Fulgent Genetics, Inc. 10-K

Item 9A. Controls and Procedures. Evaluation of Disclosure Controls and Procedures Disclosure controls and procedures are controls and other procedures of a company that are designed to ensure that information required to be disclosed by the company in the reports that it files or submits under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in the SEC’s rules and forms. Disclosure controls and procedures include, without limitation, controls and procedures designed to ensure that information required to be disclosed by a company in the reports that it files or submits under the Exchange Act is accumulated and communicated to the Company’s management, including its principal executive officer and principal financial officer, or persons performing similar functions, as appropriate to allow timely decisions regarding required disclosure. As required by Rules 13a-15(b) and 15d-15(b) under the Exchange Act, our management, with the participation of our principal executive officer and principal financial officer, conducted an evaluation of the effectiveness of our disclosure controls and procedures as of December 31, 2025. Based on this evaluation, our principal executive officer and principal financial officer concluded that our disclosure controls and procedures were effective as of December 31, 2025. Internal Control over Financial Reporting Changes in Internal Control over Financial Reporting. There has been no change in our internal control over financial reporting during the year ended December 31, 2025, that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting. Management’s Annual Report on Internal Control over Financial Reporting . Our management is responsible for establishing and maintaining adequate internal control over financial reporting, as defined in Rule 13a-15(f) of the Exchange Act. Our management conducted an evaluation of the effectiveness of our internal control over financial reporting based on the framework in Internal Control—Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (2013 framework). Based on this evaluation, management concluded that our internal control over financial reporting was effective as of December 31, 2025. Management reviewed the results of its assessment with our Audit and Compliance Committee. The effectiveness of our internal control over financial reporting as of December 31, 2025 has been audited by Deloitte & Touche LLP, an independent registered public accounting firm, as stated in its report, which is included in Item 8 of this Annual Report on Form 10-K. Inherent Limitations on Disclosure Controls and Procedures and Internal Control over Financial Reporting Management recognizes that any controls and procedures, no matter how well-designed and operated, can provide only reasonable assurance of achieving their objectives, and management necessarily applies its judgment in evaluating the benefits of possible controls and procedures relative to their costs. Because of these inherent limitations, our disclosure and internal controls may not prevent or detect all instances of fraud, misstatements or other control issues. In addition, projections of any evaluation of the effectiveness of disclosure or internal controls to future periods are subject to risks, including, among others, that controls may become inadequate because of changes in conditions or that the degree of compliance with policies or procedures may deteriorate. 91 REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM To the shareholders and the Board of Directors of Fulgent Genetics, Inc. Opinion on Internal Control over Financial Reporting We have audited the internal control over financial reporting of Fulgent Genetics, Inc. and subsidiaries (the “Company”) as of December 31, 2025, based on criteria established in Internal Control – Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). In our opinion, the Company maintained, in all material respects, effective internal control over financial reporting as of December 31, 2025, based on criteria established in Internal Control – Integrated Framework (2013) issued by COSO. We have also audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the consolidated financial statements as of and for the year ended December 31, 2025, of the Company and our report dated February 27, 2026, expressed an unqualified opinion on those financial statements. Basis for Opinion The Company’s management is responsible for maintaining effective internal control over financial reporting and for its assessment of the effectiveness of internal control over financial reporting, included in the accompanying “Management’s Annual Report on Internal Control over Financial Reporting.” Our responsibility is to express an opinion on the Company’s internal control over financial reporting based on our audit. We are a public accounting firm registered with the PCAOB and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB. We conducted our audit in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether effective internal control over financial reporting was maintained in all material respects. Our audit included obtaining an understanding of internal control over financial reporting, assessing the risk that a material weakness exists, testing and evaluating the design and operating effectiveness of internal control based on the assessed risk, and performing such other procedures as we considered necessary in the circumstances. We believe that our audit provides a reasonable basis for our opinion. Definition and Limitations of Internal Control over Financial Reporting A company’s internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. A company’s internal control over financial reporting includes those policies and procedures that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company; (2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorizations of management and directors of the company; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the company’s assets that could have a material effect on the financial statements. Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate. /s/ DELOITTE & TOUCHE LLP Los Angeles, California February 27, 2026 92 Item 9B. Other Information. Rule 10b5-1 trading arrangements 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 . Item 9C. Disclosure Regarding Foreign Jurisdictions that Prevent Inspections. None. 93 PART III Item 10. Directors, Executive Off icers and Corporate Governance. The information required by this item is incorporated by reference to the definitive proxy statement for our 2026 annual meeting of stockholders or an amendment to this report, in either case to be filed with the SEC within 120 days after the end of our fiscal year ended December 31, 2025. Item 11. Executiv e Compensation. The information required by this item is incorporated by reference to the definitive proxy statement for our 2026 annual meeting of stockholders or an amendment to this report, in either case to be filed with the SEC within 120 days after the end of our fiscal year ended December 31, 2025. Item 12. Security Ownership of Certain Beneficial Own ers and Management and Related Stockholder Matters. The information required by this item is incorporated by reference to the definitive proxy statement for our 2026 annual meeting of stockholders or an amendment to this report, in either case to be filed with the SEC within 120 days after the end of our fiscal year ended December 31, 2025. Item 13. Certain Relationships and Related Transactions, and Director Independence. The information required by this item is incorporated by reference to the definitive proxy statement for our 2026 annual meeting of stockholders or an amendment to this report, in either case to be filed with the SEC within 120 days after the end of our fiscal year ended December 31, 2025. Item 14. Principal Accou ntant Fees and Services. The information required by this item is incorporated by reference to the definitive proxy statement for our 2026 annual meeting of stockholders or an amendment to this report, in either case to be filed with the SEC within 120 days after the end of our fiscal year ended December 31, 2025. 94 PART IV Item 15. Exhibits and Financ ial Statement Schedules. (a)(1) Consolidated Financial Statements. The following financial statements are included immediately following the signature page hereof and are filed as part of this report: Report of Independent Registered Public Accounting Firm (PCAOB ID: 34 ) F- 2 Consolidated Balance Sheets as of December 31, 2025 and 2024 F- 4 Consolidated Statements of Operations for the Years Ended December 31, 2025, 2024, and 2023 F- 5 Consolidated Statements of Comprehensive Income (Loss) for the Years Ended December 31, 2025, 2024, and 2023 F- 6 Consolidated Statements of Stockholders’ Equity for the Years Ended December 31, 2025, 2024, and 2023 F- 7 Consolidated Statements of Cash Flows for the Years Ended December 31, 2025, 2024, and 2023 F- 8 Notes to Consolidated Financial Statements F- 9 (a)(2) Financial Statement Schedules. All financial statement schedules have been omitted, as they are not required, not applicable, or the required information is otherwise included. (a)(3) Exhibits. The information required by this Item 15(a)(3) is set forth on the Exhibit Index immediately preceding the signature page of this report and is incorporated herein by reference. Item 16. Form 10-K Summary. None. 95 EXHIBIT INDEX Exhibit Number Description Form File Number Incorporated by Reference Exhibit Filing Date Filed Herewith 2.1 Agreement and Plan Merger, dated September 16, 2016, by and among the registrant, Fulgent MergerSub, LLC and Fulgent Therapeutics LLC. S-1/A 333-213469 2.1 9/19/2016 3.1 Certificate of Incorporation of the registrant, as amended . 10-Q 001-37894 3.1 8/14/2017 3.1.1 Certificate of Amendment to Certificate of Incorporation of the registrant, dated August 2, 2016. 10-Q 001-37894 3.1.1 8/14/2017 3.1.2 Certificate of Amendment to Certificate of Incorporation of the registrant, dated May 17, 2017. 10-Q 001-37894 3.1.2 8/14/2017 3.2 Amended and Restated Bylaws. 10-Q 001-37894 3.2 8/4/2023 4.1 Form of Certificate of Common Stock of the registrant. S-1/A 333-213469 4.1 9/19/2016 4.2 Description of the registrant’s securities. 10-K 001-37894 4.2 2/28/2025 10.1# Form of Indemnification Agreement between the registrant and each of its officers and directors. S-1 333-213469 10.1 9/2/2016 10.2# Amended and Restated 2015 Equity Incentive Plan of Fulgent Therapeutics LLC. S-1 333-213469 10.2 9/2/2016 10.3# Form of Notice of Option Grant and Option Agreement under the Amended and Restated 2015 Equity Incentive Plan of Fulgent Therapeutics LLC. S-1 333-213469 10.3 9/2/2016 10.4# Form of Notice of Profits Interest Grant and Profits Interest Agreement under the Amended and Restated 2015 Equity Incentive Plan of Fulgent Therapeutics LLC. S-1 333-213469 10.4 9/2/2016 10.5# 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. S-1 333-213469 10.5 9/2/2016 10.6# Form of Notice of Stock Option Award and Stock Option Award Agreement under the 2016 Omnibus Incentive Plan of the registrant. S-1 333-213469 10.7 9/2/2016 10.7# Form of Notice of Restricted Stock Unit Award and Restricted Stock Unit Agreement under the 2016 Omnibus Incentive Plan of the registrant. 10-K 001-37894 10.8 3/17/2017 10.8# Form of Option Substitution Award under the 2016 Omnibus Incentive Plan of the registrant. S-1 333-213469 10.9 9/2/2016 10.9# Form of Notice of Restricted Stock Unit Substitution Award and Restricted Stock Unit Agreement under the 2016 Omnibus Incentive Plan of the registrant. S-1 333-213469 10.10 9/2/2016 10.10# Employment Agreement, dated May 25, 2016, by and among Fulgent Therapeutics LLC, the registrant and Ming Hsieh. S-1 333-213469 10.11 9/2/2016 10.11# Employment Agreement, dated May 25, 2016, by and among Fulgent Therapeutics LLC, the registrant and Paul Kim. S-1 333-213469 10.12 9/2/2016 10.12# Amended and Restated Employment Agreement, dated May 25, 2016, by and among Fulgent Therapeutics LLC, the registrant and Hanlin Gao. S-1 333-213469 10.13 9/2/2016 10.13# Severance Agreement, dated July 7, 2016, by and among Fulgent Therapeutics LLC, the registrant and Ming Hsieh. S-1 333-213469 10.14 9/2/2016 10.14# Severance Agreement, dated July 7, 2016, by and among Fulgent Therapeutics LLC, the registrant and Paul Kim. S-1 333-213469 10.15 9/2/2016 10.15# Severance Agreement, dated July 7, 2016, by and among Fulgent Therapeutics LLC, the registrant and Hanlin Gao. S-1 333-213469 10.16 9/2/2016 10.16 Contribution and Allocation Agreement, dated May 19, 2016, by and among Fulgent Therapeutics LLC, Fulgent Pharma LLC and Ming Hsieh. S-1 333-213469 10.17 9/2/2016 10.17 Form of Fourth Amended and Restated Operating Agreement of Fulgent Therapeutics LLC, to be in effect upon completion of the Reorganization . S-1/A 333-213469 2.1 9/19/2016 10.18§ Cooperation Agreement on the Establishment of Fujian Fujun Gene Biotech Co., Ltd., dated April 25, 2017, by and among Shenzhen Fujin Gene Science & 10-Q 001-37894 10.1 8/14/2017 96 Exhibit Number Description Form File Number Incorporated by Reference Exhibit Filing Date Filed Herewith Technology Co., Ltd., Xilong Scientific Co., Ltd. and Fuzhou Jinqiang Investment Partnership (LP). 10.19# Employment Agreement, dated March 8, 2021, by and among Fulgent Therapeutics, LLC, the registrant and Jian Xie. 10-K 001-37894 10.37 3/8/2021 10.20# Severance Agreement, dated March 8, 2021, by and among Fulgent Therapeutics LLC, the registrant and Jian Xie. 10-K 001-37894 10.38 3/8/2021 10.21** Restructuring Agreement of Fujian Fujun Gene Biotech Co., Ltd. 10-Q 001-37894 10.1 8/10/2021 10.22# Fulgent Genetics, Inc. Incentive Compensation Recoupment Policy. 8-K 001-37894 10.1 3/29/2022 10.23 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 . 8-K 001-37894 2.1 4/26/2022 10.24# Form of Notice of Restricted Stock Unit Award and Restricted Stock Unit Agreement under the Fulgent Pharma Holdings, Inc. 2022 Omnibus Incentive Plan. 10-Q 001-37894 10.2 11/7/2022 10.25^ 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 . 10-Q 001-37894 10.3 11/7/2022 10.26^# Amended and Restated Executive Officer Incentive Plan of the registrant . 10-Q 001-37894 10.2 11/3/2023 10.27 Lease Agreement of Premises at 15-19 Crawford Street Needham, Massachusetts, by and between Inform Diagnostics and Crawford Street DE, LLC. 10-K 001-37894 10.51 2/28/2023 10.28# Fulgent Pharma Holdings, Inc. 2022 Omnibus Incentive Plan . 10-K 001-37894 10.52 2/28/2023 10.29*^# Amended and Restated Director Compensation Program of the registrant . 10-Q 001-37894 10.1 5/5/2023 10.30 Executive Officer Incentive Plan of the registrant . 10-Q 001-37894 10.3 5/5/2023 10.31 Amended and Restated 2016 Omnibus Incentive Plan of the registrant . 8-K 001-37894 10.1 5/18/2023 10.32^ 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. 8-K 001-37894 10.1 12/22/2025 10.33^ 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. 8-K 001-37894 10.2 12/22/2025 19.1 Insider Trading Policy. 10-K 001-37894 19.1 2/28/2025 21.1 Subsidiaries of the registrant. X 23.1 Consent of Deloitte & Touche LLP, independent registered public accounting firm, relating to the financial statements of the registrant. X 24.1 Power of Attorney (included on the signature page hereto). X 31.1 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. X 31.2 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. X 97 Exhibit Number Description Form File Number Incorporated by Reference Exhibit Filing Date Filed Herewith 32.1* Certification of Principal Executive Officer and Principal Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002. X 97.1^# Amended and Restated Incentive Compensation Recoupment Policy of the registrant . 10-Q 001-37894 10.1 11/3/2023 101.INS Inline XBRL Instance Document – the instance document does not appear in the Interactive Data File because XBRL tags are embedded within the Inline XBRL document. X 101.SCH Inline XBRL Taxonomy Extension Schema Document. X 101.CAL Inline XBRL Taxonomy Extension Calculation Linkbase Document. X 101.DEF Inline XBRL Taxonomy Extension Definition Linkbase Document. X 101.LAB Inline XBRL Taxonomy Extension Label Linkbase Document. X 101.PRE Inline XBRL Taxonomy Extension Presentation Linkbase Document. X 104 Cover Page Interactive Data File (embedded within the Inline XBRL document). X * This certification is being furnished solely to accompany this report pursuant to 18 U.S.C. 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. § Confidential treatment has been granted with respect to portions of this exhibit pursuant to Rule 24b-2 under the Exchange Act, and these confidential portions have been redacted from the version of this agreement that is incorporated by reference in this report. A complete copy of this exhibit, including the redacted portions, has been separately furnished to the SEC. ^ Certain exhibits and schedules have been omitted pursuant to Item 601(a)(5) of Regulation S-K. 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. 98 SIGNAT URES 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. FULGENT GENETICS, INC. Date: February 27, 2026 By: /s/ Ming Hsieh Ming Hsieh Chief Executive Officer POWER OF ATTORNEY IN WITNESS WHEREOF, each person whose signature appears below constitutes and appoints Ming Hsieh and Paul Kim as his or her true and lawful agent, proxy and attorney-in-fact, each acting alone, with full power of substitution and resubstitution, for him or her and in his or her name, place and stead, in any and all capacities, to (i) act on and sign any amendments to this report, with exhibits thereto and other documents in connection therewith, (ii) act on and sign such certificates, instruments, agreements and other documents as may be necessary or appropriate in connection therewith, and in each case file the same with the SEC, hereby approving, ratifying and confirming all that such agent, proxy and attorney-in-fact or any of his substitutes may lawfully do or cause to be done by virtue thereof. Pursuant to the requirements of the Securities Exchange Act of 1934, as amended, this report has been signed below by the following persons on behalf of the registrant in the capacities and on the dates indicated. Name and Signature Title Date /s/ Ming Hsieh Chief Executive Officer and Chairperson of the Board February 27, 2026 Ming Hsieh (principal executive officer) /s/ Paul Kim Chief Financial Officer February 27, 2026 Paul Kim (principal financial and accounting officer) /s/ Michael Nohaile Director February 27, 2026 Michael Nohaile /s/ Regina Groves Director February 27, 2026 Regina Groves /s/ Linda Dong Director February 27, 2026 Linda Dong 99 INDEX TO CONSOLIDATED FINANCIAL STATEMENTS Report of Independent Registered Public Accounting Firm (PCAOB ID: 34) F- 2 Consolidated Balance Sheets as of December 31, 2025 and 2024 F- 4 Consolidated Statements of Operations for the Years Ended December 31, 2025, 2024, and 2023 F- 5 Consolidated Statements of Comprehensive Income (Loss) for the Years Ended December 31, 2025, 2024, and 2023 F- 6 Consolidated Statements of Stockholders’ Equity for the Years Ended December 31, 2025, 2024, and 2023 F- 7 Consolidated Statements of Cash Flows for the Years Ended December 31, 2025, 2024, and 2023 F- 8 Notes to Consolidated Financial Statements F- 9 F- 1 REPORT OF INDEPENDENT REGIST ERED PUBLIC ACCOUNTING FIRM To the shareholders and the Board of Directors of Fulgent Genetics, Inc. Opinion on the Financial Statements We have audited the accompanying consolidated balance sheets of Fulgent Genetics, Inc., and subsidiaries (the “Company”) as of December 31, 2025, and 2024, the related consolidated statements of operations, comprehensive income (loss), stockholders’ equity, and cash flows, for each of the three years in the period ended December 31, 2025, and the related notes (collectively referred to as the “financial statements”). In our opinion, the financial statements present fairly, in all material respects, the financial position of the Company as of December 31, 2025, and 2024, and the results of its operations and its cash flows for each of the three years in the period ended December 31, 2025, in conformity with accounting principles generally accepted in the United States of America. We have also audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the Company’s internal control over financial reporting as of December 31, 2025, based on criteria established in Internal Control – Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission and our report dated February 27, 2026, expressed an unqualified opinion on the Company’s internal control over financial reporting. Basis for Opinion These financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on the Company’s financial statements based on our audits. We are a public accounting firm registered with the PCAOB and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB. We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud. Our audits included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that our audits provide a reasonable basis for our opinion. Critical Audit Matters The critical audit matters communicated below are matters arising from the current-period audit of the financial statements that were communicated or required to be communicated to the audit committee and that (1) relate to accounts or disclosures that are material to the financial statements and (2) involved our especially challenging, subjective, or complex judgments. 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 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’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. F- 2 How the Critical Audit Matter Was Addressed in the Audit 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 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 external studies. o Relevant regulatory approvals supporting timing of commercial success. /s/ DELOITTE & TOUCHE LLP Los Angeles, California February 27, 2026 We have served as the Company’s auditor since 2016. F- 3 CONSOLIDATED FINANCIAL STATEMENTS FULGENT GENETICS, INC. Consolidated Balance Sheets (in thousands, except par value data) December 31, 2025 December 31, 2024 Assets Current assets Cash and cash equivalents $ 50,193 $ 55,144 Marketable securities 285,884 202,962 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 84,762 69,021 Prepaid income taxes 107,099 3,422 Other current assets 22,552 23,022 Total current assets 550,490 353,571 Marketable securities, long-term 369,269 570,351 Fixed assets, net 112,549 105,549 In-process research & development 68,490 64,590 Other intangible assets, net 64,791 70,388 Goodwill 25,080 22,055 Other long-term assets 22,856 33,460 Total assets $ 1,213,525 $ 1,219,964 Liabilities and Stockholders’ Equity Current liabilities Accounts payable $ 18,654 $ 18,364 Accrued liabilities 34,057 24,279 Customer deposit 28,145 27,610 Contract liabilities 3,635 2,234 Notes payable, current 476 412 Total current liabilities 84,967 72,899 Deferred tax liabilities 6,936 6,370 Unrecognized tax benefits 7,283 4,563 Other long-term liabilities 7,624 6,973 Total liabilities 106,810 90,805 Commitments and Contingencies (Note 8) Stockholders’ equity 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 3 3 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 574,520 543,126 Accumulated other comprehensive income (loss) 7,512 ( 368 ) Retained earnings 529,954 590,467 Total Fulgent stockholders’ equity 1,111,989 1,133,228 Noncontrolling interest ( 5,274 ) ( 4,069 ) Total stockholders’ equity 1,106,715 1,129,159 Total liabilities and stockholders’ equity $ 1,213,525 $ 1,219,964 The accompanying notes are an integral part of these consolidated financial statements. F- 4 CONSOLIDATED FINANCIAL STATEMENTS FULGENT GENETICS, INC. Consolidated Statem ents of Operations (in thousands, except per share) Year Ended December 31, 2025 2024 2023 Revenue $ 322,671 $ 283,470 $ 289,213 Cost of revenue 191,796 176,255 184,757 Gross profit 130,875 107,215 104,456 Operating expenses Research and development 53,905 48,816 41,440 Selling and marketing 43,371 36,246 41,467 General and administrative 116,664 88,106 88,999 Amortization of intangible assets 8,031 7,965 7,845 Goodwill impairment loss — — 120,234 Total operating expenses 221,971 181,133 299,985 Operating loss ( 91,096 ) ( 73,918 ) ( 195,529 ) Other income (expenses) Interest income 30,919 31,304 21,612 Interest expense ( 75 ) 170 ( 488 ) Impairment loss ( 9,926 ) ( 10,073 ) — Other income, net 153 561 320 Total other income, net 21,071 21,962 21,444 Loss before income taxes ( 70,025 ) ( 51,956 ) ( 174,085 ) (Benefit from) provision for income taxes ( 8,394 ) ( 8,136 ) 1,154 Net loss from consolidated operations ( 61,631 ) ( 43,820 ) ( 175,239 ) Net loss attributable to noncontrolling interests 1,118 1,112 7,414 Net loss attributable to Fulgent $ ( 60,513 ) $ ( 42,708 ) $ ( 167,825 ) Net loss per common share attributable to Fulgent: Basic $ ( 1.97 ) $ ( 1.41 ) $ ( 5.63 ) Diluted $ ( 1.97 ) $ ( 1.41 ) $ ( 5.63 ) Weighted-average common shares: Basic 30,777 30,235 29,784 Diluted 30,777 30,235 29,784 The accompanying notes are an integral part of these consolidated financial statements. F- 5 FULGENT GENETICS, INC. Consolidated Statements of Comprehensive Income (Loss) (in thousands) Year Ended December 31, 2025 2024 2023 Net loss from consolidated operations $ ( 61,631 ) $ ( 43,820 ) $ ( 175,239 ) Other comprehensive (loss) income Foreign currency translation income (loss) 775 ( 511 ) ( 1,200 ) Net income (loss) on available-for-sale debt securities, net of tax 7,018 ( 1,204 ) 24,717 Net comprehensive loss from consolidated operations ( 53,838 ) ( 45,535 ) ( 151,722 ) Net loss attributable to noncontrolling interest 1,118 1,112 7,414 Foreign currency translation loss (gain) attributable to noncontrolling interest 87 142 ( 1,409 ) Comprehensive loss attributable to noncontrolling interest 1,205 1,254 6,005 Comprehensive loss attributable to Fulgent $ ( 52,633 ) $ ( 44,281 ) $ ( 145,717 ) The accompanying notes are an integral part of these consolidated financial statements. F- 6 FULGENT GENETICS, INC. Consolidated Statement s of Stockholders’ Equity (in thousands) Fulgent Stockholders’ Equity Shares Amount Additional Paid-In Capital Accumulated Other Comprehensive (Loss) Income Retained Earnings Fulgent Stockholders’ Equity Noncontrolling Interest Total Equity Balance at January 1, 2023 29,438 $ 3 $ 486,585 $ ( 20,903 ) $ 801,000 $ 1,266,685 $ 3,190 $ 1,269,875 Equity-based compensation — — 42,922 — — 42,922 — 42,922 Exercise of common stock options 9 — 3 — — 3 — 3 Restricted stock awards 1,066 — — — — — — — Common stock withholding for employee tax obligations ( 93 ) — ( 2,732 ) — — ( 2,732 ) — ( 2,732 ) Repurchase of common stock ( 953 ) — ( 25,060 ) — — ( 25,060 ) — ( 25,060 ) Common stock issued in a business combination (1) 186 — — — — — — — Other comprehensive income, net — — — 22,108 — 22,108 1,409 23,517 Net loss — — — — ( 167,825 ) ( 167,825 ) ( 7,414 ) ( 175,239 ) Balance at December 31, 2023 29,653 $ 3 $ 501,718 $ 1,205 $ 633,175 $ 1,136,101 $ ( 2,815 ) $ 1,133,286 Equity-based compensation — — 44,481 — — 44,481 — 44,481 Exercise of common stock options 133 — 51 — — 51 — 51 Restricted stock awards 1,004 — — — — — — — Common stock withholding for employee tax obligations ( 125 ) — ( 2,899 ) — — ( 2,899 ) — ( 2,899 ) Repurchase of common stock ( 10 ) — ( 225 ) — — ( 225 ) — ( 225 ) Common stock issued in a business combination (1) 186 — — — — — — — Other comprehensive loss, net — — — ( 1,573 ) — ( 1,573 ) ( 142 ) ( 1,715 ) Net loss — — — — ( 42,708 ) ( 42,708 ) ( 1,112 ) ( 43,820 ) Balance at December 31, 2024 30,841 $ 3 $ 543,126 $ ( 368 ) $ 590,467 $ 1,133,228 $ ( 4,069 ) $ 1,129,159 Equity-based compensation — — 39,582 — — 39,582 — 39,582 Exercise of common stock options 2 — 1 — — 1 — 1 Restricted stock awards 1,049 — — — — — — — Common stock withholding for employee tax obligations ( 165 ) — ( 3,036 ) — — ( 3,036 ) — ( 3,036 ) Repurchase of common stock ( 646 ) — ( 10,884 ) — — ( 10,884 ) — ( 10,884 ) Contingently issuable shares in a business combination (2) — — 5,731 — — 5,731 — 5,731 Other comprehensive income (loss), net — — — 7,880 — 7,880 ( 87 ) 7,793 Net loss — — — — ( 60,513 ) ( 60,513 ) ( 1,118 ) ( 61,631 ) Balance at December 31, 2025 31,081 $ 3 $ 574,520 $ 7,512 $ 529,954 $ 1,111,989 $ ( 5,274 ) $ 1,106,715 (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. F- 7 FULGENT GENETICS, INC. Consolidated Statem ents of Cash Flows (in thousands) Year Ended December 31, 2025 2024 2023 Cash flow from operating activities Net loss from consolidated operations $ ( 61,631 ) $ ( 43,820 ) $ ( 175,239 ) Adjustments to reconcile net loss to net cash (used in) provided by operating activities: Goodwill impairment loss — — 120,234 Equity-based compensation 39,582 44,481 42,922 Depreciation and amortization 24,123 24,928 26,143 Provision (adjustment) for credit losses 7,648 ( 1,730 ) ( 880 ) Noncash lease expense 1,764 3,760 6,412 (Gain) loss on disposal of fixed asset ( 3 ) 320 305 Discount premium of marketable securities ( 5,103 ) ( 5,550 ) ( 3,911 ) Deferred taxes ( 1,214 ) ( 3,736 ) 11,466 Unrecognized tax benefits 936 ( 1,414 ) ( 3,858 ) Net realized (gain) loss on marketable securities ( 62 ) 994 589 Impairment loss 9,926 10,073 — Other 30 ( 7 ) ( 21 ) Changes in operating assets and liabilities: Trade accounts receivable ( 23,251 ) ( 16,303 ) 2,388 Income tax ( 104,937 ) 9,253 2,759 Other current and long-term assets 798 199 ( 3,331 ) Accounts payable 550 3,066 ( 6,896 ) Contract liabilities 1,400 ( 639 ) ( 325 ) Customer deposits 520 4,917 11,815 Accrued liabilities and other liabilities 8,911 ( 3,961 ) 2,718 Operating lease liabilities ( 1,625 ) ( 3,771 ) ( 6,287 ) Net cash (used in) provided by operating activities ( 101,638 ) 21,060 27,003 Cash flow from investing activities Purchase of marketable securities ( 80,842 ) ( 472,415 ) ( 491,914 ) Purchases of fixed assets ( 22,574 ) ( 40,315 ) ( 22,207 ) Maturities of marketable securities 211,007 349,795 508,558 Proceeds from sale of marketable securities — 104,270 44,085 Proceeds from sale of fixed assets 5 313 775 Acquisition of businesses, net of cash acquired 3,775 — ( 399 ) Net cash provided by (used in) investing activities 111,371 ( 58,352 ) 38,898 Cash flow from financing activities Common stock withholding for employee tax obligations ( 3,036 ) ( 2,899 ) ( 2,732 ) Repayment of notes payable ( 471 ) ( 1,230 ) ( 4,266 ) Principal paid for finance lease ( 399 ) ( 544 ) ( 730 ) Repurchase of common stock ( 10,884 ) ( 225 ) ( 25,060 ) Repayment of investment margin loan — — ( 15,000 ) Proceeds from exercise of stock options 1 51 3 Net cash used in financing activities ( 14,789 ) ( 4,847 ) ( 47,785 ) Effect of exchange rate changes on cash and cash equivalents 105 ( 55 ) ( 149 ) Net (decrease) increase in cash, cash equivalents, and restricted cash ( 4,951 ) ( 42,194 ) 17,967 Cash, cash equivalents, and restricted cash at beginning of period 55,279 97,473 79,506 Cash, cash equivalents, and restricted cash at end of period $ 50,328 $ 55,279 $ 97,473 Supplemental disclosures of cash flow information Income taxes paid (1) $ 96,445 $ 27,588 $ 3,261 Interest paid $ 52 $ 512 $ 960 Supplemental disclosures of non-cash investing and financing activities Contingent consideration for business acquisition included in additional paid-in capital (2) $ 5,731 $ — $ — Purchases of fixed assets in accounts payable $ 1,694 $ 1,806 $ 1,799 Holdback for acquisition of business included in other long-term liabilities (2) $ 1,887 $ — $ — Operating lease right-of-use assets obtained in exchange for lease liabilities $ 579 $ 1,158 $ 2,661 Operating lease right-of-use assets reduced due to lease modification and termination $ ( 47 ) $ 57 $ 142 Operating lease liabilities removed due to purchasing underlying assets $ — $ 2,799 $ — Finance lease right-of-use assets reduced due to lease modification and termination $ — $ — $ 696 (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. F- 8 FULGENT GENETICS, INC. Notes to Consolidated Financial Statements Note 1. Overview and Basis of Presentation 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. In determining whether the Company is the primary beneficiary of an entity, the Company applies a qualitative approach that determines whether it has both (i) the power to direct the economically significant activities of the entity and (ii) the obligation to absorb losses of, or the right to receive benefits from, the entity that could potentially be significant to that entity. The Company uses the equity method to account for its investments in entities that it does not control, but in which it has the ability to exercise significant influence over operating and financial policies. All intercompany accounts and transactions are eliminated from the accompanying consolidated financial statements. 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 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 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. Note 2. Summary of Significant Accounting Policies Use of Estimates The preparation of consolidated financial statements in conformity with U.S. GAAP requires management to make certain estimates, judgments and assumptions that affect the reported amounts of assets and liabilities at the date of the financial statements, as well as the reported amounts of revenue and expenses during the reporting periods. These estimates, judgments, and assumptions are based on historical data and experience available at the date of the accompanying consolidated financial statements, as well as various other factors management believes to be reasonable under the circumstances. The Company’s estimates and assumptions may evolve as conditions change. Actual results could differ significantly from these estimates. On an on-going basis, management evaluates its estimates, primarily those related to: (i) revenue recognition criteria, (ii) accounts receivable and allowances for credit losses, (iii) the useful lives of fixed assets and intangible assets, (iv) estimates of tax liabilities, (v) valuation of goodwill and indefinite-lived intangible assets at time of acquisition and on a recurring basis, and (vi) valuation of investments. Principles of Consolidation The accompanying consolidated financial statements include the accounts of the Company. All intercompany transactions and balances have been eliminated in consolidation. Cash and Cash Equivalents The Company considers all highly-liquid investments with original maturities of three months or less at the date of purchase to be cash equivalents. Cash and cash equivalents include cash held in banks and money market accounts. Cash equivalents are stated at fair value. Restricted Cash Restricted cash consists of legally restricted deposits held in conjunction with a lease contract the Company entered into with a third-party landlord. 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 12 months. As of December 31, 2025, and December 31, 2024 the Company had restricted cash of $ 0.1 million. F- 9 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, 2025 2024 2023 (in thousands) Cash and cash equivalents $ 50,193 $ 55,144 $ 97,473 Restricted cash included in Other long-term assets 135 135 — Total cash, cash equivalents, and restricted cash $ 50,328 $ 55,279 $ 97,473 Marketable Securities All marketable debt securities, which consist of U.S. government and agency debt securities, U.S. treasury bills, corporate debt securities, municipal bonds, and Yankee debt securities issued by foreign governments or entities and denominated in U.S. dollars have been classified as “available-for-sale,” and are carried at fair value. Net unrealized gains and losses, net of any related tax effects, are excluded from earnings and are included in other comprehensive income (loss) and reported as a separate component of stockholders’ equity until realized. Realized gains and losses on marketable debt securities are included in interest income, in the accompanying Consolidated Statements of Operations. The cost of any marketable debt securities sold is based on the specific-identification method. The amortized cost of marketable debt securities is adjusted for amortization of premiums and accretion of discounts to maturity. 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, 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. For available-for-sale debt securities, in an unrealized loss, the Company determines whether a credit loss exists. The credit loss is estimated by considering available information relevant to the collectability of the security and information about past events, current conditions, and reasonable and supportable forecasts. The Company compares the present value of cash flows expected to be collected from the security with the amortized cost basis of the security. If the present value of cash flows to be collected is less than the amortized basis of the security, a credit loss exists, and an allowance for credit losses is recorded for the credit loss, limited by the amount of unrealized loss. Changes in the allowance are recorded in the period of changes as credit loss expense. If the Company has an intent to sell, or if it is more likely than not that the Company will be required to sell a debt security in an unrealized loss position before recovery of its amortized cost basis, the Company will write down the security to its fair value and record the corresponding charge as a component of other income, net. Trade Accounts Receivable and Allowance for Credit Losses Trade accounts receivable are stated at the amount the Company expects to collect. The Company maintains an allowance for credit losses for expected uncollectible trade accounts receivable, which is recorded as an offset to trade accounts receivable, and changes in allowance for credit losses are classified as a general and administrative expense in the accompanying Consolidated Statements of Operations. The Company assesses collectability by reviewing trade accounts receivable on a collective basis where similar risk characteristics exist and on an individual basis when it identifies specific customers that have deterioration in credit quality such that they may no longer share similar risk characteristics with the other receivables. In determining the amount of the allowance for credit losses, the Company uses a loss rate model or probability-of-default and loss given default model. Following the loss rate method, expected credit losses are determined based on an estimated historical loss rate. The probability of default method allows the ability to define a point of default and measure credit losses for receivables that have reached the point of default for purposes of calculating the allowance for credit losses. 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 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. F- 10 A roll-forward of the activity in the Company’s allowance for credit losses is as follows: 2025 2024 2023 (in thousands) Allowance for credit losses at beginning of year $ 20,458 $ 25,226 $ 41,205 Current period provision (gain) 7,648 ( 1,730 ) ( 880 ) Write-downs ( 6,921 ) ( 11,155 ) ( 15,099 ) Recoveries of amounts previously charged off 226 8,117 — Allowance for credit losses at end of year $ 21,411 $ 20,458 $ 25,226 Preferred Stock Investment 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. As the preferred stock had the option to be redeemed, the investment was initially recorded as available-for-sale debt securities with changes in fair value recorded in other comprehensive income (loss). On June 19, 2024, the Board of Directors of LAMH approved to spin out certain U.S.-based laboratory and development operations into a separate, privately-held Delaware corporation, Helio Genomics, Inc., or Helio Genomics. The Company received 7.3 million shares of preferred stock of Helio Genomics in connection with this spin-out. Post spin-out, Helio Genomics amended and restated its certificate of incorporation on July 25, 2024, which resulted in a change in stockholder’s rights where the Company no longer holds the right to redeem its preferred stock of Helio Genomics. 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, “ 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. As the preferred stock had the option to be redeemed, the investment was recorded as available-for-sale debt securities with changes in fair value recorded in other comprehensive income (loss). The Company considered a number of factors including, but not limited to: (i) the extent to which the fair value of the investment is less than its amortized cost; (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 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: F- 11 2025 2024 2023 (in thousands) Allowance for credit losses at beginning of year $ — $ — $ — Current period provision — 10,073 — Write-downs — ( 10,073 ) — Allowance for credit losses at end of year $ — $ — $ — Business Combinations 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. When determining the fair values of assets acquired and liabilities assumed, management makes significant estimates and assumptions, especially with respect to intangible assets. Critical estimates in valuing intangible assets include, but are not limited to, expected future cash flows, which includes consideration of future growth and margins, future changes in technology, expected cost and time to develop in-process research and development, brand awareness and discount rates. Fair value estimates are based on the assumptions that management believes a market participant would use in pricing the asset or liability. Fixed Assets Fixed assets are recorded at cost, net of accumulated depreciation and amortization. Depreciation is recorded using the straight-line method over the estimated useful lives of the assets. Leasehold improvements are capitalized and amortized over the shorter of their expected lives or the applicable lease term, including renewal options, if available. Major replacements and improvements are capitalized, while general repairs and maintenance are expensed as incurred. See Note 5, Fixed Assets , for useful lives for each major class of fixed assets. Finite-Lived Intangible Assets Intangible assets, unless determined to be indefinite-lived, are amortized over their estimated useful lives. 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. Impairment of Long-Lived Assets The Company evaluates the carrying amount of its long-lived assets whenever events or changes in circumstances indicate that the assets may not be recoverable. An impairment loss would be recognized when estimated future cash flows expected to result from the use of an asset and its eventual disposition is less than the carrying amount of the asset. Goodwill and Indefinite-Lived Intangibles In-process research & development, or IPR&D, costs are considered to be indefinite-lived until the completion or abandonment of the associated research and development efforts. If and when development is complete, the associated assets would be deemed finite-lived and would then be amortized based on their respective estimated useful lives at that point in time. The Company assesses goodwill and indefinite-lived intangibles for impairment on an annual basis and between annual tests if an event occurs or circumstances change that would more likely than not reduce the fair value of a reporting unit below its carrying amount. The Company may choose to bypass a qualitative assessment of impairment for any reporting unit and proceed directly to performing a quantitative assessment. An impairment loss would be recognized for the amount by which the reporting unit’s carrying amount exceeds its fair 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. 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. The income-based approach incorporates management’s assumptions and judgments regarding economic conditions in the markets in which a company operates and conditions F- 12 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, 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 The Company maintains reagents and other consumables primarily used in testing which are valued at the lower of cost or net realizable value. Cost is determined using actual costs on a first-in, first-out basis. 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 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. 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 Financial instruments that potentially subject the Company to significant concentrations of credit risk consist primarily of cash and cash equivalents, trade accounts receivable, and marketable securities. As of December 31, 2025, substantially all of the Company’s cash and cash equivalents were deposited in accounts at financial institutions, and amounts may exceed federally insured limits. 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 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 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 F- 13 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. Leases 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. Operating and finance lease right-of-use assets, or ROU assets, short-term lease liabilities, and long-term lease liabilities are included in other long-term assets, accrued liabilities, and other long-term liabilities, respectively, in the accompanying Consolidated Balance Sheets. Lease ROU assets represent the Company’s right to use an underlying asset for the lease term. Lease liabilities represent the Company’s obligation to make lease payments arising from the lease. Lease ROU assets and liabilities are recognized at the commencement date based on the present value of lease payments over the lease term, including options to extend the lease when it is reasonably certain that the Company will exercise that option. 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 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 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 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. Software for Internal Use The Company capitalizes certain costs incurred to purchase computer software for internal use. 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 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 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 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 . 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 . Revenue Recognition The Company generates revenue from sales of its testing services. The Company currently receives payments from primarily three different customer types: (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: (Step 1) identifies the contract with the customer, (Step 2) identifies the F- 14 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. The Company bills certain customers for shipping and handling fees incurred by the Company, and shipping and handling fees billed to customers are included in revenue, and such shipping and handling fees incurred are included in cost of revenue in the accompanying Consolidated Statements of Operations. Performance Obligations Insurance 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, 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. Control over testing services is transferred to the Company’s ordering facility at a point in time. Specifically, the Company determined the customer obtains control of the promised service upon delivery of test results. The Company enters into contracts with research institutions to perform testing and research services. Revenue is recognized as each individual test is completed, as the Company has a right to payment upon completion of each test. 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 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. 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 general and administrative expense in the Consolidated Statements of Operations. Historically, contract costs have not been significant to the financial statements. Significant Judgments and Contract Estimates Accounting for insurance contracts includes estimation of the transaction price, defined as the amount the Company expects to be entitled to receive in exchange for providing the services under the contract. 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, 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. Such F- 15 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 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. 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 Contract liabilities are recorded when the Company receives payment or bills prior to completing its obligation to transfer goods or services to a customer, and the Company subsequently recognizes contract liabilities as revenue in the period in which the applicable revenue recognition criteria, as described above, are met. Customer Deposit Customer deposit in the accompanying Consolidated Balance Sheets consists of payments received from customers in excess of their outstanding trade accounts receivable balances. These deposits will be offset against future testing receivables or refunded to the customers. Overhead Expenses The Company allocates overhead expenses, such as facility, rent, and utilities, to cost of revenue and operating expense categories based on square footage. As a result, an overhead expense allocation is reflected in cost of revenue and each operating expense category. Cost of Revenue Cost of revenue reflects the aggregate costs incurred in delivering test results and consists of: personnel costs, including salaries, employee benefit costs, bonuses, and equity-based compensation expenses; costs of laboratory supplies; depreciation of laboratory equipment; 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 and treatments and our product candidates. These costs consist of: personnel costs, including salaries, employee benefit costs, bonuses, and equity-based compensation expenses; laboratory supplies; consulting costs and allocated overhead. The Company expenses all research and development costs in the periods in which they are incurred. Selling and Marketing Expenses Selling and marketing expenses consist of: personnel costs, including salaries, employee benefit costs, bonuses, and equity-based compensation expenses; customer service expenses; direct marketing expenses; educational and promotional expenses; market research and analysis and allocated overhead. The Company expenses all selling and marketing costs as incurred. General and Administrative Expenses General and administrative expenses include executive, finance and accounting, legal, and human resources functions. These expenses consist of: personnel costs, including salaries, employee benefit costs, bonuses, and equity-based compensation expenses; audit and legal expenses; consulting costs and allocated overhead. The Company expenses all general and administrative expenses as incurred. Income Taxes F- 16 Income taxes are accounted for under the asset and liability method. The Company provides for federal, state and foreign income taxes currently payable, as well as for taxes deferred due to timing differences between reporting income and expenses for financial statement purposes versus tax purposes. Deferred tax assets and liabilities are recognized for the future tax consequences attributable to temporary differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases. Deferred tax assets and liabilities are measured using enacted income tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. The effect of a change in income tax rates is recognized as income or expense in the period that includes the enactment date. The Company recognizes the effect of income tax positions only if those positions are more likely than not to be sustained. Recognized income tax positions are measured at the largest amount with a greater than 50% likelihood of being realized. Changes in recognition or measurement are reflected in the period in which the change in judgment occurs. For income tax positions where it is not more likely than not that a tax benefit will be sustained, the Company does not recognize a tax benefit in its consolidated financial statements. The Company records interest and penalties related to uncertain tax positions, if applicable, as a component of income tax expense. The Company releases income tax effects from other comprehensive income (loss) under the portfolio method. In 2024, the Company reclassified certain investments out of the available-for-sale debt security category. This reclassification resulted in the removal of unrealized gains or losses previously recorded in other comprehensive income (loss). The tax effects of these adjustments have been recognized, as a benefit of $ 2.1 million, in net loss to avoid stranded tax effects in other comprehensive income (loss). Equity-Based Compensation 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 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 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 The Company translates the assets and liabilities of its non-U.S. dollar functional currency subsidiaries into U.S. dollars using exchange rates in effect at the end of each period. Expenses for these subsidiaries are translated using rates that approximate those in effect during the period. 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. 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 Comprehensive (loss) income is comprised of net (loss) income and other comprehensive (loss) income. Other comprehensive (loss) income consists of net unrealized gain or loss on available-for-sale debt securities, net of tax, and foreign currency translation adjustments from its subsidiaries not using the U.S. dollar as their functional currency. 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 F- 17 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 Basic net income or loss per common share is computed by dividing the net income or loss attributable to common stockholders by the weighted- average number of common shares outstanding during the period. Diluted net income or loss per common share is computed by dividing the net income or loss attributable to common stockholders by the weighted-average number of common shares and dilutive common share equivalents outstanding during the period. Disaggregation of Revenue The Company classifies its customers into three payor types: (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. Year Ended December 31, 2025 2024 2023 (in thousands) Revenue by payor Institutional $ 184,601 $ 154,733 $ 134,191 Insurance 130,253 123,924 151,946 Patient 7,817 4,813 3,076 Total revenue $ 322,671 $ 283,470 $ 289,213 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. Any changes in variable consideration estimates that affect transactions are accounted for on a cumulative catch-up basis. Contract Balances 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 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. Contract liabilities are recorded when the Company receives payment prior to completing its obligation to transfer goods or services to a customer. Contract liabilities are included in the Consolidated Balance Sheets. Revenues of $ 0.4 million , $ 2.5 million and $ 2.2 million for the years ended December 31, 2025, 2024, and 2023, respectively, related to contract liabilities at the beginning of the respective periods were recognized. Transaction Price Allocated to Future Performance Obligations ASC 606 issued by the Financial Accounting Standards Board, or FASB, requires that the Company disclose the aggregate amount of transaction price that is allocated to performance obligations that have not yet been satisfied as of December 31, 2025. 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 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. F- 18 Prior Period Reclassifications 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 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. Adopted In December 2023, the FASB issued ASU 2023-09, Income Taxes (Topic 740): Improvement to Income Tax Disclosures . 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 . Issued In November 2024, the FASB issued ASU 2024-03, Income Statement-Reporting Comprehensive Income-Expense Disaggregation Disclosures (Subtopic 220-40): Disaggregation of Income Statement Expenses . This update requires disclosure in the notes to financial statements of specified information about certain costs and expenses. Amendments in this update are effective for annual periods beginning after December 15, 2026, and interim reporting periods beginning after December 15, 2027. Early adoption is permitted. 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. F- 19 Note 3. Equity and Debt Securities The Company’s equity and debt securities consisted of the following: December 31, 2025 Amortized Cost Basis Unrealized Gains Unrealized Losses Aggregate Fair Value (in thousands) Equity securities Long-term Preferred stock of privately-held companies $ 15,001 $ — $ — $ 15,001 Total equity securities 15,001 — — 15,001 Available-for-sale debt securities Short-term U.S. government debt securities 159,875 748 ( 1 ) 160,622 U.S. agency debt securities 86,786 133 ( 1 ) 86,918 Corporate debt securities 37,333 157 ( 16 ) 37,474 Yankee debt securities 500 — ( 5 ) 495 Municipal bonds 375 — — 375 Money market accounts 18,398 — — 18,398 Less: Cash equivalents ( 18,398 ) — — ( 18,398 ) Total debt securities due within 1 year 284,869 1,038 ( 23 ) 285,884 After 1 year through 5 years U.S. government debt securities 284,857 2,821 ( 67 ) 287,611 U.S. agency debt securities 70,567 123 ( 51 ) 70,639 Corporate debt securities 9,922 85 — 10,007 Municipal bonds 1,015 1 ( 4 ) 1,012 Total debt securities due after 1 year through 5 years 366,361 3,030 ( 122 ) 369,269 Total available-for-sale debt securities 651,230 4,068 ( 145 ) 655,153 Total equity and debt securities $ 666,231 $ 4,068 $ ( 145 ) $ 670,154 F- 20 December 31, 2024 Amortized Cost Basis Unrealized Gains Unrealized Losses Aggregate Fair Value (in thousands) Equity securities Long-term Preferred stock of privately-held companies $ 24,927 $ — $ — $ 24,927 Total equity securities 24,927 — — 24,927 Available-for-sale debt securities Short-term U.S. government debt securities 75,054 136 ( 25 ) 75,165 U.S. agency debt securities 65,490 72 ( 23 ) 65,539 U.S. treasury bills 44,366 19 ( 2 ) 44,383 Corporate debt securities 19,177 12 ( 50 ) 19,139 Municipal bonds 3,719 1 ( 7 ) 3,713 Money market accounts 19,720 — — 19,720 Less: Cash equivalents ( 24,696 ) ( 1 ) — ( 24,697 ) Total debt securities due within 1 year 202,830 239 ( 107 ) 202,962 After 1 year through 5 years U.S. government debt securities 379,060 565 ( 2,283 ) 377,342 U.S. agency debt securities 144,398 57 ( 1,507 ) 142,948 Corporate debt securities 47,801 114 ( 150 ) 47,765 Municipal bonds 1,820 2 ( 4 ) 1,818 Yankee debt securities 501 — ( 23 ) 478 Total debt securities due after 1 year through 5 years 573,580 738 ( 3,967 ) 570,351 Total available-for-sale debt securities 776,410 977 ( 4,074 ) 773,313 Total equity and debt securities $ 801,337 $ 977 $ ( 4,074 ) $ 798,240 F- 21 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 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 subsequent impairment of $ 9.9 million in 2025, and a credit loss of $ 10.1 million recorded in 2024 related to Helio Health. Note 4. Fair Value Measurements The authoritative guidance on fair value measurements establishes a framework with respect to measuring assets and liabilities at fair value on a recurring basis and non-recurring basis. Under the framework, fair value is defined as the exit price, or the amount that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants, as of the measurement date. The framework also establishes a three-tier hierarchy for inputs used in measuring fair value that maximizes the use of observable inputs and minimizes the use of unobservable inputs by requiring that the most observable inputs be used when available. Observable inputs are inputs market participants would use in valuing the asset or liability and are developed based on market data obtained from sources independent of the Company. Unobservable inputs are inputs that reflect the Company’s assumptions about the factors market participants would use in valuing the asset or liability and are developed based on the best information available in the circumstances. The hierarchy consists of the following three levels: Level 1: Inputs are quoted prices (unadjusted) in active markets for identical assets or liabilities that the reporting entity can access at the measurement date. Level 2: Inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly or indirectly. Level 3: Inputs are unobservable for the asset or liability. The following tables present information about the Company’s financial assets measured at fair value on a recurring basis, based on the three-tier fair value hierarchy: December 31, 2025 Total Level 1 Level 2 Level 3 (in thousands) Equity securities, debt securities and cash equivalents U.S. government debt securities $ 448,233 $ — $ 448,233 $ — U.S. agency debt securities 157,557 — 157,557 — Corporate debt securities 47,481 — 47,481 — Money market accounts 18,398 18,398 — — Preferred stock of privately-held companies 15,001 — — 15,001 Municipal bonds 1,387 — 1,387 — Yankee debt securities 495 — 495 — Total equity securities, debt securities and cash equivalents $ 688,552 $ 18,398 $ 655,153 $ 15,001 F- 22 December 31, 2024 Total Level 1 Level 2 Level 3 (in thousands) Equity securities, debt securities and cash equivalents U.S. government debt securities $ 452,507 $ — $ 452,507 $ — U.S. agency debt securities 208,487 — 208,487 — Corporate debt securities 66,904 — 66,904 — U.S. treasury bills 44,383 44,383 — — Preferred stock of privately-held companies 24,927 — — 24,927 Money market accounts 19,720 19,720 — — Municipal bonds 5,531 — 5,531 — Yankee debt securities 478 — 478 — Total equity securities, debt securities and cash equivalents $ 822,937 $ 64,103 $ 733,907 $ 24,927 The Company’s Level 1 assets include U.S. treasury bills and money market instruments and are valued based upon observable market prices. Level 2 assets consist of U.S. government and U.S. agency debt securities, municipal bonds, corporate debt securities and Yankee debt securities. Level 2 securities are valued based upon observable inputs that include reported trades, broker/dealer quotes, bids and offers. 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 . Note 5. Fixed Assets Major classes of fixed assets consisted of the following: Useful Lives December 31, 2025 December 31, 2024 (in thousands) Medical lab equipment 5 months to 13 Years $ 60,691 $ 57,541 Building improvements 6 months to 39 Years 33,198 27,924 Building 25 to 39 Years 21,689 21,689 Computer hardware 1 to 5 Years 8,640 7,328 Aircraft 7 Years 6,400 6,400 Computer software 1 to 10 Years 6,300 7,214 Leasehold improvements Shorter of lease term or estimated useful life 4,473 3,323 Furniture and fixtures 1 to 11 Years 4,128 4,109 Land improvements 5 to 15 Years 938 904 Automobile 3 to 8 Years 628 581 General equipment 5 Years 226 108 Land 17,347 17,347 Assets not yet placed in service 5,836 2,792 Total 170,494 157,260 Less: Accumulated depreciation ( 57,945 ) ( 51,711 ) Fixed assets, net $ 112,549 $ 105,549 Depreciation expense on fixed assets totaled $ 15.7 million , $ 16.4 million and $ 17.5 million for the years ended December 31, 2025, 2024, and 2023, respective ly. F- 23 Note 6. Other Significant Balance Sheet Accounts Other current assets consisted of the following: December 31, 2025 December 31, 2024 (in thousands) Reagents and supplies 10,604 8,384 Marketable securities interest receivable 5,714 6,241 Prepaid expenses 5,100 6,629 Other receivable 1,134 1,768 Total $ 22,552 $ 23,022 Accrued liabilities consisted of the following: December 31, 2025 December 31, 2024 (in thousands) Accrued legal liabilities $ 14,905 $ 1,101 Vacation accrual 5,236 4,088 Accrued bonus and commission 5,224 5,803 Payroll liabilities 4,383 8,210 Operating lease liabilities - short term 1,462 1,443 Other accrued liabilities 2,847 3,634 Total $ 34,057 $ 24,279 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: December 31, 2025 December 31, 2024 (in thousands) Operating lease liabilities, long term $ 3,781 $ 4,120 Notes payable, long term 1,958 2,493 Other long-term liabilities 1,885 360 Total $ 7,624 $ 6,973 Note 7. Reportable Segment and Geographic Information The Company has two distinct reportable segments. The laboratory services operating segment offers technical laboratory and testing services and professional interpretation of laboratory results by licensed physicians who specialize in pathology and oncology. The therapeutic development operating segment is a pharmaceutical research and development entity. The Company’s Chief Executive Officer serves as its Chief Operating Decision Maker , or CODM. The CODM oversees the Company’s operations and evaluates financial data for its two operating segments separately to make resource allocation decisions. 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. GAAP. 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 . F- 24 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. There is no inter-segment revenue and operating income or loss. The Company did not allocate income tax by segment. Information regarding the Company’s operations and assets for its reporting segments as well as geographic information are as follows, all dollars are in thousands: Laboratory Services Therapeutic Development Total Fiscal year ended December 31, 2025 Revenue $ 322,224 $ 447 $ 322,671 Less: Adjusted cost of revenue 184,964 5 184,969 Adjusted research and development 21,637 19,037 40,674 Adjusted selling and marketing 40,350 5 40,355 Adjusted general and administrative 82,485 1,247 83,732 Total adjusted operating loss $ ( 7,212 ) $ ( 19,847 ) $ ( 27,059 ) Laboratory Services Therapeutic Development Total Fiscal year ended December 31, 2024 Revenue $ 283,470 $ — $ 283,470 Less: Adjusted cost of revenue 168,456 — 168,456 Adjusted research and development 18,213 15,632 33,845 Adjusted selling and marketing 32,339 — 32,339 Adjusted general and administrative 69,374 928 70,302 Total adjusted operating loss $ ( 4,912 ) $ ( 16,560 ) $ ( 21,472 ) Laboratory Services Therapeutic Development Total Fiscal year ended December 31, 2023 Revenue $ 289,213 $ — $ 289,213 Less: Adjusted cost of revenue 175,008 — 175,008 Adjusted research and development 19,577 6,990 26,567 Adjusted selling and marketing 36,503 — 36,503 Adjusted general and administrative 74,982 681 75,663 Total adjusted operating loss $ ( 16,857 ) $ ( 7,671 ) $ ( 24,528 ) F- 25 Year Ended December 31, 2025 2024 2023 Reconciliation of “adjusted operating loss” to “loss before income taxes” Adjusted operating loss $ ( 27,059 ) $ ( 21,472 ) $ ( 24,528 ) Less (add): Equity-based compensation 39,582 44,481 42,922 Professional liability expense 14,500 — — Acquisition-related costs 1,924 — — Amortization of intangible assets 8,031 7,965 7,845 Goodwill impairment loss — — 120,234 Interest income ( 30,919 ) ( 31,304 ) ( 21,612 ) Interest expense 75 ( 170 ) 488 Impairment loss 9,926 10,073 — Other income, net ( 153 ) ( 561 ) ( 320 ) Total loss before income taxes $ ( 70,025 ) $ ( 51,956 ) $ ( 174,085 ) Significant items by segment excluded from the adjusted operating loss: Year Ended December 31, 2025 2024 2023 Equity-based compensation Laboratory services $ 31,567 $ 36,951 $ 35,649 Therapeutic development 8,015 7,530 7,273 Total $ 39,582 $ 44,481 $ 42,922 Revenue by segment: Year Ended December 31, 2025 2024 2023 Revenue Laboratory services: Precision diagnostics (1) $ 190,472 $ 167,745 $ 131,990 Anatomic pathology 106,442 97,080 104,655 BioPharma services 25,310 16,338 25,416 COVID-19 — 2,307 27,152 Total laboratory services 322,224 283,470 289,213 Therapeutic development: BioPharma services 447 — — Total therapeutic development 447 — — Total $ 322,671 $ 283,470 $ 289,213 (1) Beginning in 2025, COVID-19 revenue is grouped with precision diagnostics, which was insignificant in 2025. Depreciation and amortization by segment: Year Ended December 31, 2025 2024 2023 Depreciation and amortization Laboratory services $ 23,552 $ 24,240 $ 25,453 Therapeutic development 571 688 690 Total $ 24,123 $ 24,928 $ 26,143 F- 26 Interest income and expense by segment: Year Ended December 31, 2025 2024 2023 Interest income and expense Laboratory services Interest income $ 30,919 $ 31,304 $ 21,612 Interest expense ( 75 ) 170 ( 488 ) Therapeutic development Interest income — — — Interest expense — — — Total $ 30,844 $ 31,474 $ 21,124 Total assets by segment: December 31, 2025 December 31, 2024 Assets Laboratory services $ 1,096,379 $ 1,131,117 Therapeutic development 117,146 88,847 Total $ 1,213,525 $ 1,219,964 Geographic distribution of revenue: Year Ended December 31, 2025 2024 2023 Revenue United States $ 296,552 $ 259,132 $ 268,977 Foreign China 12,906 12,638 11,446 Other countries 13,213 11,700 8,790 Total foreign 26,119 24,338 20,236 Total $ 322,671 $ 283,470 $ 289,213 Geographic distribution of property, plant and equipment, net: December 31, 2025 December 31, 2024 Fixed assets United States $ 106,250 $ 98,992 Foreign China 4,692 4,616 Other countries 1,607 1,941 Total foreign 6,299 6,557 Total $ 112,549 $ 105,549 Note 8. Debt, Commitments and Contingencies Debt Notes payable as of December 31, 2025, consisted of $ 2.4 million of notes payable related to an installment sale contract the Company entered in February 2022 for a building. 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 $ 0.5 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 2025, 2024, and 2023 were not significant. Operating and Finance Leases See Note 9, Leases , for further information. F- 27 Contingencies From time to time, the Company may be subject to legal proceedings and claims arising in the ordinary course of business. As previously disclosed in the Company’s periodic reports filed pursuant to the Securities Exchange Act of 1934, as amended, or the Exchange Act, the Company has received a Civil Investigative Demand, or CID, issued by the U.S. Department of Justice, or the DOJ, pursuant to the False Claims Act related to its investigation of allegations of medically unnecessary laboratory testing, improper billing for laboratory testing, and remuneration received or provided in violation of the Anti-Kickback Statute and the Stark Law. Among other things, this CID requests information and records relating to certain of the Company’s customers named in this CID. 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. The Company recorded approximately $ 548.9 million of reimbursements from HRSA under the Uninsured Program during the years ended December 31, 2022, 2021, and 2020. 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 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. 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. 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. 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. F- 28 Note 9. Leases Lessee 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 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 , some of which, were acquired in business combinations. The Company does not have any leases with variable lease payments. The Company’s operating lease agreements do not contain any residual value guarantees, material restrictive covenants, bargain purchase options or asset retirement obligations. The Company’s headquarters are located in El Monte, California, which is comprised of various corporate offices and a laboratory certified under the Clinical Laboratory Improvement Amendments of 1988, or CLIA, accredited by the College of American Pathologists, or CAP, and licensed by the State of California Department of Public Health. Other CLIA-certified laboratories are located in Coppell, Texas; Needham, Massachusetts; Phoenix, Arizona; 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: December 31, 2025 December 31, 2024 (in thousands) Operating lease ROU asset, net $ 4,961 $ 5,395 Operating lease liabilities, short term $ 1,462 $ 1,443 Operating lease liabilities, long term $ 3,781 $ 4,120 Finance lease ROU asset, net $ 339 $ 771 Finance lease liabilities, short term $ 360 $ 398 Finance lease liabilities, long term $ — $ 360 The following was operating and finance lease expense: Year Ended December 31, 2025 2024 2023 (in thousands) Operating lease cost $ 1,994 $ 4,176 $ 6,875 Finance lease cost: Amortization of ROU assets 386 539 758 Interest on lease liabilities 18 39 80 Short-term lease cost 1,864 1,346 1,758 Total lease cost $ 4,262 $ 6,100 $ 9,471 Supplemental information related to leases was the following: December 31, 2025 Weighted-average remaining lease term, operating leases 5.26 Weighted-average discount rate, operating leases 5.87 % Weighted-average remaining lease term, finance lease 1.00 Weighted-average discount rate, finance lease 3.21 % F- 29 The following is a maturity analysis of operating and finance lease liabilities using undiscounted cash flows on an annual basis with renewal periods included: Operating Leases Finance Lease (in thousands) Year ending December 31, 2026 1,724 366 2027 1,167 — 2028 682 — 2029 557 — 2030 567 — Thereafter 1,517 — Total lease payments 6,214 366 Less imputed interest ( 971 ) ( 6 ) Total $ 5,243 $ 360 Note 10. Equity-Based Compensation The Company has included equity-based compensation expense as part of cost of revenue and operating expenses in the accompanying Consolidated Statements of Operations as follows: Year Ended December 31, 2025 2024 2023 (in thousands) Cost of revenue $ 6,827 $ 7,799 $ 9,749 Research and development 13,231 14,971 14,873 Selling and marketing 3,016 3,907 4,964 General and administrative 16,508 17,804 13,336 Total $ 39,582 $ 44,481 $ 42,922 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. F- 30 Award Activity Option Awards The following table summarizes activity for options to acquire shares of the Company’s common stock in the years ended December 31, 2025, 2024, and 2023: Number of Shares Subject to Options (in thousands) Weighted- Average Exercise Price Weighted- Average Grant Date Fair Value Weighted- Average Remaining Contractual Life (in years) Aggregate Intrinsic Value (in thousands) (1) Balance at December 31, 2022 212 $ 4.21 3.7 $ 5,420 Granted 20 $ 33.14 $ 24.85 Exercised ( 9 ) $ 0.38 $ 10.76 Canceled — $ — $ — Balance at December 31, 2023 223 $ 6.96 3.3 $ 4,906 Granted 5 $ 22.50 $ 16.42 Exercised ( 133 ) $ 0.38 $ 2.58 Canceled — $ — $ — Balance at December 31, 2024 95 $ 17.07 4.7 $ 134 Granted 6 $ 20.04 $ 14.26 Exercised ( 2 ) $ 0.38 $ 4.24 Canceled — $ — $ — Balance at December 31, 2025 99 $ 17.68 6.2 $ 852 Exercisable as of December 31, 2025 81 $ 14.98 3.3 (1) Aggregate intrinsic value is calculated as the difference between (i) the exercise price of options and (ii) the market value of the Company’s common stock as of the applicable date. The total fair value of options that vested during the years ended December 31, 2025, 2024, and 2023 was $ 0.3 million , $ 0.3 million and $ 0.2 million , respectively. As of December 31, 2025, the remaining unrecognized compensation expense related to all outstanding option awards was $ 0.3 million and is expected to be recognized over a weighted-average period of 1.8 years. RSU Awards RSUs are awards that entitle the holder to receive shares of the Company’s common stock upon satisfaction of vesting conditions. Each RSU represents the contingent right to receive one share of the Company’s common stock upon vesting and settlement. F- 31 The following table summarizes activity for RSUs relating to shares of the Company’s common stock in the years ended December 31, 2025, 2024, and 2023: Number of Shares (in thousands) Weighted-Average Grant Date Fair Value Balance at December 31, 2022 2,631 $ 47.76 Granted 853 $ 34.38 Vested and settled ( 1,066 ) $ 43.84 Forfeited ( 208 ) $ 54.72 Balance at December 31, 2023 2,210 $ 43.84 Granted 1,142 $ 23.47 Vested and settled ( 1,004 ) $ 43.66 Forfeited ( 142 ) $ 37.39 Balance at December 31, 2024 2,206 $ 33.85 Granted 1,166 $ 23.08 Vested and settled ( 1,049 ) $ 43.66 Forfeited ( 90 ) $ 37.39 Balance at December 31, 2025 2,233 $ 33.85 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. Fair Value Assumptions for Option Awards The Company uses the Black-Scholes option-pricing model to measure the fair value of option awards. The Black-Scholes option-pricing model requires the input of various assumptions, each of which is subjective and requires significant judgment. These assumptions include the following: • Expected Term. The expected term represents the period that the Company’s equity-based awards are expected to be outstanding. The Company determines the expected term assumption based on the vesting terms, exercise terms and contractual terms of the options. • Risk-Free Interest Rate. The Company determines the risk-free interest rate by using the equivalent to the expected term based on the U.S. Treasury yield curve in effect as of the date of grant. • Dividend Yield. The assumed dividend yield is based on the Company’s expectation that it will not pay dividends in the foreseeable future, which is consistent with its history of not paying dividends. • Expected Volatility. The Company calculates expected volatility based on historical volatility data of its stock that is publicly traded. • Forfeiture Rate. The Company accounts for forfeitures as they occur. Awards to Employees The table below sets forth the weighted-average assumptions used in the Black-Scholes option-pricing model to estimate the fair value of options to acquire shares of the Company’s common stock granted to employees during the years ended December 31, 2025, 2024, and 2023. Year Ended December 31, 2025 2024 2023 Expected term (in years) 6.1 6.1 6.1 Risk-free interest rates 4.1 % 4.3 % 3.8 % Dividend yield — — — Expected volatility 79.1 % 82.2 % 87.3 % F- 32 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. 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. Note 11. Income Taxes (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 loss before income taxes: Year Ended December 31, 2025 2024 2023 (in thousands) U.S. loss before income taxes $ ( 61,759 ) $ ( 46,813 ) $ ( 147,464 ) Foreign loss before income taxes ( 8,266 ) ( 5,143 ) ( 26,621 ) Loss before income taxes $ ( 70,025 ) $ ( 51,956 ) $ ( 174,085 ) (Benefit from) provision for income taxes consisted of the following: Year Ended December 31, 2025 2024 2023 (in thousands) Current Federal $ ( 6,470 ) $ ( 2,441 ) $ ( 5,590 ) State ( 965 ) ( 2,107 ) ( 4,722 ) Foreign 175 148 — Total Current ( 7,260 ) ( 4,400 ) ( 10,312 ) Deferred Federal ( 7,580 ) ( 10,313 ) ( 12,771 ) State 197 ( 734 ) 4,100 Foreign ( 1,113 ) 602 ( 188 ) Change in valuation allowance 7,362 6,709 20,325 Total Deferred ( 1,134 ) ( 3,736 ) 11,466 (Benefit from) provision for income taxes $ ( 8,394 ) $ ( 8,136 ) $ 1,154 F- 33 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 Amount Percent Tax provision at federal statutory rate $ ( 14,705 ) 21.00 % State and local income taxes, net of federal benefit (1) 3,133 - 4.47 % Foreign tax effects China Foreign tax rate differential 835 - 1.19 % NOL carryforward ( 496 ) 0.71 % Valuation allowance 496 - 0.71 % Other 175 - 0.25 % Australia Foreign tax rate differential 888 - 1.27 % NOL carryforward 1,609 - 2.30 % Valuation allowance ( 1,609 ) 2.30 % Effect of cross-border tax laws: 326 - 0.47 % Tax Credits Research and development credits ( 3,913 ) 5.59 % IRA tax credits ( 7,035 ) 10.05 % Change in valuation allowance 3,727 - 5.32 % Nontaxable or nondeductible items Equity-based compensation 3,465 - 4.95 % 162(m) nondeductible compensation 3,348 - 4.78 % Section 280C adjustment 647 - 0.92 % Other 566 - 0.81 % Change in unrecognized tax benefits 565 - 0.81 % Return to provision adjustments Federal true-ups 1,604 - 2.29 % State true-ups ( 2,020 ) 2.88 % Effective tax rate $ ( 8,394 ) 11.99 % (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. F- 34 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, 2024 2023 Tax provision at federal statutory rate 21.00 % 21.00 % State taxes - 1.70 % 0.22 % Equity-based compensation - 6.79 % - 1.65 % Nondeductible compensation - 162(m) - 2.10 % - 0.55 % Goodwill impairment 0.00 % - 10.62 % Amended state tax refunds 8.29 % 0.00 % Federal return to provision - 2.07 % - 0.21 % State return to provision - 0.78 % 3.41 % Other permanent differences 1.83 % - 1.15 % Uncertain tax positions - 1.14 % 0.18 % Research & development credit 6.95 % 3.19 % IRA tax credit 4.82 % 0.00 % Foreign tax rate differential - 1.68 % - 2.42 % Stranded tax effect 4.25 % 0.00 % Foreign NOL carryforward - 1.19 % 0.11 % Other - 0.29 % 0.00 % Change in valuation allowance - 13.29 % - 12.20 % Effective tax rate 16.11 % - 0.69 % 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, 2025 Federal $ 99,601 State and local ( 3,180 ) Foreign 24 $ 96,445 F- 35 The following table summarizes the elements of the deferred tax assets (liabilities). Net deferred tax assets are included in other long-term assets in the Consolidated Balance Sheets. As of December 31, 2025 2024 (in thousands) Deferred tax assets Accrued vacation and other accrued expenses $ 6,133 $ 1,775 Provision for credit losses 3,460 2,990 Net operating losses 20,557 11,875 Equity-based compensation 1,478 2,022 State income taxes 272 284 Excess tax basis in FF Gene Biotech net assets 921 1,527 Lease liability 613 789 Unrealized gain/loss on available-for-sale debt securities — 757 Research and development credits 6,405 2,762 Section 174 research & experimental expenditures 15,038 25,626 Equity loss in investment 5,478 2,965 Other 10 74 Gross deferred tax assets 60,365 53,446 Less: Valuation allowance ( 27,598 ) ( 22,702 ) Net deferred tax assets 32,767 30,744 Deferred tax liabilities Intangible assets 29,717 29,540 Depreciation 7,963 6,198 Right of use asset 594 767 Unrealized gain/loss on available-for-sale debt securities 975 — Other 454 609 Total deferred tax liabilities 39,703 37,114 Net deferred tax liabilities $ ( 6,936 ) $ ( 6,370 ) As of December 31, 2025, the Company has $ 62.9 million estimated federal net operating loss, or NOL, carryforwards and estimated state NOL carryforwards of $ 86.5 million . The Company’s state NOLs are scheduled to begin expiring in 2026 . 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. ASC 740-10-30-5 requires that deferred income tax assets be reduced by a valuation allowance if it is more likely than not that some or all of the deferred income tax assets will not be realized. The Company has evaluated the realizability of its deferred tax assets and has concluded that it is more likely than not that the Company may not realize the benefit of certain deferred tax assets and, accordingly, has established a full valuation allowance of $ 27.6 million on its deferred tax assets as of December 31, 2025. 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 $ 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. 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 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. The Company’s tax returns are subject to statutes of limitations that vary by jurisdiction. As of December 31, 2025 , the Company remains subject to income tax examinations in the United States, and various states for tax years 2020 through 2025 . 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. F- 36 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. A reconciliation of the Company’s gross unrecognized tax benefits is as follows: Year Ended December 31, 2025 2024 2023 (in thousands) Balance at beginning of year $ 4,176 $ 5,833 $ 9,742 Increases to prior year positions ( 288 ) ( 2,692 ) ( 3,845 ) Increases for current year positions 1,783 1,035 ( 64 ) Balance at end of year $ 5,671 $ 4,176 $ 5,833 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. Although it is possible that the amount of unrecognized benefits with respect to our uncertain tax positions will increase or decrease in the next 12 months, the Company does not expect material changes. While the Company believes it has adequately provided for all tax positions, amounts asserted by taxing authorities could differ from the Company’s accrued positions. Accordingly, additional provisions on federal, state and foreign tax-related matters could be recorded in future periods as revised estimates are settled or otherwise resolved. 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 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. 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. F- 37 Note 12. Income (Loss) per Share The following is a reconciliation of the basic and diluted loss per share computations: Year Ended December 31, 2025 2024 2023 (in thousands) Net loss attributable to Fulgent $ ( 60,513 ) $ ( 42,708 ) $ ( 167,825 ) Weighted-average common shares - outstanding, basic 30,777 30,235 29,784 Weighted-average effect of dilutive securities: Stock options — — — Restricted stock units — — — Contingently issuable shares — — — Weighted-average common shares - outstanding, diluted 30,777 30,235 29,784 Loss per share: Basic $ ( 1.97 ) $ ( 1.41 ) $ ( 5.63 ) Diluted $ ( 1.97 ) $ ( 1.41 ) $ ( 5.63 ) 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, 2025 2024 2023 (in thousands) Stock options 99 95 224 Restricted stock units 2,233 2,206 2,210 Contingently issuable shares 293 — 186 The anti-dilutive shares described above were calculated using the treasury stock method. 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. In May 2024, the Company released the remaining Pharma Hold Back Shares such that no shares remain contingently issuable in connection with the business combination of Fulgent Pharma. Note 13. Retirement Plans The Company offers a 401(k) retirement savings plan, or the 401(k) Plan, for its employees, including its executive officers, who satisfy certain eligibility requirements. The Internal Revenue Code of 1986, as amended, allows eligible employees to defer a portion of their compensation, within prescribed limits, on a pre-tax basis through contributions to the 401(k) Plan. The Company matches contributions to the 401(k) Plan based on the amount of salary deferral contributions the participant makes to the 401(k) Plan. The Company will match up to 4 % of a n employee’s compensation that the employee contributes to their 401(k) Plan account. Total Company matching contributions to the 401(k) Plan were $ 4.1 million , $ 3.8 million , and $ 3.2 million in the years ended December 31, 2025, 2024, and 2023, respectiv ely. Note 14. Related Party 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 F- 38 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 $ 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. Note 15. 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). F- 39 The following tables summarize the consideration and the amounts of the assets acquired and liabilities assumed recognized at the acquisition date: Amounts (in thousands) Considerations Cash paid $ 14,322 Cash held back 1,887 Settlement of pre-existing accounts payable ( 290 ) Contingent consideration 5,731 Total considerations $ 21,650 Recognized amounts of identifiable assets acquired and liabilities assumed Cash and cash equivalents $ 18,097 Trade accounts receivable 7 Other current assets 97 ROU assets - operating 612 Other long-term assets 15 Identifiable intangible assets 6,200 Accounts payable ( 75 ) Accrued liabilities ( 591 ) Operating lease liabilities ( 612 ) Income tax payable ( 1,562 ) Other long-term liabilities ( 3,563 ) Recognized amounts of identifiable assets acquired and liabilities assumed, net 18,625 Goodwill 3,025 Total $ 21,650 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 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 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 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 F- 40 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. Note 16. 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, 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, 2025, a total of approximately $ 139.6 million re mained available for future repurchases of its common stock under the stock repurchase program. Note 17. Goodwill and Intangible Assets 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: 2025 2024 (in thousands) Balance at beginning of year $ 22,055 $ 22,055 Impairment — — Acquisition 3,025 — Balance at the end of year $ 25,080 $ 22,055 F- 41 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: Weighted-Average Amortization Period December 31, 2025 December 31, 2024 (in thousands) Laboratory Services Customer relationships 13 Years $ 83,135 $ 83,088 Less: accumulated amortization ( 25,633 ) ( 19,079 ) Customer relationships, net 57,502 64,009 Royalty-free technology 10 Years 5,291 5,069 Less: accumulated amortization ( 2,469 ) ( 1,859 ) Royalty-free technology, net 2,822 3,210 Trade name 8 Years 3,790 3,790 Less: accumulated amortization ( 1,896 ) ( 1,401 ) Trade name, net 1,894 2,389 Laboratory information system platform 5 Years 1,860 1,860 Less: accumulated amortization ( 1,643 ) ( 1,271 ) Laboratory information system platform, net 217 589 In-place lease intangible assets 5 Years 360 360 Less: accumulated amortization ( 255 ) ( 186 ) In-place lease intangible assets, net 105 174 Purchased patent 10 Years 29 27 Less: accumulated amortization ( 14 ) ( 10 ) Purchased patent, net 15 17 Total 62,555 70,388 Therapeutic Development Customer relationships 18 Years 2,300 — Less: accumulated amortization ( 64 ) — Customer relationships, net 2,236 — In-process research & development n/a 68,490 64,590 Total 70,726 64,590 Total intangible assets, net $ 133,281 $ 134,978 Acquisition-related intangibles included in the above tables are generally finite-lived and are carried at cost less accumulated amortization, except for IPR&D, which is related to the acquisition of Fulgent Pharma in 2022 and has an indefinite life until research and development efforts are completed or abandoned. 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 . F- 42 Amortization of intangible assets was $ 8.0 million , $ 8.0 million and $ 7.8 million in 2025, 2024, and 2023, respectively. Based on the carrying value of intangible assets recorded as of December 31, 2025, and assuming no subsequent impairment of the underlying assets, the annual amortization expense for intangible assets is expected to be as follows: Amounts (in thousands) Year ending December 31, 2026 $ 7,808 2027 7,346 2028 7,311 2029 7,054 2030 6,925 Thereafter 28,347 Total $ 64,791 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. 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. Note 18. 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. Common stock 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. F- 43 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. F- 44