Fulgent Genetics

We believe our existing facilities are adequate for our current and expected near-term needs and additional space would be available on commercially reasonable terms if required.

• Our mix of customers fluctuates from period to period, and our revenue is often concentrated among a single large customer or a small number of customers, and the loss of or a reduction in sales to these customers could materially harm our business and results of operations.
• We face intense competition, which could intensify further in the future, and we may fail to maintain or again increase our revenue levels or sustain profitability if we cannot compete successfully.
• If any of our laboratory facilities become inoperable, if we are forced to vacate a facility, or if we are unable to obtain additional laboratory space as and when needed, we may be unable to perform our tests, maintain desired turnaround times and our business and results of operations could be harmed.
• We rely on commercial courier delivery services to transport specimens to our laboratory facilities in a timely and cost-efficient manner, and if these delivery services are disrupted, our business could be materially harmed.
• We depend on our information technology systems, and any material failure of these systems, due to hardware or software malfunctions, delays in operation, material failures to implement new or enhanced systems and/or cybersecurity breaches or attacks, could materially harm our business.
• We rely on a limited number of suppliers and, in some cases, a sole supplier, for certain laboratory substances, equipment and other materials, and any delays or difficulties securing these materials could disrupt our laboratory operations and materially harm our business.
• The loss of any member of our senior management team could adversely affect our business.
• We rely on highly skilled personnel in a broad array of disciplines, and if we are unable to hire, retain, or motivate these individuals, we may not be able to maintain the quality of our tests or grow our business.
• Our reputation and business could be damaged by negative publicity.
• We may not be successful in developing and marketing new tests or testing services, which could negatively impact our performance and prospects.
• Our development and use of AI presents risks and challenges that can impact our business, including by posing security risks to our confidential information, proprietary information, and personal data and could give rise to legal and/or regulatory actions, damage our reputation, or otherwise materially harm our business.
• We are exposed to additional business, regulatory, political, operational, financial, and economic risks related to our international operations.
• We could face substantial liabilities that exceed our resources for litigation relating to product or professional liability.
• Any inability to obtain additional capital when needed and on acceptable terms may limit our ability to execute our business plans, and our liquidity needs could be materially affected by market fluctuations and general economic conditions. If we raise funds by issuing equity securities, our stockholders may experience substantial dilution.
• Inflation has and may again materially and adversely affect us by materially increasing our costs.
• If we are unable to maintain effective internal control over financial reporting, investors could lose confidence in the accuracy and completeness of our reported financial information, and the market price of our common stock could decline.
• Our disclosure controls and procedures may not prevent or detect all errors or acts of fraud.
• Our investments in marketable securities are subject to certain risks which could affect our overall financial condition, results of operations, or cash flows.
• We maintain cash deposits in excess of federally insured limits. Adverse developments affecting financial institutions, including bank failures, could adversely affect our liquidity and financial performance.
• We have been the subject of a stockholder class action, which was dismissed without prejudice; and we may be subject to further stockholder litigation in the future; our costs of defending such litigation, arbitration, and other proceedings and any adverse outcome of such litigation, arbitration, or other proceeding may have a material adverse effect on our business and the results of our operations.
• Political uncertainty may have an adverse impact on our operating performance and results of operations.
• Impairment charges relating to our goodwill and intangible assets could negatively affect our financial performance.
• Changes in financial accounting standards or practices may cause adverse, unexpected financial reporting fluctuations and affect our reported operating results.
• We incur costs and demands upon management as a result of complying with the laws and regulations affecting public companies in the United States, which may adversely affect our operating results.
• U.S. federal government contracts are generally subject to terms more favorable to the customer than commercial contracts. If the U.S. federal government significantly decreased or ceased doing business with us, our business, financial condition, and results of operations would be materially and adversely affected.
• Our tax returns and positions are currently, and may again in the future be, subject to review and audit by the Internal Revenue Service, or the IRS, and other tax authorities, and any adverse outcomes resulting from any examination of our tax returns could adversely affect our liquidity and financial condition.
• Our ability to achieve or sustain profitability also depends on our collection of payment for the tests and testing services we deliver, which we may not be able to do successfully.
• Failure to comply with government laws and regulations related to submission of claims for our tests and testing services could result in significant monetary damages and penalties and exclusion from the Medicare and Medicaid programs and corresponding foreign reimbursement programs. We are also subject to governmental audits and investigations that could result in material refunds or settlement. Our business, prospects and financial condition may be adversely affected as the result of the HRSA Audit and CIDs.
• Billing and collection processing for our tests is complex and time-consuming, and any delay in transmitting and collecting claims could have an adverse effect on our revenue.
• Any changes in federal laws, regulations, or enforcement policies with respect to the marketing of clinical laboratory tests, or violations of laws or regulations by us, could materially and adversely affect our business, prospects, results of operations, or financial condition.
• If we fail to comply with applicable federal, state, local and foreign laboratory licensing requirements, we could lose the ability to perform our tests and experience material disruptions to our business.
• Failure to obtain necessary foreign regulatory approvals or certifications may adversely affect our ability to expand our operations internationally.
• We are subject to broad legal requirements regarding the information we test and analyze, and any failure to comply with these requirements could result in materially significant, penalties, materially damage our reputation, and materially harm our business.
• We conduct business in a heavily regulated industry. Complying with the numerous statutes and regulations pertaining to our business is expensive and time-consuming, and any failure by us, our consultants, or commercial partners to comply could result in substantial and material penalties.
• We have and may again be required to modify our business practices, pay fines, incur significant expenses, or experience losses due to litigation or governmental investigations.
• Healthcare policy changes, including recently enacted and proposed new legislation targeting the U.S. healthcare system, could cause significant harm to our business, operations, and financial condition.
• Changes in laws and regulations, or in their application, may adversely affect our business, financial condition, and results of operations.
• Changes in U.S. trade policy and the impact of tariffs may have a material adverse effect on our business, results of operations, and financial condition.
• If the hazardous materials we use in our operations cause contamination or injury, we could be liable for resulting damages.
• If we were deemed to be an investment company under the Investment Company Act of 1940, as amended, applicable restrictions could make it impractical for us to continue our business as currently conducted and could have a material adverse effect on our business, financial condition, and results of operations.
• We could be adversely affected by violations of the FCPA and other anti-bribery laws.
• Our services present the potential for embezzlement, identity theft, or other similar illegal behavior by our employees, consultants, service providers, or commercial partners.
• We could be adversely affected by alleged violations of the FTC Act or other truth-in-advertising and consumer protection laws.
• Even if we receive regulatory approval or certification of our IVD medical device products, we will continue to be subject to extensive regulatory oversight.
• Our product candidates are in early stages of development and may fail or suffer delays that materially and adversely affect their future commercial viability.
• Clinical trials are costly, time consuming, and inherently risky; and we may fail to demonstrate safety and efficacy to the satisfaction of applicable regulatory authorities and may never obtain regulatory approval for, or successfully commercialize certain or any of our product candidates.
• Product development involves a lengthy and expensive process with an uncertain outcome, and results of earlier pre-clinical studies and clinical trials, or preliminary, interim, and topline data may not be predictive of later data or future clinical trial results.
• for pharmaceutical products, including any accelerated approval, is unpredictable but typically requires up to several years and may never be obtained.
• Our commercial success will depend upon attaining significant market acceptance of our product candidates, if approved, among physicians, patients, insurance payors, and other members of the medical community.
• Our product candidates may cause undesirable side effects that could delay or prevent their marketing approval, limit the commercial profile of an approved label, or result in significant negative consequences following marketing approval, if any.
• If our product candidates are approved for marketing and commercialization, and we are unable to develop sales, marketing, and distribution capabilities on our own or enter into agreements with third parties to perform these functions on acceptable terms, we may be unable to commercialize successfully any such product candidates.
• We rely on third parties to conduct portions of our clinical trials and certain of our non-clinical studies and intend to continue to do so. If these third parties do not perform as contractually required, fail to satisfy regulatory or legal requirements, or miss expected deadlines, our development programs could be delayed with material and adverse effects on our business, financial condition, results of operations, and prospects.
• We rely on third parties to supply and manufacture our product candidates, and we expect to continue to rely on third parties to manufacture and supply our therapeutics, if approved. The development of product candidates and the commercialization of any product candidates, if approved, could be stopped, delayed, or made less profitable if any of these third parties fail to provide us with sufficient quantities of product candidates or therapeutics, fail to do so at acceptable quality levels or prices, or fail to maintain or achieve satisfactory regulatory compliance.
• If we are unable to obtain and maintain patent protection for any product candidate we develop, our competitors could develop and commercialize products or technology similar to ours, and our ability to successfully commercialize any product candidate we may develop, and our technology, may be adversely affected.
• We rely on trade secret protection, non-disclosure agreements, and invention assignment agreements to protect our proprietary information, which may ultimately not be effective.
• Litigation or other proceedings or third-party claims of intellectual property infringement or misappropriation could require us to spend significant time and money and prevent us from selling our tests or developing product candidates.
• We may be subject to claims challenging the inventorship of our patents and other intellectual property.
• Developments in patent law could have a negative impact on our business.
• Obtaining and maintaining our patent protection depends on compliance with various procedures, document submission, fee payment, and other requirements imposed by government patent agencies, and our patent protection could be reduced or eliminated for non-compliance with these requirements.
• Our future issued patents covering product candidates we develop could be found invalid or unenforceable if challenged in court or before administrative bodies in the United States or abroad.
• Patent terms may be inadequate to protect the competitive position of our products and services for an adequate amount of time.
• If we do not obtain patent term extension and/or data exclusivity for any product candidate that we may develop, our business may be materially harmed.
• We may not be able to enforce our intellectual property rights outside the United States.
• Third parties may assert that our employees or consultants have wrongfully used or disclosed confidential information or misappropriated trade secrets.
• If we fail to comply with our obligations under license or technology agreements with third parties, we could lose license rights that are important to our business. If our third-party licensors fail to comply with the terms of our license arrangements, we may be forced to engage in litigation to protect our rights, which may not be successful.
• An active, liquid trading market for our common stock may not be sustained, which could make it difficult for stockholders to sell their shares of our common stock.
• The price of our common stock may be volatile, and stockholders could lose all or part of their investment.
• Our principal stockholders and management own a significant percentage of our capital stock and are able to exert significant control over matters subject to stockholder approval.