties, restrictions, and regulations by government authorities as well as profit and cost controls, could have a material adverse impact on our business, financial condition, and results of operations.

Our tax returns and positions are currently, and may again in the future be, subject to review and audit by the Internal Revenue Service, or the IRS, and other tax authorities, and any adverse outcomes resulting from any examination of our tax returns could adversely affect our liquidity and financial condition.

We are currently under tax audit by the IRS and other state and local authorities and may again in the future be subject to further tax audits by these authorities.

The positions taken in our U.S.

federal, state and local income tax return filings require significant judgments and the interpretation and application of complex tax laws.

Our income tax returns are subject to examination by the IRS and other tax authorities.

While we believe our tax return positions are proper and supportable, these judgments and interpretations are under review during an audit.

An unfavorable outcome of any current or future tax audit could result in our need to utilize available cash to satisfy such tax liabilities and any interest or penalties thereon rather than for our business operations.

As a result, the occurrence of an unfavorable outcome with respect to any future tax audit could have a material adverse effect on our liquidity and financial condition.

Reimbursement Risks

Our ability to achieve or sustain profitability also depends on our collection of payment for the tests we deliver, which we may not be able to do successfully.

If insurance payors do not provide coverage and adequate reimbursement for our tests and testing services, our potential for growth and our ability to collect revenue for these tests and testing services could be limited and our results of operations may be materially and adversely affected.

Our ability to achieve or sustain profitability also depends on our collection of payment for the tests and testing services we deliver, which we may not be able to do successfully.

If insurance payors do not provide coverage and adequate reimbursement for our tests and services, our potential for growth and our ability to collect revenue for these tests and testing services could be limited, and our results of operations may be materially and adversely affected.

Coverage and reimbursement by insurance payors, including managed care organizations, other private health insurers, and government healthcare programs, such as Medicare and Medicaid, for the types of tests we perform can be limited and uncertain.

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Coverage and reimbursement by an insurance payor depend on a number of factors, including a payor’s determination that a test or testing service is appropriate, medically necessary, and cost-effective.

Each payor makes its own decision as to whether to establish a policy or enter into a contract to cover our tests and the amount it will reimburse for each test, and any determination by a payor regarding coverage and amount of reimbursement for our tests would likely be made on an indication-by-indication basis.

Each payor makes its own decision as to whether to establish a policy or enter into a contract to cover our tests and the amount it will reimburse for each test, and any determination by a payor regarding coverage and the amount of reimbursement for our tests would likely be made on an indication-by-indication basis.

Even if a test has been approved for reimbursement for any particular indication or in any particular jurisdiction, there is no guarantee this test will remain approved for reimbursement or that any similar or additional tests will be approved for reimbursement in the future.

Moreover, there can be no assurance that any new tests we launch will be reimbursed at all or at rates comparable to the rates of any previously reimbursed tests.

In addition, the coding procedure used by all insurance payors with respect to establishing payment rates for various procedures, including our tests, is complex, does not currently adapt well to the tests we perform and may not enable coverage and adequate reimbursement rates for our tests.

In addition, the coding procedure used by all insurance payors with respect to establishing payment rates for various procedures, including our tests, is complex, does not currently adapt well to the tests we perform and may not result in coverage and adequate reimbursement rates for our tests.

If physicians fail to provide appropriate diagnosis codes for tests that they order, we may not be reimbursed for our tests.

Additionally, if we are not able to obtain sufficient clinical information in support of our tests, insurance payors could designate our tests as experimental or investigational and decline to cover and reimburse our tests because of this designation.

Additionally, if we cannot obtain sufficient clinical information in support of our tests, insurance payors could designate our tests as experimental or investigational and decline to cover and reimburse our tests because of

this designation.

As a result of these factors, obtaining approvals from insurance payors to cover our tests and testing services and establishing adequate reimbursement levels is an unpredictable, challenging, time-consuming, and costly process, and we may never be successful.

To date, we have contracted directly with national health insurance companies to become an in-network provider and enrolled as a supplier in the Medicare program and a provider in some state Medicaid programs, and we have also received payment for our tests from other insurance payors as an out-of-network provider.

Although becoming an in-network provider or enrolling as a supplier or provider means that we have agreed with these payors to provide certain of our tests at negotiated or set fee schedule rates, it does not obligate any physicians or other practitioners to order our tests or guarantee that we will receive reimbursement for our tests from these or any other payors at adequate levels.

To date, we have contracted directly with national insurance payors to become an in-network provider and enrolled as a supplier in the Medicare program and a provider in some state Medicaid programs, and we have also received payment for our tests from other insurance payors as an out-of-network provider.

Although becoming an in-network provider or enrolling as a supplier or provider means that we have agreed with these payors to provide certain of our tests at negotiated or set fee schedule rates, it does not obligate any physician or other practitioner to order our tests or guarantee that we will receive reimbursement for our tests from these or any other payors at adequate levels.

As a result, these payor relationships, any other similar relationships we may establish in the future, or any additional payments we may receive from other payors as an out-of-network provider, may not amount to acceptable levels of reimbursement for our tests or meaningful increases in our customer base or the number of tests we sell.

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Any inability to maintain our past payment collection levels could cause our revenue and ability to achieve profitability to decline and adversely affect our business, prospects and financial condition.

Failure to comply with government laws and regulations related to submission of claims for our services could result in significant monetary damages and penalties and exclusion from the Medicare and Medicaid programs and corresponding foreign reimbursement programs.

Failure to comply with government laws and regulations related to submission of claims for our tests and testing services could result in significant monetary damages and penalties and exclusion from the Medicare and Medicaid programs and corresponding foreign reimbursement programs.

We are also subject to governmental audits and investigations that could result in material refunds or settlement.

Our business, prospects and financial condition may be adversely affected as the result of the current HRSA Audit and CIDs.

Our business, prospects and financial condition may be adversely affected as the result of the HRSA Audit and CIDs.

We are subject to laws and regulations governing the submission of claims for payment for our services, such as those relating to:

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Submission of claims in violation of these laws and regulations, identified through an audit or through the Company’s control processes, can result, as noted above, in recoupment of payments already received, substantial civil monetary penalties, and exclusion from state and federal healthcare programs, and can subject us to liability under the federal False Claims Act and similar laws.

The failure to report and return an

overpayment to the Medicare or Medicaid programs within 60 days of identifying its existence can give rise to liability under the False Claims Act.

The failure to report and return an overpayment to the Medicare or Medicaid programs within 60 days of identifying its existence also can give rise to liability under the False Claims Act.

Further, a government agency could attempt to hold us liable for causing the improper submission of claims by another entity for services that we performed.

Similar to other laboratories in the industry, the Company is currently being audited by HRSA with respect to its reimbursement for COVID-19 tests furnished to patients believed to be uninsured.

The Company is fully cooperating and working with HRSA’s auditors to resolve any issues, including any reimbursed amounts that may need to be returned to HRSA.

There is uncertainty with respect to the methodology HRSA will use and whether and how they will extrapolate audit results.

Among other things, this CID requests information and records relating to certain of the Company’s customers named in this CID.

In addition, we have also received a CID issued by the DOJ related to the DOJ’s investigation as to whether we submitted or caused to be submitted false claims to the Uninsured Program.

We are fully cooperating with the DOJ in connection with the CIDs that we have received and in connection with the HRSA audit.

Certain of the Company’s executive officers and employees have also received CIDs relating to these matters.

Similar to other laboratories in the industry, the Company responded to an audit inquiry by HRSA with respect to its reimbursement for COVID-19 tests furnished to patients believed to be uninsured pursuant to HRSA’s Uninsured Program, which covered COVID-19 testing during the pandemic.

We have fully cooperated with HRSA’s auditors and provided all requested information.

As of the date of this Annual Report, the Company has not received any final audit results from HRSA for this audit.

There is uncertainty with respect to the methodology HRSA will use and whether and how HRSA will extrapolate audit results.

We have also received a CID issued by the DOJ related to the DOJ’s investigation as to whether we submitted or caused to be submitted false claims to HRSA’s Uninsured Program and, as noted below, in February 2026, a qui tam claim related to our reimbursement for COVID-19 testing was unsealed and subsequently dismissed.

We are fully cooperating with the DOJ in connection with the CIDs that we, or our employees, have received.

We cannot currently predict when these CIDs and HRSA audit matters will be resolved, the reasonable or likely outcome of these matters, or their potential impact, which may materially and adversely affect our business, prospects, and financial condition.

These matters are not formal claims and discussions and investigations remain ongoing.

As such, we cannot reasonably estimate the loss or range of loss, if any, that may result from any material government investigations, audits, and reviews in which we are currently involved, given the inherent difficulty in predicting regulatory action, fines and penalties, if any, and the various remedies and levels of judicial review available to us in the event of an adverse finding.

Discussions and investigations remain ongoing.

As such, we cannot reasonably estimate the loss or range of loss, if any, that may result from any material government investigations, audits, claims, and reviews in which we are currently involved, given the inherent difficulty in predicting regulatory action, fines and penalties, if any, and the various remedies and levels of judicial review available to us in the event of an adverse finding.

See “ Contingencies ” in Note 8, Debt, Commitments and Contingencies , for additional information.

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Regulatory Risks

Any changes in laws, regulations, or the enforcement discretion of the FDA with respect to the marketing of diagnostic products, or violations of laws or regulations by us, could materially and adversely affect our business, prospects, results of operations, or financial condition.

The laws and regulations governing the marketing of diagnostic products are evolving, extremely complex and in many instances, have no significant regulatory or judicial interpretations of these laws and regulations.

Pursuant to its authority under the

federal FDC Act, the FDA has jurisdiction over medical devices, including IVDs, and, therefore, potentially our clinical laboratory tests.

Among other things, pursuant to the FDC Act and its implementing regulations, the FDA regulates the research, testing, manufacturing, safety, labeling, storage, recordkeeping, premarket clearance or approval, marketing and promotion, and sales and distribution of medical devices in the United States to ensure that medical products distributed domestically are safe and effective for their intended uses.

In addition, the FDA regulates the import and export of medical devices.

Although the FDA has statutory authority to assure that medical devices and IVDs, including potentially our tests, are safe and effective for their intended uses, the FDA had historically exercised enforcement discretion and not enforced applicable provisions of the FDC Act and regulations with respect to LDTs, which are a particular type of medical device.

We market our tests as LDTs and may, in the future, market other tests as LDTs.

The effective date of the agency’s final rule was July 5, 2024.

The agency’s final rule provides that the LDT enforcement policy phase-out process would occur in gradual stages over a total period of four years, with pre-market approval applications for high-risk tests to be submitted by the three-and-a-half-year mark.

Moderate-risk and low-risk tests are expected to be in compliance at the four-year mark, although FDA has stated that if premarket submissions are pending review it will continue to exercise enforcement discretion with respect to those tests.

Of potential relevance is the agency’s position on LDTs that were marketed prior to the official publication date of the final rule.

Such “currently marketed” tests are subject to many of the device regulatory controls but are exempt from the premarket review and FDA authorization requirements (unless or until significant modifications are made to such “currently marketed” tests).

Similarly, FDA has created a partial enforcement discretion policy for tests approved by the New York’s Department of Health, Clinical Laboratory Evaluation Program, or CLEP, whereby such tests also do not need to undergo FDA premarket review but must come into compliance with all other device general controls in a stagged fashion between 2025 and 2027.

We have begun the process of evaluating the final rule’s potential impact on our tests, our operations, and our business more generally.

On May 29, 2024, ACLA and one of its members filed a complaint against the FDA in the Eastern District of Texas, alleging that the agency does not have authority to promulgate the LDT final rule and seeking to vacate the FDA’s action.

A second lawsuit was also filed against FDA by AMP on August 19, 2024 in the Southern District of Texas, and subsequently the two cases were consolidated into a single action pending in the Eastern District of Texas.

Briefing is ongoing in the consolidated case, and the outcome of such litigation is uncertain.

The litigation could potentially affect FDA’s plans to implement these new LDT requirements, making the potential implementation timeline somewhat uncertain, although no preliminary injunction has been issued to date.

Accordingly, the agency has continued its implementation efforts by actively providing guidance and training to clinical laboratories on how to comply with medical device general controls.

Affected stakeholders also continue to press for a comprehensive legislative solution to create a harmonized paradigm for oversight of LDTs by both the FDA and CMS, instead of implementation of the proposed FDA administrative action, which may be disruptive to the industry and to patient access to certain diagnostic tests.

If FDA prevails in the Texas litigation and is able to fully implement the multi-year phase-in plan for the LDT final rule or Congress enacts comprehensive legislation to regulate in vitro diagnostics that moots the need for the LDT final rule, or if the FDA disagrees with our assessment that our tests meet the criteria to be marketed LDTs, we could, for the first time, be subject to enforcement of a variety of regulatory requirements, including registration and listing, medical device reporting and quality control, and we could be required to obtain premarket clearance or approval for our existing tests and any new tests we may develop, which may force us to cease marketing our tests until we obtain the required clearance or approval.

The premarket review process can be lengthy, expensive, time-consuming and unpredictable.

Further, obtaining premarket authorization may involve, among other things, successfully completing clinical trials.

Any changes in federal laws, regulations, or enforcement policies with respect to the marketing of clinical laboratory tests, or violations of laws or regulations by us, could materially and adversely affect our business, prospects, results of operations, or financial condition.

The laws and regulations governing the marketing of diagnostic products are evolving, are extremely complex, and in many instances, have no significant regulatory or judicial interpretations of these laws and regulations.

Pursuant to its authority under the FDC Act, the FDA has jurisdiction over medical devices, including IVDs, which are defined in the FDA’s implementing regulations as devices intended for use in the collection, preparation, and examination of specimens taken from the human body.

The FDA regulates the research, testing, manufacturing, safety, labeling, storage, recordkeeping, pre-market clearance or approval, marketing and promotion, and sales and distribution of IVDs and medical devices in the United States to ensure that such products distributed domestically are safe and effective for their intended uses.

In addition, the FDA regulates the import and export of medical devices, including IVDs.

We believe all of our tests that have been commercialized in the United States fall within the definition of laboratory developed tests, or LDTs.

LDTs are diagnostic tests that are intended for clinical use and are designed, manufactured, and used within a single laboratory.

The FDA had historically exercised enforcement discretion and not enforced the FDC Act and regulations with respect to LDTs, which the agency asserted were effectively a subset of IVDs.

However, in May 2024, the FDA issued a final rule aimed at regulating LDTs under the medical device framework and phasing out its longstanding enforcement discretion policy for this category of diagnostic tests over several years;

the final rule became effective on July 5, 2024, and was expected to begin entering into force against non-exempt “LDT manufacturers” in May 2025.

In May 2024, ACLA and one of its members filed a complaint against the FDA in the Eastern District of Texas, alleging that the agency did not have authority to promulgate the LDT final rule and seeking to vacate the FDA’s action.

A second lawsuit was also

filed against the FDA by AMP and one of its members in the Southern District of Texas, and subsequently the two cases were consolidated into a single action in the Eastern District of Texas.

On March 31, 2025, the U.S.

District Court for the Eastern District of Texas vacated the final rule in its entirety and remanded the matter to the FDA, holding that the rule exceeded the agency’s authority under the FDC Act.

The FDA did not appeal the district court’s decision.

As a result, the phase-in deadlines established by the rule are no longer operative, and in September 2025 the FDA implemented the court’s vacatur of the final rule with a formal public notice.

The court’s decision removes the regulatory burden that the final rule would have imposed on laboratories such as ours had it been upheld.

However, uncertainty remains regarding the future of federal oversight in this area, as Congress could enact new legislation establishing a statutory framework for regulating all IVDs, including LDTs.

Affected stakeholders continue to press for a comprehensive legislative solution to create a harmonized paradigm for oversight of LDTs by both the FDA and CMS.

If future legislative changes expand FDA’s oversight to allow the agency to regulate LDTs, or if the FDA disagrees with our assessment that our tests meet the criteria to be marketed as LDTs, we could, for the first time, be subject to enforcement of a variety of regulatory requirements that are presently applicable to IVDs, including registration and listing, medical device reporting and quality control.

We could also be required to obtain pre-market clearance or approval for existing tests or new tests we may develop that may meet the definition of an IVD, which may force us to cease or not begin marketing such tests until we obtain the required clearance or approval.

The pre-market review process can be lengthy, expensive, time-consuming and unpredictable.

Further, obtaining pre-market authorization may involve, among other things, successfully completing clinical trials.

Clinical trials require significant time and cash resources and are subject to a high degree of risk, including risks of experiencing delays, failing to complete the trial or obtaining unexpected or negative results.

If we are required to obtain premarket clearance or approval and/or conduct premarket clinical trials, our development costs could significantly increase, our introduction of any new tests we may develop may be delayed and sales of our existing tests could be interrupted or stopped.

Any of these outcomes could reduce our revenue or increase our costs and materially adversely affect our business, prospects, results of operations or financial condition.

Moreover, any cleared or approved labeling claims may not be consistent with our current claims or the test’s indications for use, and they may not be adequate to support continued adoption of and reimbursement for our tests.

For instance, if we are required by the FDA to label our tests as investigational, or if labeling claims the FDA allows us to make are limited, order levels may decline and reimbursement may be adversely affected.

As a result, we could experience significantly increased development costs and a delay in generating additional revenue from our existing tests or from tests we may develop.

In addition, while we qualify the materials used in our tests and testing services in accordance with the regulations and guidelines of CLIA, the FDA could promulgate regulations or make policy decisions impacting our ability to purchase materials necessary for the performance of our tests.

If any of the reagents we obtain from suppliers and use in our tests are affected by future regulatory actions, our business could be adversely affected, including by increasing the cost of testing or delaying, limiting or prohibiting the purchase of reagents necessary to perform testing with our products.

As a result, we could experience significantly increased development costs and a delay in generating additional revenue from such tests.

In addition, while we qualify the materials used in our tests and testing services in accordance with the regulations and guidelines of CLIA, the FDA could promulgate regulations or make policy decisions that may negatively impact our ability to purchase materials necessary for the performance of our tests within the laboratory.

Failure to comply with any applicable FDA requirements could trigger a range of enforcement actions by the FDA, including warning letters, civil monetary penalties, injunctions, criminal prosecution, recall or seizure, operating restrictions, partial suspension or total shutdown of operations and denial of or challenges to applications for clearance or approval, as well as significant adverse publicity.

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We are subject to on-site routine and complaint-driven inspections under California state laboratory laws and regulations.

If we are found to be out of compliance with California requirements, the CA Department of Public Health may suspend, restrict or revoke our license or laboratory permit, and may exclude persons or entities from owning, operating or directing a laboratory for two years following such license revocation, assess civil monetary penalties, or impose specific corrective action plans, among other sanctions.

If we are found to be out of compliance with California requirements, the CA Department of Public Health may suspend, restrict, or revoke our license or laboratory permit, and it may exclude persons or entities from owning, operating or directing a laboratory for two years following such license revocation, assess civil monetary penalties, or impose specific corrective action plans, among other sanctions.

Any such actions could materially and adversely affect our business by prohibiting or limiting our ability to offer testing.

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Our tests, and certain components of our tests, may be subject to the regulatory approval requirements in each foreign country in which they are sold by us or a laboratory partner, and our future performance may depend in part on obtaining any necessary regulatory approvals in a timely manner.

For example, we are in the process of obtaining a CE Mark from the European Commission for certain IVDs being offered to customers in Europe.

We are also in the process of obtaining NATA accreditation in Australia.

For example, in July 2025, we announced that we had obtained a CE Mark from the European Commission for certain IVDs being offered to customers in Europe.

We were required to secure, and must maintain, International Standards Organization certification of our quality management system to comply with the IVDR.

We have also obtained National Association of Testing Authorities accreditation in Australia.

We are occasionally required to address inquiries from regulatory authorities in various countries, such as those in the European Union, regarding the regulatory status of our diagnostic test offerings.

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Among others, the new regulations introduce risk-based classification for IVDs and will require Notified Body involvement for various classes of devices, including certain of our tests, which will require us to submit clinical evidence and post-market performance data to regulators.

We must also achieve and maintain International Standards Organization, or ISO, certification of our quality management system to come into compliance with the IVDR.

On December 6, 2025, the European Commission released a proposal to amend the IVDR with the goal of simplifying the applicable rules, reducing the administrative burden on manufacturers, and enhancing the predictability and cost-effectiveness of the certification procedure while maintaining a high level of public health protections for EU patients and consumers.

We may not be able to obtain foreign regulatory approvals or authorizations for our tests on a timely basis, if at all, which may cause us to incur additional costs or prevent us from marketing our tests in certain foreign countries.

We are subject to broad legal requirements regarding the information we test and analyze, and any failure to comply with these requirements could result in materially significant, penalties, materially damage our reputation, and materially harm our business.

Our business is subject to federal and state laws that protect the privacy and security of personal information, including the HIPAA, HITECH, and similar state laws, as well as numerous other federal, state and foreign laws, including consumer protection laws and regulations, that govern the collection, dissemination, use, access to, confidentiality and security of patient health information.

Our business is subject to federal and state laws that protect the privacy and security of personal information, including HIPAA, HITECH, and similar state laws, as well as numerous other federal, state and foreign laws, including consumer protection laws and regulations, that govern the collection, dissemination, use, access to, confidentiality and security of patient health information.

In addition, new laws and regulations that further protect the privacy and security of medical records or medical information are regularly considered by federal and state governments.

Further, with the recent increase in publicity regarding data breaches resulting in improper dissemination of consumer information, federal and state governments have passed or are considering laws regulating the actions that a business must take if it experiences a data breach, such as prompt disclosure to affected customers.

Further, with the increase in publicity regarding data breaches resulting in improper dissemination of consumer information, all 50 states have passed laws regulating the actions that a business must take if it experiences a data breach, such as prompt disclosure to affected customers.

The FTC and states’ attorneys general have also brought enforcement actions and prosecuted some data breach cases as unfair and/or deceptive acts or practices under the FTC Act and comparable state laws.

We intend to continue to comprehensively protect all personal information and to comply with all applicable laws regarding the protection of such information.

Any failure to implement appropriate security measures to protect the confidentiality and integrity of personal information or any breach or other failure of these systems resulting in the unauthorized access, manipulation, disclosure, or loss of this information could result in our noncompliance with these laws.

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Additionally, the HIPAA Security Rule is currently undergoing a proposed update, which, if implemented, will impose more stringent security measures on covered entities.

The European Union formally adopted the GDPR, which applies to all European Union member states.

The GDPR introduced stringent new data protection and operational requirements in the European Union for companies that receive or process personal data of European residents, as well as substantial fines for breaches of the data protection rules.

It has increased our responsibility and liability in relation to personal data that we process, and we are required to maintain additional mechanisms ensuring compliance with the GDPR.

The GDPR is a complex law, and the regulatory guidance is still evolving, including with respect to how the GDPR should be applied in the context of clinical studies and the collection, processing, and storage of sensitive personal data, including genetic information and testing.

Furthermore, many of the countries within the European Union are still in the process of drafting supplementary data protection legislation in key fields where the GDPR allows for national variation, including the fields of clinical study and other health-related information.

Additionally, in 2021, the United Kingdom’s GDPR rules became effective.

These variations in the law may raise our costs of compliance and result in greater legal risks.

On July 16, 2020, the highest Court of Justice of the European Union, or the CJEU, issued a landmark opinion in the case Maximilian Schrems vs.

Facebook (Case C-311/18), or Schrems II.

This decision calls into question certain data transfer mechanisms as between the European Union member states and the United States.

The CJEU is the highest court in Europe, and the Schrems II decision heightens the burden on data importers to assess U.S.

national security laws on their business and future actions of European Union data protection authorities are difficult to predict at this early date.

Consequently, there is some risk of any such data transfers from the European Union being halted by one or more European Union member states.

Any contractual arrangements requiring the transfer of personal data from the European Union to us in the United States will require greater scrutiny and assessments as required under Schrems II and may have an adverse impact on cross-border transfers of personal data or increase costs of compliance.

In the ordinary course of business, we transfer personal data from Europe, Australia, and other jurisdictions to the United States or other countries and may be subject to the GDPR and UK GDPR as well as other foreign data protection laws.

Europe and other jurisdictions have enacted laws requiring data to be localized or limiting the transfer of personal data to other countries and impose other restrictions on processing of sensitive personal data, including genetic information and testing.

In particular, the EEA and the UK have significantly restricted the transfer of personal data to the United States and other countries whose privacy laws it generally believes are inadequate.

Other jurisdictions may adopt or have already adopted similarly stringent data localization and cross-border data transfer laws.

In July 2023, the European Commission adopted an adequacy decision for a new mechanism for transferring personal data from the European Union to the United States, the EU-U.S.

Data Privacy Framework, which provides EU individuals with several new rights, including the right to obtain access to their data, or obtain correction or deletion of incorrect or unlawfully handled data.

In addition, the EU-U.S.

Data Privacy Framework offers additional redress avenues for violations, including free of charge independent dispute resolution mechanisms and an arbitration panel.

The UK followed the European Commission in October of 2023 and adopted its “extension” to the EU-U.S.

Data Privacy Framework.

The European Commission and the UK will continually review developments in the United States along with their adequacy decisions.

Adequacy decisions can be adapted or even withdrawn in the event of developments affecting the level of protection in the applicable jurisdiction.

Future actions of European Union and UK data protection authorities are difficult to predict.

If there is no lawful manner for us to transfer personal data from the EEA, the UK, Australia, or other jurisdictions to the United States, or if the requirements for a legally-compliant transfer are too onerous, we could face significant adverse consequences, including the interruption or degradation of our operations at significant expense, increased exposure to regulatory actions, substantial fines and penalties, the inability to transfer data and work with partners, vendors and other third parties, and injunctions against our processing or transferring of personal data necessary to operate our business.

Additionally, companies that transfer personal data out of the EEA and UK to other jurisdictions, particularly to the United States, are subject to increased scrutiny from regulators, individual litigants, and activist groups.

Some European regulators have ordered certain companies to suspend or permanently cease certain transfers out of Europe for allegedly violating the GDPR’s cross-border data transfer limitations.

Regulators in the United States such as the Department of Justice are also increasingly scrutinizing certain personal data transfers and, effective October of 2025, the DOJ has implemented what is known as the Bulk Transfer Rule restricting transfers of bulk sensitive personal data (like health, genomic, or financial info) and U.S.

government-related data to “countries of concern” (e.g., China, Russia) or related entities, focusing on national security by preventing adversary access.

It requires U.S.

companies to implement data security programs, audit compliance, and maintain records, with significant penalties for violations, aiming to safeguard sensitive U.S.

data from foreign adversaries.

In addition, many states, such as California, have implemented similar privacy laws and regulations, such as the CMIA, that impose restrictive requirements regulating the use and disclosure of patient health information and other personal information.

In addition to fines and penalties imposed upon violators, some of these state laws also afford private rights of action to individuals who believe their personal information has been misused.

California’s patient privacy laws, for example, provide for penalties of up to $250,000 and permit injured parties to sue for damages.

In addition to the CMIA, California also enacted the CCPA, which became effective on January 1, 2020.

The CCPA has been characterized as the first “GDPR-like” privacy statute to be enacted in the United States because it mirrors a number of the key provisions of the GDPR.

The CCPA establishes a new privacy framework for covered businesses in the State of California by creating an expanded definition of personal information, establishing new data privacy rights for California residents, imposing special rules on the collection of personal data from minors, and creating a new and potentially severe statutory damages framework for violations of the CCPA and for businesses that fail to implement reasonable security procedures and practices to prevent data breaches.

Additionally, the CPRA took full effect on January 1, 2023.

The CPRA amends and expands the CCPA significantly, potentially resulting in further uncertainty, additional costs and expenses in an effort to comply, and additional harm and liability for failure to comply.

Among other things, the CPRA established the CPPA, a new regulatory authority charged with administering and enforcing the CRPA and privacy rights in California.

The CPPA has the power to levy fines and bring other enforcement actions.

The CPRA could impact our operations or that of our collaborators and business partners and impose new regulatory requirements and increase costs of compliance.

California’s patient privacy laws, for example, provide for penalties of up to

$250,000 and permit injured parties to sue for damages.

In addition to the CMIA, California’s CCPA, as amended and expanded by the CPRA, applies to personal data of consumers, business representatives and employees who are California residents and requires businesses to provide specific disclosures in privacy notices and honor requests of individuals to exercise certain privacy rights.

The CCPA provides for fines and allows private litigants affected by certain data breaches to recover significant statutory damages.

Among other things, the CCPA established the CPPA, a new regulatory authority charged with administering and enforcing the CRPA and privacy rights in California.

The CPPA has the power to levy fines and bring other enforcement actions and has issued multiple enforcement actions in the past year.

The CCPA could impact our operations or that of our collaborators and business partners and impose new regulatory requirements and increase costs of compliance.

In addition to California, a number of other states have passed similar privacy laws.

Other states are considering similar legislation, adding to the complexity, costs, and risk of compliance.

Like the GDPR and CCPA, many of these state laws categorize medical or health data, genetic data, and biometric data that can be used to identify a natural person as “sensitive data” and the processing or collection of such will require additional compliance obligations.

Like the GDPR and CCPA, many of these state and foreign laws categorize medical or health data, genetic data, and biometric data that can be used to identify a natural person as “sensitive data” and the processing or collection of such will require additional compliance obligations.

The interplay of federal and state laws may be subject to varying interpretations by courts and government agencies, creating complex compliance issues for us and potentially exposing us to additional expense, adverse publicity and liability.

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Many states, including California, New York, and Massachusetts, have also implemented genetic testing, informed consent, or other privacy laws imposing specific patient consent requirements and requirements for protecting certain test results.

As regulatory

focus on genetic privacy issues continues to increase and laws and regulations concerning the protection of personal information expand and become more complex, these potential risks to our business could intensify.

Ethical, legal, and social concerns related to the use of genetic information could reduce demand for our tests.

Genetic testing has raised ethical, legal, and social issues regarding privacy and the appropriate uses of the resulting information.

Government authorities could, for social or other purposes, limit or regulate the use of genetic information or genetic testing or prohibit testing for genetic predisposition to certain conditions, particularly for those that have no known cure.

Similarly, these concerns may cause patients to refuse to use, or physicians to be reluctant to order, genetic tests such as ours, even if permissible.

These and other ethical, legal, and social concerns may limit market acceptance and adoption of our tests or reduce the potential markets for our tests, any of which could have an adverse effect on our business, financial condition and results of operations.

In addition, California has enacted the Genetic Information Privacy Act that imposes privacy requirements on direct-to-consumer genetic testing companies that could change the discussion among patients and physicians related to genetic testing as a whole and potentially reduce consumer interest in such testing more broadly.

As regulatory focus on genetic privacy issues continues to increase and laws and regulations concerning the protection of personal information expand and become more complex, these potential risks to our business could intensify.

We conduct business in a heavily regulated industry.

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• CLIA’s and CAP’s regulation of our laboratory activities;

• FDA laws and regulations, including but not limited to requirements for offering LDTs following the July 2024 effective date of the agency’s LDT final rule;

• FDA laws and regulations that apply to medical devices and IVDs;

• federal and state laws and standards affecting reimbursement by government healthcare programs, including certain coding requirements to obtain reimbursement and certain changes to the payment mechanism for clinical laboratory services resulting from PAMA;

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• the federal Anti-Kickback Statute, which generally prohibits knowingly and willfully offering, paying, soliciting or receiving remuneration, directly or indirectly, in return for or to induce a person to refer to an individual any good, facility, item or service that is reimbursable under a federal healthcare program;

• the federal Stark Law, which generally prohibits a physician from making a referral for certain designated health services covered by the Medicare and Medicaid program, including laboratory and pathology services, if the physician or an immediate family member has a financial relationship with the entity providing the designated health services;

• the federal Stark Law, which generally prohibits a physician from making a referral for certain designated health services covered by the Medicare and Medicaid programs, including clinical laboratory and pathology services, if the physician or an immediate family member has a financial relationship with the entity providing the designated health services;

• the federal False Claims Act, which imposes civil penalties, and provides for civil whistleblower or qui tam actions, against individuals or entities for knowingly presenting, or causing to be presented, to the federal government, claims for payment that are false or fraudulent or making a false statement to avoid, decrease or conceal an obligation to pay money to the federal government;

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• other federal and state fraud and abuse laws, such as anti-kickback laws, prohibitions on self-referral, fee-splitting restrictions, insurance fraud laws, anti-markup laws, prohibitions on the provision of tests at no or discounted cost to induce physician or patient adoption and false claims acts, some of which may extend to services reimbursable by any insurance payor, including private payors;

• the federal Physician Payments Sunshine Act and various state laws on reporting relationships with health care providers and customers, which could be determined to apply to our LDTs now that they are treated by FDA as medical devices pursuant to the 2024 final rule;

• the prohibition on reassignment of Medicare claims and other Medicare and Medicaid billing and coverage requirements;

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• similar foreign laws and regulations that apply to us in the countries in which we operate or may operate in the future.

Certain states also require medical device manufacturers to maintain compliance programs and/or be licensed as manufacturers or distributors by a state professional board or health department.

The genetic testing industry is currently under a high degree of government scrutiny.

The OIG and a variety of states’ Attorneys General have issued fraud alerts regarding a variety of cancer genetic testing fraud schemes, and the DOJ has announced indictments and guilty pleas in such fraud schemes involving a variety of individuals and entities, including genetic testing and other laboratories, physicians who ordered genetic testing for a large volume of patients without treating them, and third parties who arranged for the genetic testing by approaching patients through telemarketing calls, booths at public events, health fairs, and door-to-door visits.

These individuals then shared the proceeds received from Medicare, TRICARE, and other insurance payors, and these activities allegedly violated the federal Anti-Kickback Statute and other criminal laws.

The OIG and a variety of states’ Attorneys General have issued fraud alerts regarding a variety of cancer genetic testing fraud schemes, and the DOJ has announced civil settlements, indictments and guilty pleas in such fraud schemes involving a variety of individuals and entities, including genetic testing and other laboratories, physicians who ordered genetic testing for a large volume of patients without treating them, and third parties who arranged for the genetic testing by approaching patients through telemarketing calls, booths at public events, health fairs, and door-to-door visits.

This increased regulatory scrutiny could decrease demand for our testing services or increase our costs of regulatory compliance, either of which could have a material adverse effect on our business.

We are also subject to the “No Surprises Act” which prohibits balance billing in certain circumstances and also requires delivery of good faith estimates of expected charges to an uninsured or self-pay patient upon the patient’s request or when a patient schedules a service.

Civil penalties of up to $10,000 per occurrence can be imposed for knowing violations not remediated within a certain timeframe.

Any future growth of our business, including, in particular, growth of our international business and continued reliance on consultants, commercial partners, and other third parties, may increase the potential for violating these laws.

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It is not always possible to identify and deter misconduct by employees, distributors, consultants, and commercial partners, and the precautions we take to detect and prevent this activity may not be effective in controlling unknown or unmanaged risks or losses or in protecting us from government investigations or other actions or lawsuits stemming from a failure to comply with applicable laws or regulations.

Any action brought against us for violation of these or other laws or regulations, even if we successfully defend against it, could cause us to incur significant legal expenses, divert our management’s attention from the operation of our business and materially harm our reputation.

Any action brought against us for violation of these or other laws or regulations, even if

we successfully defend against it, could cause us to incur significant legal expenses, divert our management’s attention from the operation of our business, and materially harm our reputation.

In relation to a recent advisory opinion issued by the OIG, the Company’s subsidiary, Inform Diagnostics, initiated a voluntary disclosure process with the appropriate government contact.

The Company has settled and paid $3.0 million in connection with this voluntary disclosure.

If our operations, including the conduct of our employees, consultants and commercial partners, are found to be in violation of any of these laws and regulations, (including in connection with the voluntary disclosure process described above), we may be subject to applicable penalties associated with the violation, including administrative, civil and criminal penalties, damages, fines, individual imprisonment, exclusion from participation in federal healthcare programs, refunding of payments received by us and curtailment or cessation of our operations, which could materially harm our reputation, business, prospects or results of operations.

We may be required to modify our business practices, pay fines, incur significant expenses, or experience losses due to litigation or governmental investigations.

regulatory, intellectual property, product liability, antitrust, consumer, false claims, whistleblower, qui tam, privacy, anti-kickback, anti-bribery, environmental, commercial, securities and employment litigation and claims and other legal proceedings that may arise from the conduct of our business.

Healthcare providers and other participants in the healthcare industry have become subject to an increasing number of lawsuits alleging medical malpractice and related legal theories such as negligent hiring, supervision and credentialing.

During 2024, the Company settled and paid $3.0 million in connection with this voluntary disclosure.

If our operations, including the conduct of our employees, consultants and commercial partners, are found to be in violation of any of these laws and regulations, (including in connection with the voluntary disclosure process described above), we may be subject to material penalties associated with the violation, including administrative, civil and criminal penalties, damages, fines, individual imprisonment, exclusion from participation in federal healthcare programs, refunding of payments received by us and curtailment or cessation of our operations, which could materially harm our reputation, business, prospects, or results of operations.

We have and may again be required to modify our business practices, pay fines, incur significant expenses, or experience losses due to litigation or governmental investigations.

From time to time and in the ordinary course of our business, we have been and again may be subject to litigation or governmental investigation on a variety of matters in the United States or foreign jurisdictions, including, without limitation, regulatory, intellectual property, negligent testing, product liability, antitrust, consumer, false claims, whistleblower, qui tam, privacy, anti-kickback, anti-bribery, environmental, commercial, securities, and employment litigation, and claims and other legal proceedings that may arise from the conduct of our business.

Healthcare providers and other participants in the healthcare industry have become subject to an increasing number of lawsuits alleging professional liability or medical malpractice and related legal theories such as negligent hiring, supervision, and credentialing.

As previously disclosed in our periodic reports, we have received a CID, issued by the DOJ, pursuant to the False Claims Act related to its investigation of allegations of medically unnecessary laboratory testing, improper billing for laboratory testing, and remuneration received or provided in violation of the Anti-Kickback Statute and the Stark Law.

Among other things, this CID requests information and records relating to certain of our customers named in this CID.

Similar to other laboratories in the industry, we are currently being audited by HRSA with respect to our reimbursement for COVID-19 tests furnished to patients believed to be uninsured.

Among other things, this CID requests information and records relating to certain of our customers named in the CID.

Certain of our executive officers and employees have also received CIDs relating to these matters.

Similar to other laboratories in the industry, we received an audit request from HRSA with respect to our reimbursement for COVID-19 tests furnished to patients believed to be uninsured pursuant to the Uninsured Program.

We recorded approximately $548.9 million of reimbursements from HRSA under the Uninsured Program during the years ended December 31, 2022, 2021, and 2020.

There is uncertainty with respect to the methodology HRSA will use in its audit and whether and how HRSA will extrapolate audit results.

We are working with HRSA’s auditors to resolve any issues related to its audit, including any reimbursed amounts that may need to be returned to HRSA.

The Company has fully cooperated with HRSA’s auditors and provided all requested information.

We have also received a CID issued by the DOJ pursuant to the False Claims Act related to the DOJ’s investigation as to whether we submitted or caused to be submitted false claims to the Uninsured Program.

We are fully cooperating with the DOJ in connection with the CIDs that we have received and in connection with the HRSA audit.

As is typical for companies seeking reimbursement from government payors, from time to time the Company is named as defendant in claims pursuant to the qui tam provisions of the False Claims Act and comparable state laws.

Often, these proceedings remain under seal such that the Company does not have access to the specific information included in them.

Seals often remain in place for extended periods of time while the U.S.

government, or applicable regulatory authority, decides whether to intervene on behalf of the qui tam plaintiff.

As a result, the Company may not be aware of all qui tam claims that have been filed against the Company.

In or around February 2026, the United States District Court for the Central District of California unsealed a qui tam complaint (and certain related proceedings) filed against Fulgent Genetics, Inc.

and Fulgent Therapeutics LLC by a qui tam plaintiff (known as a relator) on behalf of the United States.

This complaint alleged that the Company filed false claims for reimbursement for COVID-19 tests in violation of the False Claims Act.

The complaint was subsequently dismissed without prejudice as to the relator and the U.S.

government following the U.S.

government’s filing of a motion to dismiss, meaning the relator and the U.S.

government retained the right to refile and may refile under seal.

We are fully cooperating with the DOJ in connection with the CIDs that we or our employees have received.

We cannot currently predict when these CID and HRSA audit matters will be resolved, the reasonable or likely outcome of these matters, or their potential impact, which may materially and adversely affect our business, prospects, and financial condition.

These matters are not formal claims, and discussions and investigations remain ongoing.

Discussions and investigations remain ongoing.

As a result, we have not recorded any liability related to these CID or audit matters.

In addition, and as previously disclosed, the SEC is conducting a non-public formal investigation, which relates to (i) the matters raised in the requests for the CID regarding allegations of medically unnecessary laboratory testing, improper billing for laboratory testing, and remuneration received or provided in violation of the Anti-Kickback Statute and the Stark Law and (ii) our Exchange Act reports filed for 2018 through 2020.

On May 6, 2024, the SEC staff advised us that the SEC staff made a preliminary determination to recommend that the SEC file an enforcement action against us based on a corporate negligence theory, which, if authorized, would allege violations of Sections 17(a)(2) and 17(a)(3) of the Securities Act of 1933, as amended, Sections 13(a), 13(b)(2)(A) and 13(b)(2)(B) of the Exchange Act, and Rules 13a-1, 13a-13, and 12b-20 thereunder.

The Company has fully cooperated with the SEC and its requests, and the Company and the SEC staff are continuing to communicate regarding this matter.

While we do not believe that any enforcement recommendation is warranted and deny all liability, we have recorded a $1.0 million potential liability with respect to this matter.

While we believe this amount is a reasonable and probable estimate, the actual amount of liability, if any, may be materially higher than this estimate, as discussions are ongoing and there is no formal settlement or final resolution of this matter at this time.

We cannot predict when these investigations and matters will be resolved, the outcome of the investigations and matters, or the potential impact on our business, which may ultimately be greater than we expect.

We cannot predict when these investigations, audits, and related matters will be resolved, the outcome of the investigations and matters, or the potential impact on our business, which may ultimately be greater than we expect.

Adverse developments in existing litigation claims or legal proceedings involving us or new claims could require us to establish or increase litigation reserves or enter into unfavorable settlements or satisfy judgments for monetary damages for amounts in excess of current reserves, which could adversely affect our financial results.

In addition, government investigations and litigation generally may divert the attention of our management team and resources from our core business.

As such, the time and attention of our management team in responding to these matters may limit their time available to devote to our business, and we may also incur significant expenses or experience losses in relation to these matters.

As such, the time and attention of our management team in responding to

these matters may limit their time available to devote to our business, and we may also incur significant expenses or experience losses in relation to these matters.

As a result of these matters, we may also be required to alter the conduct of our operations or be subject to other penalties.

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The ACA also contains a number of other provisions, including provisions governing enrollment in federal and state healthcare programs, reimbursement matters and fraud and abuse, which we expect will impact our industry and our operations in ways that we cannot currently predict.

The ACA has also been the focus of ongoing legal challenges that could materially affect insurance coverage for our products and services.

For example, in Braidwood Management v.

Becerra , the Fifth Circuit Court of Appeals in June 2024 upheld a lower court ruling that found the ACA’s mandate requiring insurance coverage for certain preventive services without cost sharing to be unconstitutional.

However, in June 2025, the U.S.

Supreme Court overturned the Fifth Circuit’s decision in Braidwood Management v.

Becerra and upheld the ACA’s requirement that insurance cover certain preventive services, in a ruling now captioned Kennedy v.

Braidwood Management, Inc .

Future health care reform initiatives, whether at the federal or state level, intended to reduce health care costs may instead have the effect of discouraging third-party payors from covering certain types of medical products and services.

In addition, OBBA is expected to reduce enrollments in Medicaid and state insurance exchanges under the ACA, which could limit access to insurance coverage for certain patient populations.

To the extent these changes decrease the number of insured individuals or alter reimbursement rates for our products and services, our volumes and revenues could be adversely affected.

In April 2014, Congress passed PAMA, which included substantial changes to the way in which clinical laboratory services are paid under Medicare CLFS.

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Congress may do so.

For example, since 2017, Congress has been working on legislation to create an LDT and IVD regulatory framework that would be separate and distinct from the existing medical device regulatory framework, it remains possible that congressional action in this area could moot the need for the FDA’s recently issued LDT final rule (discussed further above).

For example, since 2017, Congress has considered legislation to create an LDT and IVD regulatory framework that would be separate and distinct from the existing medical device regulatory framework.

In addition, there has been a recent trend of increased U.S.

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EKRA imposes criminal penalties for knowing or willful payment or offer, or solicitation or receipt, of any remuneration, whether directly or indirectly, overtly or covertly, in cash or in kind, in exchange for the referral or inducement of laboratory testing (among other health care services) payable by a “healthcare benefit program” (which includes private insurance companies), unless a specific exception applies.

We cannot assure you that our relationships with physicians, sales representatives, hospitals, customers, or any other party will not be subject to scrutiny or will survive regulatory challenge under such laws.

If imposed for any reason, sanctions under the EKRA could have a negative effect on our business.

We cannot assure you that our relationships with physicians, sales representatives, hospitals, customers, consultants, or any other party will not be subject to scrutiny or will survive regulatory challenge under such laws.

If imposed for any reason, sanctions under these laws could have a negative effect on our business.

Changes in U.S.

trade policy and the impact of tariffs may have a material adverse effect on our business, results of operations, and financial condition.

While we do not believe our business has been materially affected by the recent tariff environment and recent developments in U.

trade policy as of the date of this Annual Report, our business, results of operations, and financial condition may be adversely affected by uncertainty and changes in U.S.

trade policies, including tariffs, quotas, trade agreements, or other trade restrictions imposed by the U.S.

or other governments.

International trade policy may continue to evolve.

Several tariff announcements have been followed by announcements of limited exemptions, revisions, temporary pauses, and cancellations resulting in significant uncertainty.

While the majority of our equipment, materials and reagents are sourced in the United States, or locally where our testing services are performed or processed, our supply chain and international operations could be adversely affected by changes in U.S.

trade policies.

Any imposition of, or increase in, tariffs or other restrictions on imports of reagents, equipment, or other materials (or the components of these materials) could increase the cost for such materials and also increase the prices for such materials available domestically or locally, if any, which in turn could increase our costs.

We would likely be unable to pass all or potentially any such cost increases on to our customers, and such cost increases could materially and adversely affect our business, results of operations, and financial condition, including our gross margins.

Tariffs or other trade restrictions may lead to continuing uncertainty and volatility in U.S.

and global financial and economic conditions and commodity markets, declining consumer confidence, significant inflation, and diminished expectations for the economy.

Such conditions could also have a material adverse impact on our business, results of operations, and financial position.

If the hazardous materials we use in our operations cause contamination or injury, we could be liable for resulting damages.

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However, if we were to be deemed an investment company, restrictions imposed by the 1940 Act, including limitations on our capital structure and our ability to transact with affiliates, could make it impractical for us to continue our business as it is currently being conducted and could have a material adverse effect on our business, financial condition, and results of operations.

Our joint venture in China is subject to risks and uncertainties relating to the laws and regulations of China and the changes in relations between the United States and China.

Our joint venture is subject to risks and uncertainties relating to the laws and regulations of China and the changes in relations between the United States and China.

If the Chinese government determines that our joint venture does not comply with applicable regulations, our business could be adversely affected.

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China’s system of laws can be unpredictable, especially with respect to foreign investment and foreign trade.

The United States government has called for substantial changes to foreign trade policy with China and has raised tariffs on several Chinese goods.

China has retaliated with increased tariffs on certain U.S.

Moreover, China’s legislature has adopted a national security law to substantially change the way Hong Kong has been governed since the territory was handed over by the United Kingdom to China in 1997.

Trade policies between the United States and China continue to evolve.

We may be materially and adversely affected by changes in international trade policy between the United States and China.

Additionally, China’s legislature has adopted a national security law to substantially change the way Hong Kong has been governed since the territory was handed over by the United Kingdom to China in 1997.

This law increases the power of the central government in Beijing over Hong Kong, limits the civil liberties of residents of Hong Kong and could restrict the ability of businesses in Hong Kong to continue to conduct business or to continue to with business as previously conducted.

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Enforcement of existing laws or contracts based on existing law may be uncertain and sporadic.

We cannot assure you that the PRC regulatory authorities will not determine that our joint venture in China does not violate PRC laws, rules or regulations.

We cannot assure stockholders that the PRC regulatory authorities will not determine that our joint venture in China does not violate PRC laws, rules, or regulations.

If the PRC regulatory authorities determine that our current joint venture or any joint ventures, we may enter into in the future are in violation of applicable PRC laws, rules or regulations, our joint venture in China may become invalid or unenforceable, which will substantially affect our operations adversely.

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The FCPA prohibits companies and their intermediaries from offering, making, or authorizing improper payments to non-U.S.

or foreign officials for the purpose of obtaining or retaining business or securing any other

improper advantage.

or foreign officials for the purpose of obtaining or retaining business or securing any other improper advantage.

These laws are complex and far-reaching in nature, and we may be required in the future to alter one or more of our practices to be in compliance with these laws or any changes to these laws or their interpretation.

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Any such third parties could be deemed to be our agents and we could be held responsible for any corrupt or other illegal activities of our employees or these third parties, even if we do not explicitly authorize or have actual knowledge of such activities.

We have instituted policies, procedures, and internal controls reasonably designed to promote compliance with the FCPA and other anti-corruption laws and we exercise a high degree of vigilance in maintaining, implementing and enforcing these policies and controls.

We have instituted policies, procedures, and internal controls reasonably designed to promote compliance with the FCPA and other anti-corruption laws.

However, these policies and controls could be circumvented or ignored, and we cannot guarantee compliance with these laws and regulations.

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Additionally, other U.S.

companies in the medical device and pharmaceutical fields have faced substantial fines and criminal penalties in the recent past for violating the FCPA and we could also incur these types of penalties, including criminal and civil penalties, disgorgement, and other remedial measures, if we violate the FCPA or other applicable anti-bribery laws.

companies in the medical device

and pharmaceutical fields have faced substantial fines and criminal penalties in the recent past for violating the FCPA, and we could also incur these types of penalties, including criminal and civil penalties, disgorgement, and other remedial measures, if we violate the FCPA or other applicable anti-bribery laws.

Any of these outcomes could result in a material adverse effect on our business, prospects, financial condition, or results of operations.

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Outside of the United States, the legal landscape governing promotional and other marketing activities for professional laboratory services and diagnostic tests can vary widely from jurisdiction to jurisdiction, and is often more complex, less clear, or less developed than in the United States.

If our marketing activities are found to be in violation of local laws, regulations or practices, we may be subject to fines and other penalties and may be required to cease marketing or commercialization activities in such jurisdiction.

For example, in Australia, complex laws and regulations, including the Australian Consumer Law, the Therapeutic Goods Act (with respect to devices and collection kits), and in some instances, the Health Practitioner Regulation National Law, regulate the advertising of laboratory tests, testing services, and collection devices.

The penalties for violating these regulatory requirements can be severe.

If our marketing activities are found to be in violation of these or other local laws, regulations or practices, we may be subject to fines and other penalties and may be required to cease marketing or commercialization activities in such jurisdiction.

Even if we receive regulatory approval or certification of our IVD medical device products, we will continue to be subject to extensive regulatory oversight.

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If any of our IVD products are approved by the FDA or other comparable foreign regulatory agencies or certified by Notified Bodies, we will be required to timely file various reports.

If these reports are not filed timely, regulators may impose sanctions and sales of our

products may suffer, and we may be subject to product liability or regulatory enforcement actions, all of which could harm our business.

If these reports are not filed timely, regulators may impose sanctions and sales of our products may suffer, and we may be subject to product liability or regulatory enforcement actions, all of which could harm our business.

In addition, the FDA and the FTC regulate the advertising and promotion of medical devices to ensure that their promotional claims made are consistent with the applicable marketing authorizations, that there are adequate and reasonable data to substantiate the claims, and that the promotional labeling and advertising is neither false nor misleading in any respect.

If the FDA or FTC determines that any of our promotional claims for IVD products are false, misleading, not substantiated or not permissible, we may be subject to enforcement actions and we may be required to revise our promotional claims and make other corrections or restitutions.

Similar requirements apply in foreign jurisdictions.

Similar requirements apply in foreign jurisdictions, including the EU and Australia.

FDA, state, and comparable foreign authorities have broad enforcement powers.

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The EU’s regulatory landscape for IVD medical devices has also evolved in recent years with adoption of the IVDR to establish a modernized and more robust EU legislative framework, with the aim of ensuring better protection of public health and patient safety.

We are working towards compliance with the IVDR for certain of our tests and have made initial submissions to our Notified Body for purposes of the conformity assessment process.

We expect to receive CE marking under the IVDR for certain of our tests in the future, subject to ongoing review and auditing by the regulatory agency.

If we are not able to obtain and maintain regulatory compliance, we may not be permitted to market our laboratory services in the EU or may become subject to enforcement by EU Competent Authorities.

Risks Related to the Development of Drug Candidates

Our drug candidates are in early stages of development and may fail or suffer delays that materially and adversely affect their future commercial viability.

In July 2025, we announced that we had received CE certification under the IVDR for our germline NGS system, which includes FulgentExome and Fulgent PLM.

If we are not able to maintain regulatory compliance for such CE-marked test products, we may not be permitted to market our laboratory services in the European Union or may become subject to enforcement by EU Competent Authorities.

Risks Related to the Development of Product Candidates

Our product candidates are in early stages of development and may fail or suffer delays that materially and adversely affect their future commercial viability.

We are early in our development efforts.

Generally, before obtaining marketing approval for the commercial distribution of drug candidates, we must conduct preclinical tests and clinical trials to demonstrate sufficient safety and efficacy of our drug candidates in patients.

Failure can occur at any time during the development or clinical trial process and our future clinical trial results may not be successful.

As a result, we may not have, or we may deem it imprudent to use, additional financial resources to continue development of a drug candidate if there are issues that could delay or prevent marketing approval of, or ability to commercialize, our drug candidates, including:

• negative or inconclusive results from clinical trials, or the clinical trials of others for similar drug candidates, leading to a decision or requirement to conduct additional preclinical testing or clinical trials or abandon a program;

• therapeutic-related side effects experienced by participants in its clinical trials or by individuals using drugs or other drugs similar to its drug candidates;

Generally, before obtaining marketing approval for the commercial distribution of product candidates, we must conduct pre-clinical tests and clinical trials to demonstrate sufficient safety and efficacy of our product candidates in patients.

Failure can occur at any time during the development or clinical trial processes, and our future clinical trial results may not be successful.

As a result, we may not have, or we may deem it imprudent to use, additional financial resources to continue development of a product candidate if there are issues that could delay or prevent marketing approval of, or ability to commercialize, our product candidates, including:

• negative or inconclusive results from clinical trials, or the clinical trials of others for similar product candidates, leading to a decision or requirement to conduct additional pre-clinical testing or clinical trials or abandon a program;

• therapeutic-related side effects experienced by participants in our clinical trials or by individuals using drugs or other drugs similar to our product candidates;

• delays in submitting INDs or comparable foreign clinical trial applications or delays or failure in obtaining the necessary approvals from regulators to commence a clinical trial, or a suspension or termination of a clinical trial once commenced;

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• delays in enrolling research subjects or high drop-out rates of research subjects enrolled in clinical trials;

• delays or difficulties in its clinical trials due to quarantines or other restrictions resulting from pandemics or other public health emergencies;

• unfavorable FDA or other regulatory agency inspection and review of a clinical trial site or the manufacturing location(s) for a drug candidate;

• inadequate supply or quality of drug candidate clinical material or other raw materials or supplies necessary for the conduct of our clinical trials;

• delays or difficulties in our clinical trials due to quarantines or other restrictions resulting from pandemics or other public health emergencies;

• unfavorable FDA or other regulatory agency inspection and review of a clinical trial site or the manufacturing location(s) for a product candidate;

• inadequate supply or quality of product candidate clinical material or other raw materials or supplies necessary for the conduct of our clinical trials;

• failure of third-party contractors or investigators to comply with regulatory requirements or otherwise meet their contractual obligations in a timely manner, or at all;

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• varying interpretations of data by the FDA and similar foreign regulatory agencies.

The drug candidates we pursue may not demonstrate the necessary safety or efficacy requirements for marketing approval.

The product candidates we pursue may not demonstrate the necessary safety or efficacy requirements for regulatory approval.

Clinical trials are costly, time consuming, and inherently risky;

and we may fail to demonstrate safety and efficacy to the satisfaction of applicable regulatory authorities, and may never obtain regulatory approval for, or successfully commercialize certain or any of our drug candidates.

and we may fail to demonstrate safety and efficacy to the satisfaction of applicable regulatory authorities and may never obtain regulatory approval for, or successfully commercialize certain or any of our product candidates.

Clinical development is expensive, time consuming, and involves significant risk.

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Events that may prevent successful or timely completion of clinical development include but are not limited to:

• potential delays in patient enrollment for our clinical trials due to public health emergencies or pandemics, natural disasters, staffing shortages, or other events, which may affect our ability to initiate and/or complete preclinical studies, conduct ongoing clinical trials, and delay initiation of planned and future clinical trials;

• inability to generate satisfactory preclinical, toxicology or other in vivo or in vitro data or to develop diagnostics capable of supporting the initiation or continuation of clinical trials;

• potential delays in patient enrollment for our clinical trials due to public health emergencies or pandemics, natural disasters, staffing shortages, or other events, which may affect our ability to initiate and/or complete pre-clinical studies, conduct ongoing clinical trials, and delay initiation of planned and future clinical trials;

• inability to generate satisfactory pre-clinical, toxicology or other in vivo or in vitro data or to develop diagnostics capable of supporting the initiation or continuation of clinical trials;

• delays in reaching agreement on acceptable terms with CROs, and clinical trial sites, the terms of which can be subject to extensive negotiation and may vary significantly among different CROs and clinical trial sites;

• delays or failure in obtaining required an IRB approval for clinical trial site;

• delays or failure in obtaining required IRB approval for clinical trial site;

• failure to obtain or delays in obtaining a permit from regulatory authorities to conduct a clinical trial;

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• adverse events or other issues of concern significant enough for the FDA, or comparable foreign regulatory authority, to put a clinical trial or an IND on clinical hold;

• occurrence of adverse events associated with our drug candidates;

• occurrence of adverse events associated with our product candidates;

• changes in regulatory requirements and guidance that require amending or submitting new clinical protocols;

• the cost of clinical trials of our drug candidates;

• negative or inconclusive results from our clinical trials which may result in us deciding, or regulators requiring us, to conduct additional clinical trials or abandon development programs in other ongoing or planned indications for a drug candidate;

• delays in reaching agreement on acceptable terms with third-party manufacturers or an inability to manufacture sufficient quantities of our drug candidates for use in clinical trials.

Any inability to successfully complete clinical development and obtain regulatory approval for one or more of our drug candidates could result in additional costs to us or impair our ability to generate revenue.

In addition, if we make manufacturing or formulation changes to our drug candidates, we may need to conduct additional nonclinical studies and/or clinical trials to show that the results obtained from such new formulation are consistent with previous results.

Clinical trial delays could also shorten any periods during which our drug candidates have patent protection and may allow competitors to develop and bring products to market before

we do, which could impair our ability to successfully commercialize our drug candidates and may harm our business and results of operation.

Further, a clinical trial may be suspended or terminated by the company, the IRBs of the institutions in which such trials are being conducted, the Data Safety Monitoring Board, or DSMB, for such trial or by the FDA or other regulatory authorities due to a number of factors, including failure to conduct the clinical trial in accordance with regulatory requirements or our clinical protocols, inspection of the clinical trial operations or trial site by the FDA or other regulatory authorities resulting in the imposition of a clinical hold, unforeseen safety issues or adverse side effects, failure to demonstrate a benefit from using an investigational drug, changes in governmental regulations, administrative actions or lack of adequate funding to continue the clinical trial.

• the cost of clinical trials of our product candidates;

• negative or inconclusive results from our clinical trials, which may result in us deciding, or regulators requiring us, to conduct additional clinical trials or to abandon development programs in other ongoing or planned indications for a product candidate;

• delays in reaching agreement on acceptable terms with third-party manufacturers or an inability to manufacture sufficient quantities of our product candidates for use in clinical trials.

Any inability to successfully complete clinical development and obtain regulatory approval for one or more of our product candidates could result in additional costs to us or impair our ability to generate revenue.

In addition, if we make manufacturing or formulation changes to our product candidates, we may need to conduct additional non-clinical studies and/or clinical trials to show that the results obtained from such new formulation are consistent with previous results.

Clinical trial delays could also shorten any periods during which our product candidates have patent protection and may allow competitors to develop and bring products to market before we do, which could impair our ability to successfully commercialize our product candidates and may harm our business and results of operation.

Further, a clinical trial may be suspended or terminated by the Company, the IRBs of the institutions in which such trials are being conducted, the Data Safety Monitoring Board, or DSMB, for such trial, or by the FDA or other regulatory authorities due to a number of factors, including failure to conduct the clinical trial in accordance with regulatory requirements or our clinical protocols, inspection of the clinical trial operations or trial site by the FDA or other regulatory authorities resulting in the imposition of a clinical hold, unforeseen safety issues or adverse side effects, failure to demonstrate a benefit from using an investigational drug, changes in

governmental regulations, administrative actions or lack of adequate funding to continue the clinical trial.

Clinical holds may be placed prior to a clinical trial even beginning, in order to address potential safety and risk concerns of regulatory authorities, and partial or complete clinical holds can be imposed at any time during a trial.

Furthermore, while we perform certain similar functions internally, we expect to rely on CROs and clinical trial sites to ensure proper and timely conduct of our clinical trials and while we expect to enter into agreements governing those CROs’ committed activities we have limited influence over their actual performance.

If there are delays in the completion of, or termination of, any clinical trial of drug candidates, the commercial prospects of those drug candidates may be harmed.

If there are delays in the completion of, or termination of, any clinical trial of product candidates, the commercial prospects of those product candidates may be harmed.

In addition, any delays in completing clinical trials will increase costs, slow down product development and approval processes, and jeopardize the ability to commence product sales and generate revenue.

Any of these occurrences may materially and adversely affect our business, financial condition, results of operations, and prospects.

In addition, many of the factors that cause, or lead to, a delay in the commencement or completion of clinical trials may also ultimately lead to the denial of marketing approval of drug candidates.

In addition, many of the factors that cause, or lead to, a delay in the commencement or completion of clinical trials may also ultimately lead to the denial of marketing approval of product candidates.

Our nano-drug delivery platform is being researched and developed and, if approved, will be used as a delivery mechanism for other pharmaceuticals or therapeutics.

To the extent these delivered substances cause undesirable side effects, encounter competition or experience regulatory limitations either prior or following market approval or are otherwise unavailable to us due to our lack of rights or ability to utilize supplies of these candidates, the prospects for our drug candidates or, as applicable, approved therapeutics could be materially and negatively affected.

To the extent these delivered substances cause undesirable side effects, encounter competition, or experience regulatory limitations either prior or following market approval or are otherwise unavailable to us due to our lack of rights or ability to utilize supplies of these candidates, the prospects for our product candidates or, as applicable, approved therapeutics could be materially and negatively affected.

In such circumstances, our business, results of operations, and the value of our common stock may decline.

Product development involves a lengthy and expensive process with an uncertain outcome, and results of earlier preclinical studies and clinical trials may not be predictive of future clinical trial results.

Product development involves a lengthy and expensive process with an uncertain outcome, and results of earlier pre-clinical studies and clinical trials, or preliminary, interim, and topline data may not be predictive of later data or future clinical trial results.

Clinical testing is expensive and generally takes many years to complete, and the outcome is inherently uncertain.

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Clinical trials may produce negative or inconclusive results, and we or any current or future collaboration partners may decide, or regulators may require us, to conduct additional clinical trials or non-clinical studies.

We will be required to demonstrate with substantial evidence through well-controlled clinical trials that our drug candidates are safe and effective for use in a diverse population before we can seek marketing approvals for their commercial sale.

The results of preclinical studies and early clinical trials of our drug candidates may not be predictive of the results of larger, later-stage controlled clinical trials.

Drug candidates that have shown promising results in early-stage clinical trials may still suffer significant setbacks or failure in subsequent clinical trials.

Our clinical trials to date have been conducted on a small number of subjects in limited numbers of clinical trial sites for a limited number of indications.

We will be required to demonstrate with substantial evidence through well-controlled clinical trials that our product candidates are safe and effective for use in a diverse population before we can seek marketing approvals for their commercial sale.

The results of pre-clinical studies and early clinical trials of our product candidates may not be predictive of the results of larger, later-stage controlled clinical trials.

Product candidates that have shown promising results in early-stage clinical trials may still suffer significant setbacks or failure in subsequent clinical trials.

Our clinical trials to date have been conducted on a small number of subjects in a limited number of clinical trial sites for a limited number of indications.

We will have to conduct larger, well-controlled trials in our proposed indications to verify the results obtained to date and to support any regulatory submissions for further clinical development.

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Moreover, from time to time, we may publish or report interim or preliminary data from our clinical trials.

For example, we have previously announced and included interim data for our drug candidate, FID-007, in this Annual Report.

For example, we have previously announced and included interim and preliminary data for our product candidate, FID-007, in this Annual Report.

Interim or preliminary data from clinical trials that we may conduct, including any interim data we have reported for FID-007, may not be indicative of the final results of the trial and are subject to the risk that one or more of the clinical outcomes may materially change as patient enrollment continues and more patient data become available.

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As a result, interim or preliminary data should be viewed with caution until the final data is available.

In some instances, there can be significant variability in safety and efficacy results between different clinical trials of the same drug candidate due to numerous factors, including changes in trial protocols, differences in size and type of the patient populations, differences in and adherence to the dosing regimen and other trial protocols and the rate of dropout among clinical trial participants.

We therefore do not know whether any clinical trials we may conduct will demonstrate consistent or adequate efficacy and safety sufficient to obtain marketing approval to market our drug candidates.

Any drug candidate that we may attempt to develop, manufacture, or market in the United States will be subject to extensive regulation by the FDA, including regulations relating to development, non-clinical testing, performance of clinical trials, manufacturing and post-approval commercialization and will also be subject to extensive regulations outside of the United States in relevant jurisdictions.

In some instances, there can be significant variability in safety and efficacy results between different clinical trials of the same product candidate due to numerous factors, including changes in trial protocols, differences in size and type of the patient populations, differences in and adherence to the dosing regimen and other trial protocols and the rate of dropout among clinical trial participants.

We therefore do not know whether any clinical trials we may conduct will demonstrate consistent or adequate efficacy and safety sufficient to obtain marketing approval to market our product candidates.

Any product candidate that we may attempt to develop, manufacture, or market in the United States will be subject to extensive regulation by the FDA, including regulations relating to development, non-clinical testing, performance of clinical trials, manufacturing and post-approval commercialization and will also be subject to extensive regulations outside of the United States in relevant jurisdictions.

Satisfaction of these and other regulatory requirements is costly, time-consuming, uncertain, and subject to unanticipated delays.

The time required to obtain FDA approval, and any other required approvals for pharmaceutical products, is unpredictable but typically requires years to several years and may never be obtained.

The time required to obtain FDA approval, and any other required approvals

for pharmaceutical products, including any accelerated approval, is unpredictable but typically requires up to several years and may never be obtained.

Any product that we may wish to develop, manufacture or market in countries other than the United States will also be subject to numerous foreign regulatory requirements governing the conduct of clinical trials, manufacturing and marketing, pricing, and insurance reimbursement, among other things, in such countries.

The foreign marketing approval process includes all of the risks and uncertainties associated with FDA approval described above as well as risks attributable to the satisfaction of local regulations in such foreign jurisdictions.

Obtaining marketing approval for pharmaceutical products requires the submission of extensive non-clinical and clinical data and supporting information to FDA and comparable regulatory authorities for each therapeutic indication to establish the drug candidate’s safety and efficacy.

Securing marketing approval also typically requires the submission of information about the product manufacturing process, and in many cases the inspection of manufacturing, processing, and packaging facilities by the applicable regulatory authorities.

Our drug candidates may not be effective, may be only moderately effective or may prove to have undesirable or unintended side effects, toxicities or other characteristics that may preclude our obtaining marketing approval or prevent or limit commercial use, or there may be deficiencies in manufacturing compliance by us or by our contract manufacturing organizations and partners that could result in the candidate not being approved.

Moreover, we have not obtained marketing approval for any drug candidate in any jurisdiction and it is possible that none of our existing drug candidates or any drug candidates we may seek to develop in the future will ever obtain marketing approval.

Drug candidates could fail to receive, or could be delayed in receiving, marketing approval for many reasons, including any one or more of the following:

Securing marketing approval also requires the submission of information about the product manufacturing process, and in many cases the inspection of manufacturing, processing, and packaging facilities by the applicable regulatory authorities.

Our product candidates may not be effective, may be only moderately effective or may prove to have undesirable or unintended side effects, toxicities or other characteristics that may preclude our obtaining marketing approval or prevent or limit commercial use, or there may be deficiencies in manufacturing compliance by us or by our contract manufacturing organizations and partners that could result in the candidate not being approved.

Moreover, we have not obtained marketing approval for any product candidate in any jurisdiction and it is possible that none of our existing product candidates or any product candidates we may seek to develop in the future will ever obtain marketing approval.

Product candidates could fail to receive, or could be delayed in receiving, marketing approval for many reasons, including any one or more of the following:

• the FDA, EMA, or comparable foreign regulatory authorities may disagree with the design or implementation of clinical trials;

• we may be unable to demonstrate to the satisfaction of the FDA, EMA or comparable foreign regulatory authorities that a drug candidate is safe and effective for its proposed indication(s) for use;

• we may be unable to demonstrate to the satisfaction of the FDA, EMA or comparable foreign regulatory authorities that a product candidate is safe and effective for its proposed indication(s) for use;

• the results of clinical trials may not meet the level of statistical significance required by the FDA, EMA or comparable foreign regulatory authorities for marketing approval;

• we may be unable to demonstrate that a drug candidate’s clinical and other benefits outweigh its safety risks;

• we may be unable to demonstrate that a product candidate’s clinical and other benefits outweigh its safety risks;

• the FDA, EMA or comparable foreign regulatory authorities may disagree with our interpretation of data from non-clinical studies or clinical trials;

• the data collected from clinical trials of drug candidates may not be sufficient to support the submission of an application to obtain marketing approval in the United States or elsewhere;

• the data collected from clinical trials of product candidates may not be sufficient to support the submission of an application to obtain marketing approval in the United States or elsewhere;

• upon review of clinical trial sites and data, the FDA or comparable foreign regulatory authorities may find record keeping or the record keeping of clinical trial sites to be inadequate or may identify other deficiencies related to the trials;

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• the medical standard of care or the approval policies or regulations of the FDA, EMA or comparable foreign regulatory authorities may significantly change in a manner that renders our clinical data insufficient for approval.

It is possible that none of the drug candidates we may develop will obtain the marketing approvals necessary for us or our collaborators to sell the products either in the United States or any other country.

It is possible that none of the product candidates we may develop will obtain the marketing approvals necessary for us or our collaborators to sell the products either in the United States or any other country.

Furthermore, approval by the FDA of a therapeutic product does not assure approval by regulatory authorities outside the United States and vice versa.

Even if approval for a therapeutic product is obtained, such approval may be subject to limitations on the indicated uses or appropriate patient population that could result in a significantly reduced potential market size for the product.

We intend to develop and seek approval for our drug candidates developed using our nano-drug delivery platform technology, including FID-007, FID-022, and other candidates it may develop, pursuant to the FDA’s 505(b)(2) pathway.

If the FDA determines that we may not use this regulatory pathway, then we would need to seek regulatory approval via a “full” or “stand-alone” NDA under

Section 505(b)(1) of the FDC Act.

This would require us to conduct additional clinical trials, provide additional safety and efficacy data and other information, and meet additional standards for regulatory approval, including possibly nonclinical data.

If this were to occur, the time and financial resources required to obtain FDA approval, as well as the development complexity and risk associated with these programs, would likely substantially increase, which could have a material adverse effect on our business and financial condition.

We intend to develop and seek approval for our product candidates developed using our nano-drug delivery platform technology, including FID-007, FID-022, and other candidates it may develop, pursuant to the FDA’s 505(b)(2) pathway.

If the FDA determines that we may not use this regulatory pathway, then we would need to seek regulatory approval via a “full” or “stand-alone” NDA under Section 505(b)(1) of the FDC Act.

If this were to occur, the time and financial resources required to obtain FDA approval, as well as the development complexity and risk

associated with these programs, would likely substantially increase, which could have a material adverse effect on our business and financial condition.

The Drug Price Competition and Patent Term Restoration Act of 1984, informally known as the Hatch-Waxman Act, added Section 505(b)(2) to the FDC Act.

Section 505(b)(2) permits the filing of an NDA where at least some of the information required for approval comes from studies and information that were not conducted by or for the applicant and for which the applicant has not obtained a right of reference.

Utilization of the Section 505(b)(2) NDA pathway could expedite the development program for our lead drug candidates, FID-007 and of FID-022.

Utilization of the Section 505(b)(2) NDA pathway could expedite the development program for our lead product candidates, FID-007 and FID-022.

Notwithstanding the approval of an increasing number of products by the FDA under Section 505(b)(2) over the last few years, certain brand-name pharmaceutical companies and others have objected to the FDA’s interpretation of Section 505(b)(2).

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Even if we are able to utilize the Section 505(b)(2) regulatory pathway for one or more of our candidates, there is no guarantee this would ultimately lead to faster product development or earlier approval.

Moreover, any delay resulting from our inability to utilize the FDA’s 505(b)(2) pathway could result in new competitive products reaching the market more quickly than our drug candidates, which may have a material adverse impact on our competitive position and prospects.

Even if we are allowed to use the FDA’s 505(b)(2) pathway for one or more of our drug candidates, we cannot assure you that such candidates will receive the requisite approvals for commercialization.

Our commercial success will depend upon attaining significant market acceptance of our drug candidates, if approved, among physicians, patients, insurance payors and other members of the medical community.

Even if we obtain regulatory approval for our drug candidates, the approved products may nonetheless fail to gain sufficient market acceptance among patients, physicians, insurance payors, and other members of the medical community, which is critical to commercial success.

Moreover, any delay resulting from our inability to utilize the FDA’s 505(b)(2) pathway could result in new competitive products reaching the market more quickly than our product candidates, which may have a material adverse impact on our competitive position and prospects.

Even if we are allowed to use the FDA’s 505(b)(2) pathway for one or more of our product candidates, we cannot assure you that such candidates will receive the requisite approvals for commercialization.

Our commercial success will depend upon attaining significant market acceptance of our product candidates, if approved, among physicians, patients, insurance payors, and other members of the medical community.

Even if we obtain regulatory approval for our product candidates, the approved products may nonetheless fail to gain sufficient market acceptance among patients, physicians, insurance payors, and other members of the medical community, which is critical to commercial success.

If an approved product does not achieve an adequate level of acceptance, we may not generate significant product revenues or any profits from operations.

The degree of market acceptance of any drug candidate for which we receive approval depends on a number of factors, including:

The degree of market acceptance of any product candidate for which we receive approval depends on a number of factors, including:

• the efficacy and potential advantages compared to alternative treatments or competitive products;

• perceptions by the medical community, physicians, and patients, regarding the safety and effectiveness of our products and the willingness of the target patient population to try new therapies and of physicians to prescribe these therapies;

• the size of the market for such drug candidate, based on the size of the patient subsets that we are targeting, in the territories for which we gain regulatory approval and have commercial rights;

• the safety of the drug candidate as demonstrated through broad commercial distribution;

• the ability to offer our drug candidates for sale at competitive prices;

• the size of the market for such product candidate, based on the size of the patient subsets that we are targeting, in the territories for which we gain regulatory approval and have commercial rights;

• the safety of the product candidate as demonstrated through broad commercial distribution;

• the ability to offer our product candidates for sale at competitive prices;

• the availability of adequate coverage and reimbursement for our products from governmental health programs and other insurance payors;

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• the prevalence and severity of any side effects;

• the adequacy of supply of our drug candidates;

• the adequacy of supply of our product candidates;

• the timing of any such marketing approval in relation to other product approvals;

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• the effectiveness of sales, marketing and distribution efforts by us and our licensees and distributors, if any.

Our drug candidates may cause undesirable side effects that could delay or prevent their marketing approval, limit the commercial profile of an approved label, or result in significant negative consequences following marketing approval, if any.

Undesirable side effects caused by our drug candidates could cause us, our collaborators or regulatory authorities, to interrupt, delay or halt clinical trials.

Our product candidates may cause undesirable side effects that could delay or prevent their marketing approval, limit the commercial profile of an approved label, or result in significant negative consequences following marketing approval, if any.

Undesirable side effects caused by our product candidates could cause us, our collaborators, or regulatory authorities, to interrupt, delay, or halt clinical trials.

These circumstances could result in a more restrictive label or the delay or denial of marketing approval by the FDA or other regulatory authorities.

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Further, clinical trials by their nature utilize a sample of the potential patient population.

Rare and severe side effects of our drug candidates may only be uncovered with a significantly larger number of patients exposed to our drug candidates.

In the event that any of our drug candidates receives marketing approval and we, our collaborators or others identify undesirable side effects caused by a product or any other similar drugs, any of the following adverse events could occur:

Rare and severe side effects of our product candidates may only be uncovered with a significantly larger number of patients exposed to our product candidates.

In the event that any of our product candidates receives marketing approval and we, our collaborators or others identify undesirable side effects caused by a product or any other similar drugs, any of the following adverse events could occur:

• regulatory authorities may withdraw their approval of the product;

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• our reputation may suffer.

In addition, adverse side effects caused by any drugs that may be similar in nature to our drug candidates or in connection with the nanoencapsulated drugs or therapeutics used in connection with our drug candidates (similar to paclitaxel with FID-007) could delay or prevent marketing approval of our drug candidates, limit the commercial profile of an approved label for our drug candidates, or result in significant negative consequences for our drug candidates following marketing approval.

Any of the above-described events could prevent us from achieving or maintaining market acceptance of our drug candidates, if approved, and could delay, impede and/or substantially increase the costs of commercializing our drug candidates thus significantly impacting our ability to successfully commercialize our drug candidates and generate revenue.

In addition, adverse side effects caused by any drugs that may be similar in nature to our product candidates or in connection with the nanoencapsulated drugs or therapeutics used in connection with our product candidates (similar to paclitaxel with FID-007) could delay or prevent marketing approval of our product candidates, limit the commercial profile of an approved label for our product candidates, or result in significant negative consequences for our product candidates following marketing approval.

Any of the above-described events could prevent us from achieving or maintaining market acceptance of our product candidates, if approved, and could delay, impede, and/or substantially increase the costs of commercializing our product candidates thus significantly impacting our ability to successfully commercialize our product candidates and generate revenue.

Any of the above described occurrences may materially and adversely affect our business, financial condition, results of operations, and prospects.

If our drug candidates are approved for marketing and commercialization and we are unable to develop sales, marketing and distribution capabilities on our own or enter into agreements with third parties to perform these functions on acceptable terms, we will be unable to commercialize successfully any such drug candidates.

If our product candidates are approved for marketing and commercialization, and we are unable to develop sales, marketing, and distribution capabilities on our own or enter into agreements with third parties to perform these functions on acceptable terms, we may be unable to commercialize successfully any such product candidates.

We currently have no sales, marketing, or distribution capabilities for prescription pharmaceutical products.

If any of our drug candidates is approved for marketing in the United States or elsewhere, we will need to expand our internal sales, marketing and distribution capabilities to commercialize such approved drug candidates in the United States and other territories, or we will need to enter into collaborations with third parties to perform these services.

If any of our product candidates is approved for marketing in the United States or elsewhere, we will need to expand our internal sales, marketing, and distribution capabilities to commercialize such approved product candidates in the United States and other territories, or we will need to enter into collaborations with third parties to perform these services.

Any internal effort would be expensive and time-consuming, and we would need to commit significant financial and managerial resources to develop an internal marketing and sales force with technical expertise and the related supporting distribution, administration, and compliance capabilities.

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We rely on third parties to conduct portions of our clinical trials and certain of our non-clinical studies and intend to continue to do so.

If these third parties do not perform as contractually required, fail to satisfy regulatory or legal requirements, or miss

expected deadlines, our development programs could be delayed with material and adverse effects on our business, financial condition, results of operations and prospects.

While we expect to continue our current clinical trials and expect to initiate clinical trials in the near term for other drug candidates, we do not independently conduct clinical trials.

In particular, while we perform certain functions internally, we currently rely and intend to continue to rely on third-party CROs, clinical data management organizations and consultants to help us design, conduct, supervise and monitor clinical trials of our drug candidates.

If these third parties do not perform as contractually required, fail to satisfy regulatory or legal requirements, or miss expected deadlines, our development programs could be delayed with material and adverse effects on our business, financial condition, results of operations, and prospects.

While we expect to continue our current clinical trials and expect to initiate clinical trials in the near term for other product candidates, we do not independently conduct clinical trials.

In particular, while we perform certain functions internally, we currently rely and intend to continue to rely on third-party CROs, clinical data management organizations, and consultants to help us design, conduct, supervise, and monitor clinical trials of our product candidates.

As a result, we will have less control over the timing, quality, and other aspects of our clinical trials than we would have had we conducted them on our own.

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Any adverse development or delay in our clinical trials could have a material and adverse effect on our business, financial condition, results of operations, and prospects.

We rely on third parties to supply and manufacture our drug candidates, and we expect to continue to rely on third parties to manufacture and supply our therapeutics, if approved.

The development of drug candidates and the commercialization of any drug candidates, if approved, could be stopped, delayed, or made less profitable if any of these third parties fail to provide us with sufficient quantities of drug candidates or therapeutics, fail to do so at acceptable quality levels or prices, or fail to maintain or achieve satisfactory regulatory compliance.

We do not currently have, nor do we plan to acquire, the infrastructure or capability internally to develop and manufacture our drug candidates for use in the conduct of our trials or for commercial supply, if our therapeutics are approved.

We rely on third parties to supply and manufacture our product candidates, and we expect to continue to rely on third parties to manufacture and supply our therapeutics, if approved.

The development of product candidates and the commercialization of any product candidates, if approved, could be stopped, delayed, or made less profitable if any of these third parties fail to provide us with sufficient quantities of product candidates or therapeutics, fail to do so at acceptable quality levels or prices, or fail to maintain or achieve satisfactory regulatory compliance.

We do not currently have, nor do we plan to acquire, the infrastructure or capability internally to develop and manufacture our product candidates for use in the conduct of our trials or for commercial supply, if our therapeutics are approved.

Instead, we rely on, and expect to continue to rely on third-party providers to manufacture the supplies for our non-clinical studies and clinical trials.

We currently rely on a limited number of third-party contract manufacturers for our required raw materials and other components for our non-clinical research and clinical trials, as well as for the manufacture of supplies for our drug candidates.

To the extent any of our manufacturing partners are unable to fulfill these obligations in a timely manner, our clinical trials may be delayed, and our business may be adversely affected.

In general, reliance on third-party providers may expose us to more risk than if we were to manufacture our drug candidates ourselves.

We do not control the operational processes of the contract manufacturing organizations with whom we contract, and are dependent on these third parties for the production of our drug candidates in accordance with relevant regulations (such as cGMP), which include, among other things, quality control and the maintenance of records and documentation.

In general, reliance on third-party providers may expose us to more risk than if we were to manufacture our product candidates ourselves.

We do not control the operational processes of the contract manufacturing organizations with whom we contract, and we are dependent on these third parties for the production of our product candidates in accordance with relevant regulations (such as cGMP), which include, among other things, quality control and the maintenance of records and documentation.

Intellectual Property Risks

If we are unable to obtain and maintain patent protection for any drug candidate we develop, our competitors could develop and commercialize products or technology similar to ours, and our ability to successfully commercialize any drug candidate we may develop, and our technology, may be adversely affected.

Our success depends in large part on our ability to obtain and maintain patent protection in the United States and other countries with respect to any drug candidate and other technologies we may develop.

If we are unable to obtain and maintain patent protection for any product candidate we develop, our competitors could develop and commercialize products or technology similar to ours, and our ability to successfully commercialize any product candidate we may develop, and our technology, may be adversely affected.

Our success depends in large part on our ability to obtain and maintain patent protection in the United States and other countries with respect to any product candidate and other technologies we may develop.

Given that the development of our drug and therapeutic technology is at an early stage, our intellectual property portfolio comprises applications and patents with respect to coverage of

certain aspects of our technology and any drug and any drug candidates;

certain aspects of our technology and any drug and any product candidates;

however, there can be no assurance that any such patent applications will issue as granted patents.

Composition of matter patents for biological and pharmaceutical products are generally considered to be the strongest form of intellectual property protection for those types of products, as such patents provide protection without regard to any method of use.

We cannot be certain, however, that the claims in our future patent applications covering the composition of matter of any drug candidates will be considered patentable by the United States Patent and Trademark Office (“USPTO”), or by patent offices in foreign countries, or that the claims in any of its issued patents will be considered valid and enforceable by courts in the United States or foreign countries.

Furthermore, in some cases, we may not be able to obtain issued claims covering compositions of matter relating to any drug candidates we develop and instead may need to rely on filing patent applications with claims covering a method of use and/or method of manufacture.

We cannot be certain, however, that the claims in our future patent applications covering the composition of matter of any product candidates will be considered patentable by the USPTO, or by patent offices in foreign countries, or that the claims in any of its issued patents will be considered valid and enforceable by courts in the United States or foreign countries.

Furthermore, in some cases, we may not be able to obtain issued claims covering compositions of matter relating to any product candidates we develop and instead may need to rely on filing patent applications with claims covering a method of use and/or method of manufacture.

Method of use patents protect the use of a product for the specified method.

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There can be no assurance that any such patent applications will issue as granted patents, and even if they do issue, such patent claims may be insufficient to prevent third parties, such as our competitors, from utilizing our technology.

Any failure to obtain or maintain patent protection with respect to any drug candidate we develop could have a material adverse effect on our business, financial condition, results of operations, and prospects.

We rely on trade secret protection, non-disclosure agreements.

and invention assignment agreements to protect our proprietary information, which may not be effective.

Any failure to obtain or maintain patent protection with respect to any product candidate we develop could have a material adverse effect on our business, financial condition, results of operations, and prospects.

We rely on trade secret protection, non-disclosure agreements, and invention assignment agreements to protect our proprietary information, which may ultimately not be effective.

We rely on trade secret protection, non-disclosure agreements, and invention assignment agreements with our employees, consultants, and third parties to protect our confidential and proprietary information.

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If any of our trade secrets or other confidential or proprietary information were disclosed or misappropriated, or if any such information was independently developed by a competitor, our competitive position could be harmed, and our business could suffer.

Litigation or other proceedings or third-party claims of intellectual property infringement or misappropriation could require us to spend significant time and money and prevent us from selling our tests or developing drug candidates.

We believe our ability to succeed will depend in part on our avoidance of infringement of patents and other proprietary rights owned by third parties, including the intellectual property rights of competitors.

There are numerous third-party-owned U.S.

and foreign patents, pending patent applications and other intellectual property rights that cover technologies relevant to our testing, testing services and drug candidates.

and foreign patents, pending patent applications, and other intellectual property rights that cover technologies relevant to our testing, testing services, and product candidates.

We may be unaware of patents or other intellectual property rights that a third-party might assert are infringed by our business, and there may be pending patent applications that, if issued, could be asserted against us.

As a result, our existing or future operations may be alleged or found to infringe existing or future patents or other intellectual property rights of others.

Moreover, as we continue to sell our existing tests and if we launch new tests, commercialize drug candidates and enter new markets, competitors may claim that our tests or products infringe or misappropriate their intellectual property rights as part of strategies designed to impede our existing operations or our entry into new markets.

Moreover, as we continue to sell our existing tests and if we launch new tests, commercialize product candidates, and enter new markets, competitors may claim that our tests or products infringe or misappropriate their intellectual property rights as part of strategies designed to impede our existing operations or our entry into new markets.

If a patent infringement or misappropriation of intellectual property lawsuit was brought against us, we could be forced to discontinue or delay our development or sales of any tests or other activities that are the subject of the lawsuit while it is pending, even if it is not ultimately successful.

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Further, defense against these claims, regardless of their merit or success, could cause us to incur substantial expenses, be a substantial diversion to our management and other employee resources, and significantly harm our reputation.

Any of these outcomes could delay our introduction of new tests, delay commercialization of any approved drug candidates, significantly increase our costs, or prevent us from conducting certain of our essential activities, which could materially adversely affect our ability to operate and grow our business.

Any of these outcomes could delay our introduction of new tests, delay commercialization of any approved product candidates, significantly increase our costs, or prevent us from conducting certain of our essential activities, which could materially adversely affect our ability to operate and grow our business.

We may be subject to claims challenging the inventorship of our patents and other intellectual property.

We may be subject to claims that former employees, collaborators, or other third parties have an interest in our owned patents, trade secrets, or other intellectual property as an inventor or co-inventor.

For example, we may have inventorship disputes arise from conflicting obligations of consultants or others who are involved in developing our drugs or drug candidates and other proprietary technologies we may develop.

For example, we may have inventorship disputes arise from conflicting obligations of consultants or others who are involved in developing our drugs or product candidates and other proprietary technologies we may develop.

Litigation may be necessary to defend against these and other claims challenging inventorship or our ownership of our owned patents, trade secrets, or other intellectual property.

If we fail in defending any such claims, in addition to paying monetary damages, we may lose valuable intellectual property rights, such as exclusive ownership of, or right to use, intellectual property that is important to our products, drug candidates and other proprietary technologies we may develop.

If we fail in defending any such claims, in addition to paying monetary damages, we may lose valuable intellectual property rights, such as exclusive ownership of, or right to use, intellectual property that is important to our products, product candidates, and other proprietary technologies we may develop.

Even if we are successful in defending against such claims, litigation could result in substantial costs and be a distraction to management and other employees.

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CLS Bank International , or Alice , which affirmed the Prometheus and Myriad decisions and provided additional interpretation.

If we make efforts to seek patent protection for our drug candidates, products, technologies, and tests, these efforts may be negatively impacted by the Prometheus , Myriad and Alice decisions, rulings in other cases or guidance or procedures issued by the USPTO.

If we make efforts to seek patent protection for our product candidates, products, technologies, and tests, these efforts may be negatively impacted by the Prometheus , Myriad , and Alice decisions;

rulings in other cases;

or guidance or procedures issued by the USPTO.

However, we cannot fully predict the impact of the Prometheus , Myriad , and Alice decisions on the ability of genetic testing, biopharmaceutical, or other companies to obtain or enforce patents relating to DNA, genes or genomic-related discoveries in the future, as the contours of when claims reciting laws of nature, natural phenomena or abstract ideas may meet patent eligibility requirements are not clear and may take years to develop via interpretation at the USPTO and in the courts.

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In particular, although the Supreme Court has held in Myriad that isolated genomic DNA is not patent-eligible subject matter, third parties could allege that our activities infringe other classes of gene-related patent claims.

There are numerous risks associated with any patent infringement claim that may be brought against us, as discussed above under “Litigation or other proceedings or third-party claims of intellectual property infringement or misappropriation could require us to spend significant time and money and prevent us from selling our tests or developing drug candidates.”

In addition, the Leahy-Smith America Invents Act, or America Invents Act, which was signed into law in 2011, includes a number of significant changes to U.S.

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patent law could affect our susceptibility to patent infringement claims and our ability to obtain any patents we may pursue and, if obtained, to enforce or defend them, any of which could have a material adverse effect on our business.

Obtaining and maintaining our patent protection depends on compliance with various procedural, document submission, fee payment, and other requirements imposed by government patent agencies, and our patent protection could be reduced or eliminated for non-compliance with these requirements.

Obtaining and maintaining our patent protection depends on compliance with various procedures, document submission, fee payment, and other requirements imposed by government patent agencies, and our patent protection could be reduced or eliminated for non-compliance with these requirements.

Periodic maintenance fees, renewal fees, annuity fees, and various other government fees on patents and applications will be due to be paid to the USPTO and various government patent agencies outside of the United States over the lifetime of its owned patents and applications.

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In such an event, potential competitors might be able to enter the market with similar or identical products or technology, which could have a material adverse effect on our business, financial condition, results of operations, and prospects.

Worldwide, we own or exclusively in-license over 20 issued or allowed patents and over 10 active patent applications as of December 31, 2024.

This includes eight issued or allowed U.S.

Worldwide, we own or exclusively in-license over 20 issued or allowed patents and about 10 active patent applications as of December 31, 2025.

This includes nine issued or allowed U.S.

Patents in these patent families are expected to expire by 2034, and patent applications in these patent families, if granted, are expected to expire as far out as 2045, subject to any patent term disclaimers, adjustments, or extensions.

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Our intellectual property portfolio includes important patents and patent applications directed to our technologies.

This includes patent filings relating to our nano-drug delivery platform technology for delivery of water insoluble or poorly soluble drugs for treatments of disease conditions, including cancer.

In particular, as of December 31, 2024, we own or exclusively in-license 18 issued patents and five patent applications relating to FID-007 and FID-022.

This includes patent filings relating to our nanodrug delivery platform technology for delivery of water insoluble or poorly soluble drugs for treatments of disease conditions, including cancer.

In particular, as of December 31, 2025, we own full rights of all issued patents and patent applications relating to FID-007, FID-022, and ADC.

In June 2017, Fulgent Pharma LLC entered into an exclusive license agreement with ANP, as amended December 28, 2017, and May 1, 2024.

Under the agreement, ANP granted Fulgent Pharma LLC an exclusive, worldwide, perpetual, irrevocable, and sublicensable license to certain rights in patents and patent applications under which we may develop and commercialize FID-007 and related formulations for human therapeutic, prophylactic, and diagnostic uses.

As of December 31, 2024, this IP suite includes 28 patents and five patent applications that relate to FID-007 and FID-022.

Previously, in June 2017, we entered into an exclusive license agreement with ANP, as amended December 28, 2017, and May 1, 2024.

Under the agreement, ANP granted us ownership of certain patents and patent applications, and an exclusive, worldwide, perpetual, irrevocable, and sub-licensable license to certain rights in patents and patent applications under which we may develop and commercialize FID-007, FID-022, and related formulations for human therapeutic, prophylactic, and diagnostic uses.

In July 2025, we completed an acquisition of 100% of the outstanding equity of ANP and all rights on multiple proprietary product platforms.

This acquisition enabled us to secure full ownership of the patents we previously licensed from ANP.

As of December 31, 2025, this intellectual property suite includes over 20 issued patents and over 10 patent applications that relate to FID-007, FID-022, and ADC.

Patents in these patent families, if granted, are expected to expire in 2034 subject to any patent term disclaimers, adjustments, or extensions.

Our future issued patents covering drug candidates we develop could be found invalid or unenforceable if challenged in court or before administrative bodies in the United States or abroad.

Patent applications in these patent families, if granted, are expected to expire in 2045, subject to any patent term disclaimers, adjustments, or extensions.

Our future issued patents covering product candidates we develop could be found invalid or unenforceable if challenged in court or before administrative bodies in the United States or abroad.

In patent litigation in the United States, defendant counterclaims alleging invalidity or unenforceability are commonplace.

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Grounds for an unenforceability assertion could be an allegation that someone connected with prosecution of the patent withheld relevant information from the USPTO, or made a misleading statement, during prosecution.

Third parties may raise claims challenging the validity or enforceability of our owned patents before administrative bodies in the United States or abroad, even outside the context of litigation.

Such mechanisms include re-examination, post-grant review, inter partes review, interference proceedings, derivation proceedings, and equivalent proceedings in foreign jurisdictions (e.g., opposition

proceedings).

Such proceedings could result in the revocation of, cancellation of, or amendment to our future patents in such a way that they no longer cover its drug candidate or other technologies.

Third parties may raise claims challenging the validity or enforceability of our owned patents before administrative bodies in the United

States or abroad, even outside the context of litigation.

Such mechanisms include re-examination, post-grant review, inter partes review, interference proceedings, derivation proceedings, and equivalent proceedings in foreign jurisdictions (e.g., opposition proceedings).

Such proceedings could result in the revocation of, cancellation of, or amendment to our future patents in such a way that they no longer cover its product candidate or other technologies.

The outcome following legal assertions of invalidity and unenforceability is unpredictable.

With respect to the validity question, for example, we cannot be certain that there is no invalidating prior art, of which we and the patent examiner were unaware during prosecution.

If a third-party were to prevail on a legal assertion of invalidity or unenforceability, we would lose at least part, and perhaps all, of the patent protection on any drug candidates it develops or other technologies.

If a third-party were to prevail on a legal assertion of invalidity or unenforceability, we would lose at least part, and perhaps all, of the patent protection on any product candidates it develops or other technologies.

Such a loss of patent protection would have a material adverse impact on our business, financial condition, results of operations, and prospects.

Patent terms may be inadequate to protect our competitive position on our products and services for an adequate amount of time.

Patent terms may be inadequate to protect the competitive position of our products and services for an adequate amount of time.

Patents have a limited lifespan.

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The protection a patent affords is limited.

Even if patents covering our products or drug candidates are obtained, once the patent life has expired, we may be open to competition from competitive products.

Given the amount of time required for the development, testing, and regulatory review of new products and drug candidates, patents protecting such products or drug candidates might expire before or shortly after such products or drug candidates are commercialized.

As a result, our future owned and licensed patent portfolio may not provide us with sufficient rights to exclude others from commercializing products or drug candidates similar or identical to ours.

If we do not obtain patent term extension and/or data exclusivity for any drug candidate that we may develop, our business may be materially harmed.

Depending upon the timing, duration, and specifics of any FDA marketing approval of any drug candidate we may develop, one or more of our future owned U.S.

Even if patents covering our products or product candidates are obtained, once the patent life has expired, we may be open to competition from competitive products.

Given the amount of time required for the development, testing, and regulatory review of new products and product candidates, patents protecting such products or product candidates might expire before or shortly after such products or product candidates are commercialized.

As a result, our future owned and licensed patent portfolio may not provide us with sufficient rights to exclude others from commercializing products or product candidates similar or identical to ours.

If we do not obtain patent term extension and/or data exclusivity for any product candidate that we may develop, our business may be materially harmed.

Depending upon the timing, duration, and specifics of any FDA marketing approval of any product candidate we may develop, one or more of our future owned U.S.

patents may be eligible for limited patent term extension under the Hatch-Waxman Act.

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These aspects of many foreign legal systems could make it difficult for us to prevent or stop the misappropriation of our intellectual property rights in these jurisdictions.

Moreover, changes in the law and legal decisions by courts in foreign countries could affect our ability to obtain adequate protection for our technologies and enforce our intellectual property rights.

Moreover, changes in the law and legal decisions by courts in foreign countries could affect our ability to obtain adequate protection

for our technologies and enforce our intellectual property rights.

Many countries have compulsory licensing laws under which a patent owner may be compelled to grant licenses to third parties.

In addition, many countries limit the enforceability of patents against

government agencies or government contractors.

In addition, many countries limit the enforceability of patents against government agencies or government contractors.

In these countries, the patent owner may have limited remedies, which could materially diminish the value of such patent.

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We do not have intellectual property rights in every country throughout the world.

Filing, prosecuting, and defending patents on drug candidates in all countries throughout the world would be prohibitively expensive, and our intellectual property rights in some countries outside the United States and Europe can be less extensive than those in the United States.

Filing, prosecuting, and defending patents on product candidates in all countries throughout the world would be prohibitively expensive, and our intellectual property rights in some countries outside the United States and Europe can be less extensive than those in the United States.

In addition, the laws of foreign countries do not protect intellectual property rights to the same extent as federal and state laws of the United States.

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Competitors may use our technologies in jurisdictions where we have not obtained patent protection to develop their own products and, further, may export otherwise infringing products to territories where we have patent protection but where enforcement is not as strong as that in the United States.

These products may compete with our drug candidates, and our patents or other intellectual property rights may not be effective or sufficient to prevent them from competing.

These products may compete with our product candidates, and our patents or other intellectual property rights may not be effective or sufficient to prevent them from competing.

Third parties may assert that our employees or consultants have wrongfully used or disclosed confidential information or misappropriated trade secrets.

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and in the future we may enter into additional agreements that provide us with licenses to valuable intellectual property or technology.

For example, our business is substantially dependent upon certain intellectual property rights that we license from ANP under the ANP License Agreement.

Under the ANP License Agreement, ANP granted Fulgent Pharma LLC an exclusive, worldwide, perpetual, irrevocable, and sublicensable license to certain rights in patents and patent applications under which we may develop and commercialize FID-007 and FID-022 and related formulations for human therapeutic, prophylactic, and diagnostic uses.

Therefore, our commercial success will depend to a large extent on our ability to maintain and comply with our obligations under the ANP License Agreement.

The ANP License Agreement provides ANP the right to terminate for an uncured breach by us, or if we are insolvent, the subject of a bankruptcy proceeding, or potentially other reasons.

If ANP were to terminate the ANP License Agreement, the development and commercialization of FID-007 and FID-022 would be adversely affected, our potential for generating revenue from this program would be adversely affected and attracting new partners would be made more difficult.

For example, our ADC program is substantially dependent upon certain intellectual property rights for certain reagents.

If any third parties were to terminate their license agreement, the development and commercialization of ADC would be adversely affected, our potential for generating revenue from this program would be adversely affected and attracting new partners would be made more difficult.

As a result, we would likely be subject to increased competition within our market.

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An active trading market for our common stock may not be sustained.

Hsieh, our founder, Chief Executive Officer and Chairman of our board of directors, beneficially owns approximately 28.3% of our outstanding voting equity as of December 31, 2024.

Hsieh, our founder, Chief Executive Officer and Chairperson of our board of directors, beneficially owns approximately 28.3% of our outstanding voting equity as of December 31, 2025.

As a result, fewer shares are actively traded in the public market, which reduces the liquidity of our common stock.

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Our common stock is listed on the Nasdaq Global Market, or Nasdaq, under the symbol “FLGT.” If we fail to satisfy the continued listing standards of Nasdaq, however, we could be de-listed, which would negatively impact the price and liquidity of our common stock.

The price of our common stock may be volatile, and you could lose all or part of your investment.

The price of our common stock may be volatile, and stockholders could lose all or part of their investment.

The trading price of our common stock has experienced, and may continue to experience, wide fluctuations and significant volatility.

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• actual or anticipated changes in laws or regulations applicable to our business or our tests;

• whether and when we are able to obtain marketing approval to market any of our drug candidates and the outcome of meetings with applicable regulatory agencies, including the FDA;

• the outcome, success, costs and timing of preclinical studies and clinical trials for our current or future drug candidates;

• failure of any our drug candidates, if approved, to achieve commercial success;

• whether and when we are able to obtain marketing approval to market any of our product candidates and the outcome of meetings with applicable regulatory agencies, including the FDA;

• the outcome, success, costs and timing of pre-clinical studies and clinical trials for our current or future product candidates;

• failure of any our product candidates, if approved, to achieve commercial success;

• additions or departures of key management or other personnel;

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Our executive officers, directors, beneficial owners of 5% or more of our outstanding voting equity and their respective affiliates collectively beneficially own approximately 46.2% of our outstanding voting equity as of December 31, 2025, and of this, Mr.

Hsieh, our founder, Chief Executive Officer and Chairman of our board of directors, by himself beneficially owns approximately 28.3% of our outstanding voting equity as of December 31, 2024.

Hsieh, our founder, Chief Executive Officer and Chairperson of our board of directors, by himself beneficially owns approximately 28.3% of our outstanding voting equity as of December 31, 2025.

As a result, these stockholders have the ability to control matters submitted to our stockholders for approval, including elections of directors, amendments to our organizational documents or approval of any merger, sale of assets, or other major corporate transaction.

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Provisions in our charter documents and Delaware law could discourage, delay or prevent a change in control of our company or changes in our management and depress the market price of our common stock.

Our certificate of incorporation and bylaws contain provisions that could depress the market price of our common stock by acting to discourage, delay or prevent a change in control of our company or changes in our management that our stockholders may deem advantageous.

Our certificate of incorporation, as amended, or the certificate of incorporation, and amended and restated bylaws, or the bylaws, contain provisions that could depress the market price of our common stock by acting to discourage, delay or prevent a change in control of our company or changes in our management that our stockholders may deem advantageous.

These provisions, among other things:

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• prohibit stockholder action by written consent, thus requiring all stockholder actions to be taken at a duly noticed and held meeting of our stockholders;

• specify that special meetings of our stockholders can be called only by our board of directors, the Chairman of our board of directors or our President, thereby eliminating the ability of our stockholders to call special meetings;

• specify that special meetings of our stockholders can be called only by our board of directors, the Chairperson of our board of directors or our President, thereby eliminating the ability of our stockholders to call special meetings;

• permit only our board of directors to establish the number of directors and fill vacancies on the board of directors, except as may be required by law;

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We refer to the forgoing limitations as the Exclusive Forum Provisions.

The Exclusive Forum Provisions do not apply to (i) actions in which the Court of Chancery in the State of Delaware concludes that an indispensable party is not subject to the jurisdiction of the Delaware courts, and (ii) actions in which a federal court has assumed exclusive jurisdiction of a proceeding.

Accordingly, the Exclusive Forum Provisions do not apply to actions brought to enforce a duty or liability created by the Exchange Act or the rules and regulations thereunder, or Exchange Act Claims.

Further, the clause in our certificate of incorporation excepting “actions in which a federal court has assumed exclusive jurisdiction of a proceeding” from the Exclusive Forum Provisions is not intended to mean that a federal court must take any actual or affirmative action to assume jurisdiction over an Exchange Act Claim, as Section 27 of the Exchange Act creates exclusive federal jurisdiction over all Exchange Act Claims, regardless of whether a federal court takes any action.

The Exclusive Forum Provisions also do not apply to federal and state suits brought to enforce any duty or liability created by the Securities Act or the rules and regulations thereunder, or Securities Act Claims.

To the extent applicable or enforceable, the Exclusive Forum Provisions may limit a stockholder’s ability to bring a claim in a judicial forum it finds favorable for disputes with us or our directors, officers or other employees, which may discourage these lawsuits.

Alternatively, for Securities Act Claims, Exchange Act Claims or claims for which a court were to find these Exclusive Forum Provisions inapplicable or unenforceable for one or more of the specified types of actions or proceedings, we may incur additional costs associated with resolving these matters in other jurisdictions, which could adversely affect our business, financial condition or results of operations.

The Exclusive Forum Provisions do not apply to (i) actions in which the Court of Chancery in the State of Delaware con

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What changed 10-K

Item 1. Business