Fapon Biotech's Full Acquisition of Sequlite, Expands Its Strategic Presence in High-Throughput NGS

(DONGGUAN, China, Oct 18, 2021) Fapon Biotech Inc. (The Company or "Fapon Biotech") is pleased to announce its full acquisition of Sequlite Genomics ("Sequlite"), a USA enterprise that focuses on Next-Generation Sequencing (“NGS”). The two parties have signed a share purchase agreement online, with the Fapon Biotech team in Dongguan headquarter and Sequlite team in the USA. After the agreement, with a previous investment of 40% share in Sequlite, Fapon Biotech owns 100% Sequlite now. The Company takes over and manages Sequlite in all aspects of product research and development and business operation, further deepening its strategic presence in the global NGS business.

Sequlite specializes in the R&D of high-throughput NGS instruments and reagents. It has independently researched and developed core image processing algorithm (Base Calling software), core reagent raw materials production (such as high-fidelity DNA polymerase and high-purity nucleotide analogs), core optical imaging system adjustment and assembly process. It is worth mentioned that the Sequlite management team has deep genomics expertise from leading NGS companies.

Diligently worked in the IVD industry for over 20 years, Fapon Biotech has accumulated solid experience in product commercialization to serve its wide customer base. It has gained trust from more than 1,000 global business partners and achieved a relatively high market share in more than 40 countries. Fapon Biotech has always been a technology innovation driven company, with over 470 technology patents and 42% of the employees focused on R&D. About 28% of its sales revenue is invested in R&D annually. Along with the acquisition of Sequlite, the Company's R&D capability in the field of NGS will approach international top level and it will take a step further to build an R&D platform with global vision.

Meanwhile, the rising of another Chinese NGS instrument developer and manufacturer will accelerate the domestication of NGS platforms in China. In recent years, China's NGS market has developed rapidly. However, overseas brands have long dominated the core technologies and instruments. As a leading supplier of excellent IVD reagent raw materials and customized solutions in China, Fapon Biotech has worked in NGS business for several years, providing core raw materials for library prep kits and partnered with Sequlite team since its inception. In December 2020, Sequlite has completed the R&D phase and produced the functional prototype of SeqQ 100, an affordable NGS system (instrument, flow cells, and reagents) that provides flexible throughput and ease of use, which is highly desired in the clinical markets. More importantly, SeqQ 100 uses improved NGS technologies that are readily adoptable by customers worldwide, which allow them to keep their existing workflows.

The launch of the high-throughput NGS system has expanded Fapon Biotech's existing product catalog and marked an essential step of the Company’s vision to lead the establishment of open diagnostic ecosystem. Leveraging fully automatic CLIA (Short for Chemiluminescent immunoassay) analyzers, rapid MDx analyzers, and NGS systems, Fapon Biotech has fully covered immunoassay, molecular diagnostics, and NGS markets with these open system instrument platforms.

Millard Chan, the Co-founder and CEO of Sequlite, commented: "As Fapon Biotech is growing by leaps and bounds, I totally believe it has powerful strength in digging into cutting-edge diagnostic technology and providing one-stop solutions. Fapon Biotech has been a fantastic partner to Sequlite and we all look forward to a bright future where more people and organizations around the world may benefit from the power of NGS applied to healthcare.”

Mr. Zhiqiang He, the CEO of Fapon Biotech, echoed: "Both Fapon Biotech and Sequlite want to make better and more affordable NGS products. I hope that we can work together and remain true to our original aspiration to achieve this goal. NGS could be essential in the development of life science in the future and Fapon Biotech will continue to promote the development of early diagnosis and precision medicine in China and beyond, with our three different platforms of CLIA, MDx, and NGS."

Mr. Peng Cui, the Chairman of Fapon Group, said:" We are truly excited to welcome Sequlite to be a part of Fapon Family. This year marks Fapon's 20^th anniversary. We have achieved some accomplishments in the past, but shall never stop pursuing our mission of "Improve Health and Enrich Lives."