What changed in this filing

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Item 9A. Controls and Procedures

2026-02-27 compared with 2025-02-28 · 462 added, 421 removed, 1086 unchanged (45% of the section changed)

45 unchanged sentences

Rule 10b5-1 trading arrangements

During the year ended December 31, 2024, none of our directors or officers adopted or terminated “Rule 10b5-1 trading arrangement” or “non-Rule 10b5-1 trading arrangement,” as each term is defined in Item 408 of Regulation S-K.

During the quarter ended December 31, 2025, none of our directors or officers, as each term is defined in Rule 16a-1(f) of the Exchange Act, adopted or terminated “Rule 10b5-1 trading arrangement” or “non-Rule 10b5-1 trading arrangement,” as each term is defined in Item 408 of Regulation S-K, except as follows:

On November 25, 2025 , Hanlin Gao , our Chief Scientific Officer and Laboratory Director , entered into a Rule 10b5-1 sales plan, or the Gao Sales Plan, intended to satisfy the affirmative defense conditions of Rule 10b5-1(c) of the Exchange Act.

The Gao 10b5-1 Sales Plan, which has a term that expires on January 31, 2027 , provides for the sale of up to 100,000 shares of our common stock .

Disclosure Regarding Foreign Jurisdictions that Prevent Inspections.

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Reference Exhibit

Agreement and Plan of Merger, dated September 16, 2016, by and among the registrant, Fulgent MergerSub, LLC and Fulgent Therapeutics LLC.

Agreement and Plan Merger, dated September 16, 2016, by and among the registrant, Fulgent MergerSub, LLC and Fulgent Therapeutics LLC.

Certificate of Incorporation of the registrant, as amended .

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Form of Notice of Restricted Share Unit Grant and Restricted Share Unit Agreement under the Amended and Restated 2015 Equity Incentive Plan of Fulgent Therapeutics LLC.

2016 Omnibus Incentive Plan of the registrant.

Form of Notice of Stock Option Award and Stock Option Award Agreement under the 2016 Omnibus Incentive Plan of the registrant.

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Employment Agreement, dated May 25, 2016, by and among Fulgent Therapeutics LLC, the registrant and Paul Kim.

Amended and Restated Employment Agreement, dated May 25, 2016, by and among Fulgent Therapeutics LLC, the registrant and Han Lin Gao.

Amended and Restated Employment Agreement, dated May 25, 2016, by and among Fulgent Therapeutics LLC, the registrant and Hanlin Gao.

Severance Agreement, dated July 7, 2016, by and among Fulgent Therapeutics LLC, the registrant and Ming Hsieh.

Severance Agreement, dated July 7, 2016, by and among Fulgent Therapeutics LLC, the registrant and Paul Kim.

Severance Agreement, dated July 7, 2016, by and among Fulgent Therapeutics LLC, the registrant and Han Lin Gao.

Severance Agreement, dated July 7, 2016, by and among Fulgent Therapeutics LLC, the registrant and Hanlin Gao.

Contribution and Allocation Agreement, dated May 19, 2016, by and among Fulgent Therapeutics LLC, Fulgent Pharma LLC and Ming Hsieh.

Form of Fourth Amended and Restated Operating Agreement of Fulgent Therapeutics LLC, to be in effect upon completion of the Reorganization .

Director Compensation Program of the registrant, effective as of September 28, 2016 and amended November 2, 2017.

Cooperation Agreement on the Establishment of Fujian Fujun Gene Biotech Co., Ltd., dated April 25, 2017, by and among Shenzhen Fujin Gene Science &

Incorporated by

Reference Exhibit

Cooperation Agreement on the Establishment of Fujian Fujun Gene Biotech Co., Ltd., dated April 25, 2017, by and among Shenzhen Fujin Gene Science & Technology Co., Ltd., Xilong Scientific Co., Ltd.

Technology Co., Ltd., Xilong Scientific Co., Ltd.

and Fuzhou Jinqiang Investment Partnership (LP).

Fulgent Genetics, Inc.

Amended and Restated 2016 Omnibus Incentive Plan .

Fulgent Genetics, Inc.

Amended and Restated 2016 Omnibus Incentive Plan .

Agreement for Purchase and Sale of Property, dated July 23, 2020, by and between the registrant and 4401 Santa Anita Corporation .

Employment Agreement, dated March 8, 2021, by and among Fulgent Therapeutics, LLC, Fulgent Genetics, Inc.

and Jian Xie.

Severance Agreement, dated March 8, 2021, by and among Fulgent Therapeutics LLC, Fulgent Genetics, Inc.

and Jian Xie.

Amended and Restated Non-Employee Director Compensation Policy.

Employment Agreement, dated March 8, 2021, by and among Fulgent Therapeutics, LLC, the registrant and Jian Xie.

Severance Agreement, dated March 8, 2021, by and among Fulgent Therapeutics LLC, the registrant and Jian Xie.

Restructuring Agreement of Fujian Fujun Gene Biotech Co., Ltd.

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Incentive Compensation Recoupment Policy.

Agreement and Plan of Merger, dated as of April 16, 2022, by and among Fulgent Therapeutics LLC, solely for purpose of Section 6.20, Fulgent Genetics, Inc., Ducks Acquisition Sub, Inc., Symphony Buyer, Inc., solely in its capacity as the representative of Symphony’s securityholders, Avista Capital Partners IV GP, L.P.

Agreement and Plan of Merger, dated as of April 16, 2022, by and among Fulgent Therapeutics LLC, solely for purpose of Section 6.20, the registrant, Ducks Acquisition Sub, Inc., Symphony Buyer, Inc., solely in its capacity as the representative of Symphony’s securityholders, Avista Capital Partners IV GP, L.P.

and solely for purposes of Section 6.21, Article VIII and Section 10.14, those company stockholders set forth on the signature page thereto .

Amended and Restated Director Compensation Program of the registrant, dated as of August 1, 2022.

Form of Notice of Restricted Stock Unit Award and Restricted Stock Unit Agreement under the Fulgent Pharma Holdings, Inc.

2022 Omnibus Incentive Plan.

Agreement and Plan of Merger, dated November 7, 2022 by and among Fulgent Genetics, FG Merger Sub, Inc., Fulgent Pharma Holdings, Inc.

Agreement and Plan of Merger, dated November 7, 2022 by and among the registrant, FG Merger Sub, Inc., Fulgent Pharma Holdings, Inc.

and solely for purposes of Section 2.4, Section 5.5, Article VI, Section 7.8 and Section 7.14, those company stockholders set forth on the signature page thereto .

Rule 10b5-1 Issuer Repurchase Plan, dated December 12, 2023, by and between Fulgent Genetics, Inc.

and Piper Sandler & Co.

Second Amendment to Lease Agreement, July 1, 2020 by and between Inform Diagnostics, Inc., p/k/a/ Miraca Life Sciences, Inc.

and WPT Land 2 LP.

Amended and Restated Executive Officer Incentive Plan of the registrant .

Lease Agreement of Premises at 15-19 Crawford Street Needham, Massachusetts, by and between Inform Diagnostics and Crawford Street DE, LLC.

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Amended and Restated 2016 Omnibus Incentive Plan of the registrant .

Amended and Restated Executive Officer Incentive Plan of the registrant .

Purchase and Sale Agreement, dated December 20, 2025, by and among Bako Pathology LP, Bako Pathology Holdings Corp., BPA Holding Corp., Dermatopathology Experts, LLC, and Inform Diagnostics, Inc.

Asset Purchase Agreement, dated December 20, 2025, by and among Bako Pathology LP, Bako Pathology Holdings Corp., BPA Holding Corp., Bakotic Pathology Associates, L.L.C., Podceuticals L.L.C., GBRL Consulting, LLC, Fulgent Therapeutics, LLC, and Inform Diagnostics, Inc.

Insider Trading Policy.

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Power of Attorney (included on the signature page hereto).

Incorporated by

Reference Exhibit

Certification of Principal Executive Officer pursuant to Rules 13a-14(a) and 15d-14(a) under the Securities Exchange Act of 1934, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.

Certification of Principal Financial Officer pursuant to Rules 13a-14(a) and 15d-14(a) under the Securities Exchange Act of 1934, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.

Incorporated by

Reference Exhibit

Certification of Principal Executive Officer and Principal Financial Officer pursuant to 18 U.S.C.

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* This certification is being furnished solely to accompany this report pursuant to 18 U.S.C.

1350, and are not being filed for purposes of Section 18 of the Securities Exchange Act of 1934, as amended, and is not to be incorporated by reference into any filing of the registrant, whether made before or after the date hereof, regardless of any general incorporation by reference language in such filing.

1350, and is not being filed for purposes of Section 18 of the Securities Exchange Act of 1934, as amended, and is not to be incorporated by reference into any filing of the registrant, whether made before or after the date hereof, regardless of any general incorporation by reference language in such filing.

** Pursuant to Item 601(b)(10) of Regulation S-K, certain confidential portions of this exhibit have been omitted by means of marking such portions with asterisks as the identified confidential portions (i) are not material and (ii) would be competitively harmful if publicly disclosed.

# Management contract or compensatory plan, contract or arrangement.

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The Company hereby undertakes to furnish supplementally a copy of any omitted exhibit or schedule upon request by the SEC;

provided, that the Company may request confidential treatment pursuant to Rule 24b-2 of the Securities Exchange Act of 1934, as amended, for any exhibits or schedules so furnished.

Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, as amended, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

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/s/ Ming Hsieh

Chief Executive Officer and Chairman of the Board

Chief Executive Officer and Chairperson of the Board

February 27, 2026

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Regina Groves

/s/ Linda Marsh

/s/ Linda Dong

February 27, 2026

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The communication of critical audit matters does not alter in any way our opinion on the financial statements, taken as a whole, and we are not, by communicating the critical audit matters below, providing separate opinions on the critical audit matters or on the accounts or disclosures to which they relate.

Goodwill – Therapeutic Development Reporting Unit – Refer to Notes 2 and 17 to the financial statements

Critical Audit Matter Description

The Company’s evaluation of goodwill for impairment involves the comparison of the fair value of the reporting unit to its carrying value.

The Company used the discounted cash flow model to estimate fair value, which requires management to make significant estimates and assumptions related to discount rates, forecasts of future revenues and EBITDA (defined as earnings before interest, income taxes, depreciation and amortization) margin, as well as probability and timing of commercial success.

Changes in these assumptions could have a significant impact on either the fair value, the amount of any goodwill impairment charge, or both.

The goodwill balance was $22.1 million as of December 31, 2024.

The fair value of the Therapeutic Development Reporting Unit exceeded its carrying value by 268% as of the measurement date and, therefore, no impairment was recognized as of December 31, 2024.

We identified goodwill as a critical audit matter because of the significant judgments made by management to estimate the fair value of the reporting unit.

This required a high degree of auditor judgment and an increased extent of effort, including the need to involve professionals in our firm having fair value expertise when performing audit procedures to evaluate the reasonableness of management’s estimates and assumptions related to selection of the discount rate.

How the Critical Audit Matter Was Addressed in the Audit

Our audit procedures related to the discount rate and forecasts used by management to estimate the fair value of the Therapeutic Development Reporting Unit included the following, among others:

• We tested the effectiveness of controls over management’s goodwill impairment evaluation, including those over the determination of the fair value of the reporting unit, such as controls related to management’s selection of the discount rate, forecasts of future revenue and EBITDA margin, and the probability and timing of commercial success.

• We evaluated management’s ability to accurately forecast timing of commercial success by comparing actual milestones achieved to milestone assumptions in management’s historical forecast.

• We evaluated the reasonableness of management’s forecasts of future revenue and EBITDA margin, including the probability and timing of commercial success by comparing the forecasts with:

o Internal communications to management and the Board of Directors.

o Forecasted information included in Company press releases as well as in analyst and industry reports for the Company and certain of its peer companies.

o Relevant regulatory approvals supporting timing of commercial success.

• With the assistance of professionals in our firm having fair value expertise, we evaluated the reasonableness of the (1) valuation methodology and (2) discount rate by:

o Testing the source information underlying the determination of the discount rate and the mathematical accuracy of the calculation.

o Developing a range of independent estimates and comparing those to the discount rate selected by management.

Intangible Assets – IPR&D – Refer to Notes 2 and 17 to the financial statements

Goodwill and In-Process Research and Development (IPR&D) Intangible Asset —Therapeutic Development Reporting Unit—Refer to Notes 2 and 17 to the financial statements

Critical Audit Matter Description

The Company has in-process research & development (“IPR&D”) that are indefinite-lived intangible assets.

As of December 31, 2024, the carrying value of the IPR&D is $64.6 million.

Management estimates the fair value of IPR&D annually on its elected assessment date of December 31, 2024, using a multi-period excess earnings method, which is a specific discounted cash flow method.

The determination of the fair value requires management to make significant estimates and assumptions related to discount rates, forecasts of future revenues and EBITDA margin, as well as probability and timing of commercial success.

Changes in these assumptions could have a significant impact on the fair value of IPR&D and a significant change in fair value could cause a significant impairment.

The fair value of the IPR&D exceeded its carrying value by 214% as of the measurement date and therefore, no impairment was recognized as of December 31, 2024.

We identified the IPR&D as a critical audit matter because of the significant judgments made by management to estimate its fair value.

The Company’s evaluation of goodwill and IPR&D for impairment involves an initial assessment to determine whether events or circumstances change that would more likely than not reduce the fair value of the reporting unit goodwill & IPR&D to their carrying value.

The Company analyzed qualitative factors, including (i) macroeconomic, industry and market conditions, (ii) cost factors, (iii) overall financial performance compared with prior projections, (iv) the excess of fair value over carrying value as of the most recent quantitative assessment performed, and (v) other relevant entity-specific events to determine whether it was more likely than not that the fair values of the reporting unit & IPR&D were less than their carrying amount as a basis for determining whether it was necessary to perform a quantitative goodwill or IPR&D impairment test.

We identified the Company’s qualitative evaluation of goodwill and IPR&D impairment indicators as a critical audit matter because of the significant judgments made by management specifically to estimate the fair value of the reporting unit goodwill and IPR&D, specifically related to the timing assumption for commercial success.

This required a high degree of auditor judgment and an increased extent of effort when performing audit procedures to evaluate the reasonableness of management’s assumptions related to the timing of commercial success.

How the Critical Audit Matter Was Addressed in the Audit

Our audit procedures related to the discount rate and forecasts used by management to estimate the fair value of IPR&D included the following, among others:

• We tested the effectiveness of controls over management’s intangible asset impairment evaluation, including those over the determination of the IPR&D, such as controls related to management’s selection of the discount rate, forecasts of future revenue, EBITDA margin, and the probability and timing of commercial success.

Our audit procedures related to the Company’s qualitative evaluation of goodwill and IPR&D impairment for the Therapeutic Development reporting unit included the following, among others:

• We tested the effectiveness of controls over management’s qualitative evaluation of impairment indicators, such as controls related to management’s assumptions related to the timing of commercial success.

• We evaluated management’s ability to accurately forecast timing of commercial success by comparing actual milestones achieved to milestone assumptions in management’s historical forecast.

• We evaluated the reasonableness of management’s forecasts of future revenue and EBITDA margin, including the probability and timing of commercial success by comparing the forecasts with:

• We evaluated the reasonableness of management’s assumptions related to the timing of commercial success by comparing the current expectations with:

o Internal communications to management and the Board of Directors.

o Forecasted information included in Company press releases as well as in industry reports and external studies.

o Forecasted information included in Company press releases as well as in external studies.

o Relevant regulatory approvals supporting timing of commercial success.

• With the assistance of professionals in our firm having fair value expertise, we evaluated the reasonableness of the (1) valuation methodology and (2) of the discount rates by:

o Testing the source information underlying the determination of the discount rate and the mathematical accuracy of the calculation.

o Developing a range of independent estimates and comparing those to the discount rate selected by management.

/s/ DELOITTE & TOUCHE LLP

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Marketable securities

Trade accounts receivable, net of allowance for credit losses of $ 20,458 and $ 25,226

Trade accounts receivable, net of allowance for credit losses of $ 21,411 as of December 31, 2025, and $ 20,458 as of December 31, 2024

Prepaid income taxes

Other current assets

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Marketable securities, long-term

Intangible assets, net

Fixed assets, net

Redeemable preferred stock investment

In-process research & development

Other intangible assets, net

Other long-term assets

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Contract liabilities

Notes payable, current portion

Other current liabilities

Notes payable, current

Total current liabilities

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Stockholders’ equity

Common stock, $ 0.0001 par value per share, 50,000 shares authorized, 33,614 shares issued and 30,841 shares outstanding, and 32,416 shares issued and 29,653 shares outstanding

Preferred stock, $ 0.0001 par value per share, 1,000 shares authorized, no shares issued or outstanding

Common stock, $ 0.0001 par value per share, 50,000 shares authorized, 34,501 shares issued and 31,081 shares outstanding as of December 31, 2025, and 33,614 shares issued and 30,841 shares outstanding as of December 31, 2024

Preferred stock, $ 0.0001 par value per share, 1,000 shares authorized, no shares issued or outstanding as of December 31, 2025, and December 31, 2024

Additional paid-in capital

Accumulated other comprehensive (loss) income

Accumulated other comprehensive income (loss)

Retained earnings

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Goodwill impairment loss

Restructuring costs

Total operating expenses

Operating (loss) income

Operating loss

Other income (expenses)

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Interest expense

Impairment of available-for-sale debt securities

Impairment loss

Other income, net

Total other income, net

(Loss) income before income taxes

Loss before income taxes

(Benefit from) provision for income taxes

Net (loss) income from consolidated operations

Net loss from consolidated operations

Net loss attributable to noncontrolling interests

Net (loss) income attributable to Fulgent

Net (loss) income per common share attributable to Fulgent:

Net loss attributable to Fulgent

Net loss per common share attributable to Fulgent:

Weighted-average common shares:

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Year Ended December 31,

Net (loss) income from consolidated operations

Net loss from consolidated operations

Other comprehensive (loss) income

Foreign currency translation loss

Net (loss) income on available-for-sale debt securities, net of tax

Net comprehensive (loss) income from consolidated operations

Foreign currency translation income (loss)

Net income (loss) on available-for-sale debt securities, net of tax

Net comprehensive loss from consolidated operations

Net loss attributable to noncontrolling interest

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Comprehensive loss attributable to noncontrolling interest

Comprehensive (loss) income attributable to Fulgent

Comprehensive loss attributable to Fulgent

The accompanying notes are an integral part of these consolidated financial statements.

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Common stock issued in a business combination (1)

Other comprehensive loss, net

Net income (loss)

Other comprehensive income, net

Balance at December 31, 2023

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Common stock issued in a business combination (1)

Other comprehensive income, net

Other comprehensive loss, net

Balance at December 31, 2024

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Repurchase of common stock

Common stock issued in a business combination (1)

Other comprehensive loss, net

Contingently issuable shares in a business combination (2)

Other comprehensive income (loss), net

Balance at December 31, 2025

(1) As of December 31, 2022, 371,000 shares of the Company’s common stock were not issued and heldback by the Company as partial security for the indemnification obligations in connection with the business combination of Fulgent Pharma Holdings, Inc., or Fulgent Pharma, in 2022 .

(1) 371,000 shares of the Company’s common stock were not issued and heldback by the Company as partial security for the indemnification obligations in connection with the business combination of Fulgent Pharma Holdings, Inc., or Fulgent Pharma, in 2022.

186,000 shares were issued in November 2023, and the remainder were issued in May 2024 by the Company upon expiration of hold back provisions.

(2) T he Company agreed to issue up to 292,682 shares of the Company’s common stock in the acquisition of ANP upon achieving certain cash receipts.

$ 5.7 million represented the fair value of the shares on the acquisition date.

A s of December 31, 2025, no common stock has been issued as the milestones have not been met.

See details in Note 15.

Business Combinations .

The accompanying notes are an integral part of these consolidated financial statements.

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Cash flow from operating activities

Net (loss) income from consolidated operations

Adjustments to reconcile net (loss) income to net cash provided by operating activities:

Net loss from consolidated operations

Adjustments to reconcile net loss to net cash (used in) provided by operating activities:

Goodwill impairment loss

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Depreciation and amortization

(Adjustment) provision for credit losses

Provision (adjustment) for credit losses

Noncash lease expense

Loss on disposal of fixed asset

Amortization of (discount) premium of marketable securities

(Gain) loss on disposal of fixed asset

Discount premium of marketable securities

Deferred taxes

Unrecognized tax benefits

Net realized loss on marketable securities

Impairment of available-for-sale debt securities

Net realized (gain) loss on marketable securities

Impairment loss

Changes in operating assets and liabilities:

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Operating lease liabilities

Net cash provided by operating activities

Net cash (used in) provided by operating activities

Cash flow from investing activities

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Purchases of fixed assets

Purchase of preferred stock of privately held company

Contingent consideration payout related to a business acquisition

Maturities of marketable securities

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Acquisition of businesses, net of cash acquired

Net cash (used in) provided by investing activities

Net cash provided by (used in) investing activities

Cash flow from financing activities

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Supplemental disclosures of cash flow information

Cash and cash equivalents

Restricted cash

Total cash, cash equivalents, and restricted cash

Income taxes paid (1)

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Supplemental disclosures of non-cash investing and financing activities

Stock consideration in a business combination

Maturities of marketable securities in ither current assets

Purchases of fixed assets in notes payable

Contingent consideration for business acquisition included in additional paid-in capital (2)

Purchases of fixed assets in accounts payable

Finance lease right-of-use assets obtained in exchange for lease liabilities

Holdback for acquisition of business included in other long-term liabilities (2)

Operating lease right-of-use assets obtained in exchange for lease liabilities

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Finance lease right-of-use assets reduced due to lease modification and termination

(1) The Company adopted ASU 2023-09 on a prospective basis.

As such, cash paid for income taxes for the years ended December 2024 and 2023, were not adjusted to reflect current year presentation.

(2) These non-cash activities are related to the acquisition of ANP.

Refer to Note 15.

Business Combinations for further details.

The accompanying notes are an integral part of these consolidated financial statements.

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The accompanying consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States, or U.S.

GAAP, and presented in United States Dollars, or USD, the reporting currency of the Company.

These financial statements include the assets, liabilities, revenues and expenses of all subsidiaries and entities in which the Company has a controlling financial interest or is deemed to be the primary beneficiary.

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Nature of the Business

Fulgent Genetics, Inc., together with its subsidiaries and affiliated professional corporations, or PCs (collectively referred to as the Company, unless otherwise noted or the context otherwise requires), is a technology-based company with a well-established laboratory services business and a therapeutic development business.

Fulgent Genetics, Inc., together with its subsidiaries and affiliated professional corporations, or PCs (collectively referred to as the Company, unless otherwise noted or the context requires otherwise), is a technology-based company with a well-established laboratory services business and a therapeutic development business.

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

Its 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 of new and existing cancer drugs.

Its 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 of new and existing cancer drugs.

The Company aims to transform from a genomic diagnostic business into a fully integrated precision medicine company.

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A bank guarantee equivalent to six months of gross rent plus tax with an expiry date three months post the lease expiry is required under the lease contract, and the lease contract will expire in March 2034.

Restricted deposit is recorded in other long-term assets in the Company’s Consolidated Balance Sheets as the balance is not expected to be released to cash within the next

As of December 31, 2024, the Company had restricted cash of $ 0.1 million .

The Company did no t have restricted cash as of December 31, 2023 .

Restricted deposit is recorded in other long-term assets in the Company’s Consolidated Balance Sheets as the balance is not expected to be released to cash within the next 12 months.

As of December 31, 2025, and December 31, 2024 the Company had restricted cash of $ 0.1 million.

Cash, Cash Equivalents, and Restricted Cash shown in the Consolidated Statements of Cash Flows

The following table provides a reconciliation of cash, cash equivalents, and restricted cash in the consolidated balance sheets that sum to the total of the same such amounts shown in the consolidated statements of cash flows:

Year Ended December 31,

(in thousands)

Cash and cash equivalents

Restricted cash included in Other long-term assets

Total cash, cash equivalents, and restricted cash

Marketable Securities

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Interest on marketable debt securities is included in interest income.

The Company elected the practical expedient to exclude accrued interest receivable from both the amortized cost basis and fair value of available-for-sale security investments.

The Company does not measure an allowance for credit losses on accrued interest receivable.

Any interest receivable credit losses would be written off promptly in the current period.

In accordance with the Company’s investment policy, management invests to diversify credit risk and only invests in securities with high credit quality, including U.S.

government securities.

The Company’s investments in marketable equity securities are measured at fair value with the related gains and losses, realized and unrealized, recognized in interest income, in the accompanying Consolidated Statements of Operations.

The Company’s investments in marketable equity securities, if any, are measured at fair value with the related gains and losses, realized and unrealized, recognized in interest income, in the accompanying Consolidated Statements of Operations.

The cost of any marketable equity securities sold is based on the specific-identification method.

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Loss given default represents the likelihood that a receivable that has reached the point of default will not be collected in full.

The Company updates its loss rate and factors annually to incorporate the most recent historical data and adjusts the quantitative portion of the reserve through its qualitative reserve overlay.

The Company updates its loss rate and factors quarterly to incorporate the most recent historical data and adjusts the quantitative portion of the reserve through its qualitative reserve overlay.

The Company looks at qualitative factors such as general economic conditions in determining expected credit losses.

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Allowance for credit losses at beginning of year

Current period (gain) provision

Current period provision (gain)

Recoveries of amounts previously charged off

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Preferred Stock Investment

The redeemable preferred stock investment of $ 20.4 million as of December 31, 2023, represents the fair value of the 7.3 million shares of preferred stock of a privately-held, Cayman Islands company, Laboratory for Advanced Medicine, Inc., or LAMH, doing business as “Helio Health” that the Company purchased in July 2021.

The Company had 7.3 million shares of preferred stock of a privately-held, Cayman Islands company, Laboratory for Advanced Medicine, Inc., or LAMH, doing business as “Helio Health” that the Company purchased in July 2021.

Helio Health is an AI-biotechnology company developing blood-based early cancer detection tests, and the Company expected to gain access to an emerging liquid biopsy testing technology, through this strategic partnership.

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As a result, the Company reclassified $ 0.4 million unrealized gain out of accumulated other comprehensive income (loss) to net income (loss) in the consolidated financial statements.

The Company elected to record its preferred stock investment in Helio Genomics under the measurement alternative in accordance with ASC 321, defined as cost less impairment, adjusted for subsequent observable price changes and are periodically assessed for impairment when events or circumstances indicate that a decline in value may have occurred.

As of July 25, 2024, the preferred stock investment carrying value of $ 9.9 million was recorded as other long-term assets in the Consolidated Balance Sheets.

No impairment loss was recorded as of December 31, 2024.

The Company elected to record its preferred stock investment in Helio Genomics under the measurement alternative in accordance with ASC 321, “ Investments-Equity Securities ,” defined as cost less impairment, adjusted for subsequent observable price changes and are periodically assessed for impairment when events or circumstances indicate that a decline in value may have occurred.

As of July 25, 2024 and December 31, 2024, the preferred stock investment carrying value of $ 9.9 million was recorded as other long-term assets in the Consolidated Balance Sheets.

During the year ended December 31, 2025, the Company performed a qualitative assessment to determine if this investment was impaired.

Indicators considered included significant declines in the investee’s operating performance, adverse changes in industry conditions, and deterioration in the investee’s financial condition.

As part of this review, the Company identified that Helio Genomics exhibited several adverse conditions, including a deterioration in financial condition and the inability to secure sufficient financing to support future operations.

Given these developments and their impact on Helio Genomics’ ability to continue funding its operations, management concluded that the Company’s investment in Helio Genomics was impaired.

To estimate the fair value of the investment, the Company employed a discounted cash flow analysis, using assumptions including projected revenues and expenses, discount rates, and a terminal value multiple.

The resulting estimated fair value was deemed insignificant.

As a result, the Company recorded $ 9.9 million of impairment loss during the year ended December 31, 2025.

The impairment is reflected as impairment loss in the Consolidated Statement of Operations.

The carrying amount of the investment in Helio Genomics on the Consolidated Balance Sheet was reduced to its fair value of an insignificant amount, which now represents its new cost basis.

The Company continues to monitor its investments for changes in facts and circumstances that may indicate further impairments or observable price changes in orderly transactions.

Post spin-out, the Company retained the original right to redeem its LAMH preferred stock.

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(ii) the financial condition and near-term prospects of the investee, and (iii) general market conditions.

As a result, the Company recognized a $ 10.1 million credit loss during the year ended December 31, 2024, recorded as impairment of available-for-sale debt securities in the Consolidated Statements of Operations.

As a result, the Company recognized a $ 10.1 million credit loss during the year ended December 31, 2024, recorded as impairment loss in the Consolidated Statements of Operations.

The roll-forward for the allowance for credit losses related to the available-for-sale debt securities is as follows:

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Business Combinations

The Company uses the acquisition method of accounting and allocates the fair value of purchase consideration to the assets acquired and liabilities assumed from an acquiree based on their respective fair values as of the acquisition date.

The Company uses the acquisition method of accounting and allocates the fair value of purchase consideration to the assets acquired, liabilities assumed and any noncontrolling interest in the acquiree based on their respective fair values as of the acquisition date.

The excess of the fair value of purchase consideration over the fair value of these assets acquired and liabilities assumed is recorded as goodwill.

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Intangible assets, unless determined to be indefinite-lived, are amortized over their estimated useful lives.

The Company amortizes intangible assets on a straight-line basis with definite lives generally over periods ranging from three to 14 years .

The Company amortizes intangible assets with definite lives on a straight-line basis generally over periods ranging from 3 to 18 years .

See Note 17, Goodwill and Intangible Assets , for details of intangible assets.

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An impairment loss would be recognized for the amount by which the reporting unit’s carrying amount exceeds its fair value.

The Company’s quantitative assessment includes estimating the fair value of each reporting unit and comparing it to its carrying value.

If a quantitative assessment is deemed necessary, the quantitative assessment includes estimating the fair value of each reporting unit and comparing it to its carrying value.

The Company estimates the fair value of reporting units using both income-based and market-based valuation methods and typically engages a third-party appraisal firm to assist with the valuation.

The estimated fair value for each reporting unit is determined based upon the range of estimated values developed from the income and market-based methods.

If the estimated fair value of a reporting unit exceeds its carrying value, the goodwill is not impaired, and no further review is required.

The income-based fair value methodology is based on a reporting unit’s forecasted future cash flows that are discounted to the present value using the reporting unit’s weighted-average cost of capital, or WACC.

Under the income-based approach, it requires management’s assumptions and judgments regarding economic conditions in the markets in which the company operates and conditions in the capital markets, many of which are outside of management’s control.

The market-based fair value methodology looks at the guideline public company valuation method to determine the prices of comparable public companies and looks at merger and acquisition methods, similar businesses that were sold recently, to estimate the value of the reporting units.

The income-based approach incorporates management’s assumptions and judgments regarding economic conditions in the markets in which a company operates and conditions

in the capital markets, many of which are outside of management’s control.

The market-based fair value methodology includes (i) the guideline public company valuation method, which analyzes the valuation multiples of comparable public companies, and (ii) the merger and acquisition method, which compares the market values of similar businesses, to estimate the value of the reporting units.

Under the market-based approach, judgment is required in evaluating market multiples and recent transactions.

The Company performed an annual goodwill and intangible asset impairment test on December 31, 2024, and elected to bypass the optional qualitative test and perform the quantitative assessments for its therapeutic development reporting units, which includes an indefinite-lived intangible asset.

The Company performed an annual goodwill and intangible asset impairment test on December 31, 2025 , and determined it was not more likely than not that the fair value of the therapeutic development reporting unit, or the associated indefinite lived intangible asset, was less than its carrying amount.

Therefore, a quantitative assessment of the reporting unit was not deemed necessary.

Reagents and Supplies

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Cost is determined using actual costs on a first-in, first-out basis.

The reagents and other consumables were included in other current assets in the accompanying Consolidated Balance Sheets.

The reagents and other consumables are included in other current assets in the accompanying Consolidated Balance Sheets.

Fair Value of Financial Instruments

The Company’s financial instruments consist principally of cash and cash equivalents, marketable securities, trade accounts receivable, restricted cash, a redeemable preferred stock investment, preferred stock investments, accounts payable, and accrued liabilities.

The Company’s financial instruments consist principally of cash and cash equivalents, marketable securities, trade accounts receivable, restricted cash, a preferred stock investment, accounts payable, and accrued liabilities.

The carrying amounts of certain of these financial instruments, including cash and cash equivalents, accounts receivable, accounts payable, and accrued liabilities approximate fair value due to their short maturities.

Fair value of marketable securities, the redeemable preferred stock investment, and the preferred stock investments is disclosed in Note 4, Fair Value Measurement s, to the accompanying consolidated financial statements.

The fair value of marketable securities, and the preferred stock investments is disclosed in Note 4, Fair Value Measurement s, to the accompanying consolidated financial statements.

Concentrations of Credit Risk, Customers and Suppliers

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Management believes that the Company is not exposed to significant credit risk due to the financial strength of the depository institutions in which its cash and cash equivalents are held.

In certain periods, a small number of customers has accounted for a significant portion of the Company’s revenue.

For the laboratory services segment, aggregating customers under common control, one customer comprised of $ 62.6 million or 22 % of total revenue in the year ended December 31, 2024, and the same customer comprised of $ 35.7 million or 12 % of total revenue in the year ended December 31, 2023.

A different customer comprised of $ 115.6 million or 19 % of total revenue in the year ended December 31, 2022.

One customer comprised 15 % of total accounts receivable, net, as of December 31, 2024, and the same customer comprised 13 % of total accounts receivable, net, as of December 31, 2023.

For the therapeutic development segment, the Company doesn't have customers or revenue as it does not have any commercialized or approved drug candidates.

The Company’s therapeutic development business relies on ANP Technologies, Inc.

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

In certain periods, a small number of customers or a single laboratory customer have accounted for a significant portion of the Company’s revenue.

For the laboratory services segment, 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 total revenue in the year ended December 31, 2025.

The same laboratory customer comprised $ 62.6 million or 22 % of total revenue in the year ended December 31, 2024, and $ 35.7 million or 12 % of total revenue in the year ended December 31, 2023.

The same laboratory customer comprised 13 % of total accounts receivable, net, as of December 31, 2025, and 15 % of total accounts receivable, net, as of December 31, 2024.

The Company continues to see significant concentration in this single large laboratory customer.

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

Any or all of the Company’s 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 the Company, which could adversely affect the Company’s revenue.

The Company believes some of these fluctuations in customer demand may be attributable, in part, to the nature of its business.

The Company’s 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.

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

In the therapeutic development segment, revenue is an immaterial portion of the Company’s total revenue as it does not yet have any commercialized or approved product candidates.

The Company’s therapeutic development business relies on ANP, for certain laboratory services, equipment, tools, and drug intermediates in connection with research and development efforts.

In July 2025, the Company completed an acquisition of 100 % of the outstanding equity of ANP.

See more details in Note 15.

Business Combinations.

The Company also relies on a limited number of suppliers for certain laboratory substances used in the chemical reactions incorporated into its processes, referred to as reagents, as well as for the sequencers and various other equipment and materials it uses in its laboratory operations.

In particular, the Company relies on a sole supplier for the next generation sequencers and associated reagents it uses to perform its genetic tests and as the sole provider of maintenance and repair services for these sequencers.

The Company’s laboratory operations would be interrupted if it encountered delays or difficulties securing these reagents, sequencers, other equipment or materials or maintenance and repair services, which could occur for a variety of reasons, including if the Company needs a replacement or temporary substitute for any of its limited or sole suppliers and is not able to locate and make arrangements with an acceptable replacement or temporary substitute.

The Company’s development efforts could also be delayed or interrupted if it is unable to procure items needed for its therapeutic development activities.

The Company believes there are currently only a few other manufacturers that are capable of supplying and servicing some of the equipment and other materials necessary for its laboratory operations, including sequencers and various associated reagents.

The Company’s laboratory operations would be interrupted if it encountered delays or difficulties securing these reagents, sequencers, other equipment or materials or maintenance and repair services, which could occur for a variety of reasons, including if the Company needs a replacement or temporary substitute for any of its limited or sole suppliers and is not able to locate and make arrangements for an acceptable replacement or temporary substitute.

The Company’s development efforts could also be delayed or interrupted if it is unable to procure items needed for its therapeutic

development activities.

The Company believes there is currently a limited number of manufacturers capable of supplying and servicing some of the equipment and other materials necessary for its laboratory operations, including sequencers and various associated reagents.

The Company determines if an arrangement is a lease at inception by evaluating whether the arrangement conveys the right to use an identified asset and whether the Company obtains substantially all of the economic benefits from and has the ability to direct the use of the asset.

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The Company uses its incremental borrowing rate based on the information available at the commencement date, including inquiries with its bank, in determining the present value of lease payments when its leases do not provide an implicit or explicit rate.

Lease ROU assets consist of initial measurement of lease liabilities, any lease payments made to lessor on or before the lease commencement date, minus any lease incentive received, and any initial direct costs incurred by the Company.

Lease ROU assets consist of initial measurement of lease liabilities, any lease payments made to a lessor on or before the lease commencement date, minus any lease incentive received, and any initial direct costs incurred by the Company.

Operating lease expense for lease payments is recognized on a straight-line basis over the lease term.

For finance lease, ROU assets are amortized on a straight-line basis from the commencement date to the earlier of the end of useful life of the ROU assets or the end of the lease term.

Amortization of ROU assets and interest on the lease liability for finance leases are included as charges to the accompanying Consolidated Statements of Operations.

For finance leases, ROU assets are amortized on a straight-line basis from the commencement date to the earlier of the end of useful life of the ROU assets or the end of the lease term.

Amortization of ROU assets and interest on the lease liability for finance leases are included as charges in the accompanying Consolidated Statements of Operations.

Lease ROU assets and liabilities arising from business combinations are recognized and measured at the acquisition dates as if an acquired lease were a new lease at the date of acquisition using the Company’s incremental borrowing rate unless the discount rate is implicit in the lease.

The Company elects to not to recognize assets or liabilities as of the acquisition dates for leases that, on the acquisition dates, have a remaining lease term of 12 months or less.

The Company elects not to recognize assets or liabilities as of the acquisition dates for leases that, on the acquisition dates, have a remaining lease term of 12 months or less.

The Company also retains the acquirees’ classification of the leases if there are no modifications as part of the business combinations.

The Company leased out space in buildings it owns to third-party tenants under noncancelable operating leases.

The Company recognized lease payments as income over the lease terms on a straight-line basis and recognized variable lease payments as income in

the period in which the changes in facts and circumstances on which the variable lease payments were based occurred.

The net rental income was included in the other income, net, in the accompanying Consolidated Statements of Operations.

Software for Internal Use

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These costs include purchased software packages for Company use.

Capitalized computer software costs are amortized over the estimated useful life of the computer software, which is generally one to 10 years .

Capitalized computer software costs are amortized over the estimated useful life of the computer software, which is generally between 1 to 10 years .

Internally developed software costs are capitalized after management has committed to funding the project, it is probable that the project will be completed, and the software will be used for its intended function.

Costs that do not meet that criteria and costs incurred on projects in the preliminary and post-implementation phases are expensed as incurred.

Costs that do not meet those criteria and costs incurred on projects in the preliminary and post-implementation phases are expensed as incurred.

Reportable Segment and Geographic Information

Reporting segments are identified as components of an enterprise about which separate discrete financial information is available for evaluation by the chief operating decision-maker in making decisions regarding resource allocation and assessing performance.

Reporting segments are identified as components of an enterprise for which separate discrete financial information is available for evaluation by the chief operating decision-maker in making decisions regarding resource allocation and assessing performance.

The Company’s chief operating decision maker is its Chief Executive Officer .

The Company reports its business in two segments, a laboratory services business and a therapeutic development business.

In 2023, the Company changed the structure of its internal organization and increased the number of reportable segments from one segment to two segments, a laboratory services business and a therapeutic development business.

The associated financial information for the segments was recast in 2023 for comparability purposes as recommended in ASC 280-10-50-34.

For further financial information about these segments, including information for each of the last three fiscal years regarding revenue, operating income (loss), and other important information, see Note 7, Reportable Segment and Geographic Information .

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The Company currently receives payments from primarily three different customer types:

insurance payors, institutional customers, including hospitals, medical institutions, other laboratories, governmental bodies, municipalities, and large corporations, and patients who pay directly.

(i) Insurance, (ii) Institutional customers, including hospitals, medical institutions, other laboratories, governmental bodies, and large corporations, and (iii) Patients, who pay directly.

The Company recognizes revenue in an amount that reflects the consideration to which it expects to be entitled in exchange for the transfer of promised goods or services to its customers.

To determine revenue recognition for contracts with customers, the Company performs the following steps described in ASC 606:

(1) identifies the contract with the customer, or Step 1, (2) identifies the performance obligations in the contract, or Step 2, (3) determines the transaction price, or Step 3, (4) allocates the transaction price to the performance obligations in the contract, or Step 4, and (5) recognizes revenue when (or as) the entity satisfies a performance obligation, or Step 5.

(Step 1) identifies the contract with the customer, (Step 2) identifies the

performance obligations in the contract, (Step 3) determines the transaction price, (Step 4) allocates the transaction price to the performance obligations in the contract, and (Step 5) recognizes revenue when (or as) the entity satisfies a performance obligation.

The Company’s test results are primarily delivered electronically.

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Performance Obligations

The Company’s insurance contracts for testing services typically have a single performance obligation to deliver testing services to the ordering facility or patient.

For most of the Company’s insurance revenue, the Company identified the patient as the customer in Step 1 and determined a contract exists with the patient in Step 1.

In arrangements with insurance patients, the transaction price is typically stated within the contract, however, the Company may accept payments from insurance payors that are less than the contractually stated price, therefore estimation of the transaction price is considered variable consideration.

In developing the estimate of variable consideration, the Company utilizes the expected value method under a portfolio approach.

As these contracts typically have a single performance obligation, no allocation of the transaction price is required in Step 4.

Control over testing services is transferred to the Company’s ordering parties at a point in time.

Specifically, the Company determined the customer obtains control of the promised service upon delivery of the test results.

Institutional and Patient Direct Pay

The Company’s institutional contracts for its testing services typically have a single performance obligation to deliver testing services to the ordering facility or patient.

In arrangements with institutions, including hospitals, medical institutions, other laboratories, governmental bodies, municipalities, and large corporations, and patients who pay directly, the transaction price is stated within the contract and is therefore fixed consideration.

For most of the Company’s testing, the Company identified the institutions, including hospitals, medical institutions, other laboratories, governmental bodies, municipalities, and large corporations, and patients as the customer in Step 1 and have determined a contract exists with those customers in Step 1.

In arrangements with institutions, including hospitals, medical institutions, other laboratories, governmental bodies, and large corporations, and patients who pay directly, the transaction price is stated within the contract and is therefore fixed consideration.

For most of the Company’s testing, the Company identified the institutions, including hospitals, medical institutions, other laboratories, governmental bodies, and large corporations, and patients as the customer in Step 1 and have determined a contract exists with those customers in Step 1.

As these contracts typically have a single performance obligation, no allocation of the transaction price is required in Step 4.

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While the contract represents a single performance obligation to provide testing and research services, the revenue is recognized as the individual tests are completed and the results are delivered to the customer.

Each completed test is considered a measurable event that indicates the transfer of control to the customer, at which point revenue is recognized.

Each completed test is considered a measurable event that indicates the transfer of control to the customer, at which point revenue is recognized based on the output method of units delivered.

The Company regularly reviews its contracts and recognizes revenue in accordance with the completion of each test, based on the right to payment and the transfer of control.

The Company’s insurance contracts for testing services typically have a single performance obligation to deliver testing services to the ordering facility or patient.

For most of the Company’s insurance revenue, the Company identified the patient as the customer in Step 1 and determined a contract exists with the patient in Step 1.

In developing the estimate of variable consideration, the Company utilizes the expected value method under a portfolio approach.

As these contracts typically have a single performance obligation, no allocation of the transaction price is required in Step 4.

Control over testing services is transferred to the Company’s ordering parties at a point in time.

Specifically, the Company determined the customer obtains control of the promised service upon delivery of the test results.

Certain incremental costs pertaining to both insurance and institutional, such as commissions, are incurred in obtaining contracts.

Contract costs are capitalized if the Company expects to recover them, and amortization of contract costs is classified in the general and administrative expense in the Consolidated Statements of Operations.

Contract costs are capitalized if the Company expects to recover them, and amortization of contract costs is classified in general and administrative expense in the Consolidated Statements of Operations.

Historically, contract costs have not been significant to the financial statements.

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Due to the Company’s out-of-network status with various insurance payors, estimation of the transaction price represents variable consideration.

In the absence of Medicare coverage, contractually established reimbursement rates or other coverage, we have concluded that our contracts include variable consideration because the amounts paid by Medicare or commercial health insurance carriers may be paid at less than our standard rates or not paid at all, with such differences considered implicit price concessions.

Variable consideration attributable to these price concessions measured at the expected value using the “most likely amount” method under ASC 606.

The amounts are determined by the historical average collection rates by test type taking into consideration the range of possible outcomes, the predictive value of our past experiences, the time period of when uncertainties expect to be resolved and the amount of consideration that is susceptible to factors outside of our influence, such as the judgment and actions of insurance payors.

Such variable consideration is included in the transaction price only to the extent it is probable that a significant reversal in the amount of cumulative revenue recognized will not occur when the uncertainties with respect to the amount are resolved.

In the absence of Medicare coverage, contractually established reimbursement rates or other coverage, the Company has concluded that its contracts include variable consideration because the amounts paid by Medicare or commercial health insurance carriers may be paid at less than our standard rates or not paid at all, with such differences considered implicit price concessions.

Variable consideration attributable to these price concessions is measured using the “expected value” method under ASC 606.

The amounts are determined by the historical average collection rates by test type taking into consideration the range of possible outcomes, the predictive value of our past experiences, the time period during which uncertainties are expected to be resolved and the amount of consideration that is susceptible to factors outside of our influence, such as the judgment and actions of insurance payors.

variable consideration is included in the transaction price only to the extent it is probable that a significant reversal in the amount of cumulative revenue recognized will not occur when the uncertainties with respect to the amount are resolved.

Variable consideration may be constrained and excluded from the transaction price in situations where there is no contractually agreed upon reimbursement coverage or in the absence of a predictable pattern and history of collectability with a payor.

The Company re-assesses its estimated transaction price at the end of each reporting period, including an assessment of whether the estimate variable consideration is constrained to the extent that is probable that a significant reversal of cumulative revenue will not occur once any uncertainty is resolved.

The Company re-assesses its estimated transaction price at the end of each reporting period, including an assessment of whether the estimated variable consideration is constrained to the extent that it is probable that a significant reversal of cumulative revenue will not occur once any uncertainty is resolved.

The Company records any necessary adjustments in the current period’s revenue.

$ 1.8 million and $ 23.0 million variable consideration was recognized as additional revenue in the years ended December 31, 2024 and 2023 , respectively, that related to collections for COVID-19 tests completed in the prior period.

Zero and $ 1.8 million variable consideration were recognized as additional revenue in the years ended December 31, 2025, and 2024, respectively, that related to collections for COVID-19 tests completed in the prior period.

Contract Liabilities

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depreciation of laboratory equipment;

amortization of leasehold and building improvements and allocated overhead.

amortization of building or leasehold improvements and allocated overhead.

Costs associated with performing tests are recorded as tests are processed.

Research and Development Expenses

Research and development expenses represent costs incurred to develop the Company’s technology and future tests.

Research and development expenses represent costs incurred to develop the Company’s technology and future tests and treatments and our product candidates.

These costs consist of:

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The Company expenses all general and administrative expenses as incurred.

Restructuring Costs

Restructuring costs represent one-time employee termination benefits provided to employees associated with an acquired entity that were involuntarily terminated.

A plan of termination was approved and authorized by management in the second quarter of 2022.

The plan identified specific employees to be terminated and established terms of benefits those employees would receive upon termination.

No additional costs are expected to be incurred under the plan of termination post 2022, and the full amount was paid off by August 2023 .

Income taxes are accounted for under the asset and liability method.

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Equity-Based Compensation

The Company grants various types of equity-based awards to its employees, consultants, and non-employee directors.

The Company maintains stock equity incentive plans under which the Company grants incentive and nonqualified stock options, stock awards, performance awards or restricted stock units to employees, non-employee directors and consultants.

Equity-based compensation costs are reflected in the accompanying Consolidated Statements of Operations based upon each award recipient’s role with the Company.

The Company primarily grants to its employees restricted stock unit awards, or RSU awards, that generally vest over a specified period of time upon the satisfaction of service-based conditions or performance conditions.

The Company primarily grants restricted stock unit awards, or RSU awards, to its employees that generally vest over a specified period of time upon the satisfaction of service-based conditions or performance conditions.

Compensation expense for employee RSU awards with a service-based vesting condition is recognized ratably over the vesting period of the award.

Compensation expense for employee RSU awards with a performance condition is based on the probable outcome of that performance condition.

The Company measures compensation expense for equity-based awards granted to employees based on the fair value of the award on the grant date of the award.

The Company also grants stock options.

The Company estimates the fair value of service-based stock options on the date of grant using the Black-Scholes pricing model.

The Company recognizes compensation expense for service-based options over the requisite service period (generally four years) .

Foreign Currency Translation and Foreign Currency Transactions

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Expenses for these subsidiaries are translated using rates that approximate those in effect during the period.

Gains and losses from these translations are recognized in foreign currency translation gain (loss) included in the accompanying Consolidated Statements of Comprehensive Income (Loss).

These unrealized gains and losses are recognized in accumulated other comprehensive income in the equity section of the accompanying Consolidated Balance Sheets, and do not impact net income.

The Company and its subsidiaries that use the U.S.

dollar as their functional currency remeasure monetary assets and liabilities at exchange rates in effect at the end of each period, and inventories, property and nonmonetary assets and liabilities at historical rates.

Gains and losses from these measurements are included in other income, net, in the accompanying Consolidated Statements of Operations.

Losses from foreign currency exchange were not significant in 2024, 2023, and 2022 .

dollar as their functional currency remeasure monetary assets and liabilities at exchange rates in effect at the end of each period.

The carrying value of these monetary assets and liabilities will change with exchange rate fluctuations resulting in a foreign currency transaction gain or loss which is recognized in other income, net in the Consolidated Statements of Operations.

Reagents and supplies, property, and other nonmonetary assets and liabilities are remeasured when the transaction is initially recognized using the historical rate that was in effect when the asset was acquired or liability was incurred.

The carrying amounts do not change as a result of exchange rate fluctuations and no foreign currency transaction gain or loss is recognized.

Gains and losses from foreign currency exchange were not significant in 2025, 2024, and 2023 .

Comprehensive (Loss) Income

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dollar as their functional currency.

Reclassification from other comprehensive (loss) income to net loss, which includes reclassification of stranded tax effects, was $ 3.6 million in 2024.

Reclassifications from other comprehensive income (loss) to net earnings were not significant in 2023 or 2022.

Th e tax effects related to net unrealized gain or loss on available-for-sale debt securities were zero in 2024 and 2023, due to the valuation allowance in the current period that precludes the Company from recognizing the deferred tax benefit, and $ 7.2 million in 2022 .

The tax expense of foreign currency translation income (loss) was zero for each of the years ended December 31, 2025, 2024 and 2023.

Reclassification from other comprehensive (loss) income to net loss, which includes reclassification of stranded tax effects, was $ 0.1 million and $ 3.6 million in 2025 and 2024, respectively.

Reclassifications from other comprehensive income (loss) to net earnings were not significant in 2023.

The tax effects related to net unrealized gain or loss on available-for-sale debt securities wer e

zero in each of 2025, 2024 and 2023, due to the valuation allowance in the current period that precludes the Company from recognizing the deferred tax benefit.

Basic and Diluted Net Income or Loss per Share

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The Company classifies its customers into three payor types:

(i) Institutional, including hospitals, medical institutions, other laboratories, governmental bodies, municipalities, and large corporations, (ii) Insurance, including claim reimbursement from HRSA for uninsured individuals, or (iii) Patients who pay directly, as the Company believes this best depicts how the nature, amount, timing, and uncertainty of its revenue and cash flows are affected by economic factors.

(i) Insurance, (ii) Institutional, including hospitals, medical institutions, other laboratories, governmental bodies, and large corporations, or (iii) Patients who pay directly, as the Company believes this best depicts how the nature, amount, timing, and uncertainty of its revenue and cash flows are affected by economic factors.

The following table summarizes revenue from contracts with customers by payor type for the years ended December 31, 2025, 2024, and 2023.

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Total revenue

The insurance revenue category above includes zero for the years ended December 31, 2024 and 2023, and $ 83.1 million for the year ended December 31, 2022 for services related to claims covered by the HRSA COVID-19 Uninsured Program.

During the years ended December 31, 2024 and 2023, the Company experienced a change in estimate related to variable consideration.

$ 1.8 million and $ 23.0 million variable consideration were recognized in the years ended December 31, 2024 and 2023, respectively, related to COVID-19 test services completed in the prior periods due to collection efforts, which was included as revenue from insurance in the table above.

During the year ended December 31, 2024, the Company experienced a change in estimate related to variable consideration.

$ 1.8 million variable consideration was recognized in the year ended December 31, 2024, related to COVID-19 test services completed in the prior periods due to collection efforts, which was included as revenue from insurance in the table above.

No such adjustments were recognized in the year ended December 31, 2025.

The Company estimates variable consideration using the expected value method.

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Receivables from contracts with customers - Receivables from contracts with customers are included within trade accounts receivable on the Consolidated Balance Sheets.

Receivables from Insurance and Institutional customers represented 44 % and 56 % , respectively, as of December 31, 2024 and 39 % and 61 % , respectively, as of December 31, 2023.

Receivables from Insurance and Institutional customers each represented 50 % as of December 31, 2025 and 44 % and 56 % , respectively, as of December 31, 2024.

Contracts assets and liabilities - Contract assets from contracts with customers associated with contract execution and certain costs to fulfill a contract are included in other current assets in the accompanying Consolidated Balance Sheets.

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ASC 606 provides certain practical expedients that limit the requirement to disclose the aggregate amount of transaction price allocated to unsatisfied performance obligations.

The Company applied the practical expedient to no t disclose the amount of transaction price allocated to unsatisfied performance obligations when the performance obligation is part of a contract that has an original expected duration of one year or less.

The Company applies the practical expedient to no t disclose the amount of transaction price allocated to unsatisfied performance obligations when the performance obligation is part of a contract that has an original expected duration of one year or less.

The Company does not have material future obligations associated with its testing services that extend beyond one year.

Prior Period Reclassifications

Certain amounts reported in the prior periods have been reclassified to conform with the current period presentation.

In the Consolidated Statements of Cash Flow, the Company has separated prepaid income taxes from its previous inclusion in other current and long-term assets and separated customer deposits, and contract liabilities from its previous inclusion in accrued liabilities and other liabilities.

In the Consolidated Statements of Operations, the Company has also separated interest income, and interest expenses from its previous inclusion in other income, net.

Certain amounts reported in the prior period have been reclassified to conform with the current period presentation.

In the Consolidated Balance Sheets , the Company has separated prepaid income taxes from its previous inclusion in other current assets, and in-process research & development from its previous inclusion in other intangible assets, net.

Recent Accounting Pronouncements

The Company evaluates all Accounting Standards Updates, or ASUs, issued by the Financial Accounting Standards Board, or FASB, for consideration of their applicability.

The Company evaluates all Accounting Standards Updates, or ASUs, issued by the FASB for consideration of their applicability.

ASUs not included in the Company’s disclosures were assessed and determined to be either not applicable or are not expected to have a material impact on the Company’s consolidated financial statements or disclosures.

In November 2023, the FASB issued ASU 2023-07, Segment Reporting (Topic 280):

Improvements to Reportable Segments .

This update improves reportable segment disclosure requirements and requires enhanced disclosures related to significant segment expenses regularly provided to the CODM, the amount for other segment items with descriptions of the composition, segment profit or loss, and clarification on if the CODM uses more than one measurement of a segment’s profit or loss in assessing segment performance and deciding how to allocate resources.

We adopted the guidance effective January 1, 2024 for annual reporting, and January 1, 2025 for interim reporting.

Adoption of the guidance has affected the disclosures related to reportable segments, and have been applied retrospectively to all prior periods presented in the financial statements.

For further information, refer to Note 7.

Reportable Segment and Geographic Information for the presentation of the additional required disclosures.

In December 2023, the FASB issued ASU 2023-09, Income Taxes (Topic 740):

Improvement to Income Tax Disclosures .

This update requires more detailed information on certain income tax disclosures including the income tax rate reconciliation and income taxes paid.

Amendments in this update are effective for annual periods beginning December 15, 2024 for public entities, and early

adoption is permitted.

This update will result in enhanced income tax disclosures, and the Company does not expect any impact to income tax expense.

This update establishes new income tax disclosure requirements in addition to modifying and eliminating certain existing requirements.

Under the new guidance, entities must consistently categorize and provide greater disaggregation of information in the rate reconciliation.

They must also further disaggregate income taxes paid.

The standard is intended to benefit stockholders by providing more detailed income tax disclosures that would be useful in making capital allocation decisions.

The guidance applies to all entities subject to income taxes and is effective for annual period beginning after December 15, 2024.

The Company has adopted this standard on a prospective basis for the year ended December 31, 2025 .

In November 2024, the FASB issued ASU 2024-03, Income Statement-Reporting Comprehensive Income-Expense Disaggregation Disclosures (Subtopic 220-40):

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Early adoption is permitted.

The Company is currently evaluating the impacts of this amendment on the consolidated financial statements and related disclosure.

The Company is currently evaluating the impacts of this amendment on its consolidated financial statements and related disclosure.

In July 2025, the FASB issued ASU 2025-05, Financial Instruments-Credit Losses (Topic 326):

Measurement of Credit Losses for Accounts Receivable and Contract Assets .

This update provides all entities with a practical expedient related to the estimation of expected credit losses for current accounts receivable and current contract assets that arise from transactions accounted for under ASC 606.

Amendments in this update are effective for annual periods beginning after December 15, 2025, and interim reporting periods within those annual reporting periods.

Early adoption is permitted.

The Company is currently evaluating the impact of this amendment on its financial statements and related disclosures.

In September 2025, the FASB issued ASU 2025-06, Intangible - Goodwill and Other - Internal-Use Software (Subtopic 350-40):

Targeted Improvements to the Accounting for Internal-Use Software .

This update simplifies the capitalization guidance by removing all references to software development project stages, so that the guidance is neutral to different software development methods.

Amendments in this update are effective for annual periods beginning after December 15, 2027, and interim reporting periods within those annual reporting periods.

Early adoption is permitted.

The Company is currently evaluating the impacts of this amendment on its financial statements and related disclosures.

In December 2025, the FASB issued ASU 2025-11, Interim Reporting (Topic 270):

Narrow-Scope Improvements .

This update clarifies the applicability of interim reporting guidance, provides a comprehensive list of required interim disclosures, and establishes a disclosure principle that requires disclosure of material events that occurred after the end of the last annual reporting period.

Amendments in this update are effective for interim reporting periods within annual periods beginning after December 15, 2027.

Early adoption is permitted.

The Company is currently evaluating the impact of this amendment on its financial statement and related disclosures.

In December 2025, the FASB issued ASU 2025-12, Codification Improvements (“ASU 2025-12”) .

This update makes targeted amendments to various topics within the Accounting Standards Codification intended to clarify, correct errors, or make minor improvements to existing guidance.

Amendments in this update are effective for annual reporting periods beginning after December 15, 2026, and interim reporting periods within those annual reporting periods.

Early adoption is permitted.

The Company is currently evaluating the impacts of this amendment on its financial statements and related disclosures.

The Company does not expect that any other recently issued accounting guidance will have a significant effect on its consolidated financial statements.

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agency debt securities

treasury bills

Corporate debt securities

Yankee debt securities

Municipal bonds

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Municipal bonds

Yankee debt securities

Total debt securities due after 1 year through 5 years

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Equity securities

Preferred stock of privately-held company

Preferred stock of privately-held companies

Total equity securities

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Corporate debt securities

Money market accounts

Municipal bonds

Money market accounts

Cash equivalents

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Yankee debt securities

Redeemable preferred stock investment

Total debt securities due after 1 year through 5 years

After 5 years through 10 years

Municipal bonds

Total debt securities due after 5 years through 10 years

Total available-for-sale debt securities

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Gross unrealized losses on the Company’s equity and debt securities were $ 0.1 million and $ 4.1 million as of December 31, 2025 and 2024, respectively.

Proceeds from sale of available-for-sale securities were $ 104.3 million , $ 44.1 million , and $ 140.2 million in 2024, 2023, and 2022, respectively.

Gross realized losses on the Company’s available-for-sale securities were $ 1.1 million , $ 0.6 million , and $ 1.4 million in 2024, 2023, and 2022, respectively, and the gross realized income was insignificant in 2024, 2023, and 2022.

Proceeds from sale of available-for-sale securities were zero , $ 104.3 million , and $ 44.1 million in 2025, 2024, and 2023, respectively.

Gross realized losses on the Company’s available-for-sale securities were zero , $ 1.1 million , and $ 0.6 million in 2025, 2024, and 2023, respectively, and the gross realized income was insignificant in 2025, 2024, and 2023.

The cost of any marketable securities sold is based on the specific-identification method.

The Company did not recognize any credit losses for its marketable available-for sale debt securities in 2025, 2024, and 2023.

See Note 2, Summary of Significant Accounting Policies , for the reclassification of available-for-sale securities to equity securities and a credit loss of $ 10.1 million recorded in 2024 related to Helio Health.

See Note 2, Summary of Significant Accounting Policies , for the reclassification of available-for-sale securities to equity securities and subsequent impairment of $ 9.9 million in 2025, and a credit loss of $ 10.1 million recorded in 2024 related to Helio Health.

Fair Value Measurements

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Corporate debt securities

treasury bills

Preferred stock of privately-held companies

Money market accounts

Preferred stock of privately-held companies

Municipal bonds

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treasury bills

Preferred stock of privately-held companies

Money market accounts

Redeemable preferred stock investment

Preferred stock of privately-held company

Municipal bonds

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Level 2 securities are valued based upon observable inputs that include reported trades, broker/dealer quotes, bids and offers.

As of December 31, 2024 and 2023, the Company had preferred stock of two privately held companies, which were included in other long-term assets in the accompanying Consolidated Balance Sheets that were measured using unobservable

(Level 3) inputs.

For the value of the investments in private equity securities, the Company elected to measure them at cost minus impairment, as the preferred stock of the privately-held companies did not have a readily determinable fair value, and no impairment loss was recorded as of December 31, 2024.

As of December 31, 2023, the Company also had redeemable preferred stock, and the fair value of redeemable preferred stock was based on valuation performed by a third-party valuation company utilizing the guideline public company method under market approach and the discounted cash flow method under income approach.

The redeemable preferred stock has been fully impaired as of December 31, 2024, see Note 2, Summary of Significant Accounting Policies , for more details.

There were no transfers between fair value measurement lev els in 2024, 2023, and 2022 .

As of December 31, 2025, and 2024, the Company held preferred stock of two privately-held companies, which were included in other long-term assets in the accompanying Consolidated Balance Sheets, that were measured using unobservable (Level 3) inputs.

For the value of the investment in private equity securities, the Company elected to measure them at cost minus impairment, as the preferred stock of the privately-held companies did not have a readily determinable fair value.

See Note 2, Summary of Significant Accounting Policies , for an impairment of $ 9.9 million recognized in 2025 related to Helio Genomics.

There was no impairment loss recorded as of December 31, 2025, for the other preferred stock investment.

There were no transfers between fair value measurement le vels during the years ended December 31, 2025, 2024, and 2023 .

Major classes of fixed assets consisted of the following:

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Medical lab equipment

1 to 13 Years

5 months to 13 Years

Building improvements

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1 to 10 Years

Furniture and fixtures

1 to 11 Years

Leasehold improvements

Shorter of lease term or estimated useful life

Furniture and fixtures

1 to 11 Years

Land improvements

5 to 15 Years

General equipment

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Reagents and supplies

Prepaid expenses

Marketable securities interest receivable

Prepaid income taxes

Prepaid expenses

Other receivable

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(in thousands)

Payroll liabilities

Accrued bonus and commission

Accrued legal liabilities

Vacation accrual

Accrued bonus and commission

Payroll liabilities

Operating lease liabilities - short term

Accrued legal liabilities

Other accrued liabilities

Accrued legal liabilities as of December 31, 2024 included $ 1.0 million in connection with the SEC investigation as further described in Note 8, Debt, Commitments, and Contingencies.

Accrued legal liabilities as of December 31, 2023 included a previously estimated $ 6.9 million in connection with the Company’s voluntary disclosure process, which was settled at approximately $ 3.0 million and paid in 2024.

Other accrued liabilities included short-term finance lease liabilities, health insurance liabilities, and third-party billing services.

Accrued legal liabilities included an accrual of $ 14.5 million related to a professional liability matter, refer to Note 8, Debt, Commitments and Contingencies , for additional details.

Other accrued liabilities also included, short-term finance lease liabilities, health insurance liabilities, accrued property taxes, income tax payables, and third-party billing services.

Other long-term liabilities consisted of the following:

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The financial information regularly provided to the CODM includes various performance metrics by reporting segment, such as gross profit, operating income or loss, income or loss before income taxes, net income or loss from consolidated operations, and net income or loss attributable to Fulgent, all presented in accordance with U.S.

Additionally, the CODM receives these metrics on a non-GAAP basis, which excludes the impact of equity-based compensation expenses, goodwill impairment losses, amortization of intangible assets, and restructuring costs, if applicable.

Although multiple financial metrics are provided, the CODM primarily relies on adjusted operating income or loss to evaluate segment performance and allocate resources.

Although multiple financial metrics are provided, the CODM primarily relies on adjusted (non-GAAP) operating income or loss to evaluate segment performance and allocate resources.

These adjusted metrics exclude the impact of equity-based compensation expenses, goodwill impairment losses, amortization of intangible assets, acquisition-related costs, and certain professional liability expenses, if applicable as determined by management.

The balance sheet is presented on a consolidated basis, as the CODM does not use asset or liability information, including fixed assets, to assess segment performance.

As a result, segment asset and liability details are not disclosed .

The newly acquired entity, ANP, is considered part of the therapeutic development segment as this acquisition was strategically undertaken to gain full control over the patents and technologies utilized in the development of product candidates within the therapeutic development segment.

Consequently, ANP’s operations are integrated into the therapeutic development segment, with shared resources and collaborative efforts, and the CODM evaluates ANP’s operations as part of the therapeutic development segment’s consolidated financial information.

Therefore, ANP’s financial results are grouped within the therapeutic development segment’s reporting.

ANP generates revenue from technologies licensed to pharmaceutical and biotech companies, as well as contract research organizations, or CROs.

There is no inter-segment allocation of interest expense and income taxes.

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Adjusted general and administrative

Total adjusted operating income (loss)

Total adjusted operating loss

Year Ended December 31,

Reconciliation of “adjusted operating (loss) income” to “(loss) income before income taxes”

Adjusted operating (loss) income

Reconciliation of “adjusted operating loss” to “loss before income taxes”

Adjusted operating loss

Equity-based compensation

Professional liability expense

Acquisition-related costs

Amortization of intangible assets

Goodwill impairment loss

Restructuring costs

Interest income

Interest expense

Impairment of available-for-sale debt securities

Impairment loss

Other income, net

Total (loss) income before income taxes

Significant items by segment excluded from the adjusted operating (loss) income:

Total loss before income taxes

Significant items by segment excluded from the adjusted operating loss:

Year Ended December 31,

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Therapeutic development:

BioPharma services

Total therapeutic development

(1) Beginning in 2025, COVID-19 revenue is grouped with precision diagnostics, which was insignificant in 2025.

Depreciation and amortization by segment:

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December 31, 2024

December 31, 2022

Laboratory services

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December 31, 2024

December 31, 2022

United States

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The notes payable related to the installment sale are due in February 2030, and the interest rate is 1.08 %.

The current portion and noncurrent portion are $ 0.4 million and $ 2.5 million , respectively, and the noncurrent portion is included in the other long-term liabilities in the accompanying Consolidated Balance Sheets.

The current portion and noncurrent portion are $ 0.5 million and $ 2.0 million , respectively, a nd the noncurrent portion is included in the other long-term liabilities in the accompanying Consolidated Balance Sheets.

The Company also had notes payable to Xilong Scientific Co., which were paid off in 2024, and had an interest rate of 4.97 %.

The interest expenses in 2024 and 2023 were not significant, and was $ 0.3 million in 2022.

The interest expenses in 2025, 2024, and 2023 were not significant.

Operating and Finance Leases

See Note 9, Leases , for further information.

Purchase Obligations

The Company entered certain purchase commitments with its vendors, which primarily consist of services, reagent and supplies, computer software, and medical lab equipment.

As of December 31, 2024, the Company had purchase obligations of $ 40.6 million , of which $ 31.6 million is payable within 12 months, and the remainder, $ 9.0 million , is payable within the next five years.

Contingencies

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

Similar to other laboratories in the industry, the Company is currently being audited by the U.S.

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 the U.S.

Health Resources and Services Administration, or HRSA, with respect to its reimbursement for COVID-19 tests furnished to patients believed to be uninsured.

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

The Company is 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 provided HRSA’s auditors with requested information in connection with its audit in an effort to resolve any issues related to its audit, including any reimbursed amounts that may need to be returned to HRSA.

As of the date of this Annual Report, the Company has not received any final audit results from HRSA for this audit.

The Company has not received any further requests for information in connection with this audit from HRSA.

The Company has also received a CID issued by the DOJ pursuant to the False Claims Act related to the DOJ’s investigation as to whether the Company submitted or caused to be submitted false claims to the Uninsured Program.

The Company is fully cooperating with the DOJ in connection with the CIDs that it has 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.

The Company is fully cooperating with the DOJ in connection with the CIDs that it, or its employees, have received.

The Company 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 the Company’s business, prospects, and financial condition.

These matters are not formal claims, and discussions and investigations remain ongoing.

As such, the Company cannot reasonably estimate the loss or range of loss, if any, that may result from any material government investigations, audits, and reviews in which it is 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 the Company in the event of an adverse finding.

Discussions and investigations remain ongoing.

As such, the Company 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 it is 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 the Company in the event of an adverse finding.

As a result, the Company has not recorded any liability related to these CIDs 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) the Company’s Exchange Act reports filed for 2018 through 2020.

On May 6, 2024, the SEC staff advised the Company that the SEC staff made a preliminary determination to recommend that the SEC file an enforcement action against the Company 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 SEC are continuing to communicate regarding this matter.

While the Company does not believe that any enforcement recommendation is warranted and denies all liability, the Company has recorded a $ 1.0 million potential liability with respect to this matter.

While the Company believes 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.

In relation to a recent advisory opinion issued by the Office of Inspector General of the Department of Health and Human Services, or the OIG, the Company’s subsidiary, Symphony Buyer, Inc., or Inform Diagnostics, initiated a voluntary disclosure process with the appropriate government contact.

The Company had previously estimated and recorded $ 6.9 million as a liability in its financial statements in connection with this voluntary disclosure.

In December 2024, the Company entered into a settlement agreement with the DOJ pursuant to which it agreed to pay and paid $ 3.0 million in resolution of the matters directly related to this voluntary disclosure.

From time to time, the Company, like other laboratories in its industry, is subject to claims and allegations relating to professional liability.

The Company recorded an accrual of $ 14.5 million in connection with the settlement of a professional liability matter, which was included in general and administrative expense in the accompanying Consolidated Statements of Operations .

The Company maintains professional liability insurance that may provide partial coverage for this matter, subject to customary retentions, exclusions, and limits.

The Company is party as a lessee to various non-cancelable operating leases with varying terms through March 2034 primarily for laboratory and office space and equipment.

The Company has options to renew some of these leases after their expirations.

The Company has options to renew some of these leases after their expiration.

On a lease-by-lease basis, the Company considers such options, which may be elected at the Company’s sole discretion, in determining the lease term.

The Company also has various finance leases for lab equipment with varying terms through December 2026 , of which, some were acquired in business combinations.

The Company also has various finance leases for lab equipment with varying terms through December 2026 , some of which, were acquired in business combinations.

The Company does not have any leases with variable lease payments.

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Phoenix, Arizona;

Alpharetta, Georgia.

The Company is also in the process of obtaining NATA accreditation in Dulwich, Australia.

and Alpharetta, Georgia.

The Company has also obtained National Association of Testing Authorities accreditation for its laboratory located in Dulwich, Australia.

The operating and finance lease right-of-use asset, short-term lease liabilities, and long-term lease liabilities as of December 31, 2025, and 2024 were as follows:

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Less imputed interest

The Company previously leased out space in buildings it owns to third-party tenants under noncancelable operating leases.

As of December 31, 2024, there were no noncancelable operating leases remaining.

Lease income primarily represents fixed lease payments from tenants recognized on a straight-line basis over the application lease term.

Variable lease income represents tenant payments for real estate taxes, insurance and maintenance.

The lease income was included in other income, net, in the accompanying Consolidated Statements of Operations.

An insignificant amount was recognized in the year ended December 31, 2024.

For years ended December 31, 2023 and 2022, $ 0.2 million and $ 0.3 million were recognized, respectively.

There are no future fixed lease payments from tenants expected, as there were no remaining noncancelable operating leases as of December 31, 2024 .

Equity-Based Compensation

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General and administrative

The actual tax (expense) benefit realized from tax deductions related to awards vested or exercised were ($ 3.4 ) million , ($ 2.7 ) million and $ 2.1 million for the years ended December 31, 2024, 2023, and 2022, respectively.

The actual tax expense realized from tax deductions related to awards vested or exercised were $ 3.5 million , $ 3.4 million and $ 2.7 million for the years ended December 31, 2025, 2024, and 2023, respectively.

Award Activity

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Balance at December 31, 2025

The RSU awards granted in the years ended December 31, 2024, 2023, and 2022 will result in aggregate equity-based compensation expense of $ 26.9 million , $ 29.3 million and $ 94.8 million , respectively, to be recognized over the vesting periods from the grant date of each award granted in the period.

The RSU awards granted in the years ended December 31, 2025, 2024, and 2023 will result in aggregate equity-based compensation expense of $ 26.7 million , $ 26.9 million and $ 29.3 million , respectively, to be recognized over the vesting periods from the vesting commencement date of each award granted in the period.

As of December 31, 2025, the remaining unrecognized compensation expense related to all outstanding RSU awards was $ 43.0 million and is expected to be recognized over a weighted-average period of 2.2 years.

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Expected volatility

Determination of Fair Value on Grant Dates

Determination of Fair Value on Grant Dates and Shares Reserved

The fair value of the shares of the Company’s common stock underlying option and RSU awards is determined by the Company’s board of directors or the compensation committee thereof based on the closing sales price of the Company’s common stock on the date of grant as reported by the Nasdaq Global Market.

(Benefit from) provision for income taxes consists of United States federal and state income taxes.

The Company reserved for issuance 8.9 million shares of its common stock for the grant of incentive stock options, nonqualified stock options, stock appreciation rights, restricted stock, RSUs, dividend equivalent rights and other stock and cash-based awards under the Company ’s Amended and Restated 2016 Omnibus Incentive Plan, plus another 0.7 million shares of its common stock that will be available for issuance solely pursuant to the converted Fulgent, LLC awards.

The options must be exercised no later than the expiration date set forth in the notice.

(Benefit from) provision for income taxes consists of U.S.

federal and state income taxes.

A deferred tax liability is recognized for all taxable temporary differences, and a deferred tax asset is recognized for all deductible temporary differences, operating losses and tax credit carryforwards.

A valuation allowance is provided when it is more likely than not that some portion or all of a deferred tax asset will not be realized.

The following table summarizes income (loss) before income taxes:

The following table summarizes loss before income taxes:

Year Ended December 31,

(in thousands)

(loss) income before income taxes

loss before income taxes

Foreign loss before income taxes

(Loss) income before income taxes

Loss before income taxes

(Benefit from) provision for income taxes consisted of the following:

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Total Deferred

Total (benefit from) provision for income taxes

Reconciliation of the difference between the federal statutory income tax rate and the effective income tax rate is as follows:

(Benefit from) provision for income taxes

Reconciliation of the difference between the federal statutory income tax rate and the effective income tax rate for the year ended December 31, 2025, in accordance with the guidance in ASU 2023-09, is as follows:

Year Ended December 31, 2025

Tax provision at federal statutory rate

State and local income taxes, net of federal benefit (1)

Foreign tax effects

Foreign tax rate differential

NOL carryforward

Valuation allowance

Foreign tax rate differential

NOL carryforward

Valuation allowance

Effect of cross-border tax laws:

Research and development credits

IRA tax credits

Change in valuation allowance

Nontaxable or nondeductible items

Equity-based compensation

162(m) nondeductible compensation

Section 280C adjustment

Change in unrecognized tax benefits

Return to provision adjustments

Federal true-ups

State true-ups

Effective tax rate

(1) For the year ended December 31, 2025, state and local taxes in New Jersey, Texas, and New York City made up the majority (greater than 50%) of the tax effect in this category.

Reconciliation of the difference between the federal statutory income tax rate and the effective income tax rate for the years ended December 31, 2024, and 2023, in accordance with the guidance prior to the adoption of ASU 2023-09, are as follows:

Year Ended December 31,

Tax provision at federal statutory rate

Equity-based compensation

Nondeductible compensation - 162(m)

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Effective tax rate

Disclosed below is a summary of income taxes paid (net of refunds received) by jurisdiction.

The amounts for the year ended December 31, 2025, are presented pursuant to the disclosure requirements of ASU 2023-09.

Year Ended December 31,

State and local

The following table summarizes the elements of the deferred tax assets (liabilities).

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Right of use asset

Unrealized gain/loss on available-for-sale debt securities

Total deferred tax liabilities

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The Company’s state NOLs are scheduled to begin expiring in 2026 .

Company also has foreign NOL carryforwards of $ 11.0 million which are scheduled to expire from 2025 through 2029 .

The Company also has foreign NOL carryforwards of $ 14.4 million which are scheduled to expire from 2026 through 2030 .

Utilization of our net operating loss carryforwards may be subject to annual limitations due to ownership changes as imposed by the Internal Revenue Code and similar state provisions.

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The Company maintained a full valuation allowance of $ 22.7 million on its deferred tax assets as of December 31, 2024.

The increase in the valuation allowance of $ 6.8 million for the year ended December 31, 2024 was primarily due to the increase in capitalized Section 174 expenditures.

The Organization for Economic Cooperation and Development (OECD) has enacted model rules for a new global minimum tax framework (“BEPS Pillar II”).

The increase in the valuation allowance of $ 4.9 million for the year ended December 31, 2025, was primarily due to the increase in losses in the current year.

The Organization for Economic Cooperation and Development has enacted model rules for a new global minimum tax framework (“BEPS Pillar II”).

Various jurisdictions have enacted, or are in the process of enacting, legislation on these rules.

We are closely monitoring developments and are currently evaluating the potential impact in each jurisdiction in which we operate.

Based on our assessment of the current BEPS Pillar II landscape, the Company has not met the Pillar II reporting threshold.

Uncertain Tax Positions

The Company is subject to income taxation by the United States government and certain states in which the Company’s activities give rise to an income tax filing requirement.

The Company is subject to income taxation by the U.S.

government and certain states in which the Company’s activities give rise to an income tax filing requirement.

The Company does not have any significant income tax filing requirements in any foreign jurisdiction.

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However, due to the Company’s NOL carryforwards in various jurisdictions, tax authorities have the ability to adjust carryforwards related to closed years until the statute expires on the year(s) in which the NOL carryforwards are utilized.

The Company is under examination by certain tax authorities for the 2020 and 2021 tax years.

The Company is under examination by certain tax authorities for the 2020 through 2022 tax years.

While the timing of the conclusion of the examination is uncertain, the Company believes that adequate amounts have been reserved for adjustments that may result.

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Balance at end of year

As of December 31, 2024, the Company has $ 4.2 million of gross unrecognized tax benefits, of which, $ 2.5 million of unrecognized tax benefits would affect the effective tax rate if recognized.

As of December 31, 2025, the Company has $ 5.7 million of gross unrecognized tax benefits, all of which would affect the effective tax rate if recognized.

The Company has accrued $ 1.6 million and $ 0.4 million for interest at December 31, 2025, and 2024, respectively.

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The Company received $ 4.6 million , $ 40.0 million , and $ 12.5 million, in income tax refunds in 2025, 2024, and 2023, respectively.

The income tax refunds received, which were due to overpayment in prior years, were not netted in the income tax paid amounts included in the supplemental disclosure in the accompanying Consolidated Statements of Cash Flows.

The income tax refunds received, which were due to overpayment in prior years, were netted in the income tax paid amounts included in the supplemental disclosure in the accompanying Consolidated Statements of Cash Flows for 2025 after the adoption of ASU 2023-09.

The income tax refunds received, were not netted in the income tax paid amounts included in the supplemental disclosure in the accompanying Consolidated Statements of Cash Flows for 2024 and 2023.

In 2025, the Company purchased $ 106.3 million worth of Investment Tax Credits, or ITCs, under the transferability provisions of the Inflation Reduction Act of 2022 for $ 99.5 million in cash.

The $ 6.8 million difference between purchase price and the face value of the credits has been recorded as an increase to the Company’s income tax benefit for the period.

The $ 99.5 million cash payment was included in the income tax paid amounts included in the supplemental disclosure in the accompanying Consolidated Statements of Cash Flows.

The Company has utilized $ 0.2 million of the acquired credits on its 2024 tax return and carried back the remainder of $ 106.1 million to its 2021 and 2022 tax years and filed a request for a refund.

The Company did not receive the $ 106.1 million of ITCs that were carried back to the 2021 and 2022 tax years in cash in 2025.

We expect cash receipt in 2026.

In 2024, the Company purchased $ 27.1 million worth of ITCs, under the transferability provisions of the Inflation Reduction Act of 2022 for $ 24.6 million in cash.

The $ 2.5 million difference between the purchase price and the face value of the credits has been recorded as an increase to the Company’s income tax benefit for the period.

The $ 24.6 million cash payment was included in the income tax paid amounts included in the supplemental disclosure in the accompanying Consolidated Statements of Cash Flows.

The Company has utilized $ 0.4 million of the acquired credits on its 2023 tax return and carried back the

remainder of $ 26.7 million to its 2020 tax year and filed a request for a refund.

The Company has utilized $ 0.4 million of the acquired credits on its 2023 tax return and carried back the remainder of $ 26.7 million to its 2020 tax year and filed a request for a refund.

T he Company has received the full amount of $ 26.7 million of ITCs that were carried back to the 2020 tax year in cash in 2024.

On July 4, 2025, the One Big Beautiful Bill Act, or OBBBA, was signed into law, making permanent certain provisions of the Tax Cuts and Jobs Act, including 100% bonus depreciation and domestic research cost expensing.

In accordance with ASC 740, “ Income Taxes ,” the Company has recognized the effects of the new tax law in the period of enactment.

The legislation has multiple effective dates, with certain provisions effective in 2025 and others implemented through 2027.

The legislation does not have a material impact on our consolidated financial statements for the year ended December 31, 2025.

Income (Loss) per Share

The following is a reconciliation of the basic and diluted income (loss) per share computations:

The following is a reconciliation of the basic and diluted loss per share computations:

Year Ended December 31,

(in thousands)

Net (loss) income attributable to Fulgent

Net loss attributable to Fulgent

Weighted-average common shares - outstanding, basic

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Weighted-average common shares - outstanding, diluted

(Loss) income per share:

The following securities have been excluded from the calculation of diluted income (loss) per share because their effect would have been anti-dilutive:

Loss per share:

The following securities have been excluded from the calculation of diluted loss per share because their effect would have been anti-dilutive:

Year Ended December 31,

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In the years ended December 31, 2025, 2024, and 2023, the Company had outstanding stock options and restricted stock units that were excluded from the weighted-average share calculation for continuing operations due to the Company’s net loss positions.

In the year ended December 31, 2025, the Company also had contingently issuable shares for contingent consideration to the acquisition of ANP that were excluded from the weighted-average share calculation for continuing operations due to the Company’s net loss positions.

The milestones have not been satisfied as of December 31, 2025, thus, nothing was included in dilutive shares.

See more details in Note 15.

Business Combinations .

In the year ended December 31, 2023, the Company also had contingently issuable shares for shares held back in connection with the business combination of Fulgent Pharma, or Pharma Hold Back Shares.

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Related Party

Linda Marsh, who is a member of the Company’s board of directors, is currently the Senior Executive Vice President of AHMC Healthcare Inc., or AHMC.

The Company performs genetic testing and other testing services, on an arms-length basis, for AHMC , and the Company recognized an insignificant amount, $ 0.1 million and $ 1.5 million in revenue in the years ended December 31, 2024, 2023, and 2022, respectively.

As of December 31, 2024 and 2023, insignificant amounts were owed to the Company by AHMC,

which is included in trade accounts receivable, net, in the accompanying Consolidated Balance Sheets, in connection with this relationship.

Ming Hsieh, is the owner of PTJ Associates Inc., or PTJ.

PTJ provides flight services to the Company on an arms-length basis.

In the years ended December 31, 2024, 2023, and 2022 the Company incurred zero , zero and $ 0.2 million , respectively, in expenses for flights between California and Texas to transport employees and supplies.

As of December 31, 2024 and 2023 , no amount wa s owed to PTJ by the Company.

Ming Hsieh is also on the board of directors and an approximately 20 % owner of ANP Technologies, Inc., or ANP, from which the Company entered into certain drug-related licensing and development service agreements.

Linda Dong, who is a member of the Company’s board of directors, is currently the Senior Executive Vice President of AHMC Healthcare Inc., or AHMC.

The Company performs genetic testing and other testing services, on an arms-length basis, for AHMC , and the Company recognized an insignificant amount in revenue in the years ended December 31, 2025, and 2024, and $ 0.1 million in

revenue in the year ended December 31, 2023.

As of December 31, 2025, and 2024, insignificant amounts were owed to the Company by AHMC, which is included in trade accounts receivable, net, in the accompanying Consolidated Balance Sheets, in connection with this relationship.

Prior to April 25, 2025, Ming Hsieh, the Chief Executive Officer and Chairperson of the board of directors, was on the board of directors and an approximately 20 % owner of ANP, with which the Company entered into certain drug-related licensing and development service agreements.

The President and Chief Scientific Officer of Fulgent Pharma, Ray Yin, is the Founder, President, and Chief Technology Officer of ANP.

The Company incurred $ 2.1 million , $ 2.4 million and $ 1.2 million , in expenses in the years ended December 31, 2024, 2023, and 2022, respectively, related to the licensing and development services and purchase of equipment.

As of December 31, 2024 and 2023, $ 0.2 million and zero , respectively, were owed to ANP by the Company in connection with these relationships.

The Company also entered into an employee service agreement with ANP in April 2023, $ 0.1 million was recognized in revenue in each of the years ended December 31, 2024 and 2023, and insignificant amounts were owed by ANP in connection with the employee service agreement as of December 31, 2024 and 2023, respectively.

The Company incurred $ 0.6 million in expenses the year ended December 31, 2025, prior to April 25, 2025, and $ 2.1 million and $ 2.4 million in expenses the years ended December 31, 2024, and 2023, respectively, related to the licensing and development services and purchase of equipment.

As of April 25, 2025, and December 31, 2024, $ 0.3 million and $ 0.2 million , respectively, were owed to ANP by the Company in connection with these relationships.

The Company also entered into an employee service agreement with ANP in April 2023, an insignificant amount was recognized in revenue in the year ended December 31, 2025, prior to April 25, 2025, and $ 0.1 million in revenue was recognized each of the years ended December 31, 2024, and 2023.

Insignificant amounts were owed by ANP in connection with the employee service agreement as of April 25, 2025, and December 31, 2024.

In July 2025, the Company completed an acquisition of 100 % of the outstanding equity of ANP, which included the settlement of all outstanding liabilities and receivables.

See more details in Note 15.

Business Combinations.

Inform Diagnostics

On April 26, 2022, the Company completed the acquisition of 100 % of the outstanding equity of Inform Diagnostics, a leading national independent pathology laboratory based in Irving, Texas.

Under the terms of the Agreement and Plan of Merger, dated April 16, 2022, or the Inform Merger Agreement, the total purchase price payable to the securityholders of Inform Diagnostics was approximately $ 170 million, as adjusted for closing cash, closing indebtedness, closing working capital, closing transaction expenses and other transaction matters.

With the addition of Inform Diagnostics, the Company will further expand the Company’s genomic testing footprint and extend its test menu into breast pathology, gastrointestinal pathology, dermatopathology, urologic pathology, neuropathology, and hematopathology.

The financial results of Inform Diagnostics are included in the consolidated financial statements from the date of acquisition.

The Company allocated the purchase price to tangible and identified intangible assets acquired and liabilities assumed based on estimated fair values.

The following tables summarizes the consideration paid and the updated amounts of the assets acquired and liabilities assumed recognized at the acquisition date:

Business Combinations

ANP Technologies, Inc.

On July 9, 2025 , the Company completed an acquisition of 100 % of the outstanding equity of ANP, an innovation-driven company, which has developed multiple proprietary product platforms.

The acquisition was structured as a combination of cash and stock, net of cash received.

This acquisition enables the Company to secure ownership of the patents previously licensed from ANP, which are currently utilized in ongoing clinical studies.

By securing full ownership of these intellectual property rights, the Company aims to enhance its control over the development and commercialization of related therapeutic candidates, thereby aligning with its strategic objectives to advance clinical programs.

The financial results of ANP are included in the consolidated financial statements from the date of acquisition.

The Company allocated the purchase price to tangible assets and identified intangible assets acquired, liabilities assumed and goodwill based on estimated fair values.

As additional information becomes available, including the filing and finalization of federal and state tax returns for periods prior to the acquisition date, the Company may further update the preliminary purchase price allocation during the remainder of the measurement period (up to one year from the acquisition date).

The following tables summarize the consideration and the amounts of the assets acquired and liabilities assumed recognized at the acquisition date:

(in thousands)

Consideration

Cash, net of cash received

Considerations

Cash held back

Settlement of pre-existing accounts payable

Contingent consideration

Total considerations

Recognized amounts of identifiable assets acquired and liabilities assumed

Net working capital

Cash and cash equivalents

Trade accounts receivable

Other current assets

ROU assets - operating

ROU assets - finance

Deferred tax assets

Other long-term assets

Identifiable intangible assets

Accounts payable

Accrued liabilities

Operating lease liabilities

Finance lease liabilities

Income tax payable

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Recognized amounts of identifiable assets acquired and liabilities assumed, net

The goodwill of $ 71.8 million arising from the acquisition is attributed to the expected synergies, assembled workforce, other benefits that will be potentially generated from the combination and deferred tax.

The acquisition includes a contingent consideration arrangement that requires the Company to issue up to 292,682 shares of the Company’s common stock to the sellers of ANP upon ANP’s achievement of certain minimum levels of cash receipts over the next two years.

The contingent consideration is classified as equity, and the fair value of $ 5.7 million was calculated based on the stock price of the Company’s common stock on the acquisition date.

The fair value of the contingent consideration does not need to be remeasured, as the subsequent settlement will be accounted for as equity.

The merger agreement, as amended, called for the Company to hold back $ 1.9 million to serve as collateral for indemnification of the equity holders.

$ 1.0 million of the holdback will be released to the sellers of ANP after the initial survival date (three years after closing), and the remaining amount is to be released four years after the closing date.

The goodwill of $ 3.0 million arising from the acquisition is attributed to the expected synergies, assembled workforce, and other benefits that will potentially be generated from the business combination along with deferred tax.

The goodwill recognized is not deductible for tax purposes.

The goodwill was subsequently fully impaired in December 2023.

Refer to Note 17.

Goodwill and Intangible Assets for more information .

The identifiable intangible assets acquired consisted of $ 54.0 million customer relationships with an estimated amortization life of 14 years, $ 2.7 million trade name with an estimated amortization life of seven years , and $ 0.4 million in-place lease intangible asset to be amortized over the remaining lease term of five years .

The fair value of the customer relationship was estimated using the Multiperiod Excess Earnings Method, or MPEEM, of the income approach.

The identified intangible assets acquired consisted of $ 3.9 million IPR&D which is an indefinite-lived asset and as such is not amortized, and $ 2.3 million customer relationships with an estimated amortization life of 18 years.

The fair value of the IPR&D was estimated using the cost to recreate method of the cost approach.

The cost to recreate method estimates the expense to the Company if the intangible assets were to be recreated.

The fair value of the customer relationships was estimated using the Multiperiod Excess Earnings Method, or MPEEM, under the income approach.

Under the MPEEM, an intangible asset’s fair value is equal to the present value of the incremental after-tax cash flows attributable only to the subject intangible asset after deducting contributory asset charges.

The incremental after-tax cash flows attributable to the customer relationships are then discounted to their present value at a risk-adjusted rate of return.

The fair value of the trade name was estimated using the relief from royalty, or RFR, method.

The RFR method estimates the portion of the Company’s earnings attributable to an intangible asset based on the royalty rate the Company would have paid for the use of the asset if it did not own it.

The fair value of in-place lease intangible asset was estimated using the discounted cash flow under the income approach.

The incremental after-tax cash flows attributable to the customer contract are then discounted to their present value at a risk-adjusted rate of return.

The useful lives of the intangible assets for amortization purposes were determined by considering the period of expected cash flows used to measure the fair values of the intangible assets adjusted as appropriate for entity-specific factors including legal, regulatory, contractual, competitive, economic and other factors that may limit the useful life.

The customer relationships and trade name are amortized on a straight-line basis over their estimated useful lives.

Revenue and operating loss from the Inform Diagnostics acquisition since the acquisition date were $ 83.6 million and $ 17.0 million, respectively, for year ended December 31, 2022, which are included in the accompanying Consolidated Statements of Operating.

The transaction costs associated with the acquisition of Inform Diagnostics consisted primarily of legal, regulatory and financial advisory fees of approximately $ 6.6 million for the year ended December 31, 2022.

These transaction costs were expensed as incurred as general and administrative expense in the respective period.

Unaudited Pro Forma Financial Information

The following unaudited pro forma financial information summarizes the combined results of operations of Fulgent and Inform Diagnostics as if the companies had been combined as of the beginning of 2021.

The pro forma financial information has been adjusted for the following:

Acquisition-related costs - Acquisition-related costs incurred by both Fulgent and Inform Diagnostics were excluded from the net income attributable to Fulgent, and total costs were $ 9.6 million for the year ended December 31, 2022.

Other adjustments to the net income attributable to Fulgent were $ 0.8 million for the year ended December 31, 2022 .

Other adjustments to revenue were $ 1.0 million for or the year ended December 31, 2022.

Year Ended December 31, 2022

Net income attributable to Fulgent

Basic earnings per common share attributable to Fulgent

Diluted earnings per common share attributable to Fulgent

Fulgent Pharma Holdings, Inc

On November 7, 2022, the Company completed the acquisition of 100 % of the outstanding equity of Fulgent Pharma, a clinical-stage, therapeutic development company focused on perfecting drug candidates for treating a broad range of cancers.

Under the terms of the Agreement and Plan of Merger, dated November 7, 2022, or the Pharma Merger Agreement, the total merger consideration was paid in a combination of cash, the Company’s common stock, or the Stock Consideration, and assumed RSUs subject to customary adjustments for closing cash, closing indebtedness, transaction expenses and other transaction matters.

A portion of the Stock Consideration was held back for a duration of time after the closing of the transaction to satisfy certain indemnification obligations of the Pharma Stockholders as described in the Pharma Merger Agreement.

The RSUs are subject to vesting over the four-year period immediately following the date of their original grant, subject to the holder’s continuing service.

The integrated companies plan to

offer a vertically integrated solution to combat cancer with the potential to unlock significant long-term upsides for both the therapeutic and diagnostic businesses, while effectively managing risk.

The financial results of Fulgent Pharma are included in the consolidated financial statements from the date of acquisition.

The Company allocated the purchase price to tangible and identified intangible assets acquired and liabilities assumed based on estimated fair values.

The following tables summarizes the consideration paid and the updated amounts of the assets acquired and liabilities assumed recognized at the acquisition date:

The goodwill of $ 22.1 million arising from the acquisition is attributed to Fulgent Pharma ’s rights to intellectual property, expected synergies, assembled workforce, and other benefits that will potentially be generated from the combination and deferred tax.

The goodwill recognized is not deductible for tax purposes.

The identified intangible assets acquired consisted of $ 64.6 million in IPR&D.

Fulgent Pharma has developed a novel nanoencapsulation and targeted therapy platform, which is designed to improve the therapeutic window and pharmacokinetic profile of new and existing cancer drugs.

The lead drug candidate, FID-007, is currently being investigated in the United States to treat patients diagnosed with various cancers including H&N, ampullary, and pancreatic cancer.

The Company has released preliminary data and completed enrollment for a Phase 1/1b dose escalation/expansion clinical trial for evaluation of FID-007 in treating patients diagnosed with advanced solid tumors.

In this trial and to date, the Company has observed FID-007 to have a manageable safety profile and observed preliminary evidence of anti-tumor activity in heavily pre-treated patients across various tumor types.

The fair value of the IPR&D was estimated using MPEEM.

The method involves forecasting after-tax operating income from existing clients, subtracting the portions attributable to a contributory asset, and discounting the remaining earnings to present value.

The useful life of IPR&D is indefinite.

Revenue and operating loss from the Fulgent Pharma acquisition since the acquisition date are zero and $ 0.8 million, respectively, which are included in the accompanying Consolidated Statements of Operations, for the year ended December 31, 2022.

The transaction costs associated with the acquisition of Fulgent Pharma consisted primarily of legal, regulatory and financial advisory fees of approximately $ 1.4 million for the year ended December 31, 2022.

These transaction costs were expensed as incurred as general and administrative expense in the respective period.

The $ 5.0 million restricted cash received represents cash consideration payable pursuant to the share transfer agreement Fulgent Pharma entered prior to Fulgent Pharma acquisition date.

The cash consideration was not paid as of Fulgent Pharma acquisition date and was included in noncurrent or non-operating liabilities in above table, and the cash consideration was subsequently paid in 2023.

The customer relationships are amortized on a straight-line basis over the estimated useful lives.

The revenue and operating loss of the acquiree since the acquisition date are $ 0.4 million and $ 0.5 million, respectively, which

are included in the accompanying Consolidated Statements of Operations.

The transaction costs associated with the acquisition of ANP consisted primarily of legal, regulatory and financial advisory fees of approximately $ 0.4 million for the year ended December 31, 2025.

These transaction costs were expensed as incurred as general and administrative expense.

Non-recurring intra-entity transactions involving long term assets and liabilities were eliminated in consolidation and did not affect earnings per share calculations.

Bako Business Combination

On December 20, 2025, Inform Diagnostics, Inc., or the Buyer, a wholly owned subsidiary of the Company, entered into a purchase and sale agreement to, or the PSA, with Bako Pathology LP, Bako Pathology Holdings Corp., BPA Holding Corp., or the PSA Seller, Dermatopathology Experts, LLC, or the Target, and Fulgent Therapeutics, LLC (solely for purposes of Section 11.16 (and Article XI as it relates to Section 11.16) of the PSA), pursuant to which the PSA Seller, among other things, agreed to sell and Buyer agreed to purchase, all of the issued and outstanding equity interests of the Target, for a base purchase price of $ 12.5 million in cash, subject to certain customary price adjustments.

On December 20, 2025, the Buyer also entered into an Asset Purchase Agreement, or the APA with Bako Pathology LP, or Sellers’ Representative, Bako Pathology Holdings Corp., BPA Holding Corp., Bakotic Pathology Associates, L.L.C., Podceuticals L.L.C., GBRL Consulting, LLC, or collectively with Sellers’ Representative, the APA Sellers, and Fulgent Therapeutics, LLC (solely for purposes of Section 11.16 (and Article XI as it relates to Section 11.16) of the APA), pursuant to which the APA Sellers, among other things, agreed to sell and Buyer agreed to purchase and assume, substantially all of the assets and certain specified liabilities related to the APA Sellers’ business in dermatopathology and podiatric pathology and molecular diagnostic services and therapeutic products, for a base purchase price of $ 43.0 million in cash, subject to certain customary price adjustments.

The acquisition is expected to close during the first half of 2026, subject to satisfying customary closing conditions, including regulatory approvals.

Stock Repurchase Program

In March 2022, the Company’s Board authorized a $ 250.0 million stock repurchase program.

In March 2022, the Company’s board of directors authorized a $ 250.0 million stock repurchase program.

Under the stock repurchase program, the Company may repurchase shares from time to time in the open market or in privately negotiated transactions.

The stock repurchase program has no expiration from the date of authorization.

During the year ended December 31, 2024, the Company repurchased 10,000 shares of its common stock at an aggregate cost of $ 0.2 million under the stock repurchase program.

During the year ended December 31, 2025, the Company repurchased 0.6 million shares of its common stock at an aggregate cost of $ 10.9 million under the stock repurchase program.

During the year ended December 31, 2024 , the Company repurchased ten thousand shares of its common stock at an aggregate cost of $ 0.2 million under the stock repurchase program.

During the year ended December 31, 2023, the Company repurchased 1.0 million shares of its common stock at an aggregate cost of $ 25.1 million under the stock repurchase program.

As of December 31, 2024, a total of approximately $ 150.5 million remained available for future repurchases of its common stock under the stock repurchase program.

As of December 31, 2025, a total of approximately $ 139.6 million re mained available for future repurchases of its common stock under the stock repurchase program.

Goodwill and Intangible Assets

Changes in the carrying amount of goodwill, net of impairment, by reporting unit for the years ended December 31, 2024 and 2023 are as follows:

Laboratory Services

Therapeutic Development

December 31, 2024

December 31, 2023

December 31, 2024

December 31, 2023

The Company has identified its laboratory services business and its therapeutic development business as its two operating segments, and the Company determined that the operating segments represented the two reporting units.

The Company tests for goodwill impairment at the reporting unit level on December 31st of each year and more frequently if events or circumstances indicate a potential impairment.

The newly acquired entity, ANP, is considered part of therapeutic development operating segment.

The goodwill of the laboratory services reporting unit had been fully impaired in 2023.

Changes in the carrying amount of goodwill for the years ended December 31, 2025 and 2024 for Therapeutic Development reporting unit are as follows:

(in thousands)

Balance at beginning of year

Foreign currency impact

Balance at the end of year

The Company tests for goodwill impairment at the reporting unit level on December 31st of each year and more frequently if events or circumstances indicate a potential impairment.

Laboratory Services

In 2023, the Company witnessed a continued decline in its share price and market capitalization which prompted a quantitative impairment analysis as of December 31, 2023, which led to the full impairment of the laboratory services goodwill.

Therapeutic Development

As of December 31, 2024, the Company performed an updated valuation for the fair values of its therapeutic development reporting unit and IPR&D due to significant developments in its clinical pipeline.

FID-007 was previously in clinical Phase 1/1b as of the prior reporting period.

The Company has released preliminary results for a Phase 1/1b clinical trial of FID-007 in patients diagnosed with advanced solid tumors and has begun enrollment of a Phase 2 clinical trial evaluating FID-007 in patients diagnosed with recurrent or metastatic H&N squamous cell carcinoma.

The Company has also received clearance from the FDA to commence a Phase 1/1b clinical trial evaluating FID-022, a candidate using the same nano-drug delivery platform, in patients diagnosed with certain cancers.

These advancements led to a revised assessment of the probability of success for each molecule, and resulted in an increase to estimated revenue projections.

The fair value of the Company’s therapeutic development reporting unit was calculated using the income approach weighted at 100 % with a WACC of 36 %.

The fair value of the IPR&D was appraised using the income approach known as multi-period excess earnings method with a WACC of 36 %.

Due to these changes, the fair values of the Company’s therapeutic development reporting unit and IPR&D increased significantly, and are now substantially higher than the carrying value recorded.

The fair value of this reporting unit was $ 201.4 million and exceeded the carrying value of $ 54.8 million by approximately 268 %, and the fair value of IPR&D was $ 202.7 million and exceeded the carrying value of $ 64.6 million by approximately 214 %.

There can be no assurance that the estimates and assumptions management made for the purposes of the goodwill or IPR&D impairment analysis will prove to be accurate predictions of future performance.

It is possible that the conclusions regarding impairment or recoverability of goodwill or intangible assets could change in future periods.

Management will continue to monitor the therapeutic development reporting unit.

For all IPR&D projects, there are major risks and uncertainties associated with the timely and successful completion of development and commercialization of these drug candidates, including the ability to confirm their efficacy based on data from clinical trials, the ability to obtain necessary regulatory approvals, and the ability to successfully complete these tasks within budgeted costs.

The Company is not able to market a human therapeutic without obtaining regulatory approvals, and such approvals require completing clinical trials that demonstrate a drug candidate is safe and effective.

In addition, the availability and extent of coverage and reimbursement from insurance payors, including government healthcare programs and private insurance plans, impact the revenues a product can generate.

Consequently, the eventual realized value, if any, of these acquired IPR&D projects may vary from their estimated fair values.

During the year ended December 31, 2025, there have been no significant changes except for the acquisition of ANP.

The acquisition of ANP resulted in $ 3.0 million in goodwill.

Summaries of intangible assets balances as of December 31, 2025 and 2024 were as follows:

22 unchanged sentences

Therapeutic Development

Customer relationships

accumulated amortization

Customer relationships, net

In-process research & development

2 unchanged sentences

All other finite-lived acquisition-related intangibles related to the business combinations are amortized on a straight-line basis over their estimated lives, which approximates the pattern in which the economic benefits of the intangible assets are expected to be realized.

During the year ended December 31, 2025 , the Company recorded $ 2.3 million of customer relationships and $ 3.9 million of IPR&D attributable to the acquisition of ANP.

See more details in Note 15.

Business Combinations .

Amortization of intangible assets was $ 8.0 million , $ 8.0 million and $ 7.8 million in 2025, 2024, and 2023, respectively.

2 unchanged sentences

Year ending December 31,

Subsequent Event

Stock Repurchase Program

From January 1, 2025 through February 28, 2025, the Company repurchased 0.2 million shares of its common stock for an aggregate cost of $ 3.1 million at an average price of $ 16.61 per share under the stock repurchase program approved in March 2022.

See Note 16, Stock Repurchase Program .

As of February 28, 2025, a total of $ 147.4 million remained available for future repurchases of its common stock under the stock repurchase program.

The Company engaged a third-party valuation company for the valuation of the goodwill and IPR&D associated with the acquisition of ANP on the acquisition date.

There is no indication of a potential impairment for the Company’s goodwill and IPR&D, thus, no quantitative assessment was performed as of December 31, 2025.

There can be no assurance that the estimates and assumptions management made for the purposes of the goodwill or IPR&D impairment analysis will prove to be accurate predictions of future performance.

It is possible that the conclusions regarding impairment or recoverability of goodwill or intangible assets could change in future periods.

Management will continue to monitor the therapeutic development reporting unit.

For all IPR&D projects, there are major risks and uncertainties associated with the timely and successful completion of development and commercialization of these product candidates, including the ability to confirm their efficacy based on data from clinical trials, the ability to obtain necessary regulatory approvals, and the ability to successfully complete these tasks within budgeted costs.

The Company is not able to market a human therapeutic without obtaining regulatory approvals, and such approvals require completing clinical trials that demonstrate a product candidate is safe and effective.

Consequently, the eventual realized value, if any, of these acquired IPR&D projects may vary from their estimated fair values.

Stockholders’ Equity

Cash Dividends

The Company has not in the past, and the Company did not declare or pay cash dividends in the current period.

The Company does not anticipate paying dividends in the foreseeable future, however, the payment and amount of future dividends remain within the discretion of its board of directors and will depend on future earnings, financial condition, capital requirements and other factors.

Per the Company’s certificate of incorporation, as amended, the total number of shares of all classes of stock that the Company is authorized to issue is 51.0 million consisting of 50.0 million shares of Common Stock with a par value of $ 0.0001 and 1.0 million shares of Preferred Stock with a par value of $ 0.0001 .

Voting Rights

The holders of our common stock are entitled to one vote for each share held on all matters submitted to a vote of our stockholders.

The holders of our common stock do not have any cumulative voting rights.

Because of this absence of cumulative voting, the holders of a majority of the shares of common stock entitled to vote in any election of directors have the power to elect all of the directors standing for election, if they should so choose.

Dividend Rights

Holders of the Company’s common stock are entitled to receive ratably any dividends that may be declared by the Company’s board of directors, from time to time out of funds legally available for that purpose, subject to any preferential dividend rights of any outstanding preferred stock.

Liquidation Rights

In the event of the Company’s liquidation, dissolution or winding up, holders of the Company’s common stock will be entitled to share ratably in all assets remaining after payment of all debts and other liabilities and any liquidation preference of any outstanding preferred stock.

Preemptive and Conversion Rights

The Company’s common stock has no preemptive rights, conversion rights or other subscription rights or redemption or sinking fund provisions.

All of the outstanding shares of the Company’s common stock, as well as any shares of common stock issuable upon the conversion of any securities convertible into the Company’s common stock, are (or will be upon issuance) fully paid and non-assessable.

Blank Check Preferred Stock

The Company’s board of directors is authorized, subject to the limitations imposed by Delaware law, to issue up to 1.0 million shares of preferred stock, par value $ 0.0001 per share, in one or more series, without stockholder approval.

The Company ’s board of directors may fix the rights, preferences, privileges and restrictions of the Company’s authorized shares of preferred stock in one or more series and authorize its issuance without the approval of the Company’s stockholders.

These rights, preferences, privileges and restrictions could include dividend rights, conversion rights, voting rights, terms of redemption, liquidation preferences, sinking fund terms and the number of shares constituting any series or the designation of such series, any or all of which may be greater than the rights of the Company’s common stock.

As of the date of the filing of this report, no shares of preferred stock are outstanding.

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-K

Item 9A. Controls and Procedures