Permissions Required from the PRC Authorities for Our Operations We conduct our business primarily through our Chinese Mainland Subsidiaries. Our operations in the Chinese mainland are governed by PRC laws and regulations. We believe that our Chinese Mainland Subsidiaries have received all the material licenses, permissions and approvals from the PRC authorities necessary for their material business operations in the Chinese mainland, and no such permissions or approvals have been denied. In addition to the foregoing permits and licenses, we are subject to extensive and rigorous regulatory requirements imposed by governmental authorities in the PRC and other jurisdictions, and we may not be able to maintain or obtain all applicable regulatory approvals. See "—D. Risk Factors—Risks Related to Government Regulation—We can only sell products that have received regulatory approvals. Many factors affect our ability to obtain such approvals." We face various legal and operational risks and uncertainties associated with conducting a portion of our operations in the Chinese mainland and the complex and evolving PRC laws and regulations. For example, we face risks associated with regulatory approvals on offerings conducted overseas and foreign investment in Chinese mainland-based issuers, anti-monopoly regulatory actions, and regulatory oversight of cybersecurity and data privacy, which may negatively impact our ability to conduct certain businesses or access foreign investments. These risks could result in a material adverse change in our operations and the value of Sinovac Antigua's common shares, significantly limit or completely hinder our ability to conduct business, accept foreign investments, offer or continue to offer securities to investors, maintain our listing on a U.S. or other foreign stock exchange, or cause the value of such securities to significantly decline or become worthless. For more detailed information, see "—D. Risk Factors—Risks Related to Doing Business in China—There may be changes from time to time in the interpretation and application of the PRC laws and regulations, and any failure to comply with laws and regulations could have a material adverse effect on our business, results of operations, financial condition and the value of our common shares." If we and our Chinese Mainland Subsidiaries (i) do not maintain such permissions or approvals, (ii) inadvertently conclude that such permissions or approvals are not required, or (iii) applicable laws, regulations or interpretations change such that we are required to obtain additional permissions or approvals, we may be unable to obtain such necessary approvals, permits, registrations or filings in a timely manner, or at all, and such approvals, permits, registrations or filings previously obtained may be rescinded. Any such circumstance may subject us to fines and other regulatory, civil or criminal liabilities, and our Chinese Mainland Subsidiaries may be ordered by the competent PRC authorities to suspend relevant operations, which could materially and adversely affect our business, financial condition, results of operations and prospects. Given the uncertainties relating to the interpretation and enforcement of PRC laws, rules and regulations, our existing operations could be found not to be in full compliance with relevant laws and regulations in the future. In addition, the PRC legal system is based in part on government policies and implementation rules, some of which are not published on a timely basis or at all, and which may have a retroactive effect. As a result, we may not be aware of our violation of these policies and rules until after the occurrence of the violation. Permissions and Approvals Required to be Obtained from PRC Authorities for our Securities Offerings In recent years, the PRC government has indicated an intent to exert more oversight over offerings that are conducted overseas and/or foreign investment in China-based issuers like us, and promulgated new regulations and rules in this regard, the interpretation and implementation of which remain uncertain. For example, the Provisional Measures on the Administration of Overseas Securities Offering and Listing by Domestic Companies require that domestic companies that seek to offer or list securities overseas, whether directly or indirectly, should fulfill the filing procedures and report relevant information with the China Securities Regulatory Commission ("CSRC"). Therefore, our future issuances or listings may be subject to filing procedures with the CSRC and we are also required to report certain material events to CSRC. For more detailed information, see "—D. Risk Factors—Risks Related to Doing Business in China— We may be required to complete filing procedures with CSRC in connection with our future offerings, and we cannot predict whether we will be able to complete such filing in a timely manner, or at all." The Cybersecurity Review Measures and the Standard Contract for Cross-Border Transfer of Personal Information (the "Standard Contract Measures") give rise to uncertainties and potential additional restrictions on China-based overseas-listed companies like us. See "—D. Risk Factors—Risks Related to Doing Business in China—Complying with evolving laws and regulations regarding cybersecurity, information security, privacy and data protection and other related laws and requirements may be expensive and may force us to make adverse changes to our business. Many of these laws and regulations are subject to change and uncertain interpretation, and any failure or perceived failure to comply 3 with these laws and regulations could result in negative publicity, legal proceedings, suspension or disruption of operations, increased cost of operations, or otherwise harm our business" for additional details. In connection with our prior securities offerings and overseas listings, as of the date of this annual report, we are not aware of any PRC laws or regulations in effect that explicitly require us or our Chinese Mainland Subsidiaries to obtain any permission from the CSRC or other PRC authorities, and we and our Chinese Mainland Subsidiaries (i) have not been required to obtain any permission from or complete any filing with any PRC authority for our prior securities offerings and overseas listings, (ii) have not been required to go through a cybersecurity review by the Cyberspace Administration of China, and (iii) have not received or been denied such requisite permissions by any PRC authority. However, there are uncertainties with respect to how PRC authorities will regulate overseas securities offerings and overseas listings in general, as well as the interpretation and implementation of any related regulations. Although we intend to fully comply with the then effective relevant laws and regulations applicable to any securities offerings we may conduct, there are uncertainties with respect to whether we will be able to fully comply with requirements to obtain any permissions and approvals from, or complete any reporting or filing procedures with, PRC authorities that may be in effect in the future. If we and our Chinese Mainland Subsidiaries (i) do not maintain such permissions or approvals, (ii) inadvertently conclude that such permissions, approvals or filing or reporting are not required, or (iii) applicable laws, regulations or interpretations change such that we become required to obtain such permissions or approvals in the future, we may be unable to obtain such necessary approvals, permits or registrations, or complete such necessary filings, in a timely manner, or at all, and such approvals, permits, registrations or filings may be rescinded even if obtained. Any such circumstance could subject us to penalties, including fines, suspension of business and revocation of required licenses, significantly limit or completely hinder our ability to continue to offer securities to investors and cause our securities to decline in value or become worthless. For more detailed information, see "—D. Risk Factors—Risks Related to Doing Business in China—We may be required to complete filing procedures with CSRC in connection with our future offerings, and we cannot predict whether we will be able to complete such filing in a timely manner, or at all." and "—D. Risk Factors—Risks Related to Doing Business in China—There may be changes from time to time in the interpretation and application of the PRC laws and regulations, and any failure to comply with laws and regulations could have a material adverse effect on our business, results of operations, financial condition and the value of our common shares." The Holding Foreign Companies Accountable Act Pursuant to the Holding Foreign Companies Accountable Act (the "HFCAA"), if the SEC determines that we have filed audit reports issued by a registered public accounting firm that has not been subject to inspection by the Public Company Accounting Oversight Board (the "PCAOB") because of a position taken by an authority in a foreign jurisdiction for two consecutive years, the SEC will prohibit our common shares from being traded on a national securities exchange or in the over-the-counter trading market in the United States. On December 16, 2021, the PCAOB issued a report notifying the SEC of its determination that the PCAOB was unable to inspect or investigate completely registered public accounting firms headquartered in the Chinese mainland and Hong Kong. On December 15, 2022, the PCAOB issued a report vacating its December 16, 2021 determination and removing the Chinese mainland and Hong Kong from the list of jurisdictions where it was unable to inspect or investigate completely registered public accounting firms. Each year, the PCAOB will reassess whether it can inspect and investigate completely audit firms in the Chinese mainland and Hong Kong, among other jurisdictions. If the PCAOB determines in the future that it no longer has full access to inspect and investigate completely accounting firms in the Chinese mainland and Hong Kong and we continue to use an accounting firm headquartered in one of these jurisdictions to issue an audit report on our financial statements filed with the SEC, we would be identified as a Commission-Identified Issuer following the filing of the annual report on Form 20-F for the relevant fiscal year. There can be no assurance that we will not be identified as a Commission-Identified Issuer for any future fiscal year, and if we were so identified for two consecutive years, we would become subject to prohibition on trading under the HFCAA. See "D. Risk Factors—Risks Related to Doing Business in China—Our common shares will be prohibited from trading in the United States under the HFCAA in the future if the PCAOB is unable to inspect or fully investigate auditors located in China. The delisting of our common shares, or the threat of their being delisted, may materially and adversely affect the value of your investment." Cash and Asset Flows through Our Organization Sinovac Antigua is a holding company, and it relies in part on dividends paid by its subsidiaries for its cash needs, including its operating expenses and additional investment opportunities. The payment of dividends from our Chinese Mainland Subsidiaries is subject to certain limitations. Regulations in the PRC currently permit payment of dividends only out of accumulated profits as determined in accordance with accounting standards and regulations in the Chinese mainland. Each of our Chinese Mainland Subsidiaries is also required to set aside at least a portion of its after-tax profit based on PRC accounting standards each year to fund the statutory surplus reserves. The reserves can be used to recoup previous years' losses, if any, and, subject to the approval of the relevant PRC government authority, may be converted into share capital in proportion to existing shareholdings, or by increasing the par value of the shares currently held by them. Such reserves, however, are not distributable as cash dividends. In addition, at the discretion of their board of directors, our Chinese Mainland Subsidiaries may allocate a portion of their after-tax profits based on PRC accounting standards to the employee welfare and bonus funds, which may be utilized for collective staff benefits. In addition, if our Chinese Mainland Subsidiaries incur debt on their own behalf in the future, the instruments governing the debt may restrict the ability of one or more of our Chinese Mainland Subsidiaries, as the case may be, to pay dividends or make other distributions to Sinovac Antigua. 4 The ability of our Chinese Mainland Subsidiaries to convert renminbi into U.S. dollars and make payments to us is subject to PRC foreign exchange regulations. Under these regulations, the renminbi is convertible for current account items, including the distribution of dividends, interest payments, trade and service-related foreign exchange transactions. Conversion of renminbi for capital account items, such as direct investment, loans, securities investment and repatriation of investment, however, is still subject to the approval of the State Administration of Foreign Exchange ("SAFE"). See "—Risk Factors—Risks Related to Doing Business in China—We rely on dividends paid by our Chinese Mainland Subsidiaries for our cash needs. If they are unable to pay us sufficient dividends due to statutory, regulatory or contractual restrictions on their abilities to distribute dividends to us, our various cash needs may not be met." and "Item 10. Additional Information — D. Exchange Controls." Under PRC laws, Sinovac Antigua may fund our Chinese Mainland Subsidiaries only through capital contributions or loans, subject to satisfaction of applicable government registration and approval requirements. In 2023, 2024 and 2025, no assets other than cash were transferred through our organization. Sinovac Antigua received dividends of $3,958.2 million from its subsidiaries in 2025. Sinovac Antigua did not distribute any dividend to investors, including U.S. investors, in 2023 and 2024. In April 2025, the board of directors of Sinovac Antigua decided to declare a special cash dividend of $55.00 per common share (the "2025 Dividend") to valid holders of Sinovac Antigua's common shares as of the close of business on May 23, 2025. The 2025 Dividend is funded from available cash resources of Sinovac Antigua and its subsidiaries, including prior distributions from Sinovac LS and other operating subsidiaries of Sinovac Antigua to Sinovac Hong Kong. The 2025 Dividend is intended to provide Sinovac Antigua's shareholders with their appropriate share of these prior distributions from Sinovac Antigua's subsidiaries. In connection therewith, there were 11,800,000 common shares (the "2018 PIPE Shares") purportedly issued pursuant to the Securities Purchase Agreement dated July 2, 2018 (the "2018 SPA"). An amount equal to the aggregate cash that would otherwise be payable under the 2025 Dividend in respect of the 2018 PIPE Shares has been set aside and is retained in an escrow account of Sinovac Antigua, pending the final resolution of the ongoing litigation and arbitration proceedings with respect to the PIPE shares in Antigua and Hong Kong. In 2025, $20.9 million (RMB145.8 million) in dividends was declared and paid by Sinovac Beijing and Sinovac Dalian to their respective minority shareholders. $55.7 million (RMB389.3 million) in dividends was declared and paid by such subsidiaries to Sinovac Beijing Holding in 2025. Additionally, $3,958.2 million in dividends was declared and paid by Sinovac Hong Kong to Sinovac Antigua in June 2025, and $3,300.3 million in dividends was paid by Sinovac Antigua to its shareholders in 2025, and $657.9 million was retained as deferred dividend payment to Sinovac Antigua's shareholders. In 2026, $88.0 million (RMB600.0 million) in dividends was declared and paid by Sinovac Beijing, and Sinovac Dalian, of which $24.4 million (RMB166.5 million) was declared and paid to their respective minority shareholders, and $63.6 million (RMB433.5 million) in dividends was declared and paid by such subsidiaries to Sinovac Beijing Holding. Corporate Structure The chart below summarizes our corporate structure and identifies our significant subsidiaries, as that term is defined under Section 1-02 of Regulation S-X under the U.S. Securities Act, and subsidiaries representative of our major business, as of the date of this annual report. Sinovac Antigua holds 100% of the equity interest in Sinovac Biotech (Hong Kong) Limited ("Sinovac Hong Kong"), its subsidiary incorporated in Hong Kong. Sinovac Hong Kong holds 100% of the equity interest in Sinovac Biotech (Singapore) Pte. Ltd. ("Sinovac Singapore"), its subsidiary established in Singapore, and 100% of the equity interest in Sinovac Holding Group Co., Ltd., its subsidiary established in the PRC. Sinovac Holding Group Co., Ltd. holds 100% of the equity interest in Sinovac Biomed Co., Ltd., its subsidiary established in the PRC, 73.09% of the equity interest in Sinovac Biotech Co., Ltd., its subsidiary established in the PRC, 59.24% of the equity interest in Sinovac Life Sciences Co., Ltd. ("Sinovac LS," formerly known as Sinovac Research & Development Co., Ltd.), its subsidiary established in the PRC, 68.00% of the 5 equity interest in Sinovac (Dalian) Vaccine Technology Co., Ltd., its subsidiary established in the PRC, and 100% of the equity interest in Sinovac Business Services (Dalian) Co., Ltd., its subsidiary established in the PRC. * Dalian Jin Gang Group Co., Ltd. owns the remaining 32.00% equity interest in Sinovac (Dalian) Vaccine Technology Co., Ltd. ** Shandong Sinobioway Biomedicine Co., Ltd. ("Shandong Sinobioway Biomedicine") owns the remaining 26.91% equity interest in Sinovac Biotech Co., Ltd. *** Affiliates of Sino Biopharmaceutical Limited, Keding Investment (Hong Kong) Limited (a company controlled by Mr. Weidong Yin), Vivo Capital Fund IX, L.P. and Prime Success, L.P. ("Prime Success, L.P." or "Prime Success") own 15.38%, 12.69%, 6.345% and 6.345%, respectively, of the remaining equity interest in Sinovac LS. **** The former name of Sinovac Biomed Co., Ltd. is Sinovac Zhong Yi Bio-pharmaceutical Co., Ltd. A. Reserved B. Capitalization and Indebtedness Not applicable. C. Reasons for the Offer and Use of Proceeds Not applicable. D. Risk Factors Investing in our company involves significant risks. You should carefully consider the risks described below, together with all other information contained in this annual report on Form 20-F, before making an investment decision. Any of the following risks could materially and adversely affect our business, financial condition, results of operations, cash flows, prospects or the value of Sinovac Antigua's common shares. The risks described below are not the only risks that we face. Additional risks and uncertainties not currently known to us, or that we currently deem immaterial, could also materially and adversely affect our business, financial condition, results of operations, cash flows, prospects or the value of Sinovac Antigua's common shares. Risk Factors Summary The following summarizes some, but not all, of the risks provided below. All operational risks associated with being based in and having operations in the Chinese mainland also apply, to the extent relevant, to our operations in Hong Kong and Macau. With respect to legal risks associated with being based in and having operations in China, the laws, regulations and discretion of PRC governmental authorities discussed in this annual report are expected to apply primarily to entities and businesses in the Chinese mainland, rather than to entities or businesses in Hong Kong or Macau, which operate under different legal regimes. Please carefully consider all of the information in this Item D. "Risk Factors" in this annual report for a more thorough description of these and other risks. Risks Related to Our Company •Our operating results have fluctuated significantly, and we may incur losses in the future. •Our business depends on continued demand for a limited number of vaccine products and on public confidence in vaccination. Reductions in demand for our key products or declines in vaccination confidence could materially and adversely affect our business, financial condition and results of operations. •Our business performance relies on our ability to respond to infectious disease threats and to continually introduce new vaccine products into the commercial market. Our failure to effectively develop and commercialize new products could materially and adversely affect our business, financial condition, results of operations and prospects. •In China, declining birth rates and intensified price competition in the private-pay market may adversely affect our revenue and profitability. •International expansion may be costly, time-consuming and difficult, and our international operations, regulatory approvals and product registrations are subject to additional market, procurement, geopolitical, regulatory, localization, foreign exchange and operational risks. •Our business, governance and reputation could be negatively affected by shareholder disputes, litigation or actions of shareholders or others. Risks Related to Government Regulation •We can only sell products that have received regulatory approvals. Many factors affect our ability to obtain such approvals. 6 •We may not be able to comply with applicable GMP standards, product quality requirements, pharmacopoeia standards, lot release requirements and other regulatory requirements, each of which could have a material adverse effect on our business, financial condition and results of operations. •Heightened PRC healthcare anti-bribery enforcement and new rules governing medical representatives may increase our compliance obligations, require adjustments to our commercialization arrangements and adversely affect demand for our vaccine products in the Chinese mainland. Risks Related to Our Intellectual Property •If we are unable to protect our technologies from competitors with patents or other forms of intellectual property protection, our business may be harmed. •Third parties may bring intellectual property infringement claims against us in the future. •The success of our business may depend on licensing key technology or vaccine components from, and entering into collaboration arrangements with, third parties. We cannot be certain that our licensing or collaboration efforts will succeed or that we will realize any revenue from them. Risks Related to Doing Business in China •Changes in China's economic, political, social, healthcare regulatory or government policy environment could materially and adversely affect our business, operations and prospects. •Complying with evolving laws and regulations regarding cybersecurity, information security, privacy and data protection and other related laws and requirements may be expensive and may force us to make adverse changes to our business. Many of these laws and regulations are subject to change and uncertain interpretation, and any failure or perceived failure to comply with these laws and regulations could result in negative publicity, legal proceedings, suspension or disruption of operations, increased cost of operations, or otherwise harm our business. •Our common shares may be prohibited from trading in the United States under the HFCAA in the future if the PCAOB is unable to inspect or investigate completely registered public accounting firms headquartered in the Chinese mainland and Hong Kong. The delisting of, or prohibition on trading, our common shares, or the threat of their being delisted or prohibited from being traded, may materially and adversely affect the value of your investment. Risks Related to Our Company Our operating results have fluctuated significantly, and we may incur losses in the future. Our revenues, gross profit, operating profit and net income have fluctuated significantly in recent years due to changes in demand for our products, including shifts in demand for COVID-19 vaccines, influenza vaccines and other major vaccine products. We may experience lower product sales, higher selling, general and administrative expenses, higher research and development expenses, impairment charges, inventory write-offs, or other increased costs in future periods. Our ability to maintain or return to profitability depends on a number of factors, many of which are beyond our control, including market demand, pricing and procurement policies, the timing of new product approvals and launches, competitive dynamics, production utilization, the collection of receivables and our ability to control costs. If our revenues decline, our expenses increase, our product mix shifts unfavorably, or we are unable to control costs or collect receivables on a timely basis, we may incur losses, and our business, financial condition and results of operations could be materially and adversely affected. Our business depends on continued demand for a limited number of vaccine products and on public confidence in vaccination. Reductions in demand for our key products or declines in vaccination confidence could materially and adversely affect our business, financial condition and results of operations. We generate substantially all of our revenues from sales of vaccine products, and our operating results have historically depended on a limited number of key products, the composition of which may shift as our portfolio evolves. For example, in 2022, we derived a substantial portion of our revenues from sales of our COVID-19 vaccine, CoronaVac. As global demand for COVID-19 vaccines subsequently declined significantly, we suspended production of CoronaVac in 2023. As a result, our total revenues decreased from $1.5 billion in 2022 to $470.2 million in 2023, driven primarily by the reduction in COVID-19 vaccine sales. We expect a limited number of products to continue contributing a significant portion of our revenues for the foreseeable future. Accordingly, our business may be more vulnerable than those of companies with more diversified product portfolios to fluctuations in demand, pricing pressure, competitive developments, changes in vaccination policies, market acceptance, supply interruptions or other adverse developments affecting any of our key products. 7 Demand for our vaccine products also depends significantly on public confidence in vaccine safety and the effectiveness of immunization programs. Past vaccine-related incidents in China, including reports in 2013 regarding infant deaths following hepatitis B vaccination, the 2016 illegal sale of improperly stored vaccines and the 2018 falsification of production records by Changchun Changsheng Life Science Co., Ltd., have raised public concerns regarding vaccine safety and quality. Although none of these incidents involved our products, they nonetheless contributed to broader public skepticism that may indirectly affect demand for our vaccines. In addition, vaccine hesitancy may be influenced by concerns regarding vaccine safety or effectiveness, adverse events following immunization, media reports, social media discussions or misinformation. Any negative publicity involving us, our competitors, other vaccine manufacturers or the vaccine industry generally, regardless of its accuracy, may reduce public confidence in vaccination and adversely affect demand for our products, particularly those sold in the private-pay market where purchasing decisions are made directly by consumers. If demand for our key products declines or public confidence in vaccination decreases, our sales, revenues, reputation, financial condition and results of operations could be materially and adversely affected. Our business performance relies on our ability to respond to infectious disease threats and to continually introduce new vaccine products into the commercial market. Our failure to effectively develop and commercialize new products could materially and adversely affect our business, financial condition, results of operations and prospects. The biopharmaceutical market in general, and the vaccine product market in particular, are evolving rapidly as a result of ongoing infectious disease threats, advances in research, and emerging technological developments. Consequently, our success depends on our ability to respond to disease threats and technological advances, and to identify, develop, and commercialize, in a timely and cost-effective manner, effective vaccine products that meet evolving market needs. Whether we are successful in developing and commercializing new products depends on, among other things, our ability to: •accurately assess disease trends, technological advances, and market needs; •maintain strong research and development capabilities; •optimize our manufacturing and procurement processes to predict and control costs; •manufacture and deliver products of appropriate quality, in sufficient quantities, and in a timely manner; •increase customer awareness and acceptance of our products; •minimize the time and cost required to obtain necessary regulatory approvals; •anticipate and compete effectively with other vaccine product developers, manufacturers and marketers; •price our products competitively; and •comply with Good Manufacturing Practice ("GMP") standards and other applicable regulations, including by monitoring evolving regulatory requirements governing vaccine products. We face risks and uncertainties related to our efforts to develop new products, and challenges related to their manufacturing, supply, and distribution. We face significant uncertainties related to our efforts to develop new products, including the risk that our existing or future vaccines or treatments may not prove successful or commercially viable, or may not receive final approval from regulatory authorities. Pre-clinical, clinical, or safety data, and further analysis thereof, relating to our existing or future vaccines or treatments may yield unfavorable results. We may also be unable to reproduce comparable clinical or other results in larger or more diverse populations upon commercialization, including the rate of vaccine effectiveness and the safety and tolerability profile observed to date. The widespread use of our existing vaccines or treatments may generate new information about efficacy, safety, or other developments, including additional adverse reactions or side effects, and regulatory authorities may not be satisfied with the results of future pre-clinical or clinical studies and may decline to approve, or may withdraw or revoke approvals previously granted for, our existing or future vaccines or treatments. Disruptions in the relationships between us and our collaboration partners, research and development institutions, clinical trial sites, countries where trials are conducted, or third-party suppliers could delay the development or commercialization of our existing or future vaccines or products. Similarly, limitations on the availability of raw materials, our ability to scale up or maintain manufacturing capacity on a timely basis, or our access to logistics and supply channels commensurate with global demand for any approved vaccine or product candidate could delay commercialization or otherwise materially and adversely affect our business, financial condition, and results of operations. We cannot guarantee that we will produce products superior to or more competitive than those developed by our competitors, or that demand for our existing or future vaccines or treatments will continue. 8 Our financial prospects depend on the success of our clinical-stage and pre-clinical stage product pipeline. We have invested, and expect to continue to invest, significant time and resources in developing our vaccine candidates and other biopharmaceuticals, and expect to incur substantial and increasing expenditures in connection with their development and commercialization. Our ability to achieve revenue and profitability depends on our successful completion of clinical development of our vaccine candidates, obtaining necessary regulatory approvals, and having our vaccines successfully manufactured and marketed. Clinical testing is expensive and can take many years to complete, and its outcome is inherently uncertain. Failure can occur at any stage during the clinical trial process. The results of pre-clinical studies and early clinical trials of our vaccine candidates may not be predictive of the results of later-stage clinical trials, and initial or interim results of a trial may not be predictive of the final results. If our vaccine candidates fail to demonstrate sufficient efficacy in a timely manner, or at all, we could experience significant delays in, or be unable to obtain, regulatory approval for our vaccine candidates, which would impair our ability to commercialize them. In such circumstances, we may have expended significant capital to advance vaccine candidates through clinical development without realizing any return on that investment. Any such outcome could materially and adversely affect our business, financial condition, and results of operations. We have devoted significant resources to the research and development of various vaccines to address pandemic threats posed by infectious diseases, including COVID-19, SARS, avian influenza (H5N1), and swine influenza (H1N1 2009), and we intend to continue devoting resources to the development of vaccines to address emerging needs. However, the threat of a pandemic outbreak may subside before we realize any return on our investment. For example, although we believe we were the first company to complete a Phase I clinical trial of an inactivated SARS vaccine in December 2004, we did not proceed with Phase II and Phase III trials as the SARS epidemic subsequently subsided. Other organizations may obtain regulatory approvals for competing pandemic vaccines, or governmental authorities may acquire adequate stockpiles or adopt alternative technologies or strategies to prevent or limit outbreaks, in each case before our pandemic vaccines achieve significant sales. We may not achieve a return on our investment before the threat of a pandemic outbreak subsides or a competing product is adopted. Major international and Chinese vaccine companies, universities, and other research institutions are also pursuing the development of competing vaccines. These competitors may succeed in developing vaccines and obtaining regulatory approvals before us, or their products may gain broader market acceptance, which could undermine our competitive position. Moreover, because our financial and managerial resources are limited, we focus on a limited number of research programs and product candidates for specific indications. As a result, we may forego or delay pursuit of opportunities with other vaccine candidates or biopharmaceuticals that may ultimately prove to have greater commercial potential. If we are unable to enroll sufficient subjects, identify qualified clinical investigators, or effectively manage third parties and international clinical trial risks, our development programs could be delayed or terminated. The rate of completion of our clinical trials depends significantly on the rate of patient enrollment. Enrollment is a function of many factors, including: •the efforts of the sponsor and clinical sites to facilitate timely enrollment; •the patient referral practices of physicians; •the design of the protocol; •the eligibility criteria for the study in question; •the perceived risks and benefits of the drug under study; •the size of the patient population; •the availability of competing therapies; •the availability of clinical trial sites; and •the proximity of and access by patients to clinical sites. If we are unable to obtain sufficient patient enrolment or to identify qualified investigators to conduct clinical trials as planned, we may need to expend substantial funds to secure access to resources, or to delay or modify our plans significantly, and may ultimately terminate development of a product for a particular indication. Any such setback could have a material adverse effect on our business, prospects, and financial results, and would likely cause a decline in the price of Sinovac Antigua's common shares. We set goals for, and make public statements regarding, the anticipated timing of objectives material to our success, such as the commencement and completion of clinical trials and other milestones. The actual timing of these events can vary significantly due to factors such as delays or failures in our clinical trials, uncertainties inherent in the regulatory approval process, and delays in achieving manufacturing or marketing arrangements sufficient to commercialize our products. We may not complete our clinical trials, make regulatory submissions, or receive 9 regulatory approvals as planned. In addition, we may not be able to adhere to our anticipated schedule for the launch of any of our products. If we fail to achieve one or more of these milestones as planned, the market price of Sinovac Antigua's common shares could decline. Once we obtain approval to conduct clinical trials for our product candidates, we rely on qualified research organizations, medical institutions, and clinical investigators to enroll qualified patients and conduct those trials. Our reliance on these third parties for clinical development activities reduces our control over the clinical trial process. Furthermore, these third parties may also have relationships with other entities, some of which may be our competitors. If these third parties do not fulfil their contractual obligations or fail to meet expected deadlines, we may experience significant delays in obtaining regulatory approvals and commercializing our vaccine candidates. We also conduct, and may increasingly conduct, clinical trials in countries and regions outside the Chinese mainland. International clinical trials may involve additional uncertainties, including: (a) regulatory risks, such as evolving or inconsistent requirements, longer review timelines, and country-specific ethics or regulatory procedures; (b) operational risks, such as local infrastructure limitations, cold-chain and logistics constraints, variable capabilities of investigators and clinical sites, lower efficiency of overseas laboratories, and difficulties in importing or exporting clinical samples; and (c) external risks, such as geopolitical tensions and challenges in subject recruitment. Any of these factors could delay clinical development, increase costs, result in non-compliance with good clinical practice requirements, impair data quality, or delay or prevent product registration. We are making, and expect to continue to make, investments in new products, technologies and business models. These initiatives are inherently risky, and we may not realize the expected benefits from them. Technology is a key competitive driver in the biopharmaceutical industry. Our financial performance depends significantly on our ability to develop and maintain technological leadership. We have made substantial investments to develop new products and technologies. For the years ended December 31, 2025, 2024, and 2023, our research and development expenses amounted to $216.2 million, $270.7 million, and $350.2 million, respectively, representing 56.0%, 74.9%, and 74.5% of our revenues for the respective periods. We expect to continue to incur substantial research and development expenses in developing new products and technologies and to dedicate significant resources to enhancing our vaccine research and development technology platform. If we do not allocate our research and development budget efficiently and effectively toward innovative and commercially viable technologies, we may not realize the expected benefits from our investments. In addition, we are exploring and expect to continue exploring, new technologies, platforms and therapeutic areas, such as mRNA vaccine platforms, recombinant protein platforms, antibody drug development, cell therapies and other innovative biological products, as well as new commercialization or partnership models. These initiatives involve substantial risks and uncertainties because they require scientific, research, development, manufacturing, regulatory, clinical, commercialization and compliance capabilities that differ significantly from those required for our established vaccine products, and in certain of these areas we have limited experience and operating history. Our personnel may lack sufficient experience in certain of these technology areas, and our related research and development efforts may fail, be delayed or require significantly greater resources than anticipated. Because these products, technologies and business models are relatively new and rapidly evolving, they may expose us to increased regulatory scrutiny, product liability claims, safety concerns, intellectual property disputes, operational challenges and other risks, including risks that we may not currently anticipate. We may also face difficulties in recruiting and retaining qualified personnel, obtaining regulatory approvals, establishing manufacturing capabilities or successfully commercializing such products or technologies. There can be no assurance that customer or market demand for these initiatives will exist or be sustained at the levels that we anticipate, or that any such initiatives will achieve sufficient market acceptance to generate revenue adequate to offset the additional expenses, liabilities and investments associated with these activities. Products or technologies developed by our competitors may render our own products or technologies noncompetitive or obsolete. Furthermore, these initiatives may divert management attention, capital and other resources from our existing business, including our more established products and technologies. Even if we are successful in developing new products or technologies, regulatory authorities may impose new rules, restrictions or compliance requirements in response to such innovations, which could increase our costs or limit our ability to successfully commercialize these products or technologies. If we fail to realize the expected benefits of these investments and initiatives, our business, financial condition, results of operations and prospects could be materially and adversely affected. If CDCs, hospitals, vaccination providers, healthcare professionals or vaccine recipients, including parents or guardians of pediatric vaccine candidates, do not accept our products, we may be unable to generate significant revenue. Even if we obtain regulatory approvals for the commercialization of our vaccines in China or in other countries or regions, our products may not gain market acceptance among CDCs, hospitals, vaccination providers, healthcare professionals, vaccine recipients (including parents or guardians of pediatric vaccine candidates), or the broader medical and public health community. A lack of market acceptance would limit our ability to generate revenue and adversely affect our results of operations. CDCs, vaccination providers, and healthcare professionals may not recommend, procure, or administer products developed by us or our collaborators until clinical data or other factors demonstrate the superior or comparable safety and efficacy of our products relative to other available alternatives. Even if the clinical safety and efficacy of our products are established, CDCs, healthcare professionals, vaccination providers, or other public health authorities may elect not to recommend, procure, or administer our products for a variety of reasons. In addition, vaccination decisions in China are increasingly influenced by vaccine recipients themselves and, for pediatric vaccines, by their parents or guardians, although vaccine-related product information is generally communicated to them through vaccination providers and 10 healthcare professionals rather than directly by vaccine manufacturers. As a result, even if our products have obtained regulatory approval and are recommended by healthcare professionals, vaccine recipients, or, where applicable, parents or guardians, may choose not to receive or have their children receive our products due to concerns regarding safety, effectiveness, necessity, price, convenience, or the availability of competing products. In order to successfully launch and commercialize a product, we must provide accurate, balanced, and compliant scientific and product information to CDCs, hospitals, vaccination providers, and healthcare professionals, who serve as the appropriate channels for explaining vaccination options to vaccine recipients and, where applicable, their parents or guardians. We may also support disease awareness and vaccination education activities to the extent permitted by applicable laws and regulations, including restrictions on product promotion and direct interactions with the public. If our products are not perceived by CDCs, hospitals, vaccination providers, healthcare professionals, vaccine recipients, or, where applicable, parents or guardians as necessary, safe, effective, convenient, or cost-effective compared with other available vaccines or preventive options, these stakeholders may not recommend, procure, administer, or receive our products. Alternative vaccines and preventive options exist for the conditions targeted by many of our products and product candidates, including EV71, hepatitis A, influenza, and varicella. A failure of our products to gain commercial acceptance would have a material adverse effect on our business, financial condition, and results of operations. If we are unable to compete successfully in the highly competitive biopharmaceutical industry, our business could be materially harmed. We operate in a highly competitive environment, and we expect competition to intensify in the future. Our competitors include large pharmaceutical and biotechnology companies, both domestic and international, many of which possess substantially greater resources than we do. New competitors may also enter the markets in which we compete. Accordingly, even if we successfully launch a product, we may be unable to outperform a competing product for any number of reasons, including the possibility that the competitor may: •have launched its competing product first and established greater brand recognition or market share; •offer a product that has, or is perceived as having, superior efficacy, safety, or other clinical advantages; •have superior access to critical raw materials; •have more efficient manufacturing processes or greater manufacturing capacity; •have greater marketing capabilities; •have greater pricing flexibility; •have more extensive research and development and technical capabilities; •have proprietary patent portfolios or other intellectual property rights that may present obstacles to our conduct of business; •have deeper knowledge of local market conditions in jurisdictions where we seek to expand; •have a greater ability to attract and retain highly qualified management and personnel; or •have the financial capacity to pursue strategic acquisitions that are unavailable to us. The technologies employed by us and our competitors are rapidly evolving and new developments may result in price competition or product obsolescence. In addition, we may be adversely affected by competition from generic forms of our products, substitute products, or imports of products from lower-priced markets. For a detailed description of our competitors, please see "Item 4. Information on the Company — B. Business Overview — Competition." We may not be able to maintain our market share in China for our commercialized vaccines, which could adversely affect our revenues and prospects for revenue growth. According to the PRC National Medical Products Administration ("NMPA," formerly known as the PRC State Food and Drug Administration), there are approximately 50 vaccine manufacturers in China, and new market entrants or expanded product lines from existing competitors could intensify competitive pressure. Many of our commercialized vaccine products face competition from products manufactured by other vaccine companies in China, including both established state-owned enterprises and emerging private companies. Although we believe we are currently among the market leaders for certain products in China, there can be no assurance that we will maintain this position. Our revenues and prospects for revenue growth could be adversely affected if we are unable to maintain our market share due to increased competition, pricing pressure, or shifts in government procurement policies. In China, declining birth rates and intensified price competition in the private-pay market may adversely affect our revenue and profitability. In China, our commercialized vaccine products are supplied to both the private market and the public market. Certain products, including hepatitis A vaccine, influenza vaccine, sIPV (Poliomyelitis Vaccine, Inactivated, Sabin Strains), PPSV23 (23-Valent Pneumococcal Polysaccharide 11 Vaccine) and varicella vaccine, are also supplied through national or local government-funded immunization programs. All of our commercialized vaccine products are available in the private market, which represents the primary source of our revenue in China. In recent years, however, the number of births in China has continued to decline. According to data from the National Bureau of Statistics, births nationwide decreased from 9.54 million in 2024 to 7.92 million in 2025, representing a year-over-year decline of approximately 17.0%. As most of the Company's products are pediatric vaccines and a significant portion are sold in the private market, the decline in newborns has reduced the size of the addressable market, thereby intensifying competition among market participants. In a contracting market environment, competition may increasingly focus on pricing. To maintain or expand market share for certain vaccines, our Chinese Mainland Subsidiaries may need to offer more competitive pricing, which could adversely affect our revenue and gross profit margins. For example, in 2024, the average selling prices of our influenza and varicella vaccines in the private market decreased by approximately 31.3% and 19.0%, respectively. Continued pricing pressure could further erode our margins. In addition, changes in influenza vaccine recommendations, regulatory requirements or market demand could affect both the product mix and the pricing of our influenza vaccines. If the market shifts from quadrivalent influenza vaccines to lower-priced trivalent influenza vaccines, the average selling price of our influenza vaccine products may decline, which could adversely affect our revenue, gross margins and profitability. As required by PRC laws, our Chinese Mainland Subsidiaries sell vaccines in China to CDCs, which are PRC government agencies. This exposes us to risks relating to doing business with the government. As required by PRC laws, our Chinese Mainland Subsidiaries sell our vaccines to CDCs, which exposes us to various risks relating to doing business with the government. For example, demand for, and the ability to pay for, our products may be affected by government budgetary cycles, shifting availability of public funds, and changes in policy. Funding reductions, delays in payment, or unilateral demands for changes to the terms of our Chinese Mainland Subsidiaries' contracts by their government customers could adversely impact our results of operations and financial condition, exacerbate the existing seasonality of our revenues, and make it difficult for us to allocate resources or anticipate demand for our products. Furthermore, we have little or no control over government procurement decisions, and government agencies that contract to purchase our products may reduce or cancel orders, or demand price adjustments or other changes to their contracts with us, without our consent. Changes in the personnel of the PRC government agencies that purchase our products may result in changes to, delays in, or cancellations of purchase commitments due to, among other things, differing policy and budgetary agendas of the personnel involved. Similar changes could occur if a CDC or other relevant government agency were to be reorganized or consolidated with another government body. Any of the above-mentioned actions taken by government agencies could have a material adverse effect on our results of operations and expected earnings, or result in our failure to meet, or require downward adjustments to, our sales and gross margin guidance or estimates, which could adversely affect the Company's share price and result in substantial losses. In addition, many of the remedies that are available to us when dealing with private parties, such as claims for breach of contract or other legal remedies, may not be available or practicable in our dealings with government agencies. In China, government procurement mechanisms and pricing pressure in the public market may adversely affect the Company's revenue and profitability. Our sIPV, inactivated hepatitis A vaccine, influenza vaccine, PPSV23 and varicella vaccine are supplied in China's public markets, including through the National Immunization Program and provincial or local government tenders. Polio vaccines have been included in China's National Immunization Program ("NIP") since 1978, and our sIPV has been supplied through NIP tenders since its commercial launch in China. Hepatitis A vaccines have been included in China's NIP since 2007, and our inactivated hepatitis A vaccine (HepA-I), Healive, has been supplied in certain provincial public markets. Although the tender prices of these products have remained relatively stable, the decline in birth rates in China may reduce the eligible pediatric population and lower overall procurement demand. In addition, our sIPV may face pressure from new competitors, and future tender price reductions may adversely affect the revenue and profitability of this product. Our inactivated hepatitis A vaccine may also face competition from other suppliers and lower-priced live attenuated hepatitis A vaccines, and we may need to compete for larger tender allocations in existing public markets or seek entry into additional provincial or municipal markets. If procurement volumes decrease, or if we fail to maintain or expand our supply shares under these tenders, our revenue from these products may be materially and adversely affected. Our influenza vaccine, PPSV23 and varicella vaccine have been supplied through government tenders in certain provincial, municipal or county-level public markets. These local public markets are highly competitive, and manufacturers frequently lower prices to win tenders or increase their supply shares. As a result, even if we maintain or increase our market share, our average selling prices, revenue and gross margins may decline. This risk may be particularly significant for influenza vaccines. If influenza vaccination is increasingly promoted through free vaccination programs, government-coordinated supply or large-scale low-price public procurement, our influenza vaccine sales volume may increase, but our average selling price could decline significantly, which may materially and adversely affect our revenue, gross margins and profitability. 12 We are subject to credit, collection and accounts receivable risks, and delays in collection or bad debts could adversely affect our cash flows and results of operations. We sell a significant portion of our products to CDCs, government agencies, public institutions, distributors and other customers in China and in other jurisdictions. Our ability to collect accounts receivable depends on the creditworthiness, financial condition, budgetary arrangements, procurement procedures and payment approval processes of these customers and counterparties, many of which are beyond our control. If accounts receivable collections are slower than expected, payment periods lengthen, overdue receivables increase, or customers or distributors experience financial difficulty, we may be required to record additional provisions or write-offs for doubtful accounts, fail to achieve our cash collection targets, and our liquidity, cash flows, results of operations and financial condition could be materially and adversely affected. If any of our third-party suppliers, manufacturers or service providers cannot adequately meet our needs, our business could be harmed. Certain raw materials, components, spare parts, testing materials, packaging materials, equipment, maintenance services and other supplies we use are sourced from a limited number of suppliers or, in some cases, a single source. While many of these inputs are generally available from multiple commercial sources, some may be difficult for suppliers to produce to our specifications or may be in short supply. Although we are actively expanding our supplier portfolio, efforts to qualify alternative sources may be delayed by applicable regulatory requirements. Moreover, certain regulatory approvals may be conditioned upon obtaining materials from specified sources. If third-party suppliers were to cease production or otherwise fail to supply us with quality raw materials, and we were unable to contract on acceptable terms with alternative suppliers, our ability to deliver products to the market would be adversely affected. In particular, certain critical raw materials are sourced exclusively from a single supplier, creating concentration risk. For example, we source hepatitis B antigens exclusively from Beijing Institute of Biological Products Co., Ltd. ("Beijing Biological") for the production of Bilive. We and Beijing Biological have entered into a ten-year exclusive supply framework agreement expiring in June 2034, after which the parties have agreed to negotiate annual supply agreements. There can be no assurance that Beijing Biological will agree to renew or extend the supply arrangement upon expiration of the current agreement. Any interruption in supply, deterioration in supplier quality, failure to meet technical specifications, failure to comply with applicable regulatory requirements, transportation disruption, export restriction, sanctions-related restriction, price increase or termination of supply arrangements could disrupt our production, delay lot release, increase costs, require us to identify and qualify alternative suppliers, or impair our ability to maintain business continuity. We could be subject to costly and time-consuming product liability actions and, because our insurance coverage is limited, our exposure to such claims could impose a significant financial burden. Our business exposes us to product liability risks inherent in the clinical development, manufacturing, and marketing of biopharmaceutical products. We manufacture vaccines that are injected into healthy individuals to protect against infectious diseases. If our products do not perform as anticipated, whether as a result of design flaws, unanticipated health consequences or side effects, misuse or mishandling by third parties, or faulty or contaminated raw materials or components, they could cause harm to recipients and subject us to product liability lawsuits. Claims against us could also be based on a failure to confer the anticipated level of immunization. Even meritless or unsuccessful product liability claims can be time-consuming and expensive to defend, and could divert management's attention from our core business or give rise to negative publicity, any of which could have a material adverse effect on us. The successful assertion of product liability claims against us could require us to pay substantial monetary damages. Although we currently maintain worldwide product liability insurance covering Healive (Hepatitis A Vaccine, Inactivated), Bilive (Hepatitis A and B Combined Vaccine), Anflu (Influenza Vaccine (Split Virion), Inactivated), Panflu (Pandemic Influenza Vaccine (inactivated, adjuvanted)), Inlive (Enterovirus Type 71 Vaccine, Inactivated), varicella vaccine, and quadrivalent influenza vaccine, we cannot assure you that such coverage will be sufficient to satisfy any liabilities resulting from successful product liability claims. In such a case, we may be required to make substantial payments to cover losses, damages, or liabilities arising from product liability claims. Moreover, even for amounts nominally covered by insurance, foreign exchange controls or other regulatory restrictions may prevent us from using insurance proceeds to satisfy the underlying liabilities. In addition, we have not procured liability insurance for each of our clinical trials, and we do not currently maintain, and may not procure, clinical trial liability insurance for every clinical trial in the future. As a result, we may be exposed to uninsured costs, losses, or liability arising from clinical trials or from product liability claims relating to our vaccine products. Any of these factors could have a material adverse effect on our business, financial condition, and results of operations. Furthermore, adverse events following immunization, or AEFI, whether or not ultimately determined to have been caused by our products, could result in increased pharmacovigilance obligations, regulatory investigations, product recalls, suspension of lot release, claims by vaccine recipients or their families, negative media coverage, and reputational harm. In jurisdictions where pharmacovigilance systems, safety-data 13 exchange mechanisms, or adverse event investigation procedures are less developed, delayed or incomplete safety-data exchange could impede our ability to respond to AEFI in a timely and comprehensive manner, which could adversely affect our brand and product sales. We face risks related to pandemics and other widespread outbreaks of contagious disease, which could disrupt our operations and adversely affect our results of operations. Significant outbreaks of contagious diseases, and other adverse public health developments, could have a material adverse impact on our business operations and results of operations. For example, the COVID-19 pandemic negatively impacted the global economy, disrupted consumer spending and global supply chains, and created significant volatility and disruption in the financial markets. The prevention and containment measures adopted by governments and private enterprises, including varying degrees of restrictions on social and commercial activities in China and around the world, further exacerbated this economic disruption and uncertainty. The extent of the impact of any future pandemic or other public health emergency on our business will depend on developments that are inherently uncertain and difficult to predict, including the duration, severity, and geographic spread of the outbreak; the emergence of new variants; and the nature and effectiveness of governmental and private-sector response measures, including containment efforts and vaccination programs. Additionally, to the extent that any pandemic or other public health crisis adversely affects our business, results of operations, or financial condition, it may also heighten many of the other risks described in this "Risk Factors" section. Our growth may be adversely affected if market demand for our vaccine products and product candidates does not meet our expectations. We may encounter problems of inadequate supply, oversupply, inventory write-offs or product disposal. The production of vaccine products is a lengthy and complex process. Our inability to align production with market demand may result in a failure to meet that demand, which could materially and adversely affect our financial condition and results of operations and damage our reputation and corporate brand. For example, in China and certain other Northern Hemisphere markets, seasonal influenza vaccinations are typically administered during the three-month period from September to November in anticipation of the subsequent flu season, and we expect this period to constitute one of the most significant sales periods for this product each year. In anticipation of the flu season, we intend to build inventory of our influenza vaccine product in line with anticipated demand. If actual demand does not meet our expectations, or if market access, procurement, distribution or vaccination activities are delayed or disrupted, we may be required to write off inventory or dispose of products that expire before sale or administration. Vaccine products often have limited shelf lives, and production planning must be closely coordinated with market demand, lot release, distribution and vaccination schedules. Market shifts, demand fluctuations and other unforeseen circumstances may result in product disposal, incremental costs, lower gross margins and reputational harm. Conversely, if demand exceeds our production capacity or if we experience delays in production, lot release or distribution, we may be unable to satisfy customer orders in a timely manner, which could cause customers or public health authorities to seek alternative products, thereby harming our market position. Our business is highly seasonal, and this seasonality may cause our operating results to fluctuate significantly from quarter to quarter. The seasonal nature of our business is expected to result in significant quarterly fluctuations in our operating results. For example, in China and other Northern Hemisphere markets, the influenza season generally runs from November through March of the following year, and the largest proportion of influenza vaccinations is administered between September and November of each year. As a result, we expect to generate the majority of our annual revenues from influenza vaccines sold in China and other Northern Hemisphere markets during this period. We rely on a limited number of facilities for the manufacturing of our products in accordance with relevant regulatory requirements. Any disruption, underutilization or impairment of our facilities could reduce or restrict our sales, increase costs and harm our reputation. Pursuant to the China GMP guidelines, each vaccine product may only be produced in a dedicated production facility. In Beijing, we conduct primary production of each vaccine in dedicated production plants at our Shangdi, Changping and Daxing sites, and secondary filling and packaging at our Changping and Daxing sites. In Dalian, we manufacture our mumps and varicella vaccines at a single dedicated facility. Although we are constructing additional manufacturing facilities, we do not currently maintain back-up primary production facilities for any of our marketed products and are therefore dependent on our existing facilities for the continued operation of our business. Natural disasters or other unanticipated catastrophic events, including power interruptions, water shortages, storms, fires, earthquakes and terrorist attacks, could significantly impair our ability to manufacture our products, disrupt our operations and delay our research and development activities. Our facilities and certain specialized equipment therein would be difficult to replace and could require substantial lead time to repair or procure. Such events may also destroy raw materials, work-in-process or finished-product inventory stored at our facilities. We do not maintain business interruption insurance, and the occurrence of any such event could materially and adversely affect our business, financial condition and results of operations. We may construct additional manufacturing facilities in the future; however, there can be no 14 assurance that we will successfully expand our manufacturing capabilities or realize the anticipated benefits of such facilities. Any of these factors could reduce or restrict our sales, harm our reputation and have a material adverse effect on our business, financial condition, results of operations and prospects. We have made substantial investments in manufacturing facilities, production lines, industrial parks and related infrastructure. Under current product and market conditions, certain of our plants, workshops or other industrial space may experience lower utilization rates. If market demand remains weak, industry demand contracts, commercialization of new products is delayed, or leasing and other asset-utilization plans do not proceed as expected, we may continue to incur operating and maintenance costs and depreciation and amortization expenses on underperforming assets, recognize asset impairment charges, and generate lower returns on invested capital. Underutilized facilities may also create production-planning, maintenance and compliance burdens and could materially and adversely affect our financial condition and results of operations. We may need additional capital to upgrade or construct our production facilities, to continue development of our product pipeline, and to market existing and future products on a large scale. We cannot guarantee that we will find adequate sources of capital in the future. In the future, we may need to raise additional funds to finance equipment expenditures, to acquire intellectual property, to upgrade existing manufacturing facilities and develop GMP-compliant production facilities for pipeline products, to continue the development and commercialization of our product candidates, and to fund other corporate purposes. As of December 31, 2025, we had approximately $1,156.4 million in cash and cash equivalents and restricted cash. We may undertake significant future financings in order to: •upgrade existing manufacturing facilities and develop GMP-compliant production facilities for pipeline products; •proceed with the research and development of other vaccine products, including clinical trials of new products; •commercialize our products, including the marketing and distribution of new and existing products; •seek and obtain regulatory approvals; •develop or acquire, directly or indirectly through the acquisition of companies, other product candidates, technologies, or companies; •protect our intellectual property; and •finance general, administrative, and research activities that are not related to specific products under development. In the past, we funded most of our research and development and other expenditures through government grants, working capital, bank loans and proceeds from private placements and public offerings of Sinovac Antigua's common shares. We may need to raise additional funds in the future because our current operating and capital resources may be insufficient to meet future requirements. Sinovac Antigua is authorized to issue 100,000,000 common shares, of which 71,860,702 are issued and outstanding as of the date of this annual report. To increase the number of authorized common shares, we must amend Sinovac Antigua's Articles of Incorporation and By-laws, which requires (i) a majority of common shares to be present for a quorum, and (ii) the affirmative vote of two-thirds of common shares present and voting at the general meeting. We cannot assure you that Sinovac Antigua will be able to collect sufficient affirmative votes to amend its Articles of Incorporation and By-laws. If we fail to increase the number of authorized common shares of Sinovac Antigua, we may have insufficient common shares available for future issuances of equity securities to meet our capital needs. If we raise additional funds by issuing equity securities, it will result in further dilution to our existing shareholders. The dilutive impact may be exacerbated if the shares are sold when the market price is low, as shares issued in equity financing transactions will normally be sold at a discount to the current market price. Any additional equity securities issued may also provide for rights, preferences, or privileges senior or otherwise preferential to those of holders of our existing common shares. Unforeseen problems, including materially negative developments relating to, among other things, disease developments, product sales, new product rollouts, clinical trials, research and development programs, our strategic relationships, our intellectual property, litigation, regulatory changes in our industry, the Chinese market generally, or general economic conditions, could interfere with our ability to raise additional funds or materially and adversely affect the terms upon which such funding is available. If we raise additional funds by issuing debt securities, these debt securities would have rights, preferences, and privileges senior to those of holders of Sinovac Antigua's common shares, and the terms of the debt securities issued could impose significant restrictions on our operations. If we raise additional funds through collaborations and licensing arrangements, we might be required to relinquish significant rights to certain of our technologies, marketing territories, product candidates, or products that we would otherwise seek to develop or commercialize ourselves, or be required to grant licenses on terms that are not favorable to us. In the past, our Chinese Mainland Subsidiaries have received various types of grants from the PRC government to finance their research and development and facility investment for their vaccine products. They may not receive additional grants in the future. As described above, the actions of the Shareholder Group leading up to and at the 2017 AGM resulted in uncertainties as to the future direction of our company and the composition of Sinovac Antigua's board of directors. As a result of these uncertainties, we do not know whether additional 15 financing will be available to us on commercially acceptable terms when needed. If adequate funds are not available or are not available on commercially acceptable terms, we may be unable to continue developing our products. In any such event, our ability to bring a product to market and earn revenues could be delayed, and competitors could develop products sooner than we do. As a result, our business, financial condition, and results of operations could be materially and adversely affected. Our capital requirements may also increase due to rising raw material prices, higher labor costs, equipment maintenance and validation costs, depreciation and amortization associated with production facilities and information systems, and compliance costs associated with evolving regulatory requirements. We may not be able to reduce or offset such costs through price increases, cost savings, or productivity improvements, particularly in markets subject to government procurement or intense price competition. If our Chinese Mainland Subsidiaries are unable to attract, train, retain and motivate their third-party marketing agents in the Chinese mainland, sales of their products may be materially and adversely affected. In the Chinese mainland, our Chinese Mainland Subsidiaries rely on third-party marketing agents dispersed across the country to market their products to CDCs and other healthcare institutions. We believe that future success in the Chinese mainland market will depend on the dedication, efforts and performance of these third-party marketing agents. There is only a limited number of competent and qualified marketing agents in the Chinese vaccine industry, and training new marketing agents requires significant time and resources with no assurance that such agents will perform effectively. Competitors of our Chinese Mainland Subsidiaries may offer compensation or other economic incentives to third-party marketing agents significantly above market standard, which may cause such agents to cease marketing the Chinese Mainland Subsidiaries' products. In addition, our Chinese Mainland Subsidiaries may face challenges in maintaining the motivation and dedication of their marketing agents, particularly in a competitive market where agents may prioritize products that offer them greater economic returns. If our Chinese Mainland Subsidiaries are unable to attract, train, retain and motivate their marketing agents, sales of their products in the Chinese mainland market may be materially and adversely affected. We depend on our key personnel and the capabilities of our workforce. If we fail to attract, train, retain and motivate the talent required for our existing and new businesses, our business may be materially harmed. We had 2,602 full-time employees as of December 31, 2025, and we depend to a great extent on principal members of our management and scientific teams. If we lose the services of any key personnel, in particular Mr. Weidong Yin, the loss could significantly impede key decision-making on strategic and operational matters, which in turn could harm our business performance. We have entered into employment agreements with our executive officers, under which they have agreed to restrictive covenants relating to non-competition and non-solicitation. While these covenants may reduce competitive risks arising from executive departures, they do not prevent our executive officers from leaving, nor do they guarantee that we will be able to retain the services of all our executive officers in the future. In addition, recruiting and retaining qualified scientific, technical and managerial personnel and research partners will be critical to our success. Competition among biopharmaceutical and biotechnology companies for qualified employees in the Chinese mainland is intense. Moreover, there is a shortage of employees in the Chinese mainland with expertise in our areas of research and in clinical and regulatory affairs, and this shortage is likely to continue. As a result, turnover rates in our industry remain high, and we may not be able to retain existing personnel or attract and retain qualified staff in the future. If we fail to hire and retain personnel in key positions, we may be unable to develop or commercialize our product candidates in a timely manner. As we expand into different countries and regions, establish or manage entities overseas, pursue the development of new technologies such as mRNA vaccines and antibodies, and enter new areas through investments, acquisitions or business development, our business requires new skills and management capabilities. If the capabilities of our personnel, management systems or organizational structure do not keep pace with the growing complexity of our operations, our execution, compliance, innovation and operational efficiency may be adversely affected. We may encounter difficulties in managing our organizational structure, operational complexity and evolving business activities, which could adversely affect our business, financial condition and results of operations. As our business activities, product portfolio, research and development programs, manufacturing operations and regulatory obligations evolve, we may encounter difficulties in managing our organizational structure, operational complexity and business operations. We have developed, and continue to refine, a group-level control and management framework designed to achieve resource synergies and unified management across subsidiaries and business lines. This framework may require ongoing adjustment and integration. A more complex organizational structure may give rise to misalignment between the group and its subsidiaries, delayed, incomplete or distorted information flows, inconsistent implementation of policies, slower decision-making and reduced overall management effectiveness. In addition, expansion into new technologies, products, markets, commercialization models and strategic initiatives may further increase operational, compliance and management complexity, requiring significant management attention and substantial financial and human resources. If we are unable to effectively implement group-level controls, internal reporting systems, delegation of authority, compliance procedures, resource allocation and performance management across our organization, our operational efficiency, internal controls, compliance systems, financial condition and results of operations could be materially and adversely affected. 16 International expansion may be costly, time-consuming and difficult, and our international operations, regulatory approvals and product registrations are subject to additional market, procurement, geopolitical, regulatory, localization, foreign exchange and operational risks. We have entered certain selected international markets and intend to continue expanding sales of our products and product candidates into new international markets. In pursuing this international growth, we have entered, and intend to continue to enter, markets in which we have limited or no experience and in which our brand may be less recognized. We may need to invest significantly more in market education, promotion, regulatory support and local partnerships than we do in our existing markets, and we may be unable to identify, attract or retain suitable distributors, licensees, collaboration partners or service providers. In addition, before our vaccines can be sold in countries or regions other than China, regulatory approvals from the relevant governmental authorities of the target markets must be obtained, and there can be no assurance that such approvals will be granted on a timely basis, or at all. In pursuing growth in new and existing international markets, we may fail to anticipate competitive conditions, procurement practices, government budget constraints and regulatory expectations that differ materially from those in our home market. Many markets outside the Chinese mainland are highly competitive and government-procurement-oriented, and procurement authorities may seek lower prices, reduce contracted volumes, delay payments, change public health priorities or immunization guidelines, or cancel or materially modify tenders or purchasing commitments. Such actions could reduce revenues and margins, result in underutilized production capacity or inventory adjustments, and adversely affect our financial condition and results of operations. We are also exposed to a broad range of other risks associated with international operations. Political and economic instability, recessions, trade wars and disputes, and geopolitical tensions, including regional conflicts, diplomatic disputes, public health emergencies or local unrest in or affecting countries where we operate, sell products, conduct clinical trials, source materials or rely on logistics routes, could reduce routine vaccine demand, disrupt supply chains, block transportation routes, increase freight, insurance and security costs, delay revenue recognition, or prevent us from delivering products to customers. Changes in tariffs, export license requirements, sanctions and export-control restrictions could limit our ability to sell or ship products across borders, and unauthorized re-export of our products could expose us to regulatory enforcement actions. We may also face difficulties in administering foreign operations, limited intellectual property protection, terrorist activities, the financial condition and performance of international distributors, potentially adverse tax consequences, difficulties in enforcing contractual or legal rights, foreign exchange controls, exchange rate fluctuations or devaluation of local currencies, and restrictions on profit repatriation. Some countries and regions have adopted or are considering vaccine localization strategies, including local manufacturing, technology transfer, licensing or local-content expectations. For example, certain countries and regions, including in Africa, are advancing such strategies with a view to building domestic vaccine production capacity. If government or regional support for vaccine localization weakens, procurement commitments fail to materialize, local manufacturers face financing constraints, locally manufactured products experience prolonged market-entry timelines, or product upgrades and market volatility adversely affect localized products, our technology licensing, supply, localization or collaboration projects may not generate the expected benefits and could expose us to financial, operational, intellectual property and reputational risks. International product registration and regulatory approval are also complex and uncertain. Because regulatory approvals from the relevant governmental authorities of each target market must be obtained before our vaccines can be sold in countries or regions other than China, we are required to comply with differing regulatory requirements for vaccines and biologics in each jurisdiction. These requirements may include different standards for clinical data, bridging studies, local trials, pharmacopoeia standards, GMP inspections, post-approval variations and registration maintenance. Approval in one jurisdiction does not ensure approval in any other jurisdiction, and the specific requirements to obtain approval may differ in material respects. Regulatory frameworks may change during the registration process or transition to regional or unified frameworks, and implementation may remain inconsistent across national authorities. Failure to complete product variation applications, registration maintenance, local studies, GMP inspections or deficiency responses within prescribed timelines may result in market access barriers, delayed launches, interruption of post-market compliance, registration failure or loss of approvals. If we do not successfully manage these international risks, our business, growth strategy, financial condition and prospects would be materially and adversely affected. Acquisitions and strategic alliances we undertake may have a material adverse effect on our ability to manage our business and may ultimately prove unsuccessful. Our growth strategy may involve the acquisition of new production lines, technologies, businesses, products or services, or the formation of strategic alliances in areas in which we do not currently operate. These acquisitions and strategic alliances may require our management to develop expertise in new areas or geographies, manage new business relationships and attract new types of customers. The significant management attention required to pursue and integrate such transactions, and the resulting diversion of management's attention and resources, could have a material adverse effect on our ability to manage our business. We may also experience difficulties integrating acquisitions into our existing business and operations. Future acquisitions and strategic alliances may expose us to potential risks, including risks associated with: •failure or delay in obtaining regulatory approvals for newly acquired product pipelines; •the integration of new operations, services and personnel; 17 •unforeseen or hidden liabilities; •the diversion of resources from our existing businesses and technologies; •our inability to generate sufficient revenue to offset the costs of acquisitions; •potential loss of, or harm to, relationships with employees or customers; and •impairment of intangible assets acquired. Any of the foregoing could significantly disrupt our ability to manage our business and materially and adversely affect our business, financial condition and results of operations. In addition, acquisitions, joint ventures and other strategic alliances in new technologies or therapeutic areas may require us to integrate unfamiliar technologies, personnel, systems, regulatory obligations and business cultures. We may be unable to identify suitable targets, complete transactions on acceptable terms, obtain required regulatory approvals, realize expected synergies or avoid unexpected liabilities. We may be unable to ensure compliance with applicable economic sanctions, export control and trade control laws, particularly when we sell our products through distributors over which we have limited control. The U.S. Department of the Treasury's Office of Foreign Assets Control ("OFAC") administers certain laws and regulations that impose penalties upon U.S. persons and, in some instances, foreign entities owned or controlled by U.S. persons, for conducting activities or transacting business with certain countries, governments, entities or individuals subject to U.S. economic sanctions (collectively, "U.S. Economic Sanctions Laws"). We will not use any proceeds from the sale of Sinovac Antigua's common shares, directly or indirectly, to fund any activities or business with any country, government, entity or individual with respect to which U.S. persons or, as appropriate, foreign entities owned or controlled by U.S. persons, are prohibited from engaging under U.S. Economic Sanctions Laws. However, we sell our products in international markets through independent non-U.S. distributors that are responsible for interacting with the end-users of our products. We may not be able to ensure that such non-U.S. distributors fully comply with all applicable U.S. Economic Sanctions Laws. As a result, actions could be taken against us that could materially and adversely affect our reputation and have a material adverse effect on our business, financial condition, results of operations and prospects. Our international operations may also require us to screen customers, distributors, end-users, counterparties, destinations, financial institutions, logistics providers and other parties against applicable sanctions, export-control, restricted-party and embargo lists, and to assess end-use, end-user and re-export risks. If we fail to implement or maintain effective screening or other compliance procedures, we may inadvertently transact with sanctioned or restricted parties or in restricted jurisdictions, violate applicable export-control or sanctions laws, and become subject to fines, penalties, investigations, contractual disputes, reputational harm or breach of procurement or sales contracts with our suppliers or customers. Failure to achieve and maintain effective internal controls could have a material adverse effect on our business, results of operations and the trading price of Sinovac Antigua's common shares. We are subject to the reporting obligations under U.S. securities laws. Section 404 of the Sarbanes-Oxley Act of 2002 and related rules require public companies to include a report of management on their internal control over financial reporting in their annual reports. This annual report must contain an assessment by management of the effectiveness of a public company's internal control over financial reporting. In addition, an independent registered public accounting firm for a public company must attest to and report on the effectiveness of our internal control over financial reporting. In connection with the preparation of this annual report, we carried out an evaluation of the effectiveness of our internal control over financial reporting. Based on this evaluation, our chief executive officer and chief financial officer concluded that our internal control over financial reporting was not effective based on management's identification of material weaknesses. Our independent registered public accounting firm has issued an attestation report on our internal control over financial reporting, which concludes that our internal control over financial reporting was not effective as of December 31, 2025. See "Item 15. Controls and Procedures." A material weakness is a deficiency, or a combination of deficiencies, in internal control over financial reporting, such that there is a reasonable possibility that a material misstatement of the company's annual and interim financial statements will not be prevented or detected on a timely basis. We are in the process of implementing measures to remedy the material weaknesses. We cannot assure you that we will be able to resolve these material weaknesses in internal control over financial reporting in a timely and effective manner or that any material weakness or deficiency in our internal control over financial reporting will not be identified in the future. We may not always be able to maintain effective internal control over financial reporting. If we fail to maintain effective internal control over financial reporting in the future, we and our independent registered public accounting firm may not be able to conclude that we have effective internal control over financial reporting at a reasonable assurance 18 level. This could in turn result in the loss of investor confidence in the reliability of our financial statements and negatively impact the trading price of Sinovac Antigua's common shares, inhibiting our ability to raise sufficient capital on favorable terms. Furthermore, we have incurred and anticipate that we will continue to incur considerable costs and use significant management time and other resources in an effort to comply with Section 404 and other requirements of the Sarbanes-Oxley Act. Significant disruptions of IT systems, breaches of information security and cyber threats could adversely affect our business. Our business relies heavily on interconnected IT systems, including internet-based and cloud-based systems and digital tools. We collect, generate, process, store and transmit large amounts of confidential information, including sensitive and personal information relating to patients, suppliers, customers, employees, collaborators and other stakeholders, as well as information relating to clinical trials. We also develop and utilize digital systems and tools to engage patients, healthcare providers, governments and partners and to conduct business and deliver products and services. Like many companies, our systems are potentially vulnerable to service interruptions or security breaches from inadvertent or intentional actions by our employees, contingent workers, service providers, business partners or customers, or from attacks by malicious third parties. System failures or outages could result in data loss or compromise of data integrity, and our business continuity could be at risk if we are unable to recover such data through backups or other restoration measures. Cyberattacks are becoming increasingly sophisticated and are often carried out by groups and individuals with broad motivations, including industrial espionage, extortion, destruction of property and theft of personal information. A cyberattack or security breach could jeopardize the security and availability of our systems and networks, resulting in data theft, corruption or unauthorized disclosure of confidential information. Although we have continued to invest in data and IT system protection and maintain technical and procedural controls designed to safeguard our data assets, our efforts may not prevent service interruptions, extortion, theft of confidential information, unauthorized disclosure of confidential information, or compromise of data integrity. Any IT service interruption or data security incident could adversely affect our business operations, result in legal liability or loss of personal data, confidential information and intellectual property, trigger reporting obligations to governments and regulatory agencies, require notification of affected individuals, and harm our financial condition, legal position, business and reputation. Our business, governance and reputation could be negatively affected by shareholder disputes, litigation or actions of shareholders or others. Sinovac Antigua and certain of its subsidiaries, directors and officers are involved in a number of legal proceedings across various jurisdictions. For detailed information, see "Item 8. Financial Information — Legal and Administrative Proceedings." We cannot predict the outcome of these proceedings or any other actions initiated by shareholders or other parties. Nor can we predict how such actions may affect Sinovac Antigua's share price, which could experience significant volatility during the pendency of these proceedings and following their resolution. The preparation and defense of these matters have caused us to incur substantial costs, and we expect such costs to continue until the litigation concludes. Preparing for and managing litigation is also time-consuming and may disrupt our operations and divert the attention of management and key employees from the execution of our strategic plan. Shareholder disputes may also affect, or be perceived to affect, our corporate governance, our ability to make major strategic decisions, and the confidence of governmental authorities, customers, business partners, employees, investors and other stakeholders. Negative publicity relating to such disputes may harm our reputation and could have a material adverse effect on our business, financial condition, results of operations and prospects. Although the litigation arising from our annual general meeting of shareholders held on February 6, 2018 has been concluded, there is ongoing litigation concerning the 2018 PIPE Shares and the special shareholders' meeting held on July 8, 2025. In addition, there is currently a restraint placed upon Sinovac Antigua from holding a shareholder meeting while the proceedings relating to the special shareholders' meeting (the "SSM Proceedings") are pending. As a result of the earlier litigation concerning the 2018 annual general meeting and the current restraint imposed in connection with the SSM Proceedings, Sinovac Antigua has not been able to hold an annual meeting of shareholders since February 2018, and its shareholders will not have the opportunity to vote in an election of Sinovac Antigua's directors for an indeterminate amount of time. The disputes with respect to the PIPE Shares could have a material adverse effect on the results of our operations and our financial condition. An amount equal to the aggregate cash that would otherwise be payable under the 2025 Dividend in respect of the 2018 PIPE Shares has been set aside and retained in an escrow account of Sinovac Antigua. This amount will remain in escrow pending the final resolution of the ongoing litigation and arbitration proceedings with respect to the PIPE Shares in Antigua and Hong Kong. The timing and outcome of these proceedings are uncertain. The interests of the minority shareholders of Sinovac Beijing, Sinovac LS and Sinovac Dalian may diverge from our own, which may adversely affect our ability to manage these subsidiaries. We hold majority equity interests in each of Sinovac Beijing, Sinovac LS and Sinovac Dalian. If our interests diverge from those of our minority shareholders, they may exercise their rights under the relevant articles of association, shareholders' agreements or joint venture contracts of such 19 subsidiaries and the relevant PRC laws to protect their own interests, which may substantially differ from ours. As a result, our ability to manage these subsidiaries, and their respective subsidiaries and affiliates, may be adversely affected, which in turn may materially and adversely affect our business, financial condition and results of operations. Sinovac Beijing is a Sino-foreign equity joint venture in which we own a 73.09% equity interest. In 2018, Mr. Aihua Pan, acting as the representative of the then minority shareholder of Sinovac Beijing, Sinobioway Bio-medicine Co., Ltd. (formerly named Xiamen Bioway Group Co., Ltd., "Sinobioway Medicine"), took a series of disruptive actions against Sinovac Beijing, including purporting to terminate the employment of senior managers without board approval, forcibly entering Sinovac Beijing's corporate offices and cutting power to production facilities, which resulted in the destruction of products and bacterial seed stocks, the temporary suspension of production, and the postponement of an NMPA inspection necessary for PPSV23 production approval. In September 2020, the Beijing No. 4 Intermediate People's Court held Sinobioway Medicine and Mr. Aihua Pan liable for torts and breaches of shareholders' fiduciary duty and awarded Sinovac Beijing damages of RMB15.4 million, which was upheld on appeal by the Higher People's Court of Beijing Municipality in October 2022, which further ruled that Shandong Sinobioway Biomedicine, as the sole shareholder of Sinobioway Medicine, is jointly and severally liable for all relevant obligations of Sinobioway Medicine. In addition, Sinobioway Medicine filed complaints seeking to dissolve and liquidate Sinovac Beijing and claiming that Sinovac LS infringed the legitimate rights of Sinovac Beijing in connection with the research and development of CoronaVac, both of which were subsequently voluntarily withdrawn. In July 2023, following a settlement under the supervision of Zhangdian District Court, Shandong Sinobioway Biomedicine replaced Sinobioway Medicine as the minority shareholder of Sinovac Beijing, and the legal representative and chairman of the board of directors of Sinovac Beijing was changed from Mr. Aihua Pan to Mr. Weidong Yin. These and other actions taken by the former minority shareholder of Sinovac Beijing and its representatives have materially and adversely affected, and any similar actions in the future may continue to materially and adversely affect, our business, financial condition and results of operations. We cannot assure you that Shandong Sinobioway Biomedicine, the current minority shareholder of Sinovac Beijing, will cooperate with us in handling matters related to the operations of Sinovac Beijing in the future. As of the date of this annual report, Dalian Jin Gang Group, the minority shareholder of Sinovac Dalian, has been cooperating with us with respect to the business of Sinovac Dalian, and the minority shareholders of Sinovac LS have been aligned with us with respect to the business of Sinovac LS. However, we cannot assure you that these minority shareholders will continue to cooperate with us in the future. Sinovac Antigua could issue additional common shares or preferred shares, which could have the effect of diluting existing shareholders and impairing their voting and other rights. Sinovac Antigua's Articles of Incorporation authorize the issuance of up to 100,000,000 common shares and 50,000,000 preferred shares. The preferred shares may be issued with such designations, rights, privileges, restrictions and conditions as may be determined from time to time by Sinovac Antigua's board of directors. Sinovac Antigua's board is empowered, without shareholder approval, to issue additional common shares or preferred shares. The issuance of additional common shares could dilute the interest of existing shareholders. In addition, preferred shares may be issued with dividend, liquidation, conversion, voting, or other rights that could further dilute the interest of, or impair the voting and other rights of, Sinovac Antigua's existing shareholders. The issuance of such additional common shares or preferred shares could also be used as a method of discouraging, delaying, or preventing a change in control. Certain provisions of Sinovac Antigua's By-laws may discourage a change of control. Certain provisions of Sinovac Antigua's By-laws, including provisions that authorize the board of directors to issue preferred shares in one or more series and to designate the price, rights, preferences, privileges and restrictions of such preferred shares without any vote or action by the shareholders, may discourage, delay or prevent a change in control of our company or a change in our management that shareholders might otherwise consider favorable. These provisions could make it more difficult for a third party to acquire our company, even if such third party's offer may be considered beneficial by many of our shareholders. As a result, our shareholders may be deprived of the opportunity to sell their shares at a premium over the prevailing market price, or such a transaction may not occur at all. We may have exposure to greater than anticipated tax liabilities. Tax policies, laws, and rates in various jurisdictions may be subject to significant changes due to shifting economic and political conditions, which could adversely affect our financial results. In December 2021, the Organization for Economic Co-operation and Development ("OECD") released model rules introducing a 15% global minimum tax rate for large multinational enterprises ("Pillar Two"). Large multinational enterprises within the scope of the rules are required to calculate their Pillar Two effective tax rate for each jurisdiction where they operate and are required to pay a top-up tax for any jurisdiction in which their Pillar Two effective tax rate is below 15%, equal to the difference between the 15% minimum rate and their Pillar Two effective tax rate in that jurisdiction. Subsequently, the OECD has issued multiple sets of administrative guidance. As of the date of this annual report, various jurisdictions have either enacted legislation adopting certain components of the Pillar Two model rules beginning in 2024 or 2025, with additional components to follow in later years, or announced their intention to enact such legislation 20 in future years. We continue to evaluate the impact of these legislative developments in the jurisdictions in which we operate. As the rules are still evolving, there remain uncertainties regarding the interpretation and implementation of the rules, and such developments could adversely affect our financial results. There is a significant risk that we may be classified as a passive foreign investment company, which could result in adverse U.S. federal income tax consequences to U.S. Holders of Sinovac Antigua's common shares. Based on our estimates of the fair market value of our assets (subject to the discussion below) as well as the composition of our income and assets, we do not believe we were a "passive foreign investment company" ("PFIC") for U.S. federal income tax purposes for our taxable year ended December 31, 2025, although this belief is subject to significant uncertainties in several respects. As a result, there is a significant risk that we were a PFIC for our taxable year ended December 31, 2025 and we may be a PFIC for any taxable year. In general, a non-U.S. corporation will be a PFIC for any taxable year if either (i) at least 75% of its gross income for such year is "passive income" (as defined in the relevant provisions of the U.S. Internal Revenue Code of 1986, as amended (the "Code")) or (ii) at least 50% of the value of its assets (generally based on a quarterly average) during such year is attributable to assets that produce passive income or are held for the production of passive income. We must make a separate determination after the close of each taxable year as to whether we were a PFIC for that year. In particular, under normal circumstances, the value of our assets for purposes of the PFIC test for a particular taxable year would generally be determined by reference to the market price of Sinovac Antigua's common shares at the end of each quarter during such taxable year, and fluctuations in such market price (or changes in the composition of our income or assets) could cause us to become a PFIC for any subsequent year. However, as a result of the suspension of trading in Sinovac Antigua's common shares, we are unable to reference the actual market prices of Sinovac Antigua's common shares in determining our PFIC status. As a result, we have based our determination of the fair market value of our assets for purposes of the PFIC determination on our estimated enterprise value, which we estimated by reference to our book value and price-to-book ratio, and a comparison of the price-to-book ratio of certain other companies in industries similar to ours. We cannot provide any assurances that the fair market value of our assets, including the value of our unbooked goodwill, is not materially different on the applicable measurement dates from such estimated value or as to whether the U.S. Internal Revenue Service will respect our approach. If the fair market value of our assets, including the value of our unbooked goodwill, is substantially lower than our estimate, there is a significant risk that we were a PFIC for our taxable year ended December 31, 2025 and may be a PFIC for any taxable year. This uncertainty will continue so long as trading in Sinovac Antigua's common shares remains suspended. In addition, the composition of our income and assets will be affected by how, and how quickly, we use the cash we generate from our operations or raise in any offering. If we are a PFIC for any taxable year during which a U.S. Holder (as defined in "Item 10. Additional Information — E. Taxation — United States Federal Income Taxation") holds Sinovac Antigua's common shares, additional reporting requirements and certain adverse U.S. federal income tax consequences could apply to such U.S. Holder. Please see "Item 10. Additional Information — E. Taxation — United States Federal Income Taxation — Passive Foreign Investment Company." If we were deemed to be an investment company under the U.S. Investment Company Act of 1940, as amended (the "1940 Act"), applicable restrictions could make it impractical for us to continue our business as contemplated and could have a material adverse effect on our business, financial condition and results of operations. Under Sections 3(a)(1)(A) and (C) of the 1940 Act, a company generally will be deemed to be an "investment company" for purposes of the 1940 Act if (1) it is, or holds itself out as being, engaged primarily, or proposes to engage primarily, in the business of investing, reinvesting or trading in securities or (2) it engages, or proposes to engage, in the business of investing, reinvesting, owning, holding or trading in securities and it owns or proposes to acquire investment securities having a value exceeding 40% of the value of its total assets (exclusive of U.S. government securities and cash items) on an unconsolidated basis. We do not believe that we are an "investment company," as such term is defined in either of those sections of the 1940 Act. Notwithstanding Sections 3(a)(1)(A) and (C) of the 1940 Act, we are a research and development company and intend to conduct our operations in compliance with the safe harbor requirements of Rule 3a-8 of the 1940 Act, such that we will not be deemed an investment company. However, if we were to be deemed an investment company, restrictions imposed by the 1940 Act, including limitations on our capital structure and our ability to transact with affiliates, could make it impractical for us to continue our business as contemplated and could have a material adverse effect on our business, financial condition and results of operations. As a foreign private issuer, we are subject to different U.S. securities laws and NASDAQ listing rules than domestic U.S. issuers. As a foreign private issuer, we are exempt from certain rules under the Exchange Act, including those prescribing the furnishing and content of quarterly reports and proxy statements. In addition, as an Antigua and Barbuda company listed on the NASDAQ Global Select Market, we are permitted to follow Antigua and Barbuda corporate governance practices in lieu of certain NASDAQ corporate governance standards, subject to certain conditions. Certain corporate governance practices in Antigua and Barbuda may differ significantly from NASDAQ corporate governance standards. As a result, you may not be afforded the same information or protections as would be available to you if you were investing in a domestic U.S. issuer. 21 Trading of Sinovac Antigua's common shares on NASDAQ has been halted since February 22, 2019. On February 22, 2019, approximately 27.8 million common shares and approximately 14.6 million series B preferred shares (collectively, the "Exchange Shares") were issued into the Shareholder 2019 Rights Exchange Trust in the name of Wilmington Trust, National Association, which holds the Exchange Shares for the benefit of certain shareholders of Sinovac Antigua. In connection with the issuance of the Exchange Shares into the Shareholder 2019 Rights Exchange Trust, NASDAQ implemented a halt in trading in Sinovac Antigua's common shares in order to facilitate the orderly distribution of the Exchange Shares. On January 16, 2025, the Privy Council ruled that the Rights Agreement is invalid. Following the Privy Council's ruling, Sinovac Antigua cancelled the Exchange Shares and dissolved the Shareholder 2019 Rights Exchange Trust. Although the original basis for the trading halt has been resolved, there can be no assurance as to when or whether the trading halt will be lifted. Sinovac Antigua received a notification letter dated May 20, 2026 (the "Notification Letter") from NASDAQ Listing Qualifications stating that, as of May 8, 2026, Sinovac Antigua had regained compliance with the requirement to timely file periodic and interim financial reports under NASDAQ's continued listing standards (the "Periodic Filing Rule"), as required by a panel decision dated January 21, 2026. The Notification Letter also stated that Sinovac Antigua will be subject to a mandatory panel monitor (the "Panel Monitor") for a period of one year from May 20, 2026. If, within that one-year monitoring period, the NASDAQ Listing Qualifications staff (the "Staff") finds Sinovac Antigua again out of compliance with the Periodic Filing Rule that was the subject of the exception, the Staff will issue a delist determination letter and Sinovac Antigua will have an opportunity to request a new hearing with the initial panel or a newly convened panel if the initial panel is unavailable. Sinovac Antigua will have the opportunity to respond and present to the panel as provided by Nasdaq Listing Rule 5815(d)(4)(C). Subsequently, on May 22, 2026, Sinovac Antigua received a delist determination letter from NASDAQ, stating that, because Sinovac Antigua had not timely filed its annual report on Form 20-F for the fiscal year ended December 31, 2025, Sinovac Antigua no longer complies with the Periodic Filing Rule. On May 29, 2026, Sinovac Antigua requested a hearing before the panel. The hearing request automatically stayed any suspension of Sinovac Antigua's securities for a period of 22 calendar days from May 22, 2026, the date of the delist determination letter. Sinovac Antigua has also requested a further stay of any suspension action pending the completion of the hearing process. There can be no assurance that the panel will grant Sinovac Antigua's request for a continued stay or that the outcome of the hearing will be favorable to Sinovac Antigua. NASDAQ imposes continued listing standards that must be satisfied in order to maintain the listing of Sinovac Antigua's common shares. If NASDAQ determines that Sinovac Antigua fails to meet these continued listing standards, its common shares may be subject to delisting. If Sinovac Antigua's common shares are delisted and Sinovac Antigua is not able to list its common shares on another national securities exchange, Sinovac Antigua's securities would likely be quoted on an over-the-counter market. If this were to occur, Sinovac Antigua's shareholders could face material adverse consequences, including limited availability of market quotations and reduced liquidity for the trading of Sinovac Antigua's securities. In addition, Sinovac Antigua could experience a diminished ability to issue additional securities or obtain additional financing. Risks Related to Government Regulation We can only sell products that have received regulatory approvals. Many factors affect our ability to obtain such approvals. Pre-clinical and clinical trials of our products, and the manufacturing and marketing of our products, are subject to extensive, costly and rigorous regulation by governmental authorities in the PRC and in other countries. Even if we complete pre-clinical and clinical trials successfully, we may not be able to obtain applicable regulatory approvals. We cannot market any product candidate until we have both completed our clinical trials and obtained the necessary regulatory approvals for that product candidate. Conducting clinical trials and obtaining regulatory approvals are uncertain, time-consuming and expensive processes. The process of obtaining required regulatory approvals from NMPA and other regulatory authorities often takes many years and can vary significantly based on the type, complexity and novelty of the product candidates. For example, it took us approximately ten years to develop and obtain regulatory approval to commercialize Healive, and it took us five and a half years and four and a half years to develop and obtain regulatory approvals to commercialize Bilive and Anflu, respectively. Our Inlive vaccine took us approximately eight years, from 2008 to 2016, to develop and obtain regulatory approval for commercialization. Delays in obtaining NMPA approvals for our products could result in substantial additional costs and adversely affect our ability to compete with other companies. Even if regulatory approval is ultimately granted, the approval may be subject to conditions, suspension, or withdrawal. Any approval received may also restrict the intended use and marketing of the applicable product candidate. There can be no assurance that all of the clinical trials for our vaccine candidates will be completed within the timeframes we currently anticipate. We could encounter difficulties in enrolling participants in clinical trials or encounter setbacks while conducting clinical trials that result in delays or cancellation. Data obtained from pre-clinical and clinical studies are subject to varying interpretations that could delay, limit or prevent regulatory approvals, and failure to comply with regulatory requirements or inadequate manufacturing processes could also prevent approvals. In addition, we may encounter delays or rejections in the event of additional regulation resulting from future legislation, administrative action or changes in the NMPA policy, or if unforeseen health risks arise among participants in clinical trials. Clinical trials may fail at any stage. Results of early-stage trials do not necessarily predict results of later-stage trials, and acceptable results in early-stage trials may not be replicated in later-stage trials. For these reasons, we do not know whether regulatory authorities will grant approval 22 for any of our product candidates in the future. In addition, production permits for our products are valid for five years and we need to apply for renewal six months prior to their expiration. The process to approve our renewal applications could be lengthy and there is no assurance that we will be granted renewal in a timely manner or at all. Outside the PRC, our ability to market some of our products is contingent upon receiving marketing authorizations from the appropriate foreign regulatory authorities. For example, Healive can be supplied to certain international organizations and is eligible to participate in the tender process in some countries as it has passed the WHO prequalification assessment ("WHO PQ"). However, there are still countries that require additional marketing authorization for product sales notwithstanding WHO PQ status. These foreign regulatory approval processes include risks similar to those associated with the NMPA approval process as described above and may include additional risks. We may not be able to comply with applicable GMP standards, product quality requirements, pharmacopoeia standards, lot release requirements and other regulatory requirements, each of which could have a material adverse effect on our business, financial condition and results of operations. We are required to comply with applicable GMP regulations, which include, among other things, requirements relating to personnel, premises and equipment, raw materials and products, qualification and validation, document management, production management, quality control and assurance, product distribution and product recalls. Manufacturing facilities must be approved by governmental authorities before they can be used to commercially manufacture our products and are subject to inspection by regulatory agencies. We cannot assure you that we will continue to meet applicable GMP standards, product quality requirements, pharmacopoeia standards, lot release requirements and other regulatory requirements in the future. The hepatitis A vaccine, varicella vaccine and sIPV are all prequalified by the WHO. After prequalification, GMP on-site re-inspections may occur at periodic intervals. If an inspection identifies GMP non-compliance, our prequalification status may be suspended or withdrawn, rendering us ineligible to supply the relevant vaccines to United Nations agencies. Additionally, if our GMP implementation does not comply with local requirements during an overseas registration process, we may be unable to proceed with registration or market access in that country, which could materially reduce our overseas revenues and limit our international growth. The Chinese Pharmacopoeia is regularly revised. When a new version takes effect, marketed vaccines may need to meet updated quality standards, which may require additional studies, process changes, analytical method updates, comparability assessments, variation filings and revalidation. For example, the 2025 Chinese Pharmacopoeia became effective on October 1, 2025. If we fail to complete required studies, implement process changes or obtain required approvals within NMPA deadlines, our products could face restrictions, including suspension of manufacturing or lot release. The newly revised Implementing Regulations of the Drug Administration Law of the PRC, effective May 15, 2026, further reinforce the full lifecycle quality obligations of marketing authorization holders, including requirements to establish an independent quality management department and designate a qualified person for quality. Compliance with these strengthened obligations requires significant enhancements to our internal quality management systems. During the transition period, risks may arise from misinterpretation of new requirements, delayed implementation of necessary changes or gaps in integrating new processes with existing systems. Under the Measures for Lot Release of Biological Products, if a lot release authority identifies a material vaccine quality risk, it must report to the drug regulator, which may refuse or suspend lot release and order corrective actions. Separately, for enterprises with unresolved quality issues or recurring deviations, regulators may increase inspection frequency and conduct unannounced on-site plant inspections. Failure to promptly address manufacturing deviations, maintain complete records or ensure product traceability may trigger heightened scrutiny, lot release delays, production suspension, product recalls, batch rejection, warning letters, suspension of GMP certificates, administrative penalties or reputational damage. If any of our existing or future vaccine candidates obtain marketing approval through a conditional approval pathway, but we fail to complete required confirmatory studies within the prescribed timeframe or the results of such confirmatory studies fail to demonstrate clinical benefit, the relevant drug registration certificate may be revoked. In addition, we rely on third-party suppliers for certain raw materials and components. Quality failures in such input could compromise the safety and efficacy of our finished products, and our ability to seek recourse against such suppliers may be limited. More broadly, any failure to maintain or enhance our quality management system in line with evolving domestic and international standards could impair our ability to access new markets or participate in international procurement tenders. Uncertainties exist with respect to how the PRC Vaccine Administration Law and other vaccine-specific regulatory requirements may impact our current operations. According to the PRC Vaccine Administration Law, the supervision of vaccines covers the entire lifecycle from vaccine development, production and distribution to vaccination. Specialized inspection teams of pharmaceutical professionals are established at the central and provincial levels to conduct supervisory activities. An electronic traceability system has been established to ensure that all information relating to vaccines is trackable throughout the production, distribution and vaccination process. The vaccine tracking system requires that vaccination data, including information relating to the vaccine, its expiry date and date of administration, the administering medical personnel and the recipients, be recorded 23 and retained for at least five years after the vaccine's expiry date. The law imposes stringent penalties on violators, including enhanced criminal liability where a violation constitutes a criminal offence. Since the implementation of the PRC Vaccine Administration Law, the national drug regulatory authority has successively issued a series of supporting regulations and policies covering vaccine research and development, production, distribution, vaccination, traceability and other key aspects, thereby establishing a relatively comprehensive regulatory framework. In 2025, the State Council further promulgated the Regulations for the Implementation of the Drug Administration Law, which systematically refined the key institutional arrangements, operational specifications and reform measures set forth in the PRC Vaccine Administration Law and the PRC Drug Administration Law. The promulgation of the foregoing laws, regulations and supporting documents has rendered the specific requirements for full life-cycle vaccine supervision clearer and more predictable. However, PRC judicial and administrative authorities retain significant discretion in interpreting and implementing statutory provisions and contractual terms. As a result, there remains uncertainty as to how these regulations will be interpreted, amended or implemented by the relevant PRC government authorities, and we cannot assure you that evolving regulatory interpretations or enforcement actions will not have a material adverse effect on our business, financial condition or results of operations. Under the current regulatory framework, we believe we are able to reasonably assess and maintain ongoing compliance with applicable requirements; however, no assurance can be given that future regulatory developments will not necessitate changes to our operations or otherwise adversely affect our business. Heightened PRC healthcare anti-bribery enforcement and new rules governing medical representatives may increase our compliance obligations, require adjustments to our commercialization arrangements and adversely affect demand for our vaccine products in the Chinese mainland. Our vaccine products are subject to a highly regulated commercial and promotional environment in the PRC. PRC authorities have continued to strengthen healthcare compliance, anti-corruption and anti-bribery enforcement in the pharmaceutical and vaccine sectors. On April 10, 2026, the Supreme People's Court and the Supreme People's Procuratorate jointly issued the Interpretation on Several Issues Concerning the Application of Law in Handling Criminal Cases of Embezzlement and Bribery (II), effective May 1, 2026, which further clarifies conviction and sentencing standards for bribery-related offenses and identifies bribery in areas including food and drugs and healthcare as circumstances that may trigger enhanced penalties or more severe classification at lower monetary thresholds. In addition, the National Medical Products Administration and several other PRC authorities issued the Administrative Measures for Medical Representatives in 2026, effective August 1, 2026. These measures impose qualification, filing, regional responsibility, compliance undertaking and conduct requirements on medical representatives, prohibit misconduct in academic promotion, including conduct associated with commercial bribery, and hold drug marketing authorization holders responsible for the appointment, authorization, filing and management of medical representatives, including where academic promotion activities are conducted through entrusted professional organizations or other third-party promotion service providers. These developments may require us to further enhance our compliance management of academic promotion, market access and commercialization activities in the Chinese mainland. To the extent we rely on contract sales organizations ("CSOs"), promotion service providers, academic promotion partners or other third-party professional organizations, we may need to update existing arrangements, strengthen qualification review and ongoing monitoring, refine incentive and performance management mechanisms, expand training and audits, enhance controls over interactions with centers for disease control and prevention ("CDCs"), vaccination providers and healthcare professionals, and strengthen expense management and documentation practices. These measures may increase compliance costs, reduce sales and promotion efficiency, delay market access or the compliant dissemination of product information, disrupt third-party relationships, or require us to terminate or replace certain partners or representatives. If our employees, medical representatives, distributors, CSO partners, promotion service providers or other personnel acting on our behalf fail, or are alleged to fail, to comply with applicable anti-bribery, pharmaceutical promotion, medical representative, vaccine administration or healthcare compliance requirements, we may be subject to investigations, administrative penalties, criminal prosecution, disgorgement of gains, restrictions on promotional activities, suspension or revocation of licenses or permits, exclusion from procurement or tendering opportunities, civil claims, reputational harm and other adverse consequences. If we are unable to adapt our commercialization arrangements in a timely and cost-effective manner, or if our third-party partners are unable or unwilling to satisfy the new compliance requirements, our market access, product communication efficiency and demand for our vaccine products in the Chinese mainland, particularly in the private-pay market, may be adversely affected, which could materially and adversely affect our business, financial condition, results of operations and prospects. Failure to comply with PRC regulations governing human genetic resources may materially and adversely affect our research and development activities and subject us to significant regulatory and legal consequences. Our research and development projects, including pre-clinical research and clinical trials, may involve the collection, storage, use, domestic transfer or cross-border provision of human genetic resources or related data. Under the PRC Regulations on the Administration of Human Genetic Resources and their implementing rules, certain activities involving human genetic resources may require prior approval, filing, security review, data backup, reporting or other regulatory compliance procedures. 24 The procedures for human genetic resources approvals or filings may be time-consuming, and projects that fail to complete required procedures may be unable to proceed. If we, our collaborators, clinical trial sites, contract research organizations or other service providers fail to correctly determine whether a project involves human genetic resources, fail to obtain required approvals or complete required filings in a timely manner, or fail to comply with applicable restrictions on data use, domestic transfer, sharing or cross-border provision, we may face suspension or delays of clinical trials and other research activities, rejection of regulatory submissions, administrative penalties including fines and confiscation of illegal gains, reputational harm or other material adverse consequences. Because our vaccines address conditions that represent significant public health threats, governments may take actions detrimental to our business, including product seizure, compulsory licensing, and additional regulatory burdens, in order to safeguard public access. In response to a pandemic or the perceived risk of a pandemic, governments around the world may take actions to protect their citizens that could restrict our ability to control the production and export of pandemic vaccines or that could otherwise impose burdensome regulations on our business. Governments might grant compulsory licenses, enabling our competitors to manufacture products protected by our patents or to exploit our proprietary technology. Such actions could be particularly detrimental where we have invested government funding in developing the very products subject to compulsory licensing. We deal with hazardous materials that may cause injury to others. These materials are regulated by environmental laws that may impose significant costs and restrictions on our business. Our research and development programs and manufacturing operations involve the controlled use of potentially harmful biological materials and other hazardous materials. We cannot eliminate the risk of accidental contamination or injury to employees or third parties arising from the use, manufacture, storage, handling or disposal of these materials and certain waste products. In the event of contamination or injury, we could be held liable for any resulting damages, and any such liability could exceed our resources or any applicable insurance coverage. Our Chinese Mainland Subsidiaries are also subject to PRC laws and regulations governing (i) the construction and operation of production facilities that may affect the environment, and (ii) the use, manufacture, storage, handling or disposal of hazardous materials and waste products. These include the PRC Environmental Impact Assessment Law, the PRC Law on Prevention and Control of Water Pollution and the PRC Environmental Protection Law, as well as waste-disposal standards set by relevant governmental agencies. China is likely to continue adopting stricter pollution controls in response to growing environmental concerns. Although existing facilities of our Chinese Mainland Subsidiaries have passed environmental inspections conducted by authorities such as the Beijing Municipal Ecology and Environment Bureau, we cannot assure that any future production facilities will similarly satisfy applicable environmental standards. We have obtained the requisite environmental impact assessment ("EIA") approvals from the relevant regulatory authorities for our current facility construction plans; however, we cannot assure that we will obtain EIA approvals for any future production facilities we may construct. Under the PRC Environmental Impact Assessment Law, after approval of a prior EIA report, if there is any material change in the nature, scale, location or production technology of a project, or in the measures adopted to prevent ecological damage, a new EIA report must be submitted for approval. Moreover, we do not currently maintain environmental liability insurance to cover risks arising from pollution incidents or violations of environmental laws. Failure to commence or complete development, satisfy agreed land or industrial-space performance requirements, or comply with restrictions on the use or transfer of land may cause us to incur penalties, lose land use rights or be subject to other adverse consequences. Sinovac Dalian holds land use rights to two parcels of land with an aggregate area of approximately 1,029,954 square feet, or 95,686 square meters, located in the Economic and Technical Development Zone of Dalian, Liaoning Province. Under relevant PRC regulations, a parcel of land may be treated as idle land if development has not commenced within one year after the required commencement date, although land users may apply for a one-year extension of the commencement deadline. All of Sinovac Dalian's current facilities are located on one of the two parcels, which has an aggregate area of 598,537 square feet, or 55,606 square meters. As of the date of this annual report, we have not commenced development of the other parcel, which has an aggregate area of 431,417 square feet, or 40,080 square meters. The relevant PRC authorities may determine that such parcel constitutes idle land. If so, we may be required to pay idle land fees or penalties, require us to adjust the intended use or development plan for the land, require us to identify alternative land resources, or, in more serious circumstances, forfeit the relevant land use rights to the PRC government. Any such event could increase our costs, disrupt our business planning or adversely affect our future expansion plans. In addition, certain industrial-space projects in Changping District, Beijing, including the Quality Building and the Life City project, are subject to regulatory agreements and performance commitments with local governmental authorities. These agreements may include requirements relating to capital investment, commercial revenue, localized industrial output value, tax contributions, construction progress, permitted use of industrial space, and restrictions on transfer, lease or other disposition of land use rights or related properties. Due to changes in market conditions, product portfolio adjustments, facility-utilization requirements or other factors, we may be unable to satisfy all such requirements within the agreed time periods. 25 If we fail to meet applicable performance requirements or to complete any required rectification measures within prescribed timelines, the relevant local governmental authorities may require us to submit and implement remediation plans, impose penalties or other economic consequences, restrict our use, transfer or leasing of the relevant industrial space, impose credit-related disciplinary measures on the relevant subsidiary, terminate relevant agreements, or require us to exit from or return the relevant construction land use rights or industrial-space interests. Any of these measures could result in additional costs, asset impairment, loss of expected economic benefits, disruption to our facility planning or adverse effects on our business, financial condition and results of operations. Risks Related to Our Intellectual Property If we are unable to protect our technologies from competitors with patents or other forms of intellectual property protection, our business may be harmed. Our success depends, in part, on our ability to protect our proprietary technologies. We try to protect the technology that we consider important to our business by filing patent applications for our existing and potential vaccines and by relying on trade secret and pharmaceutical regulatory protection. As of the date of this annual report, we have 158 issued patents and a number of pending patent applications in China relating to our vaccines. The process of seeking patent protection in China can be lengthy and expensive, and we cannot assure you that our pending patent applications, or any patent applications we may file in the future with respect to our vaccines or other products, will result in issued patents, or that any patents issued to us will provide meaningful protection or commercial advantage. Our patent applications might be challenged, invalidated, or circumvented. In addition to patents, we rely on trade secrets and proprietary know-how to protect our intellectual property. We have entered into confidentiality agreements with many of our employees, consultants, outside scientific collaborators, sponsored researchers, and other advisors. In the case of employees, these agreements also include non-competition provisions. These agreements provide that all confidential information developed or made known to the individual during the course of his or her relationship with us is to be kept confidential and not disclosed to third parties except in specific circumstances. In the case of our employees, the agreements further provide that all of the technology that is conceived by the individual during the course of employment is our exclusive property. These agreements may not provide meaningful protection or adequate remedies in the event of unauthorized use or disclosure of our proprietary information. In addition, third parties could independently develop information and techniques substantially similar to ours or otherwise gain access to our trade secrets. Our intellectual property rights may not adequately protect our competitive position, and competitors with substantial resources and investments in competing technologies could develop products that compete directly with ours. Intellectual property rights and confidentiality protections in certain jurisdictions in which we operate may not be as effective as those available in the United States or other developed countries. Policing unauthorized use of proprietary technology in such jurisdictions is difficult and expensive, and we might need to resort to litigation to enforce or defend patents issued to us or to determine the enforceability, scope and validity of our proprietary rights or those of others. The experience and capabilities of courts in these jurisdictions in handling intellectual property litigation vary, and outcomes are inherently unpredictable. Moreover, such litigation may require significant expenditure of cash and diversion of management attention and could harm our business, financial condition and results of operations. An adverse determination in any such litigation could materially impair our intellectual property rights and harm our business, prospects and reputation. We may be exposed to infringement or misappropriation claims by third parties which, if determined adversely to us, could subject us to substantial liability or prevent us from selling certain products. Please see "Item 4. Information on the Company — B. Business Overview — Intellectual Property and Proprietary Technology." Third parties may bring intellectual property infringement claims against us in the future. Our commercial success depends significantly on our ability to operate without infringing the patents and other proprietary rights of third parties. Even after reasonable investigation, we may not know with certainty whether we infringe a third party's patent, due to the complexity of patent claims and the possibility that a third party may have filed a patent application, unknown to us, covering technology that we were independently developing. Patent applications are generally maintained in secrecy until publication, which typically occurs 18 months after the filing date. In addition, the publication of discoveries in the scientific or patent literature frequently occurs substantially later than the date on which the underlying discoveries were made or patent applications were filed. China, like many other jurisdictions, operates under a first-to-file system, meaning that the first party to file a patent application, rather than the first to make the invention, may be awarded a patent. As a result, a third party could obtain patent rights over technology that we independently developed first. In addition, technologies that we have licensed or acquired may themselves be subject to infringement, misappropriation, or other third-party claims, which could impair our ability to rely on such technologies. If a third party claims that we infringe its proprietary rights, any of the following may occur: 26 •we may become involved in time-consuming and expensive litigation, even if the claim is without merit; •we may become liable for substantial damages for past infringement if a court determines that our technology infringes a third party's patent; •a court may prohibit us from selling or licensing our product unless we obtain a license from the patent holder, which may not be available on commercially reasonable terms, if at all, or which may require us to pay substantial royalties or grant cross-licenses to our patents; •we may need to redesign or reformulate our product so that it does not infringe others' patent rights, which may not be possible or could be very expensive and time-consuming; and •we may be subject to injunctions prohibiting the manufacture and sale of our products or the use of our technologies which are deemed as infringing. If any of these events occurs, our business, financial condition, and results of operations could be materially and adversely affected, and the market price of Sinovac Antigua's common shares could decline. The success of our business may depend on licensing key technology or vaccine components from, and entering into collaboration arrangements with, third parties. We cannot be certain that our licensing or collaboration efforts will succeed or that we will realize any revenue from them. The success of our business strategy depends, in part, on our ability to enter into licensing and collaboration arrangements and to manage effectively the resulting relationships. Our ability to enter into agreements with commercial partners depends in part on our ability to demonstrate the value of our technology and know-how. This may require substantial time and effort. Although we anticipate expending substantial funds and management effort, we cannot assure you that strategic relationships will result or that we will be able to negotiate additional strategic agreements in the future on acceptable terms, if at all. We may incur significant financial commitments to collaborators in connection with potential licenses and sponsored research agreements. In addition, we may not be able to control the areas of responsibility undertaken by our strategic partners and may be adversely affected should these partners prove unable to advance a product candidate to full commercialization or should they fail to dedicate the resources necessary to advance any such product candidate in a timely manner. Third parties may terminate our licensing and other strategic arrangements if we do not perform as required under these arrangements. Generally, we expect that agreements for rights to develop technologies will require us to exercise diligence in bringing product candidates to market and may require us to make milestone and royalty payments that, in some instances, could be substantial. Our failure to exercise the required diligence or to make any required milestone or royalty payments could result in the termination of the relevant license agreement, which could have a material adverse effect on us and our operations. In addition, these third parties may breach or terminate their agreements with us or otherwise fail to conduct their activities under these arrangements in a timely manner. If any of our licenses or strategic relationships are terminated or if we or our partners are in breach, we may: •lose our rights to develop and market our product candidates; •lose patent and/or trade secret protection for our product candidates; •experience significant delays in the development or commercialization of our product candidates; •not be able to obtain any other licenses on acceptable terms, if at all; and •incur liability for damages. Licensing arrangements and strategic relationships in our industry can be complex, particularly with respect to intellectual property rights. Disputes may arise regarding ownership of intellectual property developed jointly with, or derived from technology licensed from, other parties. These and other possible disagreements between us and third parties with respect to our licenses or strategic relationships could lead to delays in the research, development, manufacture, and commercialization of our product candidates. These disputes could also result in litigation or arbitration, both of which are time-consuming and expensive. Moreover, these third parties may pursue alternative technologies or product candidates either on their own or in strategic relationships with others in direct competition with us. Any cessation or suspension of our collaborations with scientific advisors and academic institutions may increase our research and development costs, lengthen our vaccine development timelines, and reduce our efficiency in developing new products. We work with scientific advisors and academic collaborators who assist us in our research and development efforts. Some of our pre-clinical and research programs rely heavily on such collaborators, and we benefit considerably from the resources, technology, and experience that these collaborations provide. These scientists are not our employees, however, and may have commitments that limit their availability to us. If a conflict 27 of interest arises between their work for us and their work for another entity, we may lose their services. Any cessation or suspension of our collaborations with scientific advisors and academic institutions may increase our research and development costs, lengthen our vaccine development timelines, and reduce our efficiency in developing new products. In addition, although our scientific advisors and academic collaborators generally sign agreements not to disclose our confidential information, valuable proprietary knowledge may become publicly known through their independent research activities, which could compromise our competitive advantage. Some of the predecessor shareholders of Sinovac Beijing were enterprises owning state-owned assets ("EOSAs"). Their failures to comply with PRC legal requirements in asset or share transfers could, under certain circumstances, result in such transfers being invalidated by government authorities. If this occurs, we could lose our ownership of intellectual property rights that are vital to our business as well as our equity ownership in Sinovac Beijing. Sinovac Beijing is currently owned 73.09% by us and 26.91% by Shandong Sinobioway Biomedicine. The technologies related to our hepatitis A vaccine, hepatitis A and B vaccine and influenza vaccine that are vital to our business were directly or indirectly transferred to us by Tangshan Yian Biological Engineering Co., Ltd. ("Tangshan Yian"). Some of the predecessor shareholders of Sinovac Beijing, including Shenzhen Kexing Biological Engineering Ltd. ("Shenzhen Kexing"), Sinobioway Medicine, Tangshan Medicine Biotech Co., Ltd., Tangshan Yikang Biotech Co., Ltd. and Tangshan Yian, were EOSAs. Under applicable PRC laws, when EOSAs sell, transfer or assign assets or equity investments in their possession or under their control to third parties, they are required to obtain an independent appraisal of the transferred assets or shares and file such appraisal with or obtain approval of such appraisal from PRC government authorities. Since 2004, EOSAs have also been required to make such assets or equity transfers at government-designated marketplaces. Certain of our acquisitions of intellectual property rights and equity interests were subject to these requirements. Tangshan Yian failed to file with the government authorities the appraisal of the hepatitis A vaccine technology that it transferred to Sinovac Beijing in 2001 as its capital contribution to Sinovac Beijing. Under PRC laws, Tangshan Yian also failed to: •obtain the appraisal of the hepatitis A and B vaccine technology that it transferred for no consideration to Beijing Keding Investment Co., Ltd. ("Beijing Keding") in 2002 (Beijing Keding subsequently transferred the technology to Sinovac Beijing as Beijing Keding's capital contribution to Sinovac Beijing) and to file such appraisal with the government authorities; and •obtain the appraisal of the influenza vaccine technology that it transferred to Sinovac Beijing in 2004 and to file such appraisal with the government authorities. These failures subject us to the risk of losing ownership or control of these vaccine technologies. In addition, before Sinovac Hong Kong acquired 73.09% equity interest in Sinovac Beijing, Sinovac Beijing had undergone multiple changes in its shareholders and the respective equity interests held by its shareholders. Some of the predecessor EOSA shareholders of Sinovac Beijing have sold, transferred or assigned their respective equity interests in Sinovac Beijing without fully complying with the legal requirements to appraise such equity interests, to file such appraisals with or obtain regulatory approval of such appraisals from PRC government authorities or to make equity interest transfers at the government-designated marketplaces as required for transactions completed after 2004. As with the asset transfers described above, these failures subject us to the risk of losing the ownership or control of our equity interest in Sinovac Beijing. PRC government authorities may initiate legal proceedings to invalidate the transfers of the assets or equity investments discussed above for non-compliance with applicable appraisal, filing, approval and designated marketplace requirements. There can be no assurance that the government authorities will not initiate such proceedings or that such proceedings, if commenced, would not be successful. If any of these transfers were invalidated, we could lose title to the affected assets and investments. Because we depend on these technologies and because Sinovac Beijing constitutes a core part of our operations, our loss of these technologies or of our equity interest in Sinovac Beijing could materially and adversely affect our operations and financial condition. We may lose the right to use "科兴" (Kexing) on our vaccine products and/or as part of our trade name. Since 2001, Sinovac Beijing has used "科兴" (Kexing) as part of its Chinese trade name. Sinovac Dalian has used "科兴" (Kexing) as part of its Chinese trade name since 2010. Shenzhen Kexing (an unrelated third party) registered the "科兴" trademark in China for Class 5 (Pharmaceuticals) under the International Classification of Goods and Services in 2001. To protect our interest in using "科兴" in our trade names, we applied to register the "科兴" trademark in China for Class 42 (Scientific & Technological Services & Research) in 2006, and our application was approved by the PRC Trademark Office in 2010. However, our registration in Class 42 does not directly address the risk posed by Shenzhen Kexing's prior registration in Class 5, the class under which our vaccine products fall. As of the date of this annual report, the "科兴" trademark owned by Shenzhen Kexing has not been recognized as a "Well-Known Trademark" (驰名商标) by the relevant PRC authorities. If, however, the "科兴" trademark owned by Shenzhen Kexing is recognized as a "Well-Known Trademark" in the future, which would afford it cross-class protection under PRC law, we may be subject to a trademark infringement claim for the use of "科兴" in our trade names. A successful trademark infringement claim could result in the loss of our ability to use "科兴" in our trade 28 names, which could adversely affect our ability to maintain and protect our brands, cause us to incur significant litigation costs, and divert management attention and resources. Risks Related to Doing Business in China Changes in China's economic, political, social, healthcare regulatory or government policy environment could materially and adversely affect our business, operations and prospects. A substantial majority of our assets and operations are located in the Chinese mainland. Accordingly, our business, financial condition, results of operations, and prospects are significantly influenced by political, economic, social, and regulatory conditions in the Chinese mainland, including changes in economic growth trajectories and healthcare policy development. The Chinese mainland's economy, political and legal systems, and regulatory environment differ from those of many other developed jurisdictions. The PRC government exercises significant control over the Chinese mainland's economic growth through the allocation of resources, the regulation of industries, the implementation of industrial policies, and other measures. Over the past decades, the PRC government has implemented various measures intended to encourage economic development, improve corporate governance, strengthen public health administration, and enhance regulatory supervision. The PRC government also periodically adjusts its economic, fiscal, monetary, healthcare, pharmaceutical, anti-corruption, pricing, procurement, and industrial policies in response to evolving political, social, economic, and public health priorities. Any significant changes in such conditions or policies, including changes affecting the vaccine industry, healthcare sector, pharmaceutical commercialization, pricing mechanisms, procurement systems, anti-bribery enforcement, medical promotion activities, data security, capital markets regulation, or foreign investment, could materially and adversely affect our business, financial condition, results of operations, and prospects. Litigation and negative publicity surrounding companies with significant operations in China listed in the United States may result in increased regulatory scrutiny of us and negatively impact the trading price of our common shares and could have a material adverse effect upon our business. We believe that litigation and negative publicity surrounding companies with operations in China that are listed in the U.S. have negatively impacted stock prices for such companies. Various equity-based research organizations have published reports on China-based companies after examining, among other things, their corporate governance practices, related party transactions, sales practices and financial statements. Such reports have led to special investigations and stock suspensions on national exchanges. Any similar scrutiny of us, regardless of its merit, could result in a diversion of management resources and energy, potential costs to defend against such allegations, a decrease in, and increased volatility of, the trading price of our common shares, and increased directors' and officers' insurance premiums and could have a material adverse effect upon our business, including our results of operations, financial condition, cash flows and prospects. It may be difficult for overseas regulators to conduct investigations or collect evidence within the Chinese mainland. Shareholder claims or regulatory investigations that are common in the United States generally are difficult to pursue as a matter of law or practicality in China. For example, in China, there are legal and other obstacles to providing information needed for regulatory investigations or litigation initiated outside China. Although the authorities in China may establish a regulatory cooperation mechanism with the securities regulatory authorities of another country or region to implement cross-border supervision and administration, such cooperation with the securities regulatory authorities in the United States may not be efficient in the absence of a well-established mutual and practical cooperation mechanism. According to Article 177 of the PRC Securities Law ("Article 177"), no overseas securities regulator is allowed to directly conduct investigation or evidence collection activities within the territory of the PRC. Furthermore, pursuant to the Provisions on Strengthening the Confidentiality and Archives Administration Related to the Overseas Securities Offering and Listing by Domestic Enterprises, which became effective on March 31, 2023, the investigation and evidence collection in relation to the overseas securities offering and listing of PRC companies by overseas securities regulatory authorities and relevant authorities shall be conducted through the cross-border cooperation mechanism for supervision and administration. PRC companies are required to obtain prior consent from CSRC or other relevant PRC authorities before cooperating with overseas securities regulatory authorities in connection with any inspections or investigations, or before providing any relevant documents to such authorities. The inability of an overseas securities regulator to directly conduct investigation or evidence collection activities within China may further increase difficulties faced by you in protecting your interests. There may be changes from time to time in the interpretation and application of PRC laws and regulations, and any failure to comply with laws and regulations could have a material adverse effect on our business, results of operations, financial condition and the value of our common shares. Our operations in the Chinese mainland are governed by PRC laws and regulations. Our Chinese Mainland Subsidiaries are subject to laws and regulations applicable to foreign investment in the Chinese mainland. The PRC legal system is a civil law system based on written statutes. Unlike the common law system, prior court decisions under the civil law system may be cited for reference but have limited precedential value. Because the PRC legal system is evolving quickly, many laws, regulations and legal requirements are relatively new, and new laws and regulations may be promulgated or existing laws and regulations, as well as the interpretation and enforcement thereof, may change at any time. 29 In addition, any new PRC laws and regulations, or changes to existing ones, related to foreign investment in the Chinese mainland could affect the business environment and our ability to operate our business in the Chinese mainland. From time to time, we may have to resort to administrative and court proceedings to enforce our legal rights. However, administrative and court proceedings in the Chinese mainland may take a particularly long time, resulting in substantial costs and diversion of resources and management attention. Given that PRC administrative and court authorities retain broad discretion in interpreting and implementing statutory provisions and contractual terms, it may be more difficult to predict the outcome of administrative and court proceedings that we are involved in. These uncertainties may impede our ability to enforce the contracts we have entered into and could materially and adversely affect our business and results of operations. The PRC government's significant oversight and discretion over our business operations could result in a material adverse change in our operations and the value of our common shares. We conduct our business primarily in China. Our operations in the Chinese mainland are governed by PRC laws and regulations. The PRC government has significant oversight and discretion over the conduct of our business, and may intervene in or influence our operations. The PRC government has recently published new policies that have significantly affected certain industries, and we cannot rule out the possibility that it will in the future release regulations or policies that directly or indirectly affect our industry or require us to seek additional permissions or approvals to continue our operations, which could result in a material adverse effect on our business, financial condition, results of operations, and/or the value of our common shares. Any such action could significantly limit or completely hinder our ability to offer or continue to offer securities to investors, which could cause the value of such securities to significantly decline. As a result, our business and investments in our securities are subject to significant uncertainty due to the PRC government's evolving regulatory environment. We may be required to complete filing procedures with CSRC in connection with our future offerings, and we cannot predict whether we will be able to complete such filings in a timely manner, or at all. The Provisional Measures on the Administration of Overseas Securities Offering and Listing by Domestic Companies (the "Provisional Measures") require, among other things, that domestic companies seeking to offer or list securities overseas, whether directly or indirectly, fulfill filing procedures and report relevant information to CSRC. An indirect offering or listing refers to an offering or listing made under the name of an overseas entity, where such overseas entity's securities are offered or listed primarily on the basis of the equity, assets, revenues or other similar rights or interests of a domestic company whose main business activities are conducted within China. Under the Provisional Measures, the Chinese entity that seeks to offer or list securities overseas must assume the obligations and responsibilities to comply with state security regulations, take necessary security and confidentiality measures, and shall not divulge state secrets or secrets of government agencies at any level. The overseas issuer shall designate one of its PRC-based subsidiaries or affiliates that carries out business activities in China as its responsible entity to make the filings and reporting under the Provisional Measures. Further, after the initial public offering, the relevant Chinese entity shall make filings with CSRC within three business days of the completion of any issuance of new securities overseas. In addition to the above filing requirements, the filing rules also require an issuer to report to CSRC within three business days after the occurrence of any of the following events: (i) a change of control of the issuer; (ii) the issuer becoming subject to investigation or sanctions by any overseas securities regulator or overseas authority; (iii) a change of its listing status or listing segment; (iv) voluntary or mandatory delisting; and (v) a material change in its principal business operations to the extent that it ceases to be subject to the filing requirements of the Provisional Measures. The Notice on Administration of the Filing of Overseas Offering and Listing by Domestic Companies (the "Notice"), issued alongside the Provisional Measures, clarified, among other things, that companies in the Chinese mainland that were already listed overseas before March 31, 2023 are not required to make immediate filings with CSRC, but shall complete filings with CSRC for their future capital-raising activities in accordance with the Provisional Measures. Therefore, as an issuer that was listed overseas before the effective date of the Provisional Measures, Sinovac Antigua is not required to complete filings with CSRC for its prior offshore offerings at this stage. As of the date of this annual report, neither Sinovac Antigua nor its Chinese Mainland Subsidiaries have been required to obtain any permission from, or complete any filing with, CSRC. However, our future capital-raising activities, such as follow-on equity or convertible debt offerings, listings on other stock exchanges, and going-private transactions, may be subject to the filing requirements under the Provisional Measures. Pursuant to the Provisional Measures, if a Chinese entity fails to comply with the required filing procedures, the non-compliant entity may be ordered to rectify the non-compliance and may be subject to a warning and fines of up to RMB10 million; the directly responsible persons of such entity may be warned and fined between RMB500,000 and RMB5 million. Furthermore, if the controlling shareholder or actual controller of the non-compliant entity organizes or instigates such breach, such person may be fined between RMB1 million and RMB10 million. Failure to complete such filing procedures for our future capital-raising activities as required under the Provisional Measures, or a rescission of any filings completed by us or our Chinese Mainland Subsidiaries, could subject us and our Chinese Mainland Subsidiaries to sanctions by CSRC or other PRC regulatory authorities, including fines, penalties on operations, and other forms of sanctions that may materially and adversely affect our business, financial condition and results of operations. 30 Complying with evolving laws and regulations regarding cybersecurity, information security, privacy and data protection and other related laws and requirements may be expensive and may force us to make adverse changes to our business. Many of these laws and regulations are subject to change and uncertain interpretation, and any failure or perceived failure to comply with these laws and regulations could result in negative publicity, legal proceedings, suspension or disruption of operations, increased cost of operations, or otherwise harm our business. Laws and regulations governing cybersecurity, information security, privacy and data protection, the use of the Internet as a commercial medium, the use of data in artificial intelligence and machine learning, and data sovereignty requirements are rapidly evolving, extensive, complex, and include inconsistencies and uncertainties. We and our partners may routinely receive, collect, generate, store, process, transmit and maintain medical data, trial records and other personal details of the subjects enrolled in our clinical trials, along with other personal or sensitive information. The PRC Data Security Law, among others, provides for a security review procedure for the data activities that may affect national security. Furthermore, the Cybersecurity Review Measures (2020) set forth the cybersecurity review mechanism for critical information infrastructure operators, and provided that critical information infrastructure operators who intend to purchase internet products and services that affect or may affect national security shall be subject to a cybersecurity review. Pursuant to the Regulations on Protection of Critical Information Infrastructure, critical information infrastructure shall mean an important network facility and information system in important industries such as, among others, public communications and information services, as well as other important network facilities and information systems that may seriously endanger national security, the national economy, the people's livelihood, or the public interests in the event of damage, loss of function, or data leakage. In addition, the administration departments for each critical industry and sector shall be responsible to formulate eligibility criteria and determine the critical information infrastructure operator in the respective industry or sector. Furthermore, the exact scope of "critical information infrastructure operators" under the current regulatory regime remains unclear, and the PRC government authorities may have wide discretion in the interpretation and enforcement of these laws. Therefore, it is uncertain whether we would be deemed as a critical information infrastructure operator under PRC law. The Cybersecurity Review Measures (2022), which replaced the Cybersecurity Review Measures (2020), further restate and expand the applicable scope of the cybersecurity review. If we are deemed as a critical information infrastructure operator under the PRC cybersecurity laws and regulations, we must fulfill certain obligations as required under the PRC cybersecurity laws and regulations, including, among others, storing personal information and important data collected and generated during our operations within the PRC, an obligation which we have fulfilled, and we may be subject to review when purchasing internet products and services. The Security Assessment Measures for Outbound Data Transfer provide for the circumstances under which a data processor shall be subject to security assessment. The Personal Information Protection Law consolidates previously fragmented rules with respect to personal information rights and privacy protection. The Personal Information Protection Law raises the protection requirements for processing personal information, and many specific requirements of the Personal Information Protection Law remain to be clarified by the Cyberspace Administration of China, other regulatory authorities, and courts in practice. We may be required to make further adjustments to our business practices to comply with the personal information protection laws and regulations. These laws and regulations and the PRC Civil Code are subject to interpretation by the regulators. Although we only gain access to personal information that is necessary for, and relevant to, the services provided, the data we obtain and use may include information that is deemed as "personal information" or "important data" under the PRC Cyber Security Law, the Civil Code and related data privacy and protection laws and regulations. As such, we have adopted a series of measures to ensure that we comply with the laws and regulations in the collection, use, disclosure, sharing, storage, and security of personal information and other data. The Data Security Law also stipulates that the authorities will formulate the catalogs for important data and strengthen the protection of important data, and state core data, i.e. data having a bearing on national security, the lifelines of the national economy, people's key livelihood and major public interests, shall be subject to stricter management system. In addition, we may need to comply with increasingly complex and rigorous regulatory standards enacted to protect business and personal data in the U.S., Europe, Hong Kong and elsewhere. For example, the European Union adopted the General Data Protection Regulation, which imposes additional obligations on companies regarding the handling of personal data and grants certain privacy rights to individuals whose data is processed. Compliance with existing, proposed, and recently enacted laws and regulations (including implementation of the privacy and process enhancements called for under the General Data Protection Regulation) can be costly; any failure to comply with these regulatory standards could subject us to legal and reputational risks. We generally comply with industry standards and are subject to the terms of our own privacy policies. Compliance with any additional laws could be expensive, and may place restrictions on the conduct of our business and the manner in which we interact with our customers. Any failure to comply with applicable regulations could also result in regulatory enforcement actions against us, and misuse of or failure to secure personal information could also result in violation of data privacy laws and regulations, proceedings against us by governmental entities or other regulatory authorities, damage to our reputation and credibility, and could have a negative impact on revenues and profits. We rely on dividends paid by our Chinese Mainland Subsidiaries for our cash needs. If they are unable to pay us sufficient dividends due to statutory, regulatory or contractual restrictions on their ability to distribute dividends to us, our various cash needs may not be met. 31 Sinovac Antigua is a holding company, and we rely in part on dividends paid by our Chinese Mainland Subsidiaries, including our majority-owned subsidiaries Sinovac Beijing, Sinovac Dalian and Sinovac LS, and our wholly owned subsidiaries Sinovac Biomed and Sinovac Services, for our cash needs, including the funds necessary to pay dividends and other cash distributions to Sinovac Antigua's shareholders, service any debt we may incur, and pay our operating expenses. If any of our Chinese Mainland Subsidiaries incur debt on their own behalf in the future, the instruments governing such debt may restrict their ability to pay dividends or make other distributions to us. The payment of dividends in the PRC is subject to significant limitations. Regulations in the PRC currently permit payment of dividends by our Chinese Mainland Subsidiaries only out of accumulated profits as determined in accordance with PRC accounting standards and regulations. In accordance with PRC laws and regulations, Sinovac Beijing, Sinovac Dalian, Sinovac LS, Sinovac Biomed and Sinovac Services are each required to set aside at least 10% of their respective after-tax profits each year to contribute to a statutory reserve fund until the accumulated balance of each such fund reaches 50% of the registered capital of each such company. These subsidiaries may also set aside, at the discretion of their respective boards of directors, a portion of their annual after-tax profits to employee welfare and bonus funds. These allocations, together with the statutory reserve fund contributions described above, reduce the amount of funds available for distribution as dividends to us. Revenues of our Chinese Mainland Subsidiaries are primarily denominated in renminbi, which is not freely convertible into other currencies. As a result, any restriction on currency exchange may limit the ability of our Chinese Mainland Subsidiaries to use their renminbi-denominated revenues to pay dividends to us. Additionally, there can be no assurance that the PRC government will not impose additional regulatory requirements or restrictions governing the convertibility of renminbi into foreign currencies or the remittance of dividends and other distributions by PRC entities to their overseas shareholders, including in response to foreign exchange policy adjustments, changes in global economic conditions, or other considerations. The regulatory framework governing cross-border dividend payments remains subject to change, and we cannot predict whether or when the PRC government may introduce further limitations on dividend distributions to overseas entities. If such additional restrictions are imposed, or if we are otherwise unable to access sufficient foreign currencies to meet our needs, we may be unable to pay dividends to our shareholders in foreign currencies. Any limitation on the ability of our Chinese Mainland Subsidiaries to pay dividends or make other distributions to us could materially and adversely limit our ability to grow, make investments or acquisitions that could be beneficial to our business, pay dividends, or otherwise fund and conduct our business. Restrictions on currency exchange may limit our ability to receive and use our revenues effectively. In 2025, we received approximately 67.7% of our revenues in renminbi, which is not a freely convertible currency. A portion of these revenues may need to be converted into other currencies to meet our foreign currency obligations, including, among others, payment of dividends declared by Sinovac Antigua's subsidiaries. Under China's existing foreign exchange regulations, Sinovac Beijing, Sinovac LS, Sinovac Dalian and Sinovac Biomed are able to pay dividends in foreign currencies without prior approval from the State Administration of Foreign Exchange ("SAFE") by complying with certain procedural requirements. However, the PRC government may in the future restrict access to foreign currencies for current account transactions. Our Chinese Mainland Subsidiaries' ability to obtain foreign exchange is subject to significant foreign exchange controls and, in the case of amounts under the capital account, requires the approval of and/or registration with PRC government authorities, including SAFE. In particular, if we finance our Chinese Mainland Subsidiaries by means of foreign currency loans from the Company or other foreign lenders, the aggregate foreign debt may not exceed the difference between the approved total investment amount and the registered capital, each as approved by the Ministry of Commerce ("MOFCOM") and registered with SAFE. Such loans must also be registered with SAFE as foreign debts. If we finance our Chinese Mainland Subsidiaries by means of additional capital contributions from offshore, such contributions must first be approved by the relevant government authority. These limitations could affect the ability of our Chinese Mainland Subsidiaries to obtain foreign exchange through debt or equity financing. Fluctuation in the value of the renminbi may have a material adverse effect on our results of operations and the value of your investment. The conversion of renminbi into foreign currencies, including U.S. dollars, is based on rates set by the People's Bank of China. The renminbi has fluctuated against the U.S. dollar, at times significantly and unpredictably, and it is difficult to predict how market forces or PRC or U.S. government policy may impact the exchange rate in the future. The value of the renminbi against the U.S. dollar and other currencies is affected by changes in China's political and economic conditions and by China's foreign exchange policies, among other things. Any significant appreciation or depreciation of the renminbi may materially and adversely affect our revenues, earnings and financial position, and the value of, and any dividends payable on, our common shares. For example, to the extent that we need to convert U.S. dollars we receive into renminbi to pay our operating expenses, appreciation of the renminbi against the U.S. dollar would reduce the renminbi amount we receive from such conversion. Conversely, a significant depreciation of the renminbi against the U.S. dollar may reduce the U.S. dollar equivalent of our earnings, which in turn could adversely affect the price of our common shares. 32 In addition, our currency exchange losses may be magnified by PRC exchange control regulations that restrict our ability to convert renminbi into foreign currencies. As a result, fluctuations in exchange rates may have a material adverse effect on your investment. Our business benefits from certain government tax incentives. Expiration, reduction or elimination of these incentives will increase our tax expenses and in turn decrease our net income. Pursuant to the PRC Enterprise Income Tax Law (the "EIT Law") and its implementation rules, the PRC's statutory enterprise income tax ("EIT") rate is 25%. An enterprise may benefit from a preferential tax rate of 15% under the EIT Law if it qualifies as an HNTE. Each of Sinovac Beijing and Sinovac Dalian reconfirmed its "High and New Technology Enterprises" ("HNTE") status in each of 2020 and 2023, for a period of three years each time. As a result, subject to continued satisfaction of the applicable criteria as confirmed by the competent authorities, Sinovac Beijing and Sinovac Dalian are entitled to a reduced EIT rate of 15% from 2020 to 2025. It is expected that Sinovac Beijing and Sinovac Dalian will be qualified as a HNTE in 2026, and we will continue to assess the status. Sinovac LS confirmed its HNTE status in 2020 for a period of three years and reconfirmed such status in 2023 for a period of three years. Notwithstanding such reconfirmation, the applicable criteria required for HNTE status should be maintained on a three-year rolling basis. Failure to meet these criteria could result in the relevant entity losing its HNTE status, The PRC government could eliminate any of these preferential tax treatments before their scheduled expiration. Expiration, reduction or elimination of such tax incentives will increase our tax expenses and in turn decrease our net income. Under the EIT Law, dividends payable by us and gains on the disposition of Sinovac Antigua's shares may be subject to PRC taxation. If we were considered a PRC resident enterprise under the EIT Law, Sinovac Antigua's shareholders who are deemed non-resident enterprises may be subject to a 10% EIT on dividends payable by us or on any gains realized from the transfer of Sinovac Antigua's shares, if such income is deemed derived from China and where such foreign enterprise investor (i) has no establishment or premises in China, or (ii) has an establishment or premises in China but the relevant income has no real connection with such establishment or premises. If we were required under the EIT Law to withhold PRC income tax on our dividends payable to our non-PRC enterprise shareholders, or if any gains realized from the transfer of Sinovac Antigua's shares by our non-PRC enterprise shareholders were subject to the EIT, the return on such shareholders' investment in Sinovac Antigua's shares could be materially and adversely affected. PRC regulations relating to investments in offshore companies by PRC residents may subject our PRC-resident beneficial owners or our Chinese Mainland Subsidiaries to liability or penalties, limit our ability to inject capital into our Chinese Mainland Subsidiaries or limit our Chinese Mainland Subsidiaries' ability to increase their registered capital, receive capital contributions, or distribute profits. The Circular on Relevant Issues Concerning Foreign Exchange Control on Domestic Residents' Offshore Investment and Financing and Roundtrip Investment through Special Purpose Vehicles ("SAFE Circular 37"), which replaced the former circular commonly known as "SAFE Circular 75", originally required PRC residents to register with the local branches of SAFE (such registration is now processed by local banks pursuant to the Notice on Further Simplifying and Improving Policies for the Foreign Exchange Administration of Direct Investment) in connection with their direct establishment or indirect control of an offshore entity, for the purpose of overseas investment and financing, with such PRC residents' legally owned assets or equity interests in domestic enterprises or offshore assets or interests. Such offshore entity is referred to in SAFE Circular 37 as a "special purpose vehicle." SAFE Circular 37 further requires amendment to the registration in the event of any significant changes with respect to the special purpose vehicle, such as increase or decrease of capital contributed by PRC residents, share transfer or exchange, merger, division, or other material events. In the event that a PRC resident holding interests in a special purpose vehicle fails to fulfill the required foreign exchange registration, the PRC subsidiaries of that special purpose vehicle may be prohibited from making profit distributions to the offshore parent and from carrying out subsequent cross-border foreign exchange activities, and the special purpose vehicle may be restricted in its ability to contribute additional capital into its PRC subsidiary. Failure to comply with the various foreign exchange registration requirements described above could result in liability under PRC law for evasion of foreign exchange controls. Mr. Weidong Yin has completed the required foreign exchange registration with respect to his investments in our company. However, we may not be aware of the identities of all of our beneficial owners who are PRC residents. We do not control our beneficial owners and cannot assure you that all of our PRC-resident beneficial owners will comply with SAFE Circular 37 and subsequent implementation rules. The failure of our beneficial owners who are PRC residents to register or amend their foreign exchange registrations in a timely manner pursuant to SAFE Circular 37 and subsequent implementation rules, or the failure of future beneficial owners of our company who are PRC residents to comply with the registration procedures set forth in SAFE Circular 37 and subsequent implementation rules, may subject such beneficial owners or our Chinese Mainland Subsidiaries to fines and legal sanctions. Furthermore, since it is unclear how any future regulation concerning offshore or cross-border transactions will be implemented by the relevant PRC government authorities, we cannot predict how these regulations will affect our business operations or future strategy. These risks may have a material adverse effect on our business, financial condition and results of operations. 33 Any failure to comply with PRC regulations regarding our employee equity incentive plans may subject the PRC plan participants or us to fines and other legal or administrative sanctions. Pursuant to SAFE Circular 37, PRC residents who participate in share incentive plans of overseas non-publicly listed companies by virtue of their positions as directors, senior management members, or employees of the PRC subsidiaries of such overseas companies may submit applications to SAFE or its local branches for foreign exchange registration with respect to offshore special purpose companies. Sinovac Antigua's directors and our executive officers and other employees who are PRC residents and who have been granted options and restricted shares were required to follow SAFE Circular 37 to apply for foreign exchange registration before our company became an overseas listed company. Since our company became an overseas listed company, its directors, executive officers, and other employees who are PRC residents and who have been granted options have become subject to the Notice on Issues Concerning the Foreign Exchange Administration for Domestic Individuals Participating in Stock Incentive Plans of Overseas Publicly Listed Companies. Under this Notice, PRC-resident employees, directors, supervisors, and other management members who participate in any stock incentive plan of an overseas publicly listed company are required to register with SAFE through a domestic qualified agent, which may be a PRC subsidiary of such overseas listed company, and to complete certain other procedures. Failure to complete SAFE registrations may subject them to fines and other legal or administrative sanctions and may also limit the ability to make payments under our equity incentive plans or receive dividends or sales proceeds related thereto, our ability to contribute additional capital to our wholly-owned subsidiaries in China, and may limit such subsidiaries' ability to distribute dividends to us. We also face regulatory uncertainties that could restrict our ability to adopt additional equity incentive plans for Sinovac Antigua's directors and our employees under PRC law. In addition, the State Administration of Taxation has issued circulars concerning employee share options and restricted shares. Under these circulars, employees working in the PRC who exercise share options, or whose restricted shares or restricted share units ("RSUs") vest, will be subject to PRC individual income tax. The PRC subsidiaries of an overseas listed company are obligated to file documents related to employee share options or restricted shares with the relevant tax authorities and to withhold individual income taxes of those employees in respect of their share options, restricted shares, or RSUs. If the employees fail to pay, or the PRC subsidiaries fail to withhold, their income taxes according to relevant laws, rules, and regulations, the PRC subsidiaries may face sanctions imposed by the tax authorities or other PRC government authorities. PRC regulation of loans and direct investment by offshore holding companies to PRC entities may delay or prevent us from making loans or additional capital contributions to our operating subsidiaries and affiliated entities in the Chinese mainland. In funding our Chinese Mainland Subsidiaries, we must comply with PRC legal requirements relating to foreign debt registration and to PRC foreign-investment companies' "registered capital" and "total investment" ratio. "Registered capital" refers to the capital contributed to or paid into a PRC foreign-investment company in cash or in kind, and "total investment" refers to the estimated amount of the total capital as required to enable and support the full-scale operation of a PRC foreign-investment company when the company is initially established. The amounts of a PRC foreign-investment company's registered capital and total investment are set forth in the company's articles of association and joint venture contract (in the case of a Sino-foreign joint venture) and approved by the competent government authority in advance. The balance between the required "total investment" and the "registered capital" can be satisfied by borrowings or loans obtained by the company. In other words, such loans cannot exceed the difference between such company's total investment and registered capital. Loans by Sinovac Antigua or Sinovac Hong Kong to Sinovac Beijing, Sinovac LS, Sinovac Dalian, Sinovac Biomed or Sinovac Services cannot exceed the difference between such company's total investment and registered capital. The total investment and registered capital can be adjusted after the establishment of foreign-investment companies with the approval of all the shareholders or unanimous approval of the board of directors. In the case of each of Sinovac Beijing, Sinovac Dalian and Sinovac LS, the approval from their respective minority shareholders is required to increase the amount of total investment. Further, all loans from overseas lenders must be registered with SAFE as foreign debts. We may also decide to finance our Chinese Mainland Subsidiaries by making additional capital contributions. These additional contributions must be approved by the competent government authority and, in the case of each of Sinovac Beijing, Sinovac Dalian and Sinovac LS, the approval from their respective minority shareholders. We cannot assure you that we will be able to obtain these government registrations or approvals, or the approval of the minority shareholders on a timely basis, if at all, with respect to future loans or additional capital contributions by us to our subsidiaries. If we fail to obtain such registrations or approvals, our ability to capitalize our PRC operations would be negatively affected, which could materially and adversely affect the liquidity of our subsidiaries and our ability to expand the business. Because Sinovac Antigua is incorporated under Antigua and Barbuda law, substantially all of our operations, property and assets are located in China and all of our major shareholders, directors and officers and substantially all of their assets are located outside of the United States, you may have difficulty protecting your interests as a shareholder under U.S. law in a court in the United States. Sinovac Antigua is incorporated in Antigua and Barbuda. Sinovac Antigua's corporate affairs are governed by its Articles of Incorporation and By-laws and by the International Business Corporations Act and common law of Antigua and Barbuda. The rights of shareholders to take legal action against Sinovac Antigua's directors, officers and us, actions by minority shareholders and the fiduciary responsibilities of Sinovac Antigua's 34 directors to Sinovac Antigua are to a large extent governed by the International Business Corporations Act and common law of Antigua and Barbuda. The International Business Corporations Act was modelled on Canadian company law. The common law of Antigua and Barbuda is derived from comparatively limited judicial precedent in Antigua and Barbuda as well as from English common law, which has persuasive, but not binding, authority on a court in Antigua and Barbuda. The rights of Sinovac Antigua's shareholders and the fiduciary responsibilities of Sinovac Antigua's directors under Antigua and Barbuda law are not as clearly established as they would be under statutes or judicial precedents in the United States. Among other things, Antigua and Barbuda has a less developed body of securities laws than the United States and provides significantly less protection to investors. Further, Antigua and Barbuda's body of securities law and the experience of its courts in addressing corporate and securities law issues commonly encountered by public companies are likely less developed than those of some of the other jurisdictions where publicly traded China-based companies are incorporated, such as the Cayman Islands. It may be difficult or impossible for you to bring an action against us or against Sinovac Antigua's directors or officers in Antigua and Barbuda or to enforce your rights under U.S. securities laws or otherwise. Even if you are successful in bringing an action of this kind, you may be unable to enforce a judgment against our assets or the assets of Sinovac Antigua's directors and officers under the laws of Antigua and Barbuda. It is uncertain whether Antigua and Barbuda courts would enforce judgments of United States courts obtained in actions against us or Sinovac Antigua's directors or officers that are predicated upon the civil liability provisions of the Securities Act, or in original actions brought against us or such persons predicated upon the Securities Act. There is no treaty in effect between the United States and Antigua and Barbuda providing for such enforcement, and Antigua and Barbuda courts may decline to enforce judgments of United States courts on certain grounds. In addition, Antigua and Barbuda corporations may not have standing to initiate a shareholder derivative action before the federal courts of the United States. PRC courts may recognize and enforce foreign judgments in accordance with the PRC Civil Procedures Law based either on treaties between the PRC and the country where the judgment is made or on reciprocity between jurisdictions. In the absence of such treaties or reciprocity arrangements, recognition and enforcement of a foreign judgment in the PRC may need to be resolved through diplomatic channels. The PRC does not have any treaties or other arrangements with the United States or Antigua and Barbuda that provide for the reciprocal recognition and enforcement of foreign judgments. As a result, it is generally difficult to enforce in the PRC a judgment rendered by a U.S. or Antigua and Barbuda court. As a result of the foregoing, and because substantially all of our property, assets and operations are located in China and all of our major shareholders, directors and officers and substantially all of their assets are located outside of the United States, you may have difficulty protecting your interests as a shareholder through legal action against us, our officers, directors or major shareholders. The PCAOB had historically been unable to inspect our auditor, and such inability deprived our investors of the benefits of PCAOB inspections. Our auditor, the independent registered public accounting firm that issues the audit report included elsewhere in this annual report, as an auditor of companies that are traded publicly in the United States and a firm registered with the PCAOB, is subject to laws in the United States pursuant to which the PCAOB conducts regular inspections to assess its compliance with applicable professional standards. Since our auditor is located in China, a jurisdiction where the PCAOB was historically unable to conduct inspections and investigations completely before 2022, the PCAOB had not been able to conduct inspections of our auditor. The inability of the PCAOB to conduct inspections of auditors in China made it more difficult to evaluate the effectiveness of our independent registered public accounting firm's audit procedures or quality control procedures as compared to auditors outside of China that are subject to PCAOB inspections. On December 15, 2022, the PCAOB issued a report that vacated its December 16, 2021 determination and removed the Chinese mainland and Hong Kong from the list of jurisdictions where it is unable to inspect or investigate completely registered public accounting firms. However, if the PCAOB determines in the future that it no longer has full access to inspect and investigate completely accounting firms in the Chinese mainland and Hong Kong, and we use an accounting firm headquartered in one of these jurisdictions to issue an audit report on our financial statements filed with the SEC, we and investors in our common shares would be deprived of the benefits of such PCAOB inspections, which could cause investors and potential investors to lose confidence in our audit procedures and reported financial information and the quality of our financial statements. Our common shares may be prohibited from trading in the United States under the HFCAA in the future if the PCAOB is unable to inspect or investigate completely registered public accounting firms headquartered in the Chinese mainland and Hong Kong. The delisting of, or prohibition on trading, our common shares, or the threat of their being delisted or prohibited from being traded, may materially and adversely affect the value of your investment. Pursuant to the HFCAA, if the SEC determines that we have filed audit reports issued by a registered public accounting firm that has not been subject to inspections by the PCAOB because of a position taken by an authority in the foreign jurisdiction for two consecutive years, the SEC will prohibit our common shares from being traded on a national securities exchange or in the over-the-counter trading market in the United States. 35 On December 16, 2021, the PCAOB issued a report to notify the SEC of its determination that the PCAOB was unable to inspect or investigate completely registered public accounting firms headquartered in the Chinese mainland and Hong Kong. On December 15, 2022, the PCAOB removed the Chinese mainland and Hong Kong from the list of jurisdictions where it is unable to inspect or investigate completely registered public accounting firms. Each year, the PCAOB will determine whether it can inspect and investigate completely audit firms in the Chinese mainland and Hong Kong, among other jurisdictions. If the PCAOB determines in the future that it no longer has full access to inspect and investigate completely accounting firms in the Chinese mainland and Hong Kong and we use an accounting firm headquartered in one of these jurisdictions to issue an audit report on our financial statements filed with the SEC, we would be identified as a Commission-Identified Issuer following the filing of the annual report on Form 20-F for the relevant fiscal year. In accordance with the HFCAA, our securities would be prohibited from being traded on a national securities exchange or in the over-the-counter trading market in the United States if we are identified as a Commission-Identified Issuer for two consecutive years in the future. A prohibition on trading in the United States would substantially impair your ability to sell or purchase our common shares when you wish to do so, and the risk and uncertainty associated with such a prohibition would have a negative impact on the price of our common shares. Also, such a prohibition would significantly affect our ability to raise capital on terms acceptable to us, or at all, which would have a material adverse effect on our business, financial condition, and prospects. 36