D. Risk Factors Our business faces significant risks and uncertainties. You should carefully consider all of the information set forth in this Annual Report and in other documents we file with or furnish to the SEC, including the following risk factors, before deciding to invest in or to maintain an investment in our securities. If any of the events or developments described below were to occur, our business, results of operations, financial condition and prospects could suffer materially and the trading price of our ordinary shares could decline. The risks and uncertainties described below are not the only ones we face. Additional risks and uncertainties not presently known to us or that we currently believe to be immaterial may also adversely affect our business. •We may not be successful in expanding features, applications and data modalities of our SOPHiA DDM Platform and related solutions, applications, products, and services. •We may experience challenges with the acquisition, development, enhancement and deployment of technology necessary for our data analytics platform technologies. •If we are unable to expand our sales and marketing capabilities, including through additional strategic relationships, in a cost-effective manner, we may not be able to grow our revenue. •The coverage and reimbursement status of newly developed applications and products, such as data analytics platforms and related solutions, applications, products, and services, particularly in a new category of diagnostics and therapeutics, is uncertain. An inability to obtain or maintain adequate coverage and reimbursement could limit the commercial potential of our SOPHiA DDM Platform and related solutions, applications, products, and services. •If we cannot maintain our current relationships and enter into new relationships with hospitals, reference and specialty laboratories and biopharmaceutical companies, our revenue prospects could be reduced. •We are highly dependent on our senior management team and other qualified personnel, and our business could be harmed if we are unable to retain and attract such personnel. •Our industry is subject to rapid change, which could make our SOPHiA DDM Platform and related solutions, applications, products, and services obsolete. If we are unable to continue to innovate and improve our SOPHiA DDM Platform and related solutions, applications, products, and services, we could fail to attract new customers and expand our market share and we could lose existing customers and market share. •We face competition from many sources, some of whom have much greater financial resources, and we may be unable to compete successfully. •Cybersecurity or data privacy breaches, other unauthorized or improper access, or (distributed) denial service lack of access (e.g., ransomware, persistent DoS/DDoS) could result in additional costs, loss of revenue, significant liabilities, harm to our brand and decreased use of our SOPHiA DDM Platform and related solutions, applications, products, or services. •If we are not able to obtain, maintain, defend and enforce patent and other intellectual property protection or if the scope of such patent and other intellectual property protection is not sufficiently broad, our competitors could develop and commercialize applications, products, services and technology similar or identical to ours. •We license patent rights from third-party owners. If such owners do not properly or successfully obtain, maintain, defend and enforce the patents underlying such licenses, or if they retain or license to others any competing rights, our competitive position and business prospects may be adversely affected. If we fail to comply with our obligations in the agreements under which we license intellectual property rights from third parties or otherwise experience disruptions to our 4 Table of Contents relationships with any of our licensors, we could lose license rights that are important to our business. •We are, and we may in the future be, subject to claims against us alleging that we are infringing, misappropriating or otherwise violating the intellectual property rights of third parties, the outcome of which would be uncertain and could have a material adverse effect on our business, and which could result in substantial defense costs, settlement payment, and diversion of management attention, even if claims lack merit. •We have incurred net losses since our inception and expect to continue to incur losses for the foreseeable future. We may never achieve or sustain profitability. Risks Related to the Development of Our SOPHiA DDM Platform and Related Solutions, Applications, Products, and Services We may not be successful in expanding features, applications and data modalities of our SOPHiA DDM Platform and related solutions, applications, products, and services. Our SOPHiA DDM Platform offers a broad range of genomics applications across oncology, rare diseases, infectious diseases, cardiology, neurology, metabolism and other disease areas. A major part of our long-term strategy is bringing new high-impact content to our customers through updates to our platform, which may include expanding our platform with additional features, applications and data modalities and related solutions, applications, products, and services. However, enhancing our platform and developing new related solutions, applications, products, and services poses various risks and challenges, including the inability to develop features, applications, data modalities and services that achieve the desired results, analytical accuracy and utility; the need to alter our platform, solutions, applications, products, or services; the time and resources required for platform, solution, application, service, and product development; uncertainty regarding and potential limitation in the scope of new features, solutions, applications, data modalities, products, or services; and the potential need to obtain U.S. Food and Drug Administration (the “FDA”), European Medicines Agency (the “EMA”), United Kingdom (the “U.K.”) Medicines and Healthcare products Regulatory Agency (the “MHRA”) and other regulatory clearances, authorizations or approvals. Even if we successfully develop a feature, application, data modality, solution, service or product and receive any necessary regulatory clearance, authorization or approval, such feature, application, data modality, solution, service or product may never achieve significant market acceptance among various stakeholders and be commercially successful. The expenses or losses associated with unsuccessful platform innovation or expansion could adversely affect our business revenue growth and results of operations. This risk may be heightened as we generally sell our platform, solutions, applications, products, and services in industries that are characterized by rapid technological changes, frequent new application and product introductions and changing industry standards. Operating in and servicing such industries require us to develop platform enhancements based on technological innovation on a timely basis. In addition, whereas we purposefully built our SOPHiA DDM Platform in a decentralized manner and strategically positioned it as a “universal operating-system” for multimodal data analytics in order to provide for a broad range of application, product, and service expansion opportunities, European initiatives such as the European Health Data Space (“EHDS”) may introduce more centralized or coordinated services architectures for electronic health records (“EHRs”), including standardized access layers, national contact points or government-designated data access services, rather than allowing data to be shared directly between healthcare providers. The widespread implementation of these and any other centralized systems may limit the adoption and development of our platform. Strong platform, application, product, and service performance, security and reliability are necessary to maintain and grow our business. We need to maintain and continuously improve the performance, security and reliability of our SOPHiA DDM Platform and related solutions, applications, products, and services. Our platform, solutions, applications, and other products may contain errors or defects, and while we have made efforts to test them and are not aware of any widespread material errors, defects or other performance-related issues, there can be no assurance that our platform, solutions, applications, products, and services do not or will not have performance problems. As we continue to launch more platform features, applications, data modalities, solutions, products, and services, 5 Table of Contents these risks may increase. Poor performance, security and reliability could adversely impact our customers and lead to customer dissatisfaction, adversely affect our reputation and revenues and increase our application, service, and product care, and distribution costs and working capital requirements. We may experience challenges with the acquisition, development, enhancement and deployment of technology necessary for our data analytics platform technologies. Our business requires sophisticated computer systems and software in order to accurately and efficiently capture, service and process increasing volumes of health data, in particular a growing number of genomic profiles generated by our customers through various NGS test kits, sequencers and sample materials from different manufacturers. Some of the technologies are changing rapidly and we must continue to adapt to these changes in a timely and effective manner at an acceptable cost. There can be no assurance that we will be able to develop, acquire, enhance, deploy or integrate new technologies, including technologies needed to integrate new genomics test kits into our data analytics platform, that these new technologies will be effective and efficient, will meet our needs or achieve our expected goals or that we will be able to do so as quickly or cost-effectively as our competitors. Significant technological change could render our data analytics platform and technologies obsolete and incompatible with new or improved genomics test kits. In addition, we may face challenges in expanding into markets without suitable cloud infrastructure compatible with our SOPHiA DDM Platform. Our continued success will depend on our ability to adapt to changing technologies, manage and process ever-increasing amounts of data and information and improve the performance features of our data analytics platform technologies in response to an ever-changing patient population. We may experience difficulties that could delay or prevent the successful design, development, testing and introduction of new versions of our data analytics platform technologies, limiting our ability to identify new solutions, applications, products, and services. Any of these challenges could have a material adverse effect on our operating results and financial condition. Any failure to offer high-quality support for our applications, products, and services may adversely affect our relationships with customers and collaborators and negatively impact our reputation and our business, financial condition and results of operations. In implementing and using our SOPHiA DDM Platform and related solutions, applications, products, and services, our customers and collaborators depend on our support to resolve issues in a timely manner. We may be unable to respond quickly enough to accommodate short-term increases in demand for customer support. Increased customer demand for support could increase costs and adversely affect our financial condition and results of operations. In addition, we need highly trained technical support personnel. Hiring technical support personnel is very competitive in our industry due to the limited number of people available with the necessary scientific and technical backgrounds and ability to understand our technology at a technical level. Our sales are highly dependent on our reputation and on positive recommendations from our customers, users, care collaborators, providers, laboratories, hospitals and clinics. If we do not maintain high-quality customer support, or if the market perceives that we do not maintain high-quality customer support, our reputation and our business, financial condition and results of operations could be adversely affected. Delays in the commencement and successful completion of multimodal clinical studies, and negative or ambiguous data generated from such studies, could increase costs and delay or prevent regulatory approval of our SOPHiA DDM Platform and related solutions, applications, and products. To further improve our SOPHiA DDM Platform and its capabilities, for example by developing new predictive algorithmic models that we can deploy on our platform, we are sponsoring and intend to continue to sponsor observational multimodal clinical studies in various disease areas. These clinical studies are subject to numerous risks. Events that may prevent successful or timely commencement and completion of multimodal clinical studies include: •delays in receiving the required regulatory clearance from the appropriate regulatory authorities to commence the studies, delays in reaching an agreement on acceptable terms with prospective contract research organizations (“CROs”) and participating sites and difficulties in obtaining required Institutional Review Board (“IRB”) or ethics committee approval at each participating site; 6 Table of Contents •challenges in recruiting and enrolling suitable patients that meet the study criteria to participate in the studies, which challenges may be heightened for any clinical study that seeks to enroll patients with characteristics that are found in a small population; •our CROs or participating sites failing to comply with regulatory requirements or meet their contractual obligations to us, which risk may be heightened by our reliance on third parties; •lower than anticipated patient retention rates and difficulties in maintaining contact with patients, resulting in incomplete data; •changes in regulatory requirements and guidance; •lack of adequate funding to continue the study; or •delays and disruptions as a result of unforeseen external events. Furthermore, there can be no assurance that any multimodal clinical study will produce the data necessary to support further development of our platform in a particular disease area or to support any potential regulatory submission. Even if a study is completed, the data generated may be negative, ambiguous or otherwise insufficient. To obtain sufficient data, we may be required to conduct additional studies beyond those that we currently plan for, which would increase our costs and delay potential regulatory submissions and commercialization activities. If we do not have the support of key opinion leaders or clinical data using our applications and products is not published in peer-reviewed journals, it may be difficult to drive adoption of our applications and products. We have established relationships with leading thought leaders. If these key opinion leaders determine that our SOPHiA DDM Platform and related solutions, applications, products, and services are not accurate or that alternative technologies, applications, products, and services are more accurate or more cost-effective, or if we fail to establish new relationships with key opinion leaders in different markets, geographies and among various stakeholders, we may see lower demand for our SOPHiA DDM Platform and related solutions, applications, products, and services, which would limit our revenue growth and our ability to achieve profitability. The publication of clinical data using our applications and products in peer-reviewed journals is also crucial to our success. We are unable to control when, if ever, results of current or future trials and projects are published, which may delay or limit adoption of our SOPHiA DDM Platform and related solutions, applications, products, and services. Such peer-reviewed publications may be limited by many factors, including delays in the completion of, poor design of, or lack of compelling data from, clinical studies, as well as delays in the review, acceptance and publication process. If our SOPHiA DDM Platform and related solutions, applications, products, and services do not receive sufficient favorable exposure in peer-reviewed publications, the rate of adoption of our SOPHiA DDM Platform and related solutions, applications, products, and services among medical personnel and positive reimbursement coverage determinations for them could be adversely affected. Risks Related to Commercialization If we are unable to expand our sales and marketing capabilities, including through additional strategic relationships, in a cost-effective manner, we may not be able to grow our revenue. Our future sales will depend in large part on our ability to develop, train and retain our sales force, to increase the scope of our marketing efforts, including into markets and geographies where our presence is currently limited, and to maintain our current strategic relationships and enter into new strategic relationships. We are continuously expanding our sales and marketing infrastructure. Retaining and training qualified sales and marketing personnel requires significant time, expense and attention. Competition for such personnel is intense. It often takes several months or more before a sales representative is fully trained and productive, depending on the target market or geography. Our sales force may subject us to higher fixed costs than those incurred by our competitors that utilize independent third parties, which could place us at a competitive disadvantage. 7 Table of Contents In addition, we currently have multiple strategic relationships with third-party providers of solutions, applications, products, and services that can be bundled with our SOPHiA DDM Platform and offer our SOPHiA DDM Platform and related solutions, applications, products, and services through various global and local distributors. There is no guarantee that we will be successful in maintaining our existing arrangements or entering into new arrangements on favorable terms. Most of our distribution relationships are non-exclusive and permit such distributors to distribute competing applications and products. As such, our distributors may not commit the necessary resources to market our applications and products to the level of our expectations or may choose to favor marketing the applications and products of our competitors. If current or future distributors do not perform adequately or we are unable to enter into effective arrangements with distributors in particular geographies, we may not achieve revenue growth and realize our expansion strategy. Sales and marketing activities in the healthcare space are subject to various rules and regulations. In addition, our marketing messaging can be complex and nuanced, and there may be errors or misunderstandings in our sales force’s communication of such messaging. As we continue to grow our sales and marketing efforts, we face an increased need to continuously monitor and improve our policies, processes and procedures to maintain compliance with a growing number and variety of laws and regulations. To the extent that there is any violation, whether actual, perceived or alleged, of our policies or applicable laws and regulations, we could incur additional training and compliance costs, receive inquiries from third parties or be held liable or otherwise responsible for such acts of noncompliance. Any of the foregoing could adversely affect our business, reputation and results of operations. The commercial success of our SOPHiA DDM Platform and current and future applications, products, and services depend on attaining significant market acceptance. Our commercial success depends, in part, on market acceptance of our SOPHiA DDM Platform and our applications, products, and services. We cannot predict how quickly, if at all, our SOPHiA DDM Platform and related solutions, applications, products, and services will attain significant market acceptance or, if accepted, how frequently they will be used. These constituents must believe that our SOPHiA DDM Platform and related solutions, applications, products, and services offer benefits over other available alternatives. The degree of market acceptance of our SOPHiA DDM Platform and related solutions, applications, products, and services depends on a number of factors, including: •whether there is adequate utilization of our SOPHiA DDM Platform and related solutions, applications, products, and services based on their potential and perceived advantages over those of our competitors; •the safety, accuracy and ease of use of our SOPHiA DDM Platform and related solutions, applications, products, and services relative to those currently on the market; •our ability to develop, commercialize and obtain regulatory clearance or approval for in vitro diagnostic (“IVD”) applications and products for diagnostic use and our compliance with the FDA’s “Distribution of In Vitro Diagnostic Products Labeled for Research Use Only or Investigational Use Only” (the “RUO Guidance”) and other laws and regulations governing Research Use Only (“RUO”) and IVD applications and products in the United States (“U.S.”), and other geographies; •our ability to be compliant with the phased introduction of the European Union (EU) IVD Regulation 2017/746 including new product submissions; •the clinical flexibility, operational versatility and technology agnostic nature of our SOPHiA DDM Platform and related solutions, applications, products, and services; •the prices at which we and our distributors offer our SOPHiA DDM Platform and related solutions, applications, products, and services; •the effectiveness of our sales and marketing efforts; •our ability to provide incremental data that show the clinical benefits and cost-effectiveness, and operational benefits, of our SOPHiA DDM Platform and related solutions, applications, products, and services; 8 Table of Contents •our ability to build and maintain robust data sets with respect to patient populations, both in geographic regions that we have historically served and in geographic regions that we may seek to enter or further penetrate in the future; •the coverage and reimbursement acceptance of our applications, products, and services; •pricing pressure, including from group purchasing organizations (“GPOs”), seeking to obtain discounts on our SOPHiA DDM Platform and related solutions, applications, products, and services based on the collective bargaining power of the GPO members; •negative publicity regarding our or our competitors’ platforms, applications, products, and services; and •the accuracy of our SOPHiA DDM Platform and related solutions, applications, products, and services relative to those of our competitors. Additionally, even if our SOPHiA DDM Platform and related solutions, applications, products, and services achieve widespread market acceptance, they may not maintain that market acceptance over time if more cost-effective or more favorably received platforms, applications, products, services or technologies are introduced. Failure to achieve or maintain market acceptance and/or market share would limit our ability to generate revenue. There can be no assurance that we will be able to further penetrate our existing markets, that our existing markets will be able to sustain our current and future solutions, applications, products, and services offerings and that we will be able to expand into new markets. Any failure to increase penetration in our existing markets or expand into new ones would adversely affect our revenues and results of operations. The market opportunities for our SOPHiA DDM Platform and related solutions, applications, products, and services may be smaller than we estimate. Our estimates of the addressable market for our SOPHiA DDM Platform and related solutions, applications, products, and services are derived from a variety of sources, including scientific literature, surveys of clinicians, medical personnel and healthcare professionals and other forms of market research. These estimates may be inaccurate or based on imprecise data. Further, these estimates are based on various assumptions, including the outcomes of clinical studies, and whether the clinical studies will achieve objectives needed to meet clinical and payor expectations, the number of people who have a particular disease or condition, our expansion into other features, applications and data modality opportunities and disease areas, maintenance and expansion of our clinical and multimodal data sets for patient populations in specific geographic regions, the prices at which we and our distributors provide or sell our SOPHiA DDM Platform and related solutions, applications, products, and services in the market, the regulatory framework governing the development, sale and use of our SOPHiA DDM Platform and related solutions, applications, products, and services, including the laws and regulations governing RUO and IVD applications and products, the degree of coverage and reimbursement, the cost-containment efforts by payors, customers and collaborators as well as obtaining necessary clearance or regulatory approvals. While we believe our assumptions and estimates are reasonable, these assumptions and estimates may prove to be incorrect and the conditions supporting our assumptions or estimates may change at any time. If the addressable market for our SOPHiA DDM Platform and related solutions, applications, products, and services is smaller than our estimates, or if the prices at which we can sell our SOPHiA DDM Platform and related solutions, applications, products, and services are lower than our estimates, our business, financial condition, and results of operations could be negatively impacted. The coverage and reimbursement status of newly developed applications and products, such as data analytics platforms and related solutions, applications, products, and services, particularly in a new category of diagnostics and therapeutics, is uncertain. An inability to obtain or maintain adequate coverage and reimbursement could limit the commercial potential of our SOPHiA DDM Platform and related solutions, applications, products, and services. The availability and extent of reimbursement by governmental and private payors is essential for most patients to be able to afford our current and future platforms, solutions, applications, products, and services, if approved for IVD use. In addition, because our SOPHiA DDM Platform and related solutions, applications, products, and services represent new approaches to the research, diagnosis, detection and treatment of diseases, we cannot 9 Table of Contents accurately estimate how they would be priced, whether reimbursement could be obtained or any potential revenue generated. Sales of our SOPHiA DDM Platform and related solutions, applications, products, and services, if approved for IVD use, may depend substantially on the extent to which they are covered by health maintenance, managed care and similar healthcare management organizations, or reimbursed by government health administration authorities, private health coverage insurers and other third-party payors. If reimbursement is not available, or is available only to limited levels, we may not be able to successfully commercialize our SOPHiA DDM Platform and related solutions, applications, products, and services. Even if coverage is provided, the available reimbursement amount may not be high enough to allow us to establish or maintain pricing sufficient to realize an adequate return on our research and development and sales and marketing costs. Coverage and reimbursement are ever changing, and we are not in control of how our competitors’ coverage and pricing strategies are established. Some of our competitors have widespread brand recognition and substantially greater financial and technical resources and development, production and marketing capabilities than we do. Others may develop lower-priced, less complex tests that payors and healthcare professionals could view as functionally equivalent to our applications and products, which could force us to lower the list price of our tests and impact our operating margins and our ability to achieve and maintain profitability. Payors may compare our applications and products to our competitors and utilize them as precedents, which may impact our coverage and reimbursement. In addition, technological innovations that result in the creation of enhanced diagnostic tools that are more effective than ours may enable other clinical laboratories, hospitals, medical personnel or medical providers to provide specialized diagnostic tests similar to ours in a more patient-friendly, efficient or cost-effective manner than is currently possible. Cost-containment efforts of our customers and third-party payors could have a material adverse effect on our sales and profitability. Increasing efforts by governmental and third-party payors to cap or reduce healthcare costs may cause such organizations to limit both coverage and level of reimbursement for newly cleared, authorized or approved devices and medicines and, as a result, they may not cover or provide adequate payment for our platform and related solutions, applications, products, and services. Such efforts include legislation and regulations designed to control pharmaceutical and biological pricing and hospitals’ participation in group purchasing organizations (“GPOs”) and Integrated Delivery Networks (the “IDNs”) that negotiate pricing arrangements with medical device companies and distributors. We expect that a significant portion of our revenue will be derived from sales to customers for research and development applications. The demand for our SOPHiA DDM Platform and related solutions, applications, products, and services will depend in part upon the research and development budgets of these customers, which are impacted by factors beyond our control. In addition, academic, governmental and other research institutions that fund research and development activities may be subject to stringent budgetary constraints that could results in spending reductions, reduced allocations or budget cutbacks, which could jeopardize the ability of these customers to purchase our applications and products. Risks Related to Our Business Strategy Our results of operations will be materially harmed if we are unable to accurately forecast customer demand for, and utilization of, our SOPHiA DDM Platform and related solutions, applications, products, and services and manage our inventory. To ensure adequate inventory supply, we must forecast inventory needs and assemble products related to our SOPHiA DDM Platform and services based on our estimates of future demand. Our ability to accurately forecast demand could be negatively affected by various factors, including our failure to accurately manage our expansion strategy, application and product introductions by competitors, change in customer demand, changes in customer acceptance, changes in general market conditions or regulatory matters and weakening of economic conditions or consumer confidence in future economic conditions. Inventory levels in excess of customer demand may result in inventory write-downs or write-offs, which would adversely affect our gross margin and impair the strength of our brand. Conversely, if we underestimate customer demand for our SOPHiA DDM Platform and related solutions, applications, products, and services, our supply chain, manufacturing collaborators and/or internal manufacturing team may not be able to deliver components to meet our requirements, which could damage our reputation, sales growth, and customer relationships. In addition, if we experience a significant increase in demand, additional supplies of raw materials or additional manufacturing 10 Table of Contents capacity may not be available when required on terms that are acceptable to us, if at all, or suppliers may not be able to allocate sufficient capacity in order to meet our increased requirements, which could adversely affect our business, reputation, and results of operations. We have in the past and may in the future acquire other businesses, which could require significant management attention, disrupt our business, dilute shareholder value and adversely affect our results of operations. As part of our business strategy, we have in the past and may in the future acquire complementary companies, platforms, applications, products, or technologies that we believe fit within our business model and can address the needs of our current and potential customers. There can be no assurance that we can acquire or successfully integrate such companies, platforms, applications, products, or technologies into our business, in particular that we can successfully integrate any acquired technology into our SOPHiA DDM Platform. We may not be able to find suitable acquisition candidates, and we may not be able to complete such acquisitions on acceptable terms, if at all. In addition, the pursuit of potential acquisitions may divert the attention of management and cause us to incur additional expenses in identifying, investigating and pursuing suitable acquisitions, whether or not they are consummated. If we do complete acquisitions, we may not ultimately strengthen our competitive position or achieve our strategic goals and any acquisitions we complete could be viewed negatively by our customers, investors and industry analysts. We may not be aware of all of the risks associated with the acquired business. In addition, an acquisition may result in unforeseen operating difficulties and expenditures, such as: •difficulties integrating businesses, services, personnel, operations and financial and other controls and systems and retaining key employees; •assumption of unknown liabilities, known contingent liabilities, that become realized or known liabilities that prove greater than anticipated; •difficulties retaining the customers or employees of any acquired business; •incurrences of debt, contingent liabilities or future write-offs of intangible assets or goodwill; •entry into a new market or business line in which we have no prior experience and in which we may not successfully compete; •integration of an acquired company, which may disrupt ongoing operations and require management resources that would otherwise be used in developing our existing business; and •divergent interests from those of our collaborators. Acquisitions involve unique risks in addition to those mentioned above, including those related to integration of operations across different cultures and languages, currency risks, and the particular economic, political and regulatory risks associated with specific countries. Any such acquisitions may reduce cash available for operations and other uses and could result in amortization expense related to identifiable assets acquired. We may have to pay cash, incur debt or issue equity securities to pay for any such acquisition, each of which could adversely affect our financial condition and the value of our ordinary shares. The sale or issuance of equity securities to finance any such acquisitions would result in dilution to our current shareholders. The incurrence of indebtedness to finance any such acquisition would result in fixed obligations and could also include restrictive covenants that impede our ability to manage our operations. In addition, our results of operations may be adversely affected by the dilutive effect of an acquisition, performance earn-outs or contingent bonuses, and restructuring costs associated with an acquisition. 11 Table of Contents Risks Related to Our Relationships with Third Parties If we cannot maintain our current relationships and enter into new relationships with hospitals, reference and specialty laboratories and biopharmaceutical companies, our revenue prospects could be reduced. We collaborate with various constituents in the healthcare ecosystem, such as hospitals, reference and specialty laboratories, and biopharmaceutical companies to analyze patient samples for multiple applications; strategic partners with whom we combine our SOPHiA DDM Platform with their offerings and with whom we jointly develop application, product, and service offerings; and manufacturers, suppliers and distributors of our products and offerings. See “Item 10. Additional Information—Material Contracts.” There can be no assurance that these collaborations will be successful or provide benefits to us as we expect. The revenue attributable to such relationships may fluctuate from period to period, which could adversely affect our financial condition and results of operations. In addition, the termination of these relationships could result in a temporary or permanent loss of revenue and could negatively impact our reputation. Our future success depends in part on our ability to maintain these relationships and to establish new relationships, including with additional partners and collaborators and with governmental and third-party payors and patients. Many factors have the potential to impact such relationships, including our customers’ and collaborators’ satisfaction with our SOPHiA DDM Platform and related solutions, applications, products, and services, their perceptions of our SOPHiA DDM Platform, which may be impacted by decisions of our other collaborators, and our ability to respond to the evolving needs of our customers. Furthermore, our customers may decide to decrease or discontinue their use of our SOPHiA DDM Platform and related solutions, applications, products, and services due to changes in clinical routine, research and development plans, financial constraints or utilization of internal testing resources or tests. In addition, our collaborators may decide to discontinue providing services or manufacturing products, for instance testing kits, complementary to or compatible with our SOPHiA DDM Platform and related solutions, applications, products, and services, in particular, applications and products offered as part of “bundle” solutions together with our SOPHiA DDM Platform. Furthermore, our collaborators with whom we entered into both manufacturing and distribution agreements may be dis-incentivized from adequately performing their obligations under the applicable distribution agreement if we substantially decrease the quantities of products purchased from them under the manufacturing agreement or terminate the manufacturing agreement. In addition to reducing our revenue, the loss of one or more of these relationships may reduce our exposure to clinical routine and research that facilitate the collection and incorporation of new data, including new genomic profiles, into our SOPHiA DDM Platform. We engage in conversations with potential collaborators regarding commercial opportunities on an ongoing basis. There can be no assurance that any of these conversations will result in a commercial agreement, or if an agreement is reached, that the resulting relationship will be successful or that clinical or research studies conducted as part of the engagement will produce successful outcomes. Our operating results depend on the performance of third-party distributors. A portion of our sales is made through independent global and regional distributors that are not fully under our control. We rely on distributors to grow and develop our customer base and anticipate customer needs, and any lack of such actions by our distributors may adversely affect our results of operations. If the business relationship with such distributor is terminated, whether through industry consolidation or otherwise, and we are unable to find a suitable replacement, our operations and operating results could be materially adversely affected. While in such instances we would revert to using internal resources to service the market in the impacted geography, the hiring process and building a support infrastructure for a given market, can be time consuming and there could be customer attrition in the interim period. These independent distributors also generally represent applications and products offered by several companies and are not subject to any minimum sales requirements or obligation to market our applications and products to their customers. In turn, distributors could reduce their sales efforts for our applications and products or choose to terminate their representation of us. They may also fail to perform their obligations under the agreements with us, including, but not limited to, their obligations to ensure that end users of our SOPHiA DDM Platform are aware that informed consent is required from patients prior to obtaining access to our SOPHiA DDM Platform. 12 Table of Contents We rely on third-party service providers to host and deliver our SOPHiA DDM Platform and related services, and any interruptions or delays in these services could harm our business. We currently serve our customers from third-party data center hosting facilities located in the United States, Canada, Brazil, Switzerland, France, Netherlands, United Arab Emirates and Australia. Our operations depend, in part, on our third-party facility providers’ ability to protect these facilities against damage or interruption from natural disasters, power or telecommunications failures, criminal acts, and similar events. In the event that our data center arrangements are terminated, or if there are any lapses of service or damage to a center, we could experience lengthy interruptions in providing our SOPHiA DDM Platform and related solutions, applications, products, and services as well as delays and additional expenses in making new arrangements. In addition, we currently use Microsoft Corporation (“Microsoft”) and Microsoft Azure Services for a substantial portion of our computing, storage, data processing, networking and other services. Our platform can also be deployed onto other platforms, including Amazon Web Services (“AWS”) or Google Cloud Platform (“Google Cloud”). Any significant disruption of, or interference with, our use of Microsoft Azure Services, AWS, Google Cloud or other similar cloud platforms, could affect the use of, and our customers’ satisfaction with, our applications, products, and services and could harm our business, results of operations and reputation. Cloud providers have broad discretion to change and interpret the terms of service and other policies with respect to us, and those actions may be unfavorable to our business operations. Cloud providers may also take actions beyond our control that could seriously harm our business, including discontinuing or limiting our access to one or more services, increasing pricing terms, terminating or seeking to terminate our contractual relationship altogether or altering how we are able to process data in a way that is unfavorable or costly to us. If our arrangements with cloud providers were terminated, we could experience interruptions on our platform and in our ability to make our content available to users, as well as delays and additional expenses in arranging for alternative cloud infrastructure services. Any transition to new cloud providers would be difficult to implement and would cause us to incur significant delays and expense. We rely on third-party manufacturers for the supply, manufacture and production of our products. Our reliance on these third parties may impair the advancement and commercialization of our products. We rely, and expect that we will continue to rely, on third parties for the manufacturing and supply of our products offered with our SOPHiA DDM Platform, and such reliance on third-party manufacturers may expose us to different risks than if we were to manufacture products ourselves. If our agreements with these third parties expire or are terminated, there can be no assurance that we would be able to negotiate new agreements with them or other third parties on equally favorable terms as the current agreements, or at all. Reliance on third-party providers exposes us to different risks than if we were to manufacture and supply products ourselves. For example, third-party manufacturers may fail to deliver the required commercial quantities of materials on a timely basis and at commercially reasonable prices, and we may be unable to find one or more replacement manufacturers capable of production at a substantially equivalent cost in substantially equivalent volumes and quality on a timely basis. Further, as we do not have control over a manufacturer’s compliance with applicable manufacturing standards and other laws and regulations, we may receive required materials for, or components of, our products that are defective, contaminated or otherwise not conforming to applicable quality control specifications, warranties and statutory and regulatory requirements. Any failure to achieve and maintain compliance with laws, regulations and standards could lead to suspension of the manufacturing and sales of our products, revocation of obtained regulatory clearance, product recalls, marketing or promotional restrictions, litigation, customer loss and reputational harm. Further, our manufacturing collaborators may be unable to successfully increase the manufacturing capacity for our products in a timely or cost-effective manner, or at all, as needed for our development efforts or, if our additional products are developed and approved, our commercialization efforts. Establishing additional or replacement manufacturers could take a substantial amount of time and be expensive, which may result in interruptions in our operations and product delivery, negatively affect the quality and performance of our products or require that modifications be made to our products’ designs. Even if we are able to find replacement manufacturers, we will be required to verify that the new manufacturer maintains facilities, procedures and operations that comply with our quality expectations and applicable regulatory requirements. If we are unable to find an adequate replacement or another acceptable solution in time, our research and development and commercial activities could be harmed. 13 Table of Contents We rely on third parties to conduct multimodal clinical studies. If they do not properly and successfully perform their obligations to us, we may not be able to gather data necessary to support further development of our SOPHiA DDM Platform in a particular disease area or to support potential regulatory submissions and commercial activities. We rely, and we expect that we will continue to rely, on third parties to assist in managing, monitoring and otherwise carrying out multimodal clinical studies of the performance of our SOPHiA DDM Platform and related solutions, applications, and products. As a result of our reliance on these third parties, we have less direct control over the conduct, timing and completion of these studies than we would otherwise have if we relied entirely upon our own staff. If these third parties do not successfully carry out their duties under their agreements, or if the quality or accuracy of the data they obtain is compromised, or if they fail to comply with study protocols or meet expected deadlines, the multimodal clinical studies of our SOPHiA DDM Platform and related solutions, applications, and products, may fail to generate data necessary to support further development of our platform in a particular disease area or to support potential regulatory submissions and commercial activities and could subject us to liability claims. If third parties fail to comply with applicable regulatory requirements, the data generated in the multimodal clinical studies may be unreliable and these studies may be extended, delayed, suspended or terminated and we could be subject to liability claims. We compete with many other companies for the resources of these third parties. These third parties may have contractual relationships with other entities, some of which may be our competitors, which may draw time and resources away from our studies. If any of our relationships with these third parties terminate, we may not be able to enter into alternative arrangements or to do so on commercially reasonable terms. As a result, delays may occur in our studies, which can materially impact our ability to meet our desired development, regulatory and commercialization timelines. There can be no assurance that we will not encounter challenges or delays in the future or that these delays or challenges will not have a material adverse impact on our business, results of operations, financial condition and prospects. Performance issues, service interruptions or price increases by our shipping carriers and warehousing providers could adversely affect our business, reputation and ability to provide our products on a timely basis. Expedited, reliable shipping and delivery services and secure warehousing are essential to our operations. We rely on providers of transport services for reliable and secure point-to-point transport of our research and diagnostic products and for tracking of these shipments, and from time to time require warehousing for our products. Should a carrier encounter delivery performance issues such as loss, damage or destruction of any systems, it would be costly to replace such systems in a timely manner and such occurrences may damage our reputation, reduce demand for our SOPHiA DDM Platform and related solutions, applications, products, and services and increase costs and expenses to our business. In addition, any significant increase in shipping or warehousing rates could adversely affect our operating margins and results of operations. Similarly, strikes, severe weather, natural disasters, civil unrest and disturbances or other service interruptions affecting delivery or warehousing services we use would adversely affect our ability to process orders for our products on a timely basis and adversely affect specimen integrity and our ability to process samples in a timely manner. We carry marine cargo insurance, covering certain potential losses related to the shipment of our products, in an amount that we believe is reasonable for our business, but there can be no assurance that such potential losses will be covered or will not exceed our policy limits. Risks Related to Our Business and Industry We are highly dependent on our senior management team and other qualified personnel, and our business could be harmed if we are unable to retain and attract such personnel. We are highly dependent on our senior management, including our Chief Executive Officer and co-founder Dr. Jurgi Camblong. Our success will depend on our ability to retain senior management and to attract and retain qualified personnel in the future, including sales and marketing professionals, scientists, clinical specialists and other highly skilled personnel. The inability to attract and retain members of our senior management, sales and marketing professionals, scientists, IT and data experts or clinical and regulatory specialists could result in delays in application and product development and commercialization and harm our business. To induce valuable employees to remain at our company, in addition to salary and cash incentives, we have granted and intend to continue to grant share-based compensation awards that vest over time. The value to 14 Table of Contents employees of such awards is significantly affected by movements in our share price due to market volatility, and such awards may be insufficient to retain key employees and senior management, as well as to counteract more lucrative offers from other companies. Despite our efforts to retain valuable employees, members of our management, scientific and development teams may terminate their employment with us on short notice. We do not maintain “key person” insurance policies. Our industry is subject to rapid change, which could make our SOPHiA DDM Platform and related solutions, applications, products, and services obsolete. If we are unable to continue to innovate and improve our SOPHiA DDM Platform and related solutions, applications, products, and services, we could fail to attract new customers and expand our market share and we could lose existing customers and market share. Our industry is characterized by rapid changes, including technological and scientific breakthroughs, frequent new application, product, or service introductions and enhancements and evolving industry standards, all of which could make our SOPHiA DDM Platform and related solutions, applications, products, and services and others we are developing obsolete. Our future success will depend on our ability to keep pace with the evolving needs of our customers on a timely and cost-effective basis and to pursue new market opportunities that develop as a result of scientific and technological advances. In recent years, there have been numerous advancements in genomics and our understanding of cancer, rare diseases, cardiology, neurology, metabolism and infectious diseases. There have also been advancements in methods used to analyze very large amounts of molecular information. New technologies, including new artificial intelligence/machine learning-powered technologies, and evolving business models in the field of precision medicine continue to develop rapidly. We must continuously enhance our offerings and develop new and improved features, applications and data modalities of our SOPHiA DDM Platform and related solutions, applications, products, and services to keep pace with scientific and industry developments. If we do not leverage or scale our database of genomic profiles or update our data analytics platform and improve our services and research and diagnostic applications and products to reflect new scientific knowledge, including in the fields of oncology and hereditary disorders, our SOPHiA DDM Platform and related solutions, applications, products, and services could become obsolete and sales of our SOPHiA DDM Platform and related solutions, applications, products, and services could decline or fail to grow as expected. A failure to make continuous improvements to our SOPHiA DDM Platform and related solutions, applications, products, and services to keep ahead of those of our competitors could result in the loss of customers or market share. We face competition from many sources and we may be unable to compete successfully. There are a number of healthcare technology companies providing bioinformatics analysis solutions, applications, services, and products in North and South America, Europe and Asia. See “Item 4. Information on the Company—Business Overview—Competition.” These competitors provide AI-driven precision medicine platforms, applications, services, and research and diagnostic products to hospitals, researchers, medical personnel, laboratories and other medical facilities. Many of these organizations, particularly in the United States, are more established, possess regulatory clearances and approval, have broader or deeper relations with healthcare professionals, customers and third-party payors, have greater ability to price their platforms, solutions, applications, products, and services competitively and have significantly greater financial and personnel resources and market share than we do. As a consequence, they may be able to spend more on application and product development, marketing, sales and other application and product initiatives than we can. Our continued success depends on our ability to: •further penetrate the disease diagnostic solutions market and increase utilization of our SOPHiA DDM Platform and related solutions, applications, products, and services; •maintain and widen our technology lead over competitors by continuing to innovate and deliver new application and product enhancements on a continuous basis; •cost-effectively develop and improve our SOPHiA DDM Platform and related solutions, applications, products, and services; •add new clinically relevant features, applications and data modalities to our SOPHiA DDM Platform and related solutions, applications, products, and services, such as anatomical 15 Table of Contents pathology and proteomics, and generate suitable evidence supporting the research and clinical utility of our multimodal analytical approach ahead of our competitors; and •maintain existing and establish additional research and development, manufacturing, distribution and commercialization collaborations and partnerships. Our competitors also compete with us in recruiting and retaining qualified scientific, management and commercial personnel, as well as in acquiring technologies complementary to, or necessary for, development of our SOPHiA DDM Platform and related solutions, applications, products, and services. Because of the complex and technical nature of data-driven healthcare analysis and the dynamic market in which we compete, any failure to attract and retain a sufficient number of qualified employees could materially harm our ability to develop and commercialize our SOPHiA DDM Platform and related solutions, applications, products, and services, which would have a material adverse effect on our business, financial condition and results of operations. As we attain greater commercial success, our competitors are likely to develop technology, platforms, applications, products, and services that offer features and functionality similar to ours. Improvements in existing competitive technology, platforms, applications, products, and services or the introduction of new competitive technology, platforms, applications, products, and services may make it more difficult for us to compete for sales, particularly if competitors demonstrate better accuracy, reliability, convenience or effectiveness or price their platforms, applications, products, and services less expensively. Our competitors may develop data analytics platforms, applications, and products or adopt and implement standards or technologies not compatible with our SOPHiA DDM Platform and our other applications, services, and products. This may inhibit our efforts to develop our platform, applications, services, and products in a technology-agnostic manner, which could narrow the addressable market for our SOPHiA DDM Platform and our other applications, services, and products, adversely impact their sales and market acceptance, and limit our revenue growth and potential profitability. In addition, we operate in an ecosystem where we and our customers have multiple offerings and our own customers may become our competitors or may view us as potential competitors. This could dis-incentivize our customers or potential customers from adopting our offerings and sharing data with us, which would adversely impact sales and market acceptance and limit our revenue growth and potential profitability. Cybersecurity or data privacy breaches, other unauthorized or improper access, or (distributed) denial service lack of access (e.g., ransomware, persistent DoS/DDoS) could result in additional costs, service outages, loss of revenue, significant liabilities, harm to our brand and decreased/denied use of our SOPHiA DDM Platform and related solutions, applications, products, or services. Any failure to prevent or mitigate cybersecurity incidents or improper access to, use, disclosure or other misappropriation of our data or customers’ personal data or the inability to rightfully access/control any such data (e.g., ransomware, persistent DoS/DDoS, system compromise, IP leak) could result in significant liability under state (e.g., state breach notification and privacy laws such as the California Consumer Privacy Act (“CCPA”)), federal (e.g., the Health Insurance Portability and Accountability Act of 1996, as amended by the Health Information Technology for Economic and Clinical Health Act (“HITECH”), collectively “HIPAA”) and international laws (e.g., the General Data Protection Regulation (“GDPR”) and the U.K. General Data Protection Regulation (“UK GDPR”)). Such an incident may also cause a material loss of revenue from the potential adverse impact to our reputation and brand, affect our ability to retain or attract new users and customers of our applications, products, and services and potentially disrupt our business. As we become more dependent on information technologies, to conduct our operations, cybersecurity incidents, including deliberate cybersecurity attacks and attempts to gain unauthorized access to computer systems and cloud/hybrid networks, may increase in frequency and sophistication. Next generation sequencing (NGS) is becoming a new standard in public health sector. Its growing visibility inevitably attracts malicious activity threats, as it combines mission-critical infrastructure and high-value data. In addition to the nature of the data we hold and process, geopolitical factors could make cybersecurity attacks more common and targeted. These cybersecurity threats pose a risk to the security of our systems and networks, the confidentiality and the availability and integrity of our data, and these risks apply both to us (including via our corporate systems and 16 Table of Contents any employees that may be working remotely) and to third parties on whose systems we rely for the conduct of our business. The techniques used to obtain unauthorized access, disable or degrade service or sabotage systems develop and change frequently and often are not recognized until launched against a target. Increasingly, attackers leverage AI-powered cyberattacks to automate and enhance the sophistication of such techniques, making detection and mitigation more challenging. As a result, we and our collaborators may be unable to anticipate these techniques or to implement adequate preventative measures. We may in the future experience security incidents. In particular, we may be subject to cybersecurity incidents as we continue to adapt and upgrade our platform architecture. If we do not allocate and effectively manage the resources necessary to build and sustain the proper technology and cybersecurity infrastructure, we could suffer significant business disruption, data loss or damage to intellectual property or other proprietary information. While no security incidents in the past have had a material adverse effect on our business, financial condition and results of operations, we cannot predict the impact of any such future events. Further, although we are obligated under certain laws and regulations to ensure that our platform, systems and servers and those of our service providers remain compliant with the relevant legal requirements with respect to data privacy and cybersecurity, we do not have any control over the operations of the facilities or technology of such providers, including any third-party vendors that collect, process and store personal data on our behalf. Our platform, systems and servers and those of our service providers may be vulnerable to malware or physical or electronic break-ins that our or their security measures may not detect, including via supply chain attacks. Individuals able to circumvent such security measures may misappropriate our confidential or proprietary information, disrupt our operations, damage our computers or otherwise impair our reputation and business. We may need to expend significant resources and make significant capital investments to protect against cybersecurity breaches or to mitigate (compensating controls) the impact of any such breaches. In addition, to the extent that our platform, systems and servers and those of our service providers experience security breaches that result in the unauthorized or improper use of confidential data, employee data or personal data, we may not be indemnified for any losses resulting from such breaches. Currently, we carry cybersecurity insurance in amounts that we believe is reasonable for our business, but there can be no assurance that such potential losses will be covered or will not exceed our policy limits. There can be no assurance that we or our third-party providers will be successful in preventing cyberattacks or successfully mitigating their effects. If we are unable to prevent or mitigate the impact of such security breaches, our ability to attract and retain new customers, patients and other collaborators could be harmed as they may be reluctant to entrust their data to us, and we could be exposed to litigation and governmental investigations, proceedings and regulatory actions by federal, state and local regulatory entities in the United States and by other national regulatory entities, and we could breach our contractual obligations, all of which could result in significant legal and financial exposure and reputational damages and lead to a potential disruption to our business or other adverse consequences. If we experience significant disruptions in our information technology systems, our business may be adversely affected. We depend on our information technology systems for the efficient functioning of our business, including the performance, distribution and maintenance of our SOPHiA DDM Platform and related solutions, applications, products, and services, as well as for accounting, data storage, compliance, purchasing and inventory management, and our continued growth is dependent on our ability to adapt and upgrade our platform architecture without suffering significant business disruption, data loss or the loss of or damage to intellectual property or other proprietary information. Our information technology systems may fail and are vulnerable to breakdown, cybersecurity breach, interruption or damage from computer viruses, ransomware, DoS/DDoS attacks or other malware, attacks by computer hackers, including sophisticated nation-state and nation-state-supported actors, employee error or malfeasance, theft or misuse, failures during the process of upgrading or replacing software, databases or components thereof, power outages, damage or interruption from fires or other natural disasters, hardware failures, telecommunication failures and user errors, among other malfunctions. We could be subject to an unintentional event that involves a third party gaining unauthorized access to our systems, which could disrupt our operations, corrupt our data or result in release of our confidential information. Technological interruptions would disrupt our operations, including our ability to timely ship and track diagnostic test orders and results, project inventory requirements, manage our supply chain and otherwise adequately service our customers or disrupt our customers’ ability to use our applications, products, and services. In the event we experience significant disruptions, we may be unable to repair our systems in an efficient and timely manner. Accordingly, such events may disrupt or reduce the efficiency of our entire operation and have a material adverse effect on our business, financial condition and results of operations. Due to the confidential nature of the information that we deal in, any loss in customer trust could have a significant adverse impact on our business. 17 Table of Contents Currently, we carry business interruption insurance in amounts that we believe is reasonable for our business, but there can be no assurance that such potential losses will be covered or will not exceed our policy limits. We are increasingly dependent on complex information technology to manage our infrastructure. Our information systems require an ongoing commitment of significant resources to maintain, protect and enhance our existing systems. Failure to maintain or protect our information systems and data integrity effectively could have a material adverse effect on our business, financial condition and results of operations. Our business could be adversely affected by health epidemics, pandemics and unplanned events. Our business could be adversely affected by health epidemics, pandemics and natural disasters. To the extent any pandemic, epidemic or outbreak of an infectious disease adversely affects our business and financial results, it may also have the effect of heightening many of the other risks described in this “Risk Factors” section. In addition, any unplanned event, such as a flood, fire, explosion, earthquake, extreme weather condition, power shortage, telecommunication failure or other natural or man-made accidents or incidents that result in us being unable to fully use our facilities, which may render it difficult or impossible for us to operate our platform for some period of time or result in damages to our inventory that require sensitive storage conditions. Certain of these natural events and disasters may become more frequent and severe as a result of the effects of climate change. We do not presently have an emergency back-up generator in place at our Rolle, Switzerland laboratory facility which would otherwise mitigate, to some extent, the effects of a prolonged power outage. Furthermore, our facility and the equipment we use to perform our research and development work could be unavailable or costly and time-consuming to repair or replace, which may increase backlog. It would be difficult, time-consuming and expensive to rebuild our facility, to locate new facilities or license or transfer our proprietary technologies to a third party. Currently, we carry business continuity insurance in amounts that we believe is reasonable for our business, but there can be no assurance that such potential losses will be covered or will not exceed our policy limits. If product liability lawsuits are brought against us, we may incur substantial liabilities and may be required to limit or halt the marketing and sale of our SOPHiA DDM Platform and related solutions, applications, products, and services. We face an inherent risk of product liability as a result of the marketing and sale of our SOPHiA DDM Platform and related solutions, applications, products, and services and the testing of our SOPHiA DDM Platform in clinical studies. Such claims may be made against us even if the apparent injury is due to the actions of others or the preexisting health of the patient. This risk may be heightened by our reliance on third parties for the manufacturing, marketing and research and development of our SOPHiA DDM Platform and related solutions, applications, products, and services. If we cannot successfully defend ourselves against product liability claims, we may incur substantial liabilities or be required to limit or halt the marketing and sale of our products. Even successful defense would require significant financial and management resources, harm our reputation in our industry and reduce sales. We believe that we have adequate product liability insurance, but it may not prove to be adequate to cover all liabilities that we may incur. Insurance coverage is increasingly expensive. We may not be able to maintain or obtain insurance at a reasonable cost or in an amount adequate to satisfy any liability that may arise. Our insurance policy contains various exclusions, and we may be subject to a product liability claim for which we have no coverage. The potential inability to obtain sufficient product liability insurance at an acceptable cost to protect against product liability claims could prevent or inhibit the marketing and sale of our applications, products, and services. In addition, any product liability claims brought against us, with or without merit, could increase our product liability insurance rates or prevent us from securing continuing coverage. If we fail to maintain an effective system of internal controls over financial reporting, we may not be able to accurately report our financial condition and results of operations in a timely manner or prevent fraud. Effective internal controls over financial reporting are necessary for us to provide reliable financial reports and, together with adequate disclosure controls and procedures, are designed to prevent and/or detect errors and/or fraud in a timely manner . Any failure to implement required new or improved controls, or difficulties encountered in their implementation could cause us to fail to meet our reporting obligations. As required by Section 404 of 18 Table of Contents the Sarbanes-Oxley Act, our management has conducted an assessment on the effectiveness of our internal controls over financial reporting. However, as an emerging growth company, our independent registered public accounting firm has not provided an attestation report on our internal controls over financial reporting. There can be no assurance that any future testing conducted by us or, if required, by our independent registered public accounting firm will not reveal deficiencies in our internal controls over financial reporting. If we do not maintain an effective system of internal controls over financial reporting, we may be unable to accurately report our financial condition and results of operations in a timely manner, may incur additional financial and management resources to remediate any deficiencies, or may be unable to detect and prevent fraud, all of which would adversely affect our business and investor confidence. Litigation and other legal proceedings may adversely affect our business. From time to time, we may become involved in legal proceedings relating to patent and other intellectual property matters, product liability claims, employee claims, tort or contract claims, claims related to our public commitments, regulatory investigations, securities class action and other legal proceedings or investigations, which could have an adverse impact on our reputation, business and financial condition and divert the attention of our management from the operation of our business. Litigation is inherently unpredictable and can result in excessive or unanticipated judgments and/or injunctive relief that affect how we operate our business. We could incur judgments or enter into settlements of claims for monetary damages or for agreements to change the way we operate our business, or both. There may be an increase in the scope of these matters or there may be additional lawsuits, claims, proceedings or investigations in the future, which could have a material adverse effect on our business, financial condition and results of operations. Adverse publicity about regulatory or legal action against us could damage our reputation and brand image, undermine our customers’ confidence and reduce long-term demand for our solutions, applications, products, and services, even if the regulatory or legal action is unfounded or not material to our operations. In this regard, we are currently defending against patent infringement claims brought by Guardant Health in multiple jurisdictions, as described below in section “Risks Related to Intellectual Property”. Our business is subject to economic, political, regulatory and other risks associated with international operations. Our results could be adversely affected by a variety of risks associated with our international operations, including economic weakness, such as inflation and rising interest rates, or political instability in economies and markets; global trends towards pharmaceutical pricing; differing regulatory requirements for bioinformatics analysis services and research and diagnostic products approvals; differing reimbursement, pricing and insurance regimes; potentially reduced protection for, and complexities and difficulties in obtaining, maintaining, protecting and enforcing, intellectual property rights; difficulties in compliance with U.S. and non-U.S. laws and regulations, including data security and data protection laws, which may result in increased compliance costs to us, and anti-corruption and anti-bribery laws; changes in regulations and customs, tariffs and trade barriers; changes in currency exchange rates and currency controls; changes in a specific country’s or region’s political or economic environment; trade protection measures, economic sanctions and embargoes on certain countries and persons, import or export licensing requirements or other restrictive actions by governments, including with respect to our applications, products, and services, in particular IT solutions, services and technologies on which our operations rely; changes in tax laws; compliance with tax, employment, immigration and labor laws for employees living or traveling abroad; workforce uncertainty in countries where labor unrest is more common than in Switzerland and the United States; difficulties associated with staffing and managing international operations, including differing labor relations; production shortages resulting from any events affecting raw material supply or manufacturing capabilities abroad; business interruptions resulting from geopolitical actions, including war and terrorism (including the ongoing conflict between Russia and Ukraine and in the Middle East), or natural disasters including earthquakes, typhoons, floods and fires; and the impact of public health epidemics on employees and the global economy. As a result, we may experience supply chain disruptions and interruptions in our operations. Any of these factors could require us to modify our business plans and strategy and significantly harm our future international expansion and operations and, consequently, our revenue and results of operations. 19 Table of Contents Risks Related to Governmental Regulation Currently our applications and products in the United States are labeled as RUO. We intend to seek regulatory clearance or approval to offer our applications and products as IVD applications and products for diagnostic use. We cannot guarantee when, if at all, we will apply for regulatory clearance or approval or that we will be successful in obtaining such clearances or approvals. While we have several CE-IVD marked applications and products in the European Union (“EU”), our currently available applications and products in the United States are labeled as RUO applications and products and are not intended for diagnostic use. Although we have focused initially on the RUO applications and products only, our strategy is to expand our application and product line to encompass applications and products that are intended to be used as IVDs. Such IVD products will be subject to regulation by the FDA as medical devices, including requirements for regulatory clearance or approval of such applications and products before they can be marketed. Accordingly, we will be required to obtain FDA 510(k) clearance or premarket approval (“PMA”) in order to sell our applications and products in a manner consistent with FDA current laws and regulations. Such regulatory approval processes or clearances are expensive, time-consuming and uncertain; our efforts may never result in any premarket approval or 510(k) clearance for our applications and products; and failure by us to obtain or comply with such approvals and clearances could have an adverse effect on our business, financial condition or operating results. Regulatory authorities have substantial discretion in the clearance and approval process. They may refuse to accept any application or may decide that our data are insufficient for clearance or approval and require additional studies. Therefore, even if we believe the data collected from studies of our platform are promising, such data may not be sufficient to support clearance or approval by any regulatory authority. If we are required to conduct additional studies or other testing of any of our platform beyond those we contemplate, we may incur significant additional costs and regulatory approval may be delayed or prevented. Furthermore, approval by one regulatory authority does not ensure approval by regulatory authorities in other jurisdictions, and we may be required to undertake additional studies to access particular markets. If we successfully obtain such clearances or approvals, we will be subject to a substantial number of additional requirements for medical devices, including, but not limited to, establishment registration, device listing, and compliance with the Quality Management System Regulation (“QMSR”), which covers the design, testing, production, control, quality assurance, labeling, packaging, servicing, sterilization (if required), and storage and shipping of medical devices (among other activities), advertising, record keeping, post-market surveillance, post-approval studies, adverse event reporting, and correction and removal (recall) regulations. We may be required to expend significant resources to ensure ongoing compliance with the FDA regulations and/or take satisfactory corrective action in response to enforcement action, which may have a material adverse effect on the ability to design, develop and commercialize applications and products using our technology as planned. Failure to comply with these requirements may subject us to a range of enforcement actions, such as warning letters, injunctions, civil monetary penalties, criminal prosecution, recall and/or seizure of products, and revocation of marketing authorization, as well as significant adverse publicity. If we fail to obtain, or experience significant delays in obtaining, regulatory approvals for IVD or other applications and products, such applications and products may not be able to be launched or successfully commercialized in a timely manner, or at all. Laboratory developed tests (“LDTs”) are a subset of IVD tests that are designed, manufactured and used within a single laboratory. The FDA maintains that LDTs are medical devices and has historically exercised enforcement discretion for most LDTs. Regulation of LDTs, however, falls under the purview of the Clinical Laboratory Improvement Amendment (“CLIA”) with oversight between the Centers for Medicare and Medicaid Services (“CMS”), Centers for Disease Control and Prevention (“CDC”), and the FDA. On May 6, 2024, the FDA proposed a final rule that would bring LDTs under the current definition of an IVD. The rule was challenged and has since been vacated, resulting in the existing LDT regulatory framework remaining unchanged. While we do not anticipate any changes to the FDA’s enforcement discretion practices as applicable to any LDTs that our customers develop using our RUO applications and products, there is potential for increased regulator scrutiny following the vacating of the FDA’s rule. 20 Table of Contents We develop applications and products for clinical laboratories, which may be qualified as LDTs, as well as market RUO applications and products. Our customers may decide to validate our applications and products to use as an LDT. The laws and regulations governing the marketing of diagnostic applications and products are evolving, extremely complex and in many instances, there are no significant regulatory or judicial interpretations of these laws and regulations. Pursuant to its authority under the Federal Food, Drug, and Cosmetic Act (the “FDCA”), the FDA has jurisdiction over medical devices, including in vitro diagnostics and, therefore, potentially our applications and products. Pursuant to the FDCA and its implementing regulations, the FDA regulates the research, testing, manufacturing, safety, labeling, storage, record keeping, premarket clearance or approval, marketing and promotion, and sales and distribution of medical devices in the United States to ensure that medical products distributed domestically are safe and effective for their intended uses. We currently do not offer any diagnostic applications and products in the United States. We believe that our research applications and products, as utilized in clinical laboratories by our customers, are and would be considered LDTs and that as a result, the FDA does not require that they obtain regulatory clearances or approvals for the LDTs or their components pursuant to the FDA’s current policies and guidance. Although we believe that our products and test components delivered to our customers, when validated by customers as LDTs, are either exempt from FDA medical device regulations or are subject to an enforcement discretion policy, it is possible that the FDA would not agree with these determinations or that the FDA will change its regulations and policies such that our applications and products become regulated as medical devices. In addition, changes in the current regulatory framework for diagnostic applications, products, and services can impose additional regulatory burdens on us. For example, the FDA’s Center for Devices and Radiological Health is currently considering a total product lifecycle-based regulatory framework for artificial intelligence/machine learning (“AI/ML”) technologies. On January 12, 2021, the FDA released its Artificial Intelligence/Machine Learning-Based Software as a Medical Device Action Plan. As the regulatory framework evolves, we may incur substantial costs to ensure compliance with new or amended laws and regulations. Failure to comply with any of these laws and regulations could result in enforcement actions against us, damage to our reputation and loss of goodwill, any of which could have a material adverse effect on our business. In addition, legislation could require us to seek FDA-premarket review of other applications, products, and services, including reports that we do not currently believe require premarket authorization but could be subject to additional regulation including premarket review. For any such review, we may be required to conduct extensive analytical validation and user comprehension studies to demonstrate the accuracy of our test results and that they are appropriate for sale directly to consumers. This process will likely be costly, time-consuming and uncertain. Further, on January 29, 2026, FDA issued an update to their existing guidance on Clinical Decision Support software. The updated guidance provides additional clarity on the criteria the Agency uses to determine whether a Clinical Decision Support software is non-device, a low-risk device falling under enforcement discretion, or a device requiring regulatory review (FD&C Act 520(o)(1)(E)). This guidance only provides the Agency’s current thinking on the topic and is subject to future revision. As the specific uses of the SOPHiA DDM Platform would need to be evaluated against the Agency’s criteria to determine the appropriate regulatory strategy on an individual basis, the regulatory burden may change in scope. Our operations, therefore, are or may become subject to extensive regulation by the FDA in the United States, the IVDR in the EU, the MHRA in the U.K., and various health authorities, in particular SwissMedic in Switzerland, and the ANSM in France, and in other jurisdictions in which we conduct business. Government regulations specific to medical devices are wide-ranging and govern, among other things: •test design, development, manufacture, and release; •laboratory and clinical testing, labeling, packaging, storage and distribution; •product safety and efficacy; •pre-marketing clearance, approval or certification; •service operations; 21 Table of Contents •record keeping; •application and product marketing, promotion and advertising, sales and distribution; •post-marketing surveillance, including reporting of deaths or serious injuries, recalls, correction and removals; •post-market approval studies; and •product import and export. As discussed above, although we believe that our current line of products and their components, as validated and utilized in clinical laboratories by our customers, would be considered LDTs, subject to state licensing requirements and federal regulation by CMS under CLIA, it is possible that the FDA or comparable regulatory authorities would not agree with our determinations. If our products become subject to 510(k) or other similar FDA regulations, we would need to comply with the applicable regulations or face significant civil and criminal penalties. Exposure to these additional regulatory requirements would also affect our business, financial condition and results of operations. We have limited ability to monitor or control how customers use our platform, and customer use of our solutions for off-label purposes, in clinical contexts beyond our intended use statements or regulatory authorizations, or in reliance on outputs in ways we did not design or validate for, could result in patient harm, regulatory enforcement actions, product liability claims, additional regulatory burdens and reputational damage, and could expose us to securities litigation if such risks are alleged to have been inadequately disclosed. Our platform and solutions are developed, validated, labeled and marketed for specific intended uses, which may include use solely for research purposes without claims of clinical or diagnostic utility, use in specific disease areas, use with specific specimen types, analysis of data generated on specified sequencing platforms or using defined library preparation and sequencing protocols, or use as clinical decision support to be interpreted in conjunction with other diagnostic information and clinical judgment rather than as a primary or standalone diagnostic test. Where we have obtained regulatory clearances, approvals or CE marks, those authorizations specify particular indications that define the authorized scope of marketing and use. Similarly, products labeled for research use only (“RUO”) are not intended or authorized for use in clinical diagnostic procedures. However, once our platform is implemented at customer sites or made available via cloud-based access, we have limited practical ability to monitor, supervise, restrict or control the specific ways in which healthcare providers, laboratory personnel, researchers, bioinformaticians or other end users choose to use the platform, what types of patient samples or cases they analyze, what clinical questions or decisions they seek to inform, how they interpret and communicate results generated by the platform, whether they use our solutions in strict compliance with our intended use labeling and user documentation, or whether they use research-labeled features to inform clinical care decisions contrary to labeling restrictions. Despite our labeling, training, contractual restrictions and communications, customers may deploy our solutions beyond the validated and authorized scope of use. Such off-label, unanticipated or unauthorized uses, even if we did not explicitly promote or encourage them and took reasonable steps to prevent them, could result in patient harm if our platform has not been adequately validated for the specific use case and if reliance on platform outputs contributes to misdiagnosis, delayed diagnosis, missed actionable findings, selection of ineffective or harmful therapies, inappropriate clinical trial enrollment or other adverse patient outcomes. Such off-label uses could also subject us to product liability claims, professional malpractice litigation, regulatory complaints or regulatory enforcement actions if authorities determine that we promoted off-label use, failed to include adequate warnings or labeling, failed to implement technical safeguards to prevent clinical use of RUO features, failed to conduct adequate post-market surveillance to detect and respond to off-label use patterns, or otherwise did not take sufficient steps to ensure that our platform is used only for its cleared, approved or intended purposes. This could result in requirements to conduct additional validation studies, seek expanded regulatory authorizations, implement use restrictions or technical controls (such as disabling certain features for certain customer types or requiring additional user attestations), modify labeling or instructions for use, issue field safety notices or customer communications, or undertake other costly corrective and preventive actions. If our products are misused or used for off-label purposes, we could also face adverse publicity, publications in medical or scientific literature describing cases of inappropriate use or adverse outcomes associated with our platform, and reputational harm that could undermine trust among healthcare providers, patients, payers, partners and investors which could lead to loss of customers, difficulty securing new customer contracts, and 22 Table of Contents challenges obtaining reimbursement or coverage if payers perceive that our platform is being used beyond validated and evidence-supported applications. Finally, we could face securities class action litigation or SEC enforcement if investors or regulators allege that we failed to adequately disclose the risks and potential liabilities associated with off-label use, that our disclosures regarding intended use or regulatory status were misleading, or that we did not appropriately recognize or reserve for liabilities related to such use. Even in circumstances where we believe we have taken all reasonable and legally required steps to communicate intended use, limit off-label use and comply with regulatory requirements, the occurrence of patient harm, regulatory action or significant off-label use could materially harm our business, financial condition, reputation and prospects, could result in significant legal defense costs, settlement payments, judgments, regulatory fines or mandated corrective actions, and could expose us to substantial securities litigation risk if our stock price declines or if our prior disclosures are alleged to have been inadequate. We may fail to obtain required clearances or approvals in additional jurisdictions for any of our applications, products, or services and, even if we do, we may never be able to commercialize them in additional jurisdictions, which would limit our ability to realize their full market potential. In order to eventually market any of our current or future applications, products, and services in any particular jurisdiction, we must establish and comply with numerous and varying regulatory requirements on a jurisdiction-by-jurisdiction basis regarding quality, safety, performance and efficacy. In addition, regulatory clearance, authorization or approval in one country does not guarantee regulatory clearance, authorization or approval in any other country. For example, the performance characteristics of our applications, products, and services may need to be validated separately in specific ethnic and genetic populations. Approval processes vary among countries and can involve additional product testing and validation and additional administrative review periods. Seeking regulatory clearance, authorization or approval could result in difficulties and costs. Regulatory requirements and ethical approval obligations can vary widely from country to country and could delay or prevent the introduction of our applications, products, and services in those countries. We have no experience in obtaining regulatory clearance, authorization or approval in international markets. If we fail to comply with regulatory requirements in international markets or to obtain and maintain required regulatory clearances, authorizations or approvals in international markets, or if those approvals are delayed, our target market will be reduced and our ability to realize the full market potential of our applications, products, and services will be unrealized. Our products or services may be subject to product or service recalls in the future. A recall of products or services, either voluntarily or at the direction of a regulatory authority, or the discovery of serious safety issues with our products or services, could have a significant adverse impact on us. Regulatory authorities can require the recall of commercialized products or services that are subject to its regulation. Manufacturers may, under their own initiative, recall a product or service if any deficiency is found. A government-mandated or voluntary recall by us or one of our distributors could occur as a result of an unacceptable health risk, component failures, failures in laboratory processes, malfunctions, manufacturing errors, design or labeling defects, or other deficiencies and issues. Recalls of any of our commercialized products or services would divert managerial and financial resources, subject us to liability claims and require us to bear other costs and adversely affect our business, results of operations, financial condition and reputation. If we initiate a recall, including a correction or removal, for one of our commercialized products or services, issue a safety alert, or undertake a field action or recall to reduce a health risk, this could lead to increased scrutiny by the FDA, other governmental and regulatory enforcement bodies, and our customers regarding the quality and safety of our products and services, and to negative publicity, including FDA alerts, press releases, or administrative or judicial actions. Furthermore, the submission of these reports could be used against us by competitors and cause customers to delay purchase decisions or cancel orders, which would harm our reputation. We are subject to stringent privacy and, information security laws and regulations and changes in such laws and regulations could adversely affect our business and increase our costs. We are subject to numerous state, federal and foreign laws and regulations that govern the collection, transmission, storage, dissemination, use, privacy, confidentiality, security, availability, integrity and processing 23 Table of Contents of individually identifiable information. For additional details, please see “Item 4. Information on the Company—B. Business Overview—Government Regulation—Data Privacy and Security.” These laws and regulations are complex and change frequently, at times due to changes in political climate, and existing laws and regulations are subject to different and conflicting interpretations, which adds to the complexity of processing personal data from these jurisdictions. Failure to comply with any of these laws and regulations could result in enforcement actions against us, including fines, imprisonment of company officials, public censure, claims for damages by affected individuals, damage to our reputation and loss of goodwill, any of which could have a material adverse effect on our business. This risk is heightened as there is uncertainty regarding the applicability of data privacy regulations to certain types of data that we process, such as health-related and genetic data. While we deploy specific measures and processes designed to de-identify data, we may fail in the comprehensive application of the process resulting in a breach of requirements and our contractual obligation. Some of our product and services rely on anonymized data and while the legal definition is clear, the effective application of the anonymization techniques are subject to multiple interpretation and can prove to be highly difficult and costly. The transfer of data has been subject to increasing scrutiny. Although there are legal mechanisms to allow for the transfer of personal data from the European Economic Area (the “EEA”), Switzerland and the U.K. to the United States, uncertainty remains about such mechanisms. There have been and there may in the future be legal challenges surrounding the mechanisms that allow companies to transfer personal data from the EU and EEA to the United States, which could limit our ability to transfer personal data across borders, particularly if governments are unable or unwilling to reach new or maintain existing agreements that support cross-border data transfers. Inability to transfer personal data from the EU, EEA, Switzerland or the U.K. to the United States may restrict our research and development activities in these territories and limit our ability to offer applications, products, and services we may develop. Because the interpretation and application of health-related and data protection laws, regulations, standards and other obligations are uncertain, and often contradictory and in flux, it is possible that the scope and requirements of these laws may be interpreted and applied in a manner that is inconsistent with our practices and our efforts to comply with the evolving data protection rules may be unsuccessful. If so, this could result in government-imposed fines or orders requiring that we change our practices, which could adversely affect our business. In addition, these privacy regulations may differ from country to country, and may vary based on whether testing is performed in the United States or in the local country, and our operations or business practices may not comply with these regulations in each country. In addition to the possibility of fines, sanctions, lawsuits, regulatory investigations, public censure, other claims and penalties, and significant costs for remediation and damage to our reputation, we could be materially and adversely affected if legislation or regulations are expanded to require changes in our data processing practices and policies or if governing jurisdictions interpret or implement their legislation or regulations in ways that negatively impact our business. Complying with these various laws could cause us to incur substantial costs or require us to change our business practices and compliance procedures in a manner adverse to our business. Any inability to adequately address data privacy or security-related concerns, even if unfounded, or to comply with applicable laws, regulations, standards and other obligations relating to data privacy and security, could result in additional cost and liability to us, harm our reputation and brand, damage our relationships with customers and have a material and adverse impact on our business. Any failure to comply with our privacy policies or contractual or statutory notification obligations could result in significant liability or reputational harm. We make public statements about our use and disclosure of personal information through our privacy policy, information provided on our internet platform and press statements. Although we endeavor to comply with our public statements and documentation, we may be alleged to have failed to do so. The publication of our privacy policy and other statements that provide promises and assurances about data privacy and security can subject us to potential government or legal action if they are found to be deceptive, unlawful, unfair or misrepresentative of our actual practices. Any failure, real or perceived, by us to comply with our posted privacy policies or with any legal or regulatory requirements, standards, certifications or orders or other privacy or consumer protection-related laws and regulations applicable to us could cause our customers to reduce their use of our applications, products, and services and could materially and adversely affect our business, financial condition and results of operations. In many jurisdictions, enforcement actions and consequences for noncompliance can be significant and are rising. In addition, from time to time, concerns may be expressed about whether our applications, 24 Table of Contents products, services, or processes compromise the privacy of customers and others. Concerns about our practices with regard to the collection, use and reuse, retention, security, disclosure, transfer and other processing of personal information or other privacy-related or security-related matters, even if unfounded, could damage our reputation and materially and adversely affect our business, financial condition and results of operations. Many statutory requirements, both in the United States and abroad, include obligations for companies to notify individuals of security breaches involving certain personal information, which could result from breaches experienced by us or our third-party service providers. For example, the GDPR requires from companies experiencing a personal data breach to report the breach within 72 hours to the supervisory authority and where necessary to the individuals affected by the breach. Also, laws in all 50 U.S. states and the District of Columbia require businesses to provide notice to consumers whose personal information has been disclosed as a result of a data breach. These laws are not consistent, and compliance in the event of a widespread data breach is difficult and may be costly. Moreover, jurisdictions have been frequently amending existing laws, requiring attention to changing regulatory requirements. We also may be contractually required to notify customers or other counterparties of a security breach. Although we may have contractual protections with our third-party service providers, contractors and consultants, any actual or perceived security breach could harm our reputation and brand, expose us to potential liability or require us to expend significant resources on data security and in responding to any such actual or perceived breach. Any contractual protections we may have from our third-party service providers, contractors or consultants may not be sufficient to adequately protect us from any such liabilities and losses, and we may be unable to enforce any such contractual protections. Our operations may subject us to various healthcare laws and regulations and could face substantial penalties if we are unable to fully comply with such laws. Our operations may subject us to healthcare regulation and enforcement by both U.S. (federal government and state governments) and foreign jurisdictions in which we conduct our business, which influence, among other things, how we structure our sales offerings, including discount practices, customer support, education and training programs, and physician consulting and other service arrangements. Applicable U.S. federal and state healthcare laws and regulations include the following: •the federal Anti-Kickback Statute (the “AKS”), which prohibits, among other things, persons or entities from soliciting, receiving, offering or providing remuneration, directly or indirectly, overtly or covertly, in cash or in kind, in return for, or to induce, either the referral of an individual for, or the purchase, lease, order or recommendation of, any good, facility, item or services for which payment may be made under a federal healthcare program such as the Medicare and Medicaid programs; •the federal physician self-referral prohibition, commonly known as the Stark Law, which prohibits physicians from referring Medicare or Medicaid patients to providers of “designated health services” with whom the physician or a member of the physician’s immediate family has an ownership interest or compensation arrangements, unless a statutory or regulatory exception applies; •the federal Eliminating Kickbacks in Recovery Act of 2018 (the “EKRA”) prohibits payments for referrals to recovery homes, clinical treatment facilities, and laboratories. EKRA’s reach extends beyond federal health care programs to include private insurance (i.e., it is an “all payor” statute); •HIPAA, which established additional federal civil and criminal liability for, among other things, knowingly and willfully executing a scheme to defraud any healthcare benefit program or making false statements in connection with the delivery of or payment for healthcare benefits, items or services; •HIPAA, as amended by HITECH and its implementing regulations, which imposes certain requirements relating to the privacy, security and transmission of individually identifiable health information; •federal false claims and civil monetary penalties laws, which prohibit, among other things, individuals or entities from knowingly presenting, or causing to be presented, false or fraudulent claims for payment to the federal government; 25 Table of Contents •the federal Physician Payments Sunshine Act requirements, which require certain manufacturers of drugs, devices, biologics and medical supplies to report to CMS information related to payments and other transfers of value made to or at the request of physicians (defined to include doctors, dentists, optometrists, podiatrists and chiropractors) and teaching hospitals, and certain ownership and investment interests held by physicians and their immediate family members; and •state law equivalents of each of the above federal laws, such as anti-kickback and false claims laws, which may apply to items or services reimbursed by any third-party payor, including commercial insurers. Ensuring that our business and operations comply with applicable healthcare laws and regulations is costly. Any action brought against us for violation of these laws or regulations, even if we successfully defend against it, could cause us to incur significant legal expenses and divert our management’s attention from the operation of our business. If our operations are found to be in violation of any of these laws and regulations, we may be subject to any applicable penalty associated with the violation, including, among others, significant administrative, civil and criminal penalties, damages, fines, disgorgement, imprisonment, integrity oversight and reporting obligations, and exclusion from participation in government-funded healthcare programs such as Medicare and Medicaid. Additionally, we could be required to refund payments received by us, and we could be required to curtail or cease our operations. Any of the foregoing consequences could seriously harm our business, financial condition and results of operations. Our employees, collaborators, distributors, agents, contractors and collaborators may engage in misconduct or other improper activities, including noncompliance with regulatory standards and requirements. We cannot ensure that our compliance controls, policies and procedures will in every instance protect us from acts committed by our employees, collaborators, distributors, agents, contractors or collaborators that would violate the laws or regulations of the jurisdictions in which we operate, including, without limitation, healthcare, employment, anti-corruption, environmental, competition, and patient privacy and other privacy laws and regulations. Misconduct by these parties could include intentional failures to comply with FDA, EMA, MHRA or other applicable regulations, including, without limitation, regulations governing the marketing, sale, labeling and use of RUO and IVD applications and products, provide accurate information to the FDA, the EMA, the MHRA and comparable regulatory authorities, comply with healthcare fraud and abuse laws and regulations in the United States and abroad, report financial information or data accurately or disclose unauthorized activities to us. In addition, because business is heavily regulated and therefore involves significant interaction with public officials, including officials of non-U.S. governments, government purchasers and healthcare providers who are employed by governments, we face heightened risk with respect to compliance with the Foreign Corrupt Practices Act (the “FCPA”) and similar anti-bribery or anti-corruption laws, regulations or rules of other countries in which we operate, including the U.K. Bribery Act 2010 and the French Law n° 2016-1691 (Sapin II). These laws prohibit offering, promising, giving, or authorizing others to give anything of value, either directly or indirectly, to a government official in order to influence official action, or otherwise obtain or retain business. There is no certainty that all of our employees, collaborators, distributors, agents, contractors and collaborators, or those of our affiliates, will comply with all applicable laws and regulations, particularly given the high level of complexity of these laws. We have provisions in our Code of Business Conduct and Ethics (the “Code of Ethics”), an anti-corruption policy, certain provisions in some of our agreements with third parties, including our collaborators and distributors, and certain controls and procedures in place that are designed to mitigate the risk of noncompliance with anti-corruption and anti-bribery laws. However, it is not always possible to identify and deter misconduct by employees and agents, and the precautions we take to detect and prevent this activity may not be effective in controlling unknown or unmanaged risks or losses or in protecting us from government investigations or other actions stemming from a failure to comply with these laws or regulations. Violations of these laws and regulations could result in, among other things, significant administrative, civil and criminal fines and sanctions against us, our officers, or our employees, the closing down of our facilities, exclusion from participation in federal healthcare programs, implementation of compliance programs, integrity oversight and reporting obligations and prohibitions on the conduct of our business. Any such violations could include prohibitions on our ability to offer our SOPHiA DDM Platform and related solutions, applications, products, and services in one or more countries and could materially damage our reputation, our brand, our international 26 Table of Contents expansion efforts, our ability to attract and retain employees, and our business, prospects, operating results and financial condition. We face risks related to handling of hazardous materials and other regulations governing environmental safety. Our activities currently require and may in the future continue to require the use of hazardous chemicals and biohazardous waste, including chemical, biological agents and compounds, blood and bone marrow samples, and other human tissue. We cannot eliminate the risk of accidental contamination or injury to employees or third parties from the use, storage, handling or disposal of these materials. In the event of contamination or injury, we could be held liable for any resulting damages, and any liability could exceed our resources or any applicable insurance coverage we may have. Additionally, we are subject on an ongoing basis to laws and regulations governing the use, storage, handling and disposal of these materials and specified waste services that both public officials and private individuals may seek to enforce. We could discover that we, an acquired business or our suppliers are not in material compliance with these regulations. The cost of compliance with these laws and regulations may become significant and could negatively affect our business, financial condition and results of operations. We do not carry specific biological waste or hazardous waste insurance coverage, workers’ compensation or property and casualty and general liability insurance policies that include coverage for damages and fines arising from biological or hazardous waste exposure or contamination. If a clinical trial subject’s or a clinical research study participant’s informed consent is challenged or proven invalid, unlawful, or otherwise inadequate for our purposes, our application and product development efforts may be hindered and we could become involved in legal challenges. We seek to ensure that all data and biological samples that we receive from our collaborators and customers have been collected from subjects or participants who have provided appropriate informed consent for purposes that extend to our development activities. We also strive to make sure such data and samples are provided to us in a subject de-identified manner. Our collaborators currently conduct clinical trials and clinical research studies in a number of different countries. The collection of data and samples in many different countries results in complex legal questions regarding the adequacy of informed consent and the status of genomic material under a large number of different legal systems. Therefore, we rely on our collaborators and customers to comply with the informed consent requirements and with applicable local law and international regulation. The subject’s or participant’s informed consent obtained in any particular country could be challenged in the future, and those could prove invalid, unlawful or otherwise inadequate for our purposes. Any findings against us, or our collaborators and customers, could deny us access to or force us to stop using some of our data and clinical samples, which would hinder our application and product development efforts, potentially involve us in costly and prolonged litigation, result in reputational harm and adversely affect our business, financial condition and results of operations. If we or our suppliers fail to comply with ongoing FDA or comparable regulatory authority requirements, or if we experience unanticipated problems with our research and diagnostic, they could be subject to restrictions or withdrawal from the market. Any medical device that we manufacture, including those for which we obtain regulatory clearance, approval, or certification and the manufacturing processes, reporting requirements, post-approval clinical data and promotional activities for such diagnostic test, will be subject to continued regulatory review, oversight and periodic inspections by the FDA and comparable regulatory authorities. In particular, we and our suppliers may be required to comply with the FDA’s QMSR for medical devices, the International Standards Organization (“ISO”) 13485 standards for the manufacture of our diagnostic products and other regulations that cover the methods and documentation of the design, testing, production, control, quality assurance, labeling, packaging, storage and shipping of any diagnostic test for which we obtain clearance or approval. Regulatory authorities such as the FDA enforce the QMSR and other regulations through periodic inspections. The failure by us or one of our suppliers to comply with applicable statutes and regulations administered by the FDA and comparable regulatory authorities, or the failure to timely and adequately respond to any adverse inspection observations or product safety issues, could result in, among other things, one or more of the following enforcement actions: •untitled letters, warning letters, fines, injunctions, consent decrees and civil penalties; •unanticipated expenditures to address or defend such actions; 27 Table of Contents •customer notifications for repair, replacement or refunds; •recall, detention or seizure of our diagnostics products; •operating restrictions or partial suspension or total shutdown of production; •refusing or delaying our requests for 510(k) clearance or PMA of new diagnostics products or modified versions of such products currently manufactured, as well as CE marking certification (in the EU); •operating restrictions; •withdrawing 510(k) clearances on PMA approvals that have already been granted; •suspending or withdrawing our CE mark certifications; and •criminal prosecution. In addition, we are required to conduct surveillance to monitor the safety or effectiveness of our research and diagnostic products, and we must comply with medical device reporting requirements, including the reporting of adverse events and malfunctions related to our research and diagnostic products. Later discovery of previously unknown problems with our diagnostic products, including unanticipated adverse events or adverse events of unanticipated severity or frequency, manufacturing problems, or failure to comply with regulatory requirements such as QMSR, may result in changes to labeling restrictions on such products or manufacturing processes, withdrawal of the research and diagnostic products from the market, voluntary or mandatory recalls, a requirement to repair, replace or refund the cost of any medical device we manufacture or distribute, fines, suspension of regulatory approvals, product seizures, injunctions or the imposition of civil or criminal penalties, which would adversely affect our business, operating results and prospects. Changes in tariffs could increase our cost of revenue and our operating expenses. In April 2025, the United States government announced significant changes to its trade policy, including the imposition of tariffs. The new tariff system consists of two tiers: a 10% baseline tariff on all imports to the United States and higher reciprocal tariffs on imported goods from approximately 60 countries. An initial 31% tariff was announced on goods imported into the U.S. from Switzerland, where our headquarters are located, which was subsequently increased to 39% by Executive Order on July 31, 2025. On December 10, 2025 Switzerland announced an agreement with the U.S. to reduce the tariffs to 15% retroactive to November 14, 2025. The tariffs are to be reduced if the products imported into the U.S. have U.S. content in them. We operate internationally, with the majority of our bundles assembled at and shipped from our headquarters in Rolle, Switzerland. While the majority of our revenues are generated from the EMEA region and are not directly impacted by these tariffs, our sale of bundles to the United States are currently subject to additional costs due to the tariffs, leading to increases in our cost of revenue and decreases in our gross margin if we are unable to fully offset such costs by increasing our prices. In addition, the tariffs if they remain in effect, will lead to higher operating expenses. These effects could adversely affect our financial condition and results of operations. Furthermore, the imposition of tariffs by the United States may prompt other countries, including Switzerland, to impose reciprocal tariffs, which could impact the cost of our raw materials purchased from the United States. Risks Related to Intellectual Property If we are not able to obtain, maintain, defend and enforce patent and other intellectual property protection or if the scope of such patent and other intellectual property protection is not sufficiently broad, our competitors could develop and commercialize applications, products, services, and technology similar or identical to ours. Our success depends in part on our ability to obtain, maintain, defend, and enforce patents and other forms of intellectual property rights, including in-licenses of intellectual property rights of others, as well as our ability to preserve our trade secrets and to prevent third parties from infringing, misappropriating or otherwise violating our intellectual property and proprietary rights. Our ability to protect our applications, products, or services from unauthorized use by third parties depends on the extent to which valid and enforceable patents cover them or 28 Table of Contents they are effectively protected as trade secrets. Although we have filed a number of patents, our patent portfolio is in an earlier stage of prosecution, and we own a limited number of issued patents related to our applications, products, and technology. For information regarding our patent portfolio, see “Item 4. Information on the Company—B. Business Overview—Intellectual Property.” The patent position of biotechnology and information technology companies generally is highly uncertain, involves complex legal and factual questions, and has been the subject of much litigation in recent years. As a result, the issuance, scope, validity, enforceability, and commercial value of our patent rights are highly uncertain. There can be no assurance that our patent rights will not be invalidated or held to be unenforceable, will adequately protect our technology, applications, products, or services or provide any competitive advantage, or that any of our pending or future patent applications will issue as valid and enforceable patents. Our ability to obtain and maintain patent protection for our methods and related solutions, applications, products, or services is uncertain due to a number of factors, including that: •we or our licensors may not have been the first to invent the technology covered by our pending patent applications or issued patents; •we or our licensors may not be the first to file all patent applications, as patent applications in the United States and most other countries are confidential for a period of time after filing; •our methods and related solutions, applications, and products may not be patentable; •our disclosures in patent applications may not be sufficient to meet the statutory requirements for patentability; •any or all of our pending patent applications may not result in issued patents; •others may independently develop identical, similar or alternative technologies; •others may design around our patent claims to produce competitive technologies, methods, applications, or products that fall outside of the scope of our patents; •we may fail to identify patentable aspects of our research and development output before it is too late to obtain patent protection; •we may not seek or obtain patent protection in countries that may eventually provide us a significant business opportunity; •any patents issued to us may not provide a basis for commercially viable methods, applications, or products, may not provide any competitive advantages or may be successfully challenged by third parties; •a third party may challenge our patents in court and, upon such a challenge, a court may not hold that our patents are valid, enforceable and non-infringing; •a third party may challenge our patents in various patent offices and, if challenged, we may be compelled to limit the scope of our pending, allowed or granted claims or lose some or all of the pending, allowed or granted claims altogether; •the patents of others could harm our business; and •our competitors could conduct research and development activities in countries where we will not have enforceable patent rights and then use the information learned from such activities to develop competitive methods, applications, or products for sale in our major commercial markets. While we will endeavor to protect our technology with intellectual property rights such as patents, as appropriate, the process of obtaining patents is time-consuming, expensive and sometimes unpredictable, and we may not be able to file, prosecute, maintain, enforce, or license all necessary or desirable patent applications at a reasonable cost or in a timely manner. Although we enter into non-disclosure and confidentiality agreements with parties who have access to confidential or patentable aspects of our research 29 Table of Contents and development output, such as our employees, corporate collaborators, outside scientific collaborators, contract research organizations (“CROs”) or manufacturers, consultants, advisors and other third parties, any of these parties may breach the agreements and disclose such output before a patent application is filed, thereby jeopardizing our ability to seek patent protection. Furthermore, we cannot guarantee that any patents will be issued from any of our pending or future patent applications. The standards applied by the U.S. Patent and Trademark Office (“the USPTO”) and foreign patent offices in granting patents are not always applied uniformly or predictably. For example, there is no uniform worldwide policy regarding patentable subject matter or the scope of claims allowable in biotechnology or information technology patents. Moreover, the coverage claimed in a patent application can be significantly reduced before the patent is issued, and its scope can be reinterpreted after issuance. As such, we do not know the degree of future protection that we will have on our proprietary applications, products, services, and technology. Thus, even if our patent applications issue as patents, they may not issue in a form that will provide us with meaningful protection, prevent competitors from competing with us or otherwise provide us with any competitive advantage. Even if we have or obtain patents, we may still be barred from making, using, and selling such methods, applications, products, or services because of the patent rights of others. Others may have filed, and in the future may file, patent applications covering compositions, software applications, products, or methods that are similar or identical to ours, which could materially affect our ability to successfully develop our technology or to successfully commercialize any approved assays alone or with collaborators. Patent applications in the United States and elsewhere are generally published approximately 18 months after the earliest filing for which priority is claimed, with such earliest filing date being commonly referred to as the priority date. Therefore, patent applications could have been filed by others without our knowledge. Additionally, pending claims in patent applications which have been published can, subject to certain limitations, be later amended in a manner that could cover our platform technologies or related solutions, applications, products, and services. These patent applications may have priority over patent applications filed by us. The issuance of a patent is not conclusive as to its inventorship, scope, validity or enforceability, and our owned and licensed patents may be challenged in the courts or patent offices in the United States and abroad. We may be subject to third party pre-issuance submissions of prior art to the USPTO, or become involved in opposition, derivation, revocation, reexamination, post-grant and inter partes review, or interference proceedings challenging our patent rights. An adverse determination in any such submission, proceeding or litigation could reduce the scope of, or invalidate, our patent rights, allow third parties to commercialize our applications, products, services and technology and compete directly with us, without payment to us, or result in our inability to manufacture or commercialize applications, products, or provide services without infringing third-party patent rights. Moreover, we, or our licensors, may have to participate in interference proceedings declared by the USPTO to determine priority of invention or in post-grant challenge proceedings, such as oppositions in a foreign patent office, that challenge priority of invention or other features of patentability. Such challenges may result in loss of patent rights, loss of exclusivity or freedom to operate or in patent claims being narrowed, invalidated or held unenforceable, in whole or in part, which could limit our ability to stop others from using or commercializing similar or identical applications, products, services, and technology, or limit the duration of the patent protection of our applications, products, services, and technology. Such proceedings also may result in substantial cost and require significant time from our employees and management, even if the eventual outcome is favorable to us. In addition, if the breadth or strength of protection provided by the patents and patent applications we own or in-license is threatened, it could dissuade companies from collaborating with us to license, develop or commercialize current or future technology. In addition, third parties may be able to develop technology that is similar to, or better than, ours in a way that is not covered by the claims of our patents or may have blocking patents that could prevent us from marketing our applications and products or practicing our own patented technology. Moreover, patents have a limited lifespan. In the United States, the natural expiration of a patent is generally 20 years after it is filed and the life of a patent, and the protection it affords, is limited. Without patent protection for current or future methods and related solutions, applications, products, and services, we may face competing technology. Given the amount of time required for the development and testing, and regulatory review where necessary, patents protecting such technology might expire before or shortly after such technology is commercialized. At the same time, given the rapid pace of technological advancement and innovation in the information technology field, the time needed to obtain patents for novel information technology solutions often renders the protection, once obtained, ineffective if the protected solution has become obsolete or widely-adopted while the patent protection was pending. As a result, our patent portfolio may not provide us with sufficient rights to exclude others from commercializing technology similar or identical to that we or our collaborators may develop. 30 Table of Contents Moreover, certain of our patents and patent applications may in the future be, co-owned with third parties. If we are unable to obtain an exclusive license to any such third party co-owners’ interest in such patents or patent applications, such co-owners may be able to use or license their rights to other third parties, including our competitors, and our competitors could market competing applications, products, and technology. In addition, we may need the cooperation of any such co-owners of our patents in order to enforce such patents against third parties, and such cooperation may not be provided to us. Any of the foregoing could have a material adverse effect on our business, financial conditions, results of operations, and prospects. We may in the future be involved in lawsuits to defend or enforce our patents and proprietary rights. Such disputes could result in substantial costs or loss of productivity, delay or prevent the development and commercialization of our technology, applications, products, and services, prohibit our use of proprietary technology or put our patents and other proprietary rights at risk. Competitors and other third parties may infringe, misappropriate or otherwise violate our patents and intellectual property rights or the patents and intellectual property rights of our licensors. The enforcement of such claims can be expensive and time-consuming. In an infringement proceeding, a court may decide that a patent owned or in-licensed by us is invalid or unenforceable or may refuse to stop the other party from using the technology at issue on the grounds that our owned and in-licensed patents do not cover the technology in question. An adverse result in any litigation proceeding could put one or more of our owned or in-licensed patents at risk of being invalidated or interpreted narrowly. In addition, our ability to enforce our patents or other intellectual property rights depends on our ability to detect infringement. It may be difficult to detect those who infringe on our intellectual property rights who do not advertise the components or methods that are used in connection with their applications, products, and services. Moreover, it may be difficult or impossible to obtain evidence of infringement in a competitor’s or potential competitor’s application, product, or service. If we were to initiate legal proceedings against any other third party to enforce a patent covering our technology, the defendant could assert that our patent is invalid or unenforceable. In patent litigation in the United States and Europe, defendants alleging invalidity or unenforceability are common responses to a claim of infringement. Grounds for a validity challenge could be an alleged failure to meet any of several statutory requirements, for example, lack of novelty, obviousness, overbreadth or lack of utility. Third parties might allege unenforceability of our patents because during prosecution of the patent, an individual connected with such prosecution withheld relevant information or made a misleading statement. Third parties may also raise challenges to the validity of our patent claims before administrative bodies in the United States or abroad, even outside the context of litigation. Such mechanisms include re-examination, post-grant review, inter partes review, interference proceedings, derivation proceedings, and equivalent proceedings in foreign jurisdictions (e.g., opposition proceedings). Such proceedings could result in the revocation of, cancellation of, or amendment to, our patents in such a way that they no longer cover our technology, applications, or products. The outcome of proceedings involving assertions of invalidity and unenforceability, including during patent litigation, is unpredictable. With respect to the validity of patents, for example, we cannot be certain that there is no invalidating prior art of which we and the patent examiner were unaware during prosecution, but that an adverse third party may identify and submit in support of such assertions of invalidity. If a defendant were to prevail on a legal assertion of invalidity or unenforceability, we would lose at least part, and perhaps all, of the patent protection on our technology. Such a loss of patent protection could have a material adverse effect on our business. Our patents and other intellectual property rights also will not protect our technology if competitors design around our protected technology without infringing our patents or other intellectual property rights. Even if resolved in our favor, litigation or other legal proceedings relating to intellectual property claims may cause us to incur significant expenses and could distract our personnel from their normal responsibilities. There can be no assurance that we will have sufficient financial or other resources to file and pursue infringement claims, which typically last for years before they are concluded. We may or may not choose to pursue litigation or other actions against those who have infringed on our patents, or have used them without authorization, due to the associated expense and time commitment of monitoring these activities. In addition, because of the substantial amount of discovery required in connection with intellectual property litigation, there is a risk that our confidential information could be compromised by disclosure during this type of litigation. There could also be public announcements of the results of hearings, motions, or other interim proceedings or developments, and if securities analysts or investors perceive these results to be negative, it could have a material adverse effect on the price of our ordinary shares. Such litigation or proceedings could substantially increase our operating losses and reduce the resources available for development activities or any future sales, marketing or commercialization activities. We may not have sufficient financial or other resources to conduct such litigation or 31 Table of Contents proceedings adequately. Uncertainties resulting from patent and other intellectual property litigation or other proceedings could have a material adverse effect on our ability to compete in the marketplace, our ability to raise additional funds, and could otherwise have a material adverse effect on our business, financial condition, results of operations, and prospects. We are, and we may in the future be, subject to claims against us alleging that we are infringing, misappropriating or otherwise violating the intellectual property rights of third parties, the outcome of which would be uncertain and could have a material adverse effect on our business. Our commercial success depends in part upon our ability to develop, manufacture, market, and sell our applications, products, and services and use our proprietary technology without infringing, misappropriating or otherwise violating the patents or other intellectual property or proprietary rights of third parties. Litigation relating to infringement, misappropriation or other violations of patents and other intellectual property rights in the biotechnology industry is common, including patent infringement lawsuits, trade secret lawsuits, interferences, oppositions, and inter partes review, post-grant review and re-examination proceedings before the USPTO, and corresponding international patent offices. In this regard, we are currently defending against patent infringement claims brought by Guardant Health ("Guardant") in multiple jurisdictions. Guardant filed suit against us in the U.K. in July 2025, and in the EU at the Unified Patent Court (the “UPC”) in Paris in August 2025, alleging that our MSK-Access liquid biopsy test infringes certain of their patents and seeking remedies, including unspecified monetary damages and injunctive relief. In the U.K. action, Guardant claims relief in respect of activities in the U.K. said to infringe four patents: EP 3470533 (titled "Systems and Methods to Detect Copy Number Variation"), GB 2510725 (titled "Systems and Methods to Detect Rare Mutations and Copy Number Variation"), EP 3766986 (titled "Detection and Treatment of Disease Exhibiting Disease Cell Heterogeneity and Systems and Methods for Communicating Test Results"), and EP 3443066 (titled "Methods for Early Detection of Cancer"). In the UPC proceedings, Guardant named Sophia Genetics SA, Sophia Genetics SAS, Sophia Genetics SRL, and Sophia Genetics GmbH as defendants and alleged infringement in Belgium, Germany, France, Italy, the Netherlands, Sweden, Switzerland, and Spain, asserting EP 3470533, EP 3591073 (titled "Methods to Detect Rare Mutations and Copy Number Variation"), EP 3766986, and EP 3443066. On January 23, 2026, the UPC Paris Local Division issued a final order rejecting Guardant's application for provisional measures and ordered Guardant to pay an interim award of costs of €400,000. The UPC rejected Guardant's application under three asserted patents (EP 3591073, EP 3443066, and EP 3766986), and Guardant withdrew its request regarding a fourth patent (EP 3470533). On February 9, 2026, Guardant filed an appeal challenging the UPC's finding that EP 3443066 was more likely than not invalid. On February 17, 2026, the UPC Paris Local Division set a payment deadline of March 10, 2026, for this interim costs award. On February 18, 2026, the Court of Appeal rejected Guardant's application for suspensive effect of the interim costs award. We expect to receive payment of the EUR 400,000 interim costs award by March 10, 2026, and are separately pursuing reimbursement of additional legal costs. For further details regarding the Guardant Health litigation, see "Recent Developments—Guardant Health Litigation." Patent litigation is inherently uncertain, and even favorable preliminary rulings do not guarantee ultimate success. An adverse outcome in any of these or other patent infringement claims could require us to cease selling certain products in major markets, pay significant damages, or obtain licenses on unfavorable terms, any of which could materially harm our business, financial condition, and results of operations. These pending litigation cases resulted in higher legal expenses in the second half of 2025 of approximately $2.4 million, and we could incur further costs and divert the attention of our management and technical personnel in defending ourselves against these claims. Furthermore, Guardant may in the future be able to obtain injunctive or other relief, which effectively could block our ability to further develop, commercialize, market or sell products or services in certain jurisdictions, such as the United Kingdom and European Union. Any adverse ruling or perception of an adverse ruling in defending ourselves against these claims could have an adverse impact on our business, financial condition or results of operations. In addition to the litigation brought by Guardant alleging patent infringement as set out above, we may in the future be, subject to other third-party claims and similar adversarial proceedings or litigation regarding our infringement, misappropriation, or any other violation of a third party’s patent or other intellectual property rights. Any such claim or proceeding against us, our collaborators or our third-party service providers could adversely 32 Table of Contents affect our development, manufacturing, marketing, sales, and other commercialization activities. Even if we believe third-party intellectual property claims are without merit, there is no assurance that a court would find in our favor on questions of infringement, validity, enforceability or priority. A court of competent jurisdiction could hold that third-party patents asserted against us are valid, enforceable, and infringed, which could materially and adversely affect our ability to develop, manufacture, market, sell and commercialize any of our applications, products, or services. In order to successfully challenge the validity of any such U.S. patent in federal court, we would need to overcome a presumption of validity. As this burden is a high one requiring us to present clear and convincing evidence as to the invalidity of any such U.S. patent claim, there is no assurance that a court of competent jurisdiction would invalidate the claims of any such U.S. patent. If we are found to infringe any third party’s patents or other intellectual property rights, and we are unsuccessful in demonstrating that such patents or other intellectual property are invalid or unenforceable, we could be required to obtain a license from such third party to continue developing, manufacturing, marketing, selling, and commercializing our applications, products, and services. However, we may not be able to obtain any required license on commercially reasonable terms or at all. Even if we were able to obtain a license, it could be non-exclusive, which would give our competitors and other third parties access to the same technologies licensed to us, and it could require us to make substantial licensing, royalty, and other payments. We also could be forced, including by court order, to cease developing, manufacturing, marketing, selling, and commercializing the infringing application, product, or technology. In addition, we could be found liable for significant monetary damages, including treble damages and attorneys’ fees, if we are found to have willfully infringed a patent or other intellectual property right. Claims that we have misappropriated the confidential information or trade secrets of third parties could have a similar material adverse effect on our business, financial condition, results of operations, and prospects. The various markets in which we plan to operate are subject to frequent and extensive litigation regarding patents and other intellectual property rights. It is possible that one or more organizations will hold patent rights to which we will need a license. If those organizations refuse to grant us a license to such patent rights on reasonable terms, we may be unable to develop, manufacture, market, sell, and commercialize applications, products, or services or perform research and development or other activities covered by these patents. Some claimants may have substantially greater resources than we do and may be able to sustain the costs of complex intellectual property litigation to a greater degree and for longer periods of time than we could. In addition, many companies in intellectual property-dependent industries, including the biotechnology industry, have employed intellectual property litigation as a means to gain an advantage over their competitors. Furthermore, patent holding companies that focus solely on extracting royalties and settlements by enforcing patent rights may target us. As the biotechnology industry expands and more patents are issued, and as we gain greater visibility and market exposure as a public company, the risk increases that our applications, products, services, and technology may be subject to intellectual property-related claims by third parties. Even if resolved in our favor, litigation or other legal proceedings relating to intellectual property claims may cause us to incur significant expenses and could distract our personnel from their normal responsibilities. In addition, intellectual property litigation, regardless of its outcome, may cause negative publicity, adversely impact prospective customers, cause product shipment delays or prohibit us from manufacturing, marketing, selling or otherwise commercializing our applications, products, services, and technology. Furthermore, because of the substantial amount of discovery required in connection with intellectual property litigation, there is a risk that our confidential information could be compromised by disclosure during this type of litigation. There could also be public announcements of the results of hearings, motions, or other interim proceedings or developments, and if securities analysts or investors perceive these results to be negative, it could have a material adverse effect on the price of our ordinary shares. Such litigation or proceedings could substantially increase our operating losses and reduce the resources available for development activities or any future sales, marketing or commercialization activities. We may not have sufficient financial or other resources to conduct such litigation or proceedings adequately. Uncertainties resulting from patent and other intellectual property litigation or other proceedings could have a material adverse effect on our ability to compete in the marketplace, our ability to raise additional funds, and could otherwise have a material adverse effect on our business, financial condition, results of operations, and prospects. We license patent rights from third-party owners. If such owners do not properly or successfully obtain, maintain, defend and enforce the patents underlying such licenses, or if they retain or license to others any competing rights, our competitive position and business prospects may be adversely affected. If we fail to comply with our obligations in the agreements under which we license intellectual property rights 33 Table of Contents from third parties or otherwise experience disruptions to our relationships with any of our licensors, we could lose license rights that are important to our business. Even though we actively file patent applications, we also rely on intellectual property rights licensed from third parties to protect our technology, including licenses that give us rights to third-party intellectual property that is necessary or useful for our business. For example, we are dependent on licenses from Normandie Valorisation for certain products we commercialize. If one or both of our license agreements with Normandie Valorisation were to terminate for any reason, we may be required to cease the manufacturing, marketing, selling, and commercialization of certain products. For more information regarding these license agreements, please see “Item 10. Additional Information—C. Material Contracts.” We also may license additional third-party intellectual property in the future. Our success will depend in part on the ability of our licensors to obtain, maintain, protect, and enforce patent protection for our licensed intellectual property, in particular, those patents to which we have secured exclusive rights. These licenses, and other licenses we may enter into in the future, may not provide adequate rights to use such intellectual property and proprietary technologies in all relevant fields of use or in all territories in which we may wish to develop or commercialize technology, applications, products, and services in the future. In some cases, patent prosecution of our licensed technology is controlled by the licensor. Therefore, we cannot be certain that these patents and patent applications will be prepared, filed, prosecuted, and maintained in a manner consistent with the best interests of our business. For example, under our license agreements with Normandie Valorisation, Normandie Valorisation controls the prosecution, maintenance and defense of the patents licensed to us pursuant to the agreements. Our licensors may not successfully prosecute the patent applications licensed to us, by failing to draft or prosecute the patents and patent applications licensed to us in compliance with applicable laws and regulations, which may affect the validity and enforceability of such patents or any patents that may issue from such applications. Even if patents issue or are granted, our licensors may fail to maintain these patents, may determine not to pursue litigation against other companies that are infringing these patents, or may pursue litigation less aggressively than we would. Further, we may not obtain exclusive rights, which would allow for third parties to develop competing applications and products. In addition, our licensors may have relied on third-party consultants or collaborators or on funds from third parties such that our licensors are not the sole and exclusive owners of the patents we in-licensed. If our licensors fail to obtain and maintain a patent or other protection for the proprietary intellectual property we license from such licensor, we could lose our rights to such intellectual property or the exclusivity of such rights, and our competitors could market competing technology using such intellectual property. In that event, we may be required to expend significant time and resources to develop or license replacement technology. If we are unable to do so, we or our collaborators may be unable to develop or commercialize the affected technology, which could adversely affect our competitive business position and harm our business prospects. Our existing license agreements impose, and we expect that future license agreements will impose, various development, commercialization, royalty, diligence, patent prosecution and enforcement, and other obligations on us. If we breach any of these obligations, we may be required to pay damages and the licensor may have the right to terminate the license, which could result in our being unable to commercialize related solutions, applications, products, or services that are covered by these agreements, which could materially adversely affect the value of any such technology and our business. In spite of our efforts, our licensors might conclude that we have breached our obligations under such license agreements, and might therefore terminate the license agreements. Termination of these agreements or reduction or elimination of our rights under these agreements may result in our having to negotiate new or reinstated agreements with less favorable terms, or cause us to lose our rights under these agreements, including our rights to important intellectual property or technology. In addition, while we cannot currently determine the amount of the royalty obligations we would be required to pay on sales of future applications and products, if any, the amounts may be significant. The amount of our future royalty obligations will depend on the technology and intellectual property we use in the applications, products, and services that we successfully develop and commercialize, if any. Therefore, even if we successfully develop and commercialize applications, products, and services, we may be unable to achieve or maintain profitability. In addition, disputes may arise under our license agreements, including regarding the payment of the royalties or other payments due to licensors in connection with our exploitation of the rights we license from them. For example, licensors may contest the basis of royalties we retained and claim that we are obligated to make payments under a broader basis. In addition to the costs of any litigation we may face as a result, any legal 34 Table of Contents action against us could increase our payment obligations under the respective agreement and require us to pay interest and potentially damages to such licensors. Disputes may arise regarding intellectual property subject to a license agreement, including those relating to: •the scope of rights, if any, granted under the license agreement and other interpretation-related issues; •the amounts of royalties due under the license agreement; •whether, and the extent to which, our technology and processes infringe, misappropriate or otherwise violate intellectual property of the licensor that is not subject to the license agreement; •our diligence obligations under the license agreement and what activities satisfy those diligence obligations; •the sublicensing of patent and other rights under the license agreements; •the inventorship and ownership of inventions and know-how resulting from the creation or use of intellectual property by our licensors and by us and our collaborators; and •the priority of invention of patented technology. The agreements under which we currently license intellectual property or technology from third parties are complex, and certain provisions in such agreements may be susceptible to multiple interpretations. The resolution of any contract interpretation disagreement that may arise could narrow what we believe to be the scope of our rights to the relevant intellectual property or technology or increase what we believe to be our financial or other obligations under the relevant agreement. Such disputes may be costly to resolve and may divert management’s attention away from day-to-day activities. If disputes over intellectual property that we have licensed from third parties prevent or impair our ability to maintain our licensing arrangements on acceptable terms, we or our collaborators may be unable to successfully develop and commercialize the affected technology, which could have a material adverse effect on our business, financial condition, results of operations, and prospects. We may not be successful in obtaining necessary rights to any applications, products, or services we may develop through acquisitions and in-licenses. We currently have rights to intellectual property, through licenses from third parties, to identify and develop certain applications, products, services and technology. Many pharmaceutical companies, biotechnology companies and academic institutions are competing with us and filing patent applications potentially relevant to our business. In order to avoid infringing these third-party patents, we may find it necessary or prudent to obtain licenses from such third-party intellectual property holders. However, we may be unable to secure such licenses or otherwise acquire or in-license any compositions, methods of use, processes or other intellectual property rights from third parties that we identify as necessary for our business. The licensing or acquisition of third-party intellectual property rights is a competitive area, and several more established companies may pursue strategies to license or acquire third-party intellectual property rights that we may consider attractive or necessary. These established companies may have a competitive advantage over us due to their size, capital resources, and greater clinical development and commercialization capabilities. In addition, companies that perceive us to be a competitor may be unwilling to assign or license rights to us. We also may be unable to license or acquire third-party intellectual property rights on terms that would allow us to make an appropriate return on our investment or at all. If we are unable to successfully obtain rights to required third-party intellectual property rights or maintain the existing intellectual property rights we have, it could have a material adverse effect on our business, financial condition, results of operations, and prospects. 35 Table of Contents We will not seek to protect our intellectual property rights in all jurisdictions throughout the world, and we may not be able to adequately enforce our intellectual property rights even in the jurisdictions where we seek protection. Filing, prosecuting, and defending patents in all countries and jurisdictions throughout the world would be prohibitively expensive, and our intellectual property rights in some countries outside the United States could be less extensive than those in the United States, assuming that rights are obtained in the United States. In-licensing patents covering our technology in all countries throughout the world may similarly be prohibitively expensive, if such opportunities are available at all. In addition, the laws of some foreign countries do not protect intellectual property rights to the same extent as federal and state laws in the United States, even in jurisdictions where we do pursue patent protection. Consequently, we may not be able to prevent third parties from practicing our inventions in all countries outside the United States, even in jurisdictions where we do pursue patent protection, or from selling or importing our technology in and into the United States or other jurisdictions. We generally apply for patents in those countries where we intend to make, have made, use or offer for sale our applications, products, or services, and where we assess the risk of infringement to justify the cost of seeking patent protection. However, we may not seek protection in all countries where we will commercialize our applications, products, and services and we may not accurately predict all the countries where patent protection would ultimately be desirable. If we fail to timely file a patent application in any such country or major market, we may be precluded from doing so at a later date. Competitors may use our technology in jurisdictions where we do not pursue and obtain patent protection to develop their own assays and products and may export otherwise infringing assays and products to territories where we have patent protection, but where our ability to enforce our patent rights is not as strong as in the United States. These applications, products, and services may compete with technologies that we or our collaborators may develop, and our patents or other intellectual property rights may not be effective or sufficient to prevent such competition. The laws of some other countries do not protect intellectual property rights to the same extent as the laws of the United States. Patent protection must ultimately be sought on a country-by-country basis, which is an expensive and time-consuming process with uncertain outcomes. Accordingly, we may choose not to seek patent protection in certain countries, and we will not have the benefit of patent protection in such countries. In addition, the legal systems of some countries, particularly developing countries, do not favor the enforcement of patents and other intellectual property protection, particularly those relating to biopharmaceuticals or biotechnologies. As a result, many companies have encountered significant difficulties in protecting and defending intellectual property rights in certain jurisdictions outside the United States. Such issues may make it difficult for us to stop the infringement of our patents, if obtained, or the misappropriation or other violation of our other intellectual property rights. For example, many other countries, including countries in the EU, have compulsory licensing laws under which a patent owner must grant licenses to third parties. In addition, many countries limit the enforceability of patents against third parties, including government agencies or government contractors. In these countries, patents may provide limited or no benefit. In those countries, we and our licensors may have limited remedies if patents are infringed or if we or our licensors are compelled to grant a license to a third party, which could materially diminish the value of those patents and could limit our potential revenue opportunities. Accordingly, our and our licensors’ efforts to enforce intellectual property rights around the world may be inadequate to obtain a significant commercial advantage from the intellectual property that we own or license. Furthermore, proceedings to enforce our patent rights in foreign jurisdictions could result in substantial costs and divert our efforts and attention from other aspects of our business, subject our patents to the risk of being invalidated or interpreted narrowly, subject our patent applications to the risk of not issuing or provoke third parties to assert claims against us. We may not prevail in any lawsuits that we initiate, and the damages or other remedies awarded to us, if any, may not be commercially meaningful, while the damages and other remedies we may be ordered to pay such third parties may be significant. If we are unable to execute invention assignment agreements with our employees and consultants or protect the confidentiality of our trade secrets, our business and competitive position would be harmed. In addition to seeking patent protection for certain aspects of our technology, we also consider trade secrets, including confidential and unpatented know-how, important to the maintenance of our competitive position. We protect trade secrets and confidential and unpatented know-how, in part, by entering into non-disclosure and 36 Table of Contents confidentiality agreements with parties who have access to such knowledge, such as our employees, corporate collaborators, outside scientific collaborators, CROs, or manufacturers, consultants, advisors and other third parties. We also enter into confidentiality and invention or patent assignment agreements with our employees and consultants that obligate them to maintain confidentiality and assign their inventions to us. We cannot guarantee that we have entered into such agreements with each party that may have or have had access to our trade secrets or proprietary technology and processes or that the assignment agreements that have been entered into are self-executing. Despite these efforts, any of these parties may breach the agreements and disclose our proprietary information, including our trade secrets, or claim ownership in intellectual property that we believe is owned by us. Monitoring unauthorized uses and disclosures of our intellectual property is difficult, and we do not know whether the steps we have taken to protect our intellectual property will be effective. In addition, we may not be able to obtain adequate remedies for such breaches. Enforcing a claim that a party illegally disclosed or misappropriated a trade secret is difficult, expensive and time-consuming, and the outcome is unpredictable. In addition, some courts in the United States and certain foreign jurisdictions are less willing or unwilling to protect trade secrets. Moreover, our competitors or other third parties may independently develop knowledge, methods and know-how equivalent to our trade secrets or seek to reverse-engineer our technology for which we do not have patent protection. If any of our trade secrets were to be lawfully obtained or independently developed by a competitor or other third parties, we would have no right to prevent them from using that technology or information to compete with us. If any of our trade secrets were to be disclosed to or independently developed by a competitor, our competitive position would be harmed. We are also subject both in the United States and outside the United States to various regulatory schemes regarding requests for the information we provide to regulatory authorities, which may include, in whole or in part, trade secrets or confidential commercial information. While we are likely to be notified in advance of any disclosure of such information and would likely object to such disclosure, there can be no assurance that our challenge to the request would be successful. Any of the foregoing could have a material adverse effect on our business, financial condition, results of operations, and prospects. We have in the past and may in the future be subject to claims that our employees, consultants or advisors have wrongfully used or disclosed trade secrets or other confidential information of their current or former employers or claims asserting ownership of what we regard as our own intellectual property. Many of our employees, consultants and advisors are currently or were previously employed at universities, research institutes or other biotechnology or pharmaceutical companies, including our competitors or potential competitors. Although we try to ensure that our employees, consultants and advisors do not use the proprietary information or know-how of others in their work for us, we have in the past and may in the future be subject to claims that we or these individuals have used or disclosed intellectual property, including trade secrets or other proprietary information, of any such individual’s current or former employer. Litigation may be necessary to defend against these claims. If we fail in defending any such claims, in addition to paying monetary damages, we may lose valuable intellectual property rights or personnel. Even if we are successful in defending against such claims, litigation could result in substantial costs and be a distraction to management. In addition, while it is our policy to require our employees and contractors who may be involved in the conception or development of intellectual property to execute agreements assigning such intellectual property to us, we may be unsuccessful in executing such an agreement with each party who, in fact, conceives or develops intellectual property that we regard as our own. The assignment of intellectual property rights may not be self-executing, or the assignment agreements may be breached or invalid, and we may be forced to bring claims against third parties, or defend claims that they may bring against us, to determine the ownership of what we regard as our intellectual property. Such claims could have a material adverse effect on our business, financial condition, results of operations, and prospects. If our trademarks and trade names are not adequately protected, we may not be able to build name recognition in our markets of interest and our business may be adversely affected. Our registered or unregistered trademarks or trade names may be challenged, infringed, circumvented, declared generic, cancelled or determined to be infringing on other marks. As a means to enforce our trademark 37 Table of Contents rights and prevent infringement, we may be required to file trademark claims against third parties or initiate trademark opposition proceedings. This can be expensive, particularly for a company of our size, and time-consuming. In addition, in an infringement proceeding, a court may decide that a trademark of ours is not valid or is unenforceable, or may refuse to stop the other party from using the trademark at issue. We may not be able to protect our rights to these and other trademarks and trade names or may be forced to stop using these names, which we may need to build name recognition with potential collaborators or customers in our markets of interest. We have certain trademark applications pending in the United States and abroad, but there can be no assurance that these applications will be allowed and not opposed. Any denial of our trademark applications or adverse ruling in any opposition proceedings could prevent us from differentiating our applications, products and/or services and maintaining consistency across our brand. Even if these applications proceed to registration, third parties may challenge our use or registration of these trademarks in the future. In the event that our trademarks are successfully challenged, we could be forced to rebrand our applications and products, which could result in loss of brand recognition and could require us to devote resources to advertising and marketing new brands. Other biotechnology companies may be using trademarks that are similar to ours, thereby impeding our ability to build brand identity and possibly leading to market confusion. In addition, they may infringe our trademarks and we may not have adequate resources to enforce our trademarks. If we attempt to enforce our trademarks and assert trademark infringement claims, a court may determine that the party against whom we have asserted trademark infringement has superior rights to the marks in question. In this case, we could ultimately be forced to cease use of such trademarks. Furthermore, there could be potential trade name or trademark infringement claims brought by owners of other trademarks or trademarks that incorporate variations of our registered or unregistered trademarks or trade names. Failure to maintain our trademark registrations, or to obtain new trademark registrations in the future, could limit our ability to protect our trademarks and impede our marketing efforts in the countries in which we operate. Over the long term, if we are unable to establish name recognition based on our trademarks and trade names, then we may not be able to compete effectively and our business may be adversely affected. We utilize artificial intelligence, including in our SOPHiA DDM Platform and related solutions, applications, products and services, which could expose us to liability or adversely affect our business. We use artificial intelligence, generative artificial intelligence, machine learning and similar tools and technologies (collectively, “AI”) in connection with our business, including in our SOPHiA DDM Platform and related solutions, applications, products and services, and may in the future expand our use of AI. The use of AI poses risks such as incomplete or inaccurate data, human error, or lack of appropriate controls and processes, and the use of generative artificial intelligence, a relatively new and emerging technology in the early stages of commercial use, exposes us to additional risks, each including damage to our reputation, competitive position, and business, legal and regulatory risks and additional costs. For example, generative artificial intelligence has been known to produce false or “hallucinatory” inferences or output, and certain generative artificial intelligence uses machine learning and predictive analytics, which can create inaccurate, incomplete, or misleading content, unintended biases and other discriminatory or unexpected results, errors or inadequacies, any of which may not be easily detectable by us or any of our related service providers. Accordingly, while AI systems may help provide more tailored or personalized user experiences, if the content, analyses, or recommendations that AI systems assist in producing in our products and solutions are, or are perceived to be, deficient, inaccurate, biased, unethical or otherwise flawed, our reputation, competitive position and business may be materially and adversely affected. Additionally, if any of our employees, contractors, consultants, vendors or service providers use any third-party AI-powered software in connection with our business or the services they provide to us, it may lead to the inadvertent disclosure or incorporation of our confidential information into publicly available training sets, which may impact our ability to realize the benefit of, or adequately maintain, protect and enforce our intellectual property or confidential information, harming our competitive position and business. Any output created by us using AI tools may not be subject to copyright protection, which may adversely affect our intellectual property rights in, or ability to commercialize or use, any such content. In the United States, a number of civil lawsuits have been initiated related to the foregoing and other concerns, any one of which may, among other things, require us to limit the ways in which our AI systems are trained and may affect our ability to develop our AI-powered products and solutions. To the extent that we do not have sufficient rights to use the data or other material or content used in or produced by the AI tools used in our business, or if we experience cybersecurity 38 Table of Contents incidents in connection with our use of AI, it could adversely affect our reputation and expose us to legal liability or regulatory risk, including with respect to third-party intellectual property, privacy, data protection and cybersecurity, publicity, contractual or other rights. Further, our competitors or other third parties may incorporate AI into their products more quickly or more successfully than us, which could impair our ability to compete effectively. In addition, the regulatory framework for AI and similar technologies, and automated decision making, is changing rapidly. It is possible that new laws and regulations will be adopted in the United States and in non-U.S. jurisdictions, or that existing laws and regulations may be interpreted, in ways that would affect the operation of our products and solutions and the way in which we use AI and similar technologies. For example, in Europe, on August 1, 2024, the European Union's Artificial Intelligence Act (the “AI Act”) was entered into force. The AI Act establishes, among other things, a risk-based governance framework for regulating AI systems operating in the European Union. This framework would categorize AI systems, based on the risks associated with such AI systems' intended purposes, as creating unacceptable or high risks, with all other AI systems being considered low risk. We may not be able to adequately anticipate or respond to these evolving laws and regulations, and we may need to expend additional resources to adjust our offerings in certain jurisdictions if applicable legal frameworks are inconsistent across jurisdictions. Moreover, because these technologies are themselves highly complex and rapidly developing, it is not possible to predict all of the legal or regulatory risks that may arise relating to our use of such technologies. Further, the cost to comply with such laws or regulations could be significant and would increase our operating expenses, which could adversely affect our business, financial condition and results of operations. As the utilization of AI becomes more prevalent, we anticipate that it will continue to present new or unanticipated ethical, reputational, technical, operational, legal, competitive and regulatory issues, among others. We expect that our incorporation of AI in our business will require additional resources, including the incurrence of additional costs, to develop and maintain our products and solutions and features to minimize potentially harmful or unintended consequences, to comply with applicable and emerging laws and regulations, to maintain or extend our competitive position, and to address any ethical, reputational, technical, operational, legal, competitive or regulatory issues which may arise as a result of any of the foregoing. As a result, the challenges presented with our use of AI could adversely affect our business, financial condition and results of operations. Our AI and machine learning algorithms may experience performance degradation over time due to data drift, evolving genomic knowledge or changes in clinical practice, requiring costly retraining, revalidation or regulatory resubmission and potentially causing temporary performance gaps that could harm our reputation, customer relationships and financial results. The AI and machine learning models that form core components of our SOPHIA DDM platform are trained and validated on genomic, clinical and other data that reflect the state of sequencing technologies, sample preparation methods, disease biology, patient populations, variant classification standards and clinical knowledge at a point in time. The performance of these models may degrade over time due to a variety of factors, including data drift (changes in the statistical distribution of input data caused by adoption of new sequencing instruments, changes in library preparation kits or reagents, shifts in the demographic or clinical characteristics of tested patient populations, changes in disease prevalence or stage at diagnosis, or differences in sample quality or specimen types), concept drift (evolution of the underlying scientific or clinical knowledge such as reclassification of variants in public databases like ClinVar, updates to gene-disease associations, changes in treatment paradigms that alter the clinical significance of biomarkers, or refinement of pathogenicity prediction criteria), adversarial evolution (emergence of novel genomic alterations, fusion transcripts, resistance mutations or tumor escape mechanisms that were not represented in training datasets), infrastructure changes (updates to cloud computing environments, software dependencies, third-party bioinformatics tools or reference databases that subtly alter computational outputs or introduce version incompatibilities), and other factors. When we detect performance degradation, or when customers, regulators or other stakeholders raise concerns about analytical accuracy or clinical utility, we may need to suspend or limit the use of affected algorithms or features while we investigate the root cause, retrain models on updated and more representative datasets (which may be costly, time-consuming and require access to additional data that may be difficult to obtain), revalidate analytical and clinical performance through internal testing or external studies, update our labeling, instructions for use or marketing materials, communicate changes to customers and manage their expectations regarding temporarily reduced functionality or performance, and potentially seek 39 Table of Contents new or modified regulatory clearances, submit notifications to regulatory authorities regarding significant algorithm modifications, or conduct post-market surveillance studies. During investigation, retraining and revalidation periods, we may experience gaps in platform functionality, customer dissatisfaction, loss of competitive advantage if competitors offer superior or more current solutions, heightened regulatory scrutiny, adverse publicity, difficulty acquiring new customers or retaining existing customers, reduction in usage volumes or subscription renewals, or product liability exposure if performance degradation contributed to suboptimal clinical decisions. Additionally, if we fail to detect performance degradation in a timely manner, or if our monitoring and quality control systems do not identify emerging issues before they affect customer results, we may unknowingly deliver outputs of diminished accuracy or clinical utility, exposing us to professional liability claims, regulatory warning letters or enforcement actions, customer contract breaches, reputational harm, and loss of trust in our platform. Any material performance degradation of our AI algorithms, or any failure to promptly detect and remediate such degradation, could materially harm our business, results of operations, financial condition and prospects. Our use of “open-source” software could subject our proprietary software to general release, adversely affect our ability to sell our applications and products or provide our services, and subject us to possible litigation. A portion of the applications, products, or technologies licensed, developed or distributed by us incorporate so-called “open-source” software, and we may incorporate open-source software into other applications, products, or technologies in the future. Such open-source software is generally licensed by its authors or other third parties under open-source licenses. Some open-source licenses may contain requirements that we disclose source code for modifications we make to the open-source software and that we license such modifications to third parties at no cost. In some circumstances, distribution of our software in connection with open-source software could require that we disclose and license some or all of our proprietary code in that software as well as distribute our applications and products that use particular open-source software at no cost to the user. We monitor our use of open-source software in an effort to avoid uses in a manner that would require us to disclose or grant licenses under our proprietary source code; however, there can be no assurance that such efforts will be successful. Open-source license terms are often ambiguous and such use could inadvertently occur. There is little legal precedent governing the interpretation of many of the terms of certain of these licenses, and the potential impact of these terms on our business may result in unanticipated obligations regarding our applications, products, and technologies. Companies that incorporate open-source software into their applications and products have, in the past, faced claims seeking enforcement of open-source license provisions and claims asserting ownership of open-source software incorporated into their applications and products. If an author or other third party that distributes such open-source software were to allege that we had not complied with the conditions of an open-source license, we could incur significant legal costs from defending ourselves against such allegations. In the event such claims were successful, we could be subject to significant damages or be enjoined from the distribution of our applications and products. In addition, if we combine our proprietary software with open-source software in certain ways, under some open-source licenses we could be required to release the source code of our proprietary software, which could substantially help our competitors develop applications, products, and services that are similar to or better than ours and otherwise have a material adverse effect on our business, financial condition, results of operations, and prospects. Changes in U.S. patent law could diminish the value of patents in general, thereby impairing our ability to protect our applications and products. Changes in either the patent laws or interpretation of the patent laws in the United States could increase the uncertainties and costs surrounding the prosecution of patent applications and the enforcement or defense of issued patents. Changes in either the patent laws or the interpretation of the patent laws in the United States or other jurisdictions could increase the uncertainties and costs surrounding the prosecution of patent applications and the enforcement or defense of issued patents. Depending on future actions by the U.S. Congress, the U.S. courts, the USPTO and the relevant law-making bodies in other countries, the laws and regulations governing patents could change in unpredictable ways that could have a material adverse effect on our existing patent portfolio and our ability to protect and enforce our intellectual property in the future. 40 Table of Contents Risks Related to Our Financial Position and Capital Requirements We have incurred net losses since our inception and expect to continue to incur losses for the foreseeable future. We may never achieve or sustain profitability. We have incurred losses since our inception and expect to continue to incur losses for the foreseeable future. For the years ended December 31, 2025 and 2024, we reported net losses of $79.0 million and $62.5 million, respectively. As of December 31, 2025, we had an accumulated deficit of $519.3 million. We expect to continue to incur net losses for the foreseeable future as we continue to devote substantial resources to (i) research and development, in particular to further expand and enhance the features, applications and data modalities of our SOPHiA DDM Platform in order to accommodate multimodal data analytics capabilities across a wide range of disease areas; (ii) expanding selling and marketing efforts for our SOPHiA DDM Platform, in particular to drive new customer adoption with clinical customers and biopharmaceutical companies; (iii) establishing and maintaining relationships with our collaborators and customers across the healthcare system; and (iv) obtaining regulatory clearance or approval to offer our applications and products as IVD applications and products for diagnostic use. We may encounter unforeseen expenses, difficulties, complications, delays and unknown factors that may adversely affect our business. The size of our future net losses will depend, in part, on the rate of growth of our expenses and of our revenue. In addition, we have incurred and expect to continue to incur increased general and administrative expenses associated with operating as a public company. Our net losses may fluctuate significantly from quarter to quarter and from year to year. Because of the numerous risks and uncertainties associated with our research and development and commercialization efforts, although we have stated our desire to become cash flow positive in the next few years, we may not be able to achieve this goal. We may never become profitable or cash flow positive. Even if we achieve profitability, we may not be able to sustain or increase profitability on a quarterly or annual basis. Our failure to achieve or sustain profitability could depress our market value and could impair our ability to raise capital, and execute our business plan, develop additional applications, products, and services and continue our operations. A decline in the value of our company could cause our shareholders to lose all or part of their investment. We may need to raise additional capital to fund our existing operations; further develop our SOPHiA DDM Platform, applications, and products; commercialize our applications, products, and services; and expand our operations. Since our inception, we have used substantial amounts of cash. The research and development process as well as selling and marketing efforts are capital intensive and we expect that we will continue to expend substantial resources for the foreseeable future to develop, commercialize and market additional features, applications and data modalities of our SOPHiA DDM Platform and related solutions, applications, products, and services. In addition, we may also raise capital to expand our business and pursue strategic investments, to take advantage of financing opportunities or for other reasons. Additional funds may not be available when we need them or on terms that are acceptable to us. Our ability to raise additional funds will depend on financial, economic and market conditions and other factors, over which we may have no or limited control. Further, as a Swiss company, we have less flexibility to raise capital, particularly in a quick and efficient manner, as compared to U.S. companies. See “—Risks Related to Our Securities—Our shareholders enjoy certain rights that may limit our flexibility to raise capital, issue dividends and otherwise manage ongoing capital needs.” The restrictions contained in our contractual agreements may also limit our ability to raise capital. For example, subject to certain exceptions, the Perceptive Credit Agreement restricts our ability to incur additional indebtedness. If adequate funds are not available to us on a timely basis or on terms acceptable to us, we may be required to delay, limit, reduce or terminate our research and development, commercialization and growth efforts. We may seek additional capital through a variety of means, including through public and private equity offerings and debt financings, credit and loan facilities and collaborations. If we raise additional capital through the sale of equity or convertible debt securities, your ownership interest will be diluted, and the terms of such equity or convertible debt securities may include liquidation or other preferences that are senior to or otherwise adversely affect your rights as a shareholder. If we raise additional capital through the sale of debt securities or through entering into credit or loan facilities, we may be restricted in our ability to take certain actions, such as incurring additional debt, making capital expenditures, acquiring or licensing intellectual property rights, declaring 41 Table of Contents dividends or encumbering our assets to secure future indebtedness. Such restrictions could adversely impact our ability to conduct our operations and execute our business plan. If we raise additional capital through collaborations with third parties, we may be required to relinquish valuable rights to our intellectual property, technology, applications, and products or we may be required to grant licenses for our intellectual property, technology, applications, and products on unfavorable terms. Our indebtedness under the Perceptive Credit Agreement and the associated restrictive covenants thereunder could adversely affect our financial condition. Indebtedness under the Perceptive Credit Agreement requires us to dedicate a substantial portion of our cash and cash equivalents to the payment of interest on, and principal of, the indebtedness, thereby reducing the amounts available to fund working capital, capital expenditures, research and development efforts, commercialization efforts and other general corporate purposes. Indebtedness under the Perceptive Credit Agreement bears variable rates of interest based on the prevailing SOFR, thereby making us more vulnerable to rising interest rates. The Perceptive Credit Agreement contains certain restrictions on our activities and customary covenants, including an affirmative covenant to maintain qualified cash of at least $3.0 million and an affirmative last twelve months revenue covenant of $67.4 million as of December 31, 2025, and negative covenants including limitations on indebtedness, liens, fundamental changes, asset sales, investments, dividends and other restricted payments and other matters customarily restricted in such agreements. The obligations under the Perceptive Credit Agreement are secured by substantially all of our and certain of our subsidiaries’ assets. Such covenants could limit our flexibility in planning for, or reacting to, changes in our business and our industry; place us at a competitive disadvantage compared to our competitors who have less debt or competitors with comparable debt on more favorable terms; and limit our ability to borrow additional amounts. Our ability to maintain compliance with the covenants imposed by our indebtedness and to repay the principal of, pay interest on and refinance our indebtedness depends on our future performance, which is subject to economic, financial, competitive and other factors, many of which are beyond our control. If we are unable to comply with the covenants imposed by our indebtedness or to generate sufficient cash flow to service or repay our indebtedness, we may be in default of the Perceptive Credit Agreement and be required to adopt one or more alternatives, such as restructuring debt or obtaining additional financing on terms that may be unfavorable to us or highly dilutive. Our operating results may fluctuate significantly or may fall below the expectations of investors or securities analysts, each of which may cause the price of our ordinary shares to fluctuate or decline. Our quarterly and annual operating results may fluctuate significantly. This fluctuation may be as a result of a variety of factors, many of which are outside our control and, as a result, may not fully reflect the underlying performance of our business. The cumulative effects of these factors could result in large fluctuations and unpredictability in our quarterly and annual financial results. Because a substantial portion of our expenses are relatively fixed in the short-term and require time to adjust, our results of operations and liquidity would suffer if revenue falls below our expectations in a particular period. If our operating results fall below the expectations of investors or securities analysts, the price of our ordinary shares could decline substantially. Furthermore, any fluctuations in our operating results may, in turn, cause the price of our ordinary shares to fluctuate substantially. We believe that quarterly comparisons of our financial results are not necessarily meaningful and should not be relied upon as an indication of our future performance. We may not be able to sufficiently reduce our costs to achieve sustainable gross margins. Operating our business is costly, and we expect our expenses to continue to increase in the future as we broaden our customer base and expand our platform, applications, services, and product offerings. In particular, a significant portion of our business, including our SOPHiA DDM Platform, is provided through a cloud-native software platform and computational and storage-related costs and fees constitute a significant portion of our cost of revenue. While we seek to negotiate favorable economic arrangements with respect to computational and storage-related costs and fees, in the near term, we expect that our gross profit margin will be adversely impacted by such fees and costs as we have purchased, and may be required to continue to purchase, increased capacity at less favorable rates in order to address increased demand for our SOPHiA DDM Platform and related solutions, applications, products, and services. In addition, we collaborate with manufacturers in the 42 Table of Contents assembly and development of our research and diagnostic products, in particular DNA enrichment kits. While we are undertaking a number of initiatives designed to reduce our costs, including provisions in our manufacturing and supply agreements that limit our counterparty’s ability to increase prices for the manufactured products if certain conditions are met by us, and expect that our gross margin will increase as we broaden our customer base and increase customer engagement, there can be no assurance that we will be able to achieve planned cost reductions. There may also be unforeseen occurrences that increase our costs, such as increased prices of the components of our products, increased costs of hosting and consumer support services, changes to labor costs or less favorable terms with third-party suppliers, service providers or manufacturing collaborators. In addition, if our platform, applications, services and product mix becomes more customer-specific and diversified, our costs may increase. If we are unable to reduce our costs, or if cost reductions are less significant or less timely than those we project, we will not be able to achieve sustainable gross margins, which would adversely affect our ability to invest in and grow our business. We customize a substantial portion of our research and diagnostic products to address the needs of individual customers and collaborators. If we cannot sell our customized products in the event an order is cancelled, we may be unable to cover our costs and may be left with substantial unsaleable inventory, which could have a material adverse effect on our financial condition and results of operations. We assemble a substantial portion of our products to address the needs of individual customers. Some of the agreements with our customers require us to cover the initial manufacturing and assembly costs of such products. We will be paid only upon delivery of such products to our customers once the products have been ordered. If our customers fail to purchase these customized products from us in sufficient quantities, do not purchase such products from us at all or otherwise fail to perform their obligations under the agreements with us, we may bear the full cost of manufacturing and assembling of such products, fail to cover our costs and have substantial unsaleable inventory, each of which could have a material adverse effect on our financial condition and results of operations. Our ability to use tax loss carryforwards in Switzerland, the United States and other jurisdictions may be limited. We are entitled to carry forward losses incurred in Switzerland, the United States and other jurisdictions in which we conduct business, which could be used to offset future taxable income. Due to our limited income and ongoing losses, there is a significant risk that our tax loss carryforwards will expire in part or in their entirety and cannot be used to offset future taxable income for corporate income tax purposes. Furthermore, any tax loss carryforwards that we report on our tax returns are subject to review and confirmation by the competent tax authorities in their tax assessment of the tax year for which the tax loss carryforwards are used to offset taxable income. Consequently, we are exposed to the risk that the competent tax authorities may not accept the reported tax loss carryforwards in part or in their entirety. We are subject to risks related to taxation in multiple jurisdictions. We are subject to income taxes in Switzerland and foreign jurisdictions. Significant judgments based on interpretations of existing tax laws or regulations may be required in determining our provision for income taxes. Our effective income tax rate could be adversely affected by various factors, including, but not limited to, changes in the combination of earnings in tax jurisdictions with different statutory tax rates, changes in the valuation of deferred tax assets and liabilities, changes in existing tax policies, laws, regulations or rates, changes in the level of non-deductible expenses (including share-based compensation), changes in the location of our operations, changes in our future levels of research and development spending, mergers and acquisitions or the result of examinations by various tax authorities. Although we believe our tax estimates are reasonable, if taxing authorities disagree with the positions taken on our tax returns, we could have additional tax liability, including interest and penalties. Exchange rate fluctuations have in the past materially affected and may in the future materially affect our results of operations and financial condition. We operate internationally and a meaningful portion of our revenue, expenses, assets and liabilities are denominated in currencies other than the U.S. dollar, our presentation currency, and the Swiss franc, SOPHiA GENETICS SA’s functional currency. In preparing our consolidated financial statements, those revenues, 43 Table of Contents expenses, assets and liabilities are translated into U.S. dollars at applicable exchange rates. Increases or decreases in exchange rates between the U.S. dollar and other currencies affect the U.S. dollar value of those items, as reflected in the consolidated financial statements. We expect that a significant part of our revenues and expenses will continue to be denominated in currencies other than the U.S. dollar, including the euro and Swiss franc, and to a lesser extent, British pound, Australian dollar, Brazilian real, Turkish lira and Canadian dollar. Therefore, unfavorable developments in the value of the U.S. dollar relative to other relevant currencies could adversely affect our results of operations, financial condition and liquidity. For example, fluctuations in the exchange rate between the U.S. dollar and the Swiss franc has impacted our revenues and results of operations for the year ended December 31, 2025 and 2024. The exchange rates of the U.S. dollar and other currencies are affected by many factors, including forces of supply and demand in the foreign exchange markets and global economic events. These rates are also affected by the international balance of payments and other economic and financial conditions, government intervention, speculation and other factors. We currently do not engage in hedging transactions to protect against uncertainty in future exchange rates between particular foreign currencies and the U.S. dollar and even if we engage in hedging operations in the future, there can be no assurance as to the success of any hedging operations that we may implement. Foreign currency fluctuations may adversely affect our results of operations, financial condition and liquidity. We are subject to risks related to the accounting treatment of our pension and other post-employment benefit plans. We provide retirement benefits to our employees as required by Swiss law by means of a pension fund that is maintained by a life insurance company. The life insurance company operates a pension plan for all of our employees as a defined benefit plan under International Accounting Standards (“IAS”) 19, Employee Benefits (“IAS 19”). As of December 31, 2025, we reported an employee benefit obligation related to our Swiss plan, before deduction of plan assets, of $28.3 million in accordance with IAS 19. The obligation represents our projected obligations towards current and future pensioners discounted at an annual rate of 1.10%. Under Swiss statutory rules and pursuant to our contract with the group life assurance provider, all risks including investment risk are fully covered. That said, no underfunding exists under Swiss law. The variance between Swiss statutory rules and IFRS Accounting Standards is apparent in many Swiss companies, and the IFRS Accounting Standards obligation of our pension plan does not necessarily reflect a true payment obligation under Swiss law because Swiss law allows us to maintain flexibility to adjust benefit levels under the plans and we could use this flexibility to mitigate any liability. For more information, see Note 21—“Post-employment benefits” to the audited consolidated financial statements included elsewhere in this Annual Report. However, should the Swiss statutory rules at any time require a determination that our pension plan is significantly underfunded, we could be obliged to make additional contributions to the pension plan in addition to our obligation to make regular contributions as defined in the pension plan regulation. If such risk materializes, this could have a material adverse effect on our financial position or results of operations. Risks Related to Our Securities The market price of our ordinary shares has historically been, and in the future may continue to be, volatile and may fluctuate due to factors beyond our control. In the past, we have experienced significant fluctuations in the price of our ordinary shares. The market price of our ordinary shares could be subject to wide fluctuations in response to many risk factors listed in this “Risk Factors” section, some of which are beyond our control, including: •actual or anticipated fluctuations in our financial condition and operating results; •effectiveness, accuracy and efficiency of our SOPHiA DDM Platform and related solutions, applications, products, and services; •public concern relating to the commercial value or safety of any of our SOPHiA DDM Platform and related solutions, applications, products, and services; •the timing and results of multimodal clinical studies of our SOPHiA DDM Platform; 44 Table of Contents •our inability to adequately protect our proprietary and intellectual property rights, including patents, trademarks and trade secrets; •our inability to raise additional capital and the terms on which we raise it; •our ability to enter into strategic collaboration or licensing agreements and the commencement, termination and terms of such agreements; •regulatory developments, including actions with respect to our and our competitors’ platforms, applications, products, and services; •publication of research reports by securities analysts about us or our competitors or our industry; •our failure or the failure of our competitors to meet analysts’ projections or guidance that we or our competitors may give to the market; •additions and departures of key personnel; •the passage of legislation or other regulatory developments affecting us or our industry; •fluctuations in the valuation of companies perceived by investors to be comparable to us; •sales of our ordinary shares or securities convertible into or exercisable for our ordinary shares by us, our insiders or our other shareholders; •changes in market conditions for our industry, including changes in the structure of healthcare payment systems; and •changes in general market and economic conditions. In addition, the stock market has historically experienced significant volatility, particularly with respect to healthcare technology company stocks. As we operate in a single industry, we are particularly vulnerable to these factors to the extent that they affect our industry. In the past, securities class action litigation has often been initiated against companies following periods of volatility in their stock price. This risk is particularly relevant for healthcare technology companies, which have experienced significant stock price volatility in recent years. Securities litigation could result in substantial costs and divert our management’s attention and resources and could also require us to make substantial payments to satisfy judgments or to settle litigation. Future sales, or the possibility of future sales, of a substantial number of our ordinary shares could adversely affect the price of our ordinary shares. Future sales of a substantial number of our ordinary shares, or the perception that such sales will occur, could cause a decline in the market price of our ordinary shares. Ordinary shares that were issued prior to our initial public offering can be sold pursuant to Rule 144 under the Securities Act, subject to current public information and volume and manner of sale limitations applicable to affiliates. In addition, we have registered under the Securities Act all ordinary shares that we may issue under our share-based compensation plans, such that they can be freely sold in the public market upon issuance, subject to volume limitations applicable to affiliates. We have adopted a sell-to-cover approach for withholding and other taxes upon restricted stock units (“RSU”) settlement for executive officers and certain directors, which may result in substantial sales of ordinary shares into the market in relatively short periods of time, particularly around the date of our annual general meeting. If our shareholders sell substantial numbers of ordinary shares in the public market or if the market perceives that such sales may occur, the market price of our ordinary shares and our ability to raise capital through the issuance and sale of equity or equity-linked securities in the future could be adversely affected. Under Swiss law, shareholders benefit from pre-emptive rights to subscribe on a pro rata basis for issuances of equity or other securities that are convertible into equity, unless such pre-emptive rights are excluded in accordance with Swiss law and our articles of association. However, due to the laws and regulations in certain jurisdictions, shareholders in certain jurisdictions may not be able to exercise such rights, unless we register or otherwise qualify the rights offering, including by complying with Annual Report requirements under the laws of that jurisdiction. There can be no assurance that we will take any action to register or otherwise qualify an 45 Table of Contents offering of subscription rights or shares under the laws of any jurisdiction where the offering of such rights is restricted, other than the United States. If shareholders in such jurisdictions are unable to exercise their subscription rights, their ownership interest will be diluted. We have never paid dividends and do not expect to pay any dividends in the foreseeable future. Since inception, we have not paid any dividends. Even if future operations lead to significant levels of distributable profits, we currently intend to reinvest any earnings in our business and do not anticipate declaring or paying any dividends until we have an established revenue stream to support dividend payments. In addition, any proposal for the payment of future dividends will be at the discretion of our board of directors after taking into account various factors including our business prospects, liquidity requirements, financial performance and new application and product development. Furthermore, payment of future dividends is subject to certain limitations pursuant to our current and future debt instruments, Swiss law and our articles of association. See “Item 10. Additional Information—Memorandum and Articles of Association.” The Perceptive Credit Agreement also limits our ability to pay dividends. Accordingly, investors cannot rely on dividend income from our ordinary shares, and any returns on an investment in our ordinary shares will likely depend entirely upon any future appreciation in the price of our ordinary shares. If securities or industry analysts publish inaccurate or unfavorable research about our business or case to publish research about our business, the price of our ordinary shares and our trading volume could decline. The trading market for our ordinary shares depends, in part, on the research and reports that securities or industry analysts publish about us or our business. If one or more of the analysts who cover us downgrade our ordinary shares or publish inaccurate or unfavorable research about us or our business, the price of our ordinary shares will likely decline. In addition, if our operating results fail to meet the forecast of analysts, the price of our ordinary shares will likely decline. If one or more of these analysts cease coverage of our company or fail to publish reports on us regularly, demand for our ordinary shares could decrease, which might cause the price of our ordinary shares and trading volume to decline. The rights of our shareholders may be different from the rights of shareholders in companies governed by the laws of U.S. jurisdictions. We are a Swiss corporation. Our corporate affairs are governed by our articles of association and by the laws governing companies, including listed companies, incorporated in Switzerland. The rights of our shareholders and the responsibilities of members of our board of directors may be different from the rights and obligations of shareholders and directors of companies governed by the laws of U.S. jurisdictions. In the performance of its duties, our board of directors is required by Swiss law to consider the interests of our company, our shareholders, our employees and other stakeholders, in all cases with due observation of the principles of reasonableness and fairness. It is possible that some of these parties will have interests that are different from, or in addition to, shareholders’ interests. Swiss law limits the ability of our shareholders to challenge resolutions made or other actions taken by our board of directors in court. Our shareholders generally are not permitted to file a suit to reverse a decision or an action taken by our board of directors, but are instead only permitted to seek damages for breaches of fiduciary duty. As a matter of Swiss law, shareholder claims against a member of our board of directors for breach of fiduciary duty would have to be brought to the competent courts in Switzerland, or where the relevant member of our board of directors is domiciled. In addition, under Swiss law, any claims by our shareholders against us must be brought exclusively to the competent courts in Switzerland. For a further summary of applicable Swiss company law contained in this Annual Report, see “Item 10. Additional Information—Memorandum and Articles of Association.” However, there can be no assurance that Swiss law will not change in the future, which could adversely affect the rights of our shareholders, or that Swiss law will protect our shareholders in a similar fashion as under U.S. corporate law principles. Our shareholders enjoy certain rights that may limit our flexibility to raise capital, issue dividends and otherwise manage ongoing capital needs. Swiss law reserves for approval by shareholders certain corporate actions over which a board of directors would have authority in some other jurisdictions. For example, the payment of dividends and cancellation of treasury 46 Table of Contents shares must be approved by shareholders. Swiss law also requires that our shareholders themselves resolve to, or authorize our board of directors to, increase our share capital. While our shareholders may authorize share capital that can be issued by our board of directors without additional shareholder approval, Swiss law limits this authorization to 50% of the issued share capital at the time of the authorization. The authorization, furthermore, has a limited duration of up to five years and must be renewed by the shareholders from time to time thereafter in order to be available for raising capital. Additionally, subject to specified exceptions, including exceptions explicitly described in our articles of association, Swiss law grants pre-emptive subscription rights to existing shareholders to subscribe for new issuances of shares. Swiss law also does not provide as much flexibility in the various rights and regulations that can attach to different categories of shares as do the laws of some other jurisdictions. These Swiss law requirements relating to our capital management may limit our flexibility, and situations may arise where greater flexibility would have provided benefits to our shareholders. See “Item 10. Additional Information—Memorandum and Articles of Association.” Our ordinary shares are not listed in Switzerland, our home jurisdiction. As a result, our shareholders will not benefit from certain provisions of Swiss law that are designed to protect shareholders in a public takeover offer or a change-of-control transaction. Because our ordinary shares will be listed exclusively on Nasdaq and not in Switzerland, our shareholders will not benefit from the protection afforded by certain provisions of Swiss law that are designed to protect shareholders in the event of a public takeover offer or a change-of-control transaction. For example, Article 120 of the Swiss Financial Market Infrastructure Act and its implementing provisions require investors to disclose their interest in our company if they reach, exceed or fall below certain ownership thresholds. Similarly, the Swiss takeover regime imposes a duty on any person or group of persons who acquires more than one-third of a company’s voting rights to make a mandatory offer for all of the company’s outstanding listed equity securities. In addition, the Swiss takeover regime imposes certain restrictions and obligations on bidders in a voluntary public takeover offer that are designed to protect shareholders. However, these protections are applicable only to issuers that list their equity securities in Switzerland, and because our ordinary shares will be listed exclusively on Nasdaq, they will not be applicable to us. Furthermore, since Swiss law restricts our ability to implement rights plans or U.S.-style “poison pills,” our ability to resist an unsolicited takeover attempt or to protect minority shareholders in the event of a change-of-control transaction may be limited. Therefore, our shareholders may not be protected in the same degree in a public takeover offer or a change-of-control transaction as are shareholders in a Swiss company listed in Switzerland. U.S. shareholders may not be able to obtain judgments or enforce civil liabilities against us or our executive officers or members of our board of directors. We are organized under the laws of Switzerland and our registered office and domicile is located in Rolle, Canton of Vaud, Switzerland. Moreover, a number of our directors and executive officers are not residents of the United States, and all or a substantial portion of the assets of such persons are located outside the United States. As a result, it may not be possible for investors to effect service of process within the United States upon us or upon such persons or to enforce against them judgments obtained in U.S. courts, including judgments in actions predicated upon the civil liability provisions of the federal securities laws of the United States. We have been advised by our Swiss counsel that there is doubt as to the enforceability in Switzerland of original actions, or in actions for enforcement of judgments of U.S. courts, of civil liabilities to the extent solely predicated upon the U.S. federal and state securities laws. Original actions against persons in Switzerland based solely upon the federal or state securities laws are governed, among other things, by the principles set forth in the Swiss Federal Act on Private International Law (the “PILA”). This statute provides that the application of provisions of non-Swiss law by the courts in Switzerland shall be precluded if the result is incompatible with Swiss public policy (ordre public). Also, certain mandatory provisions of Swiss law may be applicable regardless of any other law that would otherwise apply. Switzerland and the United States do not have a treaty providing for reciprocal recognition and enforcement of judgments in civil and commercial matters. The recognition and enforcement of a judgment of the courts of the United States in Switzerland is governed by the principles set forth in the PILA. This statute provides in principle that a judgment rendered by a non-Swiss court may be enforced in Switzerland only if: •the non-Swiss court had jurisdiction pursuant to the PILA; •the judgment of such non-Swiss court has become final and non-appealable; 47 Table of Contents •the judgment does not contravene Swiss public policy; •the court procedures and the service of documents leading to the judgment were in accordance with the due process of law; and •no proceeding involving the same parties and the same subject matter was first brought in Switzerland, or adjudicated in Switzerland, or was earlier adjudicated in a third state, and this decision is recognizable in Switzerland. Anti-takeover provisions in our articles of association could make an acquisition of us, which may be beneficial to our shareholders, more difficult. Our articles of association contain provisions that may have the effect of discouraging, delaying or preventing a change in control of us that shareholders may consider favorable, including transactions in which our shareholders may receive a premium for their shares. Our articles of association include provisions that: •in certain cases, allow our board of directors to place up to 33,199,082 ordinary shares and rights to acquire an additional 33,199,082 ordinary shares with affiliates or third parties, without existing shareholders having statutory pre-emptive rights in relation to this share placement; •allow our board of directors not to record any acquirer of ordinary shares, or several acquirers acting in concert, in our share register as a shareholder with voting rights with respect to more than 15% of our share capital as set forth in the commercial register; •limit the exercise of voting rights by shareholders, acting alone or in concert with others, to a maximum of 15% of the share capital recorded in the commercial register; •limit the size of our board of directors to eight members; and •require two-thirds of the votes represented at a general meeting of the shareholders for amending or repealing most of the above-mentioned authorizations to place shares as well as the above-mentioned voting and recording restrictions, for amending the provision setting a maximum board size or providing for indemnification of our directors and members of our executive committee and for removing the chairman or any member of the board of directors before the end of his or her term of office. These and other provisions, alone or together, could delay or prevent takeovers and changes in control. See “Item 10. Additional Information—Memorandum and Articles of Association.” These provisions could also limit the price that investors might be willing to pay in the future for our ordinary shares, thereby depressing the market price of our ordinary shares. There can be no assurance that we were not a passive foreign investment company for any taxable year, which could subject U.S investors in our ordinary shares to significant adverse U.S. federal income tax consequences. Under the Internal Revenue Code of 1986, as amended (the “Code”), we will be a passive foreign investment company (“PFIC”), for any taxable year in which, after the application of certain look-through rules with respect to subsidiaries, either (i) 75% or more of our gross income consists of “passive income” or (ii) 50% or more of the average quarterly value of our assets consists of assets that produce, or are held for the production of, “passive income” (including cash). Passive income generally includes dividends, interest, certain non-active rents and royalties, and capital gains. Cash is generally characterized as a passive asset for these purposes. Goodwill is generally characterized as a non-passive or passive asset based on the nature of the income produced in the activity to which the goodwill is attributable. The extent to which our goodwill should be characterized as a non-passive asset is not entirely clear. We hold a substantial amount of cash, and while this continues to be the case our PFIC status for any taxable year will depend largely on the value of our goodwill and the characterization of our goodwill as passive or non-passive. The value of our goodwill for any taxable year may be determined in large part by reference to the average of our market capitalization for that year. Although we believe that we were a PFIC for our 2022 taxable year, based on the nature of our operations and assets, as well as certain estimates as to our income 48 Table of Contents and the relative values of our assets during our 2023, 2024 and 2025 taxable years, we believe that we were not a PFIC for our 2023, 2024 and 2025 taxable years (subject to the discussion in the next paragraph with respect to U.S. Holders who held our ordinary shares during our 2022 taxable year). There can be no assurance that the IRS will agree with our conclusion, however. If we are a PFIC for any taxable year during which a U.S. investor holds ordinary shares, we generally will continue to be treated as a PFIC with respect to that U.S. investor for all succeeding years during which the U.S. investor holds ordinary shares, even if we cease to meet the threshold requirements for PFIC status. Accordingly, since we believe that we were a PFIC for our 2022 taxable year, we believe that we will remain a PFIC with respect to a U.S. Holder that held our ordinary shares during our 2022 taxable year unless certain mitigating steps were taken. For further discussion, see “Item 10. Additional Information—. Taxation—Material U.S. Federal Income Tax Consequences for U.S. Holders.” If we are deemed to be a PFIC with respect to a particular U.S. investor, such U.S. investor may be subject to adverse U.S. federal income tax consequences, including (i) the treatment of all or a portion of any gain on disposition as ordinary income; (ii) the application of a deferred interest charge on such gain and the receipt of certain dividends; and (iii) compliance with certain reporting requirements. A “mark-to-market” or “qualified electing fund” (“QEF”) election may be available that will alter the consequences of PFIC status if our ordinary shares are regularly traded on a qualified exchange. For further discussion, see “Item 10. Additional Information—E. Taxation—Material U.S. Federal Income Tax Consequences for U.S. Holders.” Risks Related to Our Status Under U.S. Securities Laws We are a foreign private issuer, and, as a result, we are not subject to certain rules and obligations that are applicable to a U.S. domestic public company and are not subject to certain Nasdaq corporate governance listing standards that are applicable to a Nasdaq-listed U.S. domestic public company. We report under the Exchange Act as a non-U.S. company with foreign private issuer status. Because we qualify as a foreign private issuer under the Exchange Act and although we intend to furnish quarterly financial information to the SEC, we are exempt from certain provisions of the Exchange Act that are applicable to U.S. domestic public companies, including (i) the sections of the Exchange Act regulating the solicitation of proxies, consents or authorizations in respect of a security registered under the Exchange Act; (ii) the sections of the Exchange Act imposing liability for insiders who profit from trades made in a short period of time; and (iii) the rules under the Exchange Act requiring the filing with the SEC of quarterly reports on Form 10-Q containing unaudited financial and other specified information, or current reports on Form 8-K upon the occurrence of specified significant events. In addition, foreign private issuers are not required to file their annual report on Form 20-F until four months after the end of each financial year, while U.S. domestic issuers are required to file their annual report on Form 10-K in less time. Foreign private issuers are also exempt from the Regulation Fair Disclosure, aimed at preventing issuers from making selective disclosures of material information. Furthermore, because we are a foreign private issuer, we comply with our home country governance requirements and certain exemptions thereunder, rather than complying with certain of the Nasdaq corporate governance listing standards that are applicable to U.S. companies listed on Nasdaq. For example, we are exempt from Nasdaq listing standards that require a listed U.S. company to have (i) a majority of the board of directors consist of independent directors, (ii) regularly scheduled executive sessions with only independent directors and (iii) a compensation committee and a nomination and corporate governance committee consisting entirely of independent directors. Furthermore, Nasdaq listing standards generally require Nasdaq-listed U.S. companies to, among other things, seek shareholder approval for the implementation of certain equity compensation plans and issuances of securities, which we are not required to follow as a foreign private issuer. Accordingly, our shareholders may not have the same protections afforded to shareholders of companies that are not foreign private issuers. For an overview of the material differences between our governance principles and Nasdaq corporate governance listing standards, see “Item 16G—Corporate Governance.” We may lose our foreign private issuer status, which would then require us to comply with the Exchange Act’s domestic reporting regime and cause us to incur significant legal, accounting and other expenses. We qualify as a foreign private issuer, and therefore we are not required to comply with all of the periodic disclosure and current reporting requirements of the Exchange Act applicable to U.S. domestic issuers. We may 49 Table of Contents no longer be a foreign private issuer as of June 30, 2026, which would require us to comply with all of the periodic disclosure and current reporting requirements of the Exchange Act applicable to U.S. domestic issuers, as of January 1, 2027. In that case, we would be required to comply with the Exchange Act reporting and other requirements applicable to U.S. domestic issuers, which are more detailed and extensive than the requirements for foreign private issuers. We would also be required to make changes in our corporate governance practices in accordance with various SEC and stock exchange rules. The regulatory and compliance costs to us under U.S. securities laws, if we are required to comply with the reporting requirements applicable to a U.S. domestic issuer, may be significantly higher than the cost we would incur as a foreign private issuer. As a result, we expect that a loss of foreign private issuer status would increase our legal and financial compliance costs and would make some activities highly time-consuming and costly. We also expect that if we were required to comply with the rules and regulations applicable to U.S. domestic issuers, it would be more difficult and expensive for us to obtain director and officer liability insurance, and we may be required to accept reduced coverage or incur substantially higher costs to obtain coverage. These rules and regulations could also make it more difficult for us to retain and attract qualified members of our board of directors. We are an emerging growth company and will lose this status by the end of 2026. The additional obligations we will face upon losing emerging growth company status could materially increase our costs and compliance burden. We are currently an "emerging growth company," as defined in the Jumpstart Our Business Startups Act of 2012 (the JOBS Act). We cannot predict if investors will find our ordinary shares less attractive because we are an emerging growth company and rely on exemptions available to emerging growth companies. If some investors find our ordinary shares less attractive as a result, there may be a less active trading market for our ordinary shares and the price of our ordinary shares may be more volatile. We expect to lose our emerging growth company status by December 31, 2026. When we lose emerging growth company status, we will be required to comply with Section 404(b) of the Sarbanes-Oxley Act, which will require our independent registered public accounting firm to attest to and report on the effectiveness of our internal control over financial reporting. This auditor attestation requirement will significantly increase our annual audit costs, and will require us to dedicate substantial additional internal resources, including finance, accounting, IT and internal audit personnel, to support the auditor's work, document our controls more extensively and implement any enhancements to our control environment that may be necessary to support a favorable attestation opinion. An adverse opinion on the effectiveness of our internal control over financial reporting could result in loss of investor confidence, stock price declines, increased scrutiny from regulators, heightened risk of securities litigation alleging inadequate financial controls or unreliable financial reporting, and difficulty accessing capital markets on favorable terms. Even after we lose emerging growth company status, if we no longer qualify as a foreign private issuer, we may still qualify as a "smaller reporting company," which, under certain circumstances, would allow us to take advantage of some of the same exemptions from disclosure requirements, including not being required to comply with the auditor attestation requirements of Section 404(b) of the Sarbanes-Oxley Act (if we have less than $100.0 million in annual revenues and a public float of less than $700.0 million) and reduced disclosure obligations in our periodic reports and proxy statements. However, we cannot predict whether we would qualify as a smaller reporting company if we lost our foreign private issuer status. Risks Related to ESG and Sustainability Our public commitments, targets, and statements relating to environmental, social, and governance ("ESG") matters may expose us to reputational, regulatory, legal, and financial risks. We have made, and expect to continue to make, public statements, disclosures, and commitments relating to environmental, social, and governance ("ESG") matters, including statements regarding our greenhouse gas ("GHG") emissions profile, climate-related targets, sustainability strategy, workforce practices, and corporate governance. These disclosures may appear in a variety of contexts, including in our annual report, in standalone sustainability-related publications, in regulatory filings, and in communications with customers, investors, employees, and other stakeholders. The following risks relate to such disclosures and commitments: 50 Table of Contents Risk of Non-Achievement of Environmental Targets. We have established near-term GHG emissions reduction targets, including both absolute Scope 2 and emissions-intensity-based Scope 3 targets, validated by an independent third-party standard-setting body. There is no guarantee that we will achieve these targets within the stated timeframes or at all. Achievement depends on a number of factors outside our control or that may change materially over time, including: •the availability, cost, and quality of renewable energy sources in the markets in which we operate, including the availability of market-based instruments (such as renewable energy certificates and power purchase agreements) sufficient to support our Scope 2 reduction commitments; •the extent to which our operational footprint, facility portfolio, cloud infrastructure usage, and business travel patterns evolve in ways that differ from current assumptions; •the accuracy, completeness, and evolving methodology of our Scope 3 emissions data, a significant portion of which is derived from third-party suppliers and other value-chain participants over whom we have limited or no direct control and who may not themselves achieve emissions reductions commensurate with our targets; •the fact that our Scope 3 target is expressed as an emissions-intensity metric (per unit of economic value added) rather than an absolute reduction target, meaning that our total absolute Scope 3 emissions may increase even if we achieve our intensity target, particularly if our business grows; and •changes to the criteria, methodologies, or recommendations of any third-party standard-setting body whose framework we have adopted, which may require us to revise, resubmit, or reassess our targets or to adopt more stringent or differently structured objectives. Risk of Evolving ESG Standards and Regulatory Requirements. The regulatory and standards landscape governing ESG-related disclosures, GHG emissions reporting, and sustainability practices is evolving, and, in some contexts, diverging, rapidly across multiple jurisdictions, including the United States, the European Union, and Switzerland. Changes in applicable laws, regulations, disclosure standards, or the criteria of voluntary standard-setting bodies may affect the scope, methodology, or comparability of our ESG disclosures and the adequacy of our stated commitments relative to then-current expectations. These may include developments relating to the U.S. Securities and Exchange Commission's climate disclosure framework, the European Union's Corporate Sustainability Reporting Directive and European Sustainability Reporting Standards, the Swiss Code of Obligations non-financial reporting requirements, and other applicable national or international frameworks. Compliance with any new or expanded ESG disclosure or compliance requirements could result in significant additional costs and management burden. Risk of Inconsistency Between Public Statements and Actual Performance. Our ESG-related disclosures, including those regarding our environmental commitments, workforce practices, and sustainability initiatives, may be scrutinized for consistency with our actual operational and financial performance. If our public ESG statements are found to be inaccurate, incomplete, overstated, or inconsistent with our actual performance, disclosures in other documents, or information available from third parties, we may be subject to reputational harm, loss of customer or investor confidence, private litigation under applicable securities laws, or regulatory investigation or enforcement action by the SEC or other authorities. Risk of Changing Investor, Customer, and Regulatory Expectations. Investor, customer, employee, and regulatory expectations regarding corporate ESG performance and disclosure continue to evolve and, in some contexts, diverge across jurisdictions. We may face pressure from customers, investors, proxy advisory firms, or other stakeholders to adopt more ambitious, differently structured, or more rapidly achievable ESG commitments than those we have established. Conversely, in certain jurisdictions and regulatory environments, ESG-focused disclosures and commitments have attracted increased legal and political scrutiny, including challenges to the use of environmental criteria in corporate strategy and to the accuracy or materiality of ESG-related claims. Our ESG strategy may not satisfy all constituencies, and we may face reputational or business consequences regardless of our actual ESG performance. Risk to Reputation and Business from Non-Achievement or Perceived Non-Achievement. Our reputation among current and prospective customers, investors, business partners, employees, healthcare system partners, and other stakeholders is an important asset to our business. If we fail to meet, are perceived to have 51 Table of Contents failed to meet, or are required to revise or withdraw our stated ESG commitments, whether due to operational challenges, changes in business scale or strategy, data limitations, changes in applicable methodologies, or other factors, our reputation and brand may be adversely affected, which could result in loss of revenue, increased cost of capital, difficulty attracting and retaining qualified personnel, and other material adverse consequences for our business and financial condition. Risk of ESG-Related Contractual Obligations and Commercial Consequences. Certain of our existing and prospective business partners, customers, and counterparties, including but not limited to hospital systems, healthcare networks, pharmaceutical companies, and other institutional customers, incorporate ESG-related requirements into their commercial agreements and procurement processes, or evaluate potential partners against ESG criteria as part of their own supply chain due diligence and sustainability reporting obligations. Such requirements may include public disclosure of GHG emission reduction targets, representations or warranties regarding our GHG emissions profile, progress toward stated emissions reduction targets, adherence to recognized sustainability frameworks, or compliance with applicable environmental, labor, or governance standards. Where our commercial agreements contain ESG-related representations, covenants, or performance obligations, our failure to meet those obligations, or changes in our ESG commitments, performance, or public disclosures that give rise to a claim of breach, could result in contractual liability, termination rights, financial penalties, loss of preferred vendor status, or exclusion from future procurement processes. Even in the absence of express ESG contractual provisions, customers and partners may decline to renew or expand their relationships with us, or may seek to renegotiate commercial terms, if our ESG performance or disclosures do not meet their expectations or the expectations of their own stakeholders and regulators. As ESG-related contractual requirements become more prevalent, including as a result of supply chain transparency legislation and the proliferation of corporate sustainability commitments among our customer base, the scope and enforceability of ESG-related commercial obligations to which we are or may become subject may increase. There can be no assurance that we will be able to satisfy all such requirements or that our failure to do so will not have an adverse effect on our revenue, customer relationships, and business prospects. Risk of Increased Costs and Capital Requirements. Achieving our stated ESG targets and implementing the operational, supply chain, and governance initiatives underlying our sustainability strategy may require, and may over time require at increasing scale, significant investment, including in renewable energy procurement, supplier engagement programs, emissions measurement infrastructure, and enhanced ESG reporting systems and controls. These costs may be material, may not result in commensurate benefits to our business, and may divert resources from other strategic priorities. 52 Table of Contents