Financial Data and Key Metrics Changes - For the full-year 2023, the company generated $11 million in revenue, up 62% compared to 2022, with Q4 revenue of $2.7 million, an 89% increase year-over-year [28][41] - Gross profit for the full-year was $4.8 million, compared to $0.9 million in 2022, with a gross margin of 43.1%, up 30 percentage points from the prior year [22][41] - The net loss for Q4 was $10.7 million, equating to a net loss of $0.15 per share, an improvement from a net loss of $13.1 million or $0.19 per share in the same period of the prior year [42] Business Line Data and Key Metrics Changes - The company sold seven Swoop systems in Q4, predominantly through U.S. direct sales, achieving a record average selling price [29] - The implementation programs run by the clinical support team have resulted in strong user advocates across various hospital departments [30] Market Data and Key Metrics Changes - The company is focusing on expanding its commercial efforts into select international markets, having received regulatory clearances such as CE and UKCA approval for its latest AI-powered software [19][71] - There is significant demand for brain MRI technology due to new FDA requirements for monitoring MRIs for patients on amyloid-targeting therapies [11] Company Strategy and Development Direction - The company is committed to three strategic pillars: innovation, clinical evidence, and commercialization, with a focus on expanding its Alzheimer's program [9][15] - The company plans to maintain a robust cadence of innovation to support the use of Swoop, particularly in stroke and Alzheimer's [9][17] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about the growth opportunities in Alzheimer's care, highlighting the potential for the Swoop system to improve access and equity in treatment [32][35] - The company expects to achieve revenue in the range of $12 million to $15 million for 2024, with a first-quarter expectation of over $3 million [43] Other Important Information - The company has initiated a new study called Care PMR to assess the use of the Swoop system in detecting ARIA complications in Alzheimer's patients [37] - The company has a cash runway into early 2026, with total cash burn expectations of approximately $40 million for 2024, down from $42 million in 2023 [44][60] Q&A Session Summary Question: What led to the revenue shortfall in Q4? - Management indicated that variability in deal closures affected Q4 performance, but they are confident in the progress made in Q1 [64] Question: Can you explain the guidance for 2024 revenue? - Management provided a range of $12 million to $15 million, emphasizing steady progress in adoption and commercialization while investing in R&D and clinical evidence [50][72] Question: How does the company plan to manage cash flow and burn rate? - The company is focused on maintaining spending discipline while investing in growth initiatives, with a projected cash burn of approximately $40 million for 2024 [53][60]

Hyperfine, Inc. (NASDAQ:HYPR) Q3 2023 Earnings Call November 9, 2023 4:30 PM ET Company Participants Marissa Bych - Investor Relations Maria Sainz - President and Chief Executive Officer Brett Hale - Chief Administrative Officer and Chief Financial Officer Conference Call Participants Neil Chatterji - B. Riley Operator Good afternoon, and welcome to Hyperfine's Third Quarter 2023 Earnings Conference Call. Currently, all participants are in a listen-only mode. We will be facilitating a question-and-answer se ...

The Swoop system expands the fast growing (6% annual CAGR) $35 billion global imaging market. CONFIDENTIAL – PROPERTY OF HYPERFINE, INC. ©2023, All rights reserved. 10 Deep Foundation to Drive Long-term Success Rapid Innovation Clinical Proof Regulatory Excellence Ecosystem of Support 11 A First for Brain Health | --- | --- | |---------------------|----------------------------------------------------| | | | | | | | Hyperfine, Inc. has | | | 01 | reimagined brain imaging | | with the | Swoop system — | | | a ...

[Cautionary Statement Regarding Forward-Looking Statements](index=3&type=section&id=CAUTIONARY%20STATEMENT%20REGARDING%20FORWARD-LOOKING%20STATEMENTS) This report contains forward-looking statements based on management's beliefs and assumptions, subject to **inherent risks, uncertainties, and assumptions** - This report contains forward-looking statements based on management's beliefs and assumptions, which are subject to **inherent risks, uncertainties, and assumptions**. These statements are **not guarantees of performance** and readers should not place **undue reliance** on them[9](index=9&type=chunk)[12](index=12&type=chunk) - Forward-looking statements include, but are not limited to, those concerning **product development, commercialization, regulatory approval, technology acquisition, competition, market size, pricing, financial performance, and global economic factors**[11](index=11&type=chunk)[13](index=13&type=chunk) [PART I — FINANCIAL INFORMATION](index=5&type=section&id=PART%20I%20%E2%80%94%20FINANCIAL%20INFORMATION) This section provides the Company's unaudited condensed consolidated financial information [Item 1. Financial Statements](index=5&type=section&id=Item%201.%20Financial%20Statements) This section presents the unaudited condensed consolidated financial statements of Hyperfine, Inc. and its subsidiaries, prepared in accordance with U.S. GAAP [Condensed Consolidated Balance Sheets (unaudited)](index=5&type=section&id=Condensed%20Consolidated%20Balance%20Sheets%20(unaudited)) This statement provides a snapshot of the Company's assets, liabilities, and equity at specific points in time Condensed Consolidated Balance Sheets (in thousands) | Metric | September 30, 2023 (in thousands) | December 31, 2022 (in thousands) | | :-------------------------- | :-------------------------------- | :-------------------------------- | | Cash and cash equivalents | $85,424 | $117,472 | | Total current assets | $98,215 | $128,664 | | Total assets | $103,064 | $134,051 | | Total current liabilities | $8,211 | $8,803 | | Total liabilities | $9,297 | $10,329 | | Total stockholders' equity | $93,767 | $123,722 | [Condensed Consolidated Statements of Operations and Comprehensive Loss (unaudited)](index=6&type=section&id=Condensed%20Consolidated%20Statements%20of%20Operations%20and%20Comprehensive%20Loss%20(unaudited)) This statement details the Company's revenues, expenses, and net loss over specific reporting periods Metric (in thousands) | Metric (in thousands) | Three Months Ended Sep 30, 2023 | Three Months Ended Sep 30, 2022 | Nine Months Ended Sep 30, 2023 | Nine Months Ended Sep 30, 2022 | | :-------------------- | :------------------------------ | :------------------------------ | :----------------------------- | :----------------------------- | | Total sales | $2,330 | $2,348 | $8,346 | $5,390 | | Gross margin | $1,124 | $688 | $3,723 | $607 | | Total operating expenses | $12,883 | $13,970 | $40,209 | $60,852 | | Loss from operations | $(11,759) | $(13,282) | $(36,486) | $(60,245) | | Net loss | $(10,757) | $(13,171) | $(33,554) | $(60,105) | | Net loss per share (basic & diluted) | $(0.15) | $(0.19) | $(0.47) | $(0.85) | [Condensed Consolidated Statements of Changes in Stockholders' Equity (unaudited)](index=7&type=section&id=Condensed%20Consolidated%20Statements%20of%20Changes%20in%20Stockholders'%20Equity%20(unaudited)) This statement outlines changes in the Company's equity components, including net loss and stock-based compensation Metric (in thousands) | Metric (in thousands) | Balance, Dec 31, 2022 | Balance, Sep 30, 2023 | | :-------------------- | :-------------------- | :-------------------- | | Total Stockholders' Equity | $123,722 | $93,767 | | Net loss (9 months) | N/A | $(33,554) | | Stock-based compensation expense (9 months) | N/A | $3,453 | [Condensed Consolidated Statements of Cash Flows (unaudited)](index=8&type=section&id=Condensed%20Consolidated%20Statements%20of%20Cash%20Flows%20(unaudited)) This statement summarizes the Company's cash inflows and outflows from operating, investing, and financing activities Cash Flow Activity (in thousands) | Cash Flow Activity (in thousands) | Nine Months Ended Sep 30, 2023 | Nine Months Ended Sep 30, 2022 | | :-------------------------------- | :----------------------------- | :----------------------------- | | Net cash used in operating activities | $(31,871) | $(56,994) | | Net cash used in investing activities | $(546) | $(427) | | Net cash provided by financing activities | $146 | $2 | | Net decrease in cash, cash equivalents, and restricted cash | $(32,271) | $(57,419) | | Cash, cash equivalents and restricted cash, end of period | $85,972 | $133,741 | [Notes to Condensed Consolidated Financial Statements (unaudited)](index=9&type=section&id=Notes%20to%20Condensed%20Consolidated%20Financial%20Statements%20(unaudited)) These notes provide detailed information on the Company's organization, accounting policies, revenue, and other financial disclosures [1. Organization and Description of Business](index=9&type=section&id=1.%20ORGANIZATION%20AND%20DESCRIPTION%20OF%20BUSINESS) This section describes Hyperfine, Inc.'s core business, its flagship Swoop® system, and recent program changes - Hyperfine, Inc. is an innovative health technology business focused on revolutionizing patient care globally through its **Swoop® Portable MR Imaging® System**, an **ultra-low-field (ULF)** magnetic resonance diagnostic brain imaging device[26](index=26&type=chunk) - The **Swoop® system** received initial **510(k) clearance** from the U.S. FDA in **2020**, with additional **AI-powered software updates cleared in February and October 2023**, significantly improving image quality[26](index=26&type=chunk) - The Company suspended its **Liminal program**, which focused on developing a device to non-invasively measure key vital signs in the brain, in **December 2022**[26](index=26&type=chunk) [2. Summary of Significant Accounting Policies](index=9&type=section&id=2.%20SUMMARY%20OF%20SIGNIFICANT%20ACCOUNTING%20POLICIES) This section outlines the accounting principles and policies used in preparing the consolidated financial statements - The condensed consolidated financial statements are prepared in accordance with **U.S. GAAP** and include the accounts of Hyperfine, Inc. and its subsidiaries[27](index=27&type=chunk) - The Company relies on **single-source manufacturers and suppliers**, and disruptions could negatively impact its business[32](index=32&type=chunk) - The Company operates as a **single reportable segment (Legacy Hyperfine)** and adopted **ASU 2016-13 (Credit Losses)** effective **January 1, 2023**, with **no material impact**[35](index=35&type=chunk)[41](index=41&type=chunk) [3. Revenue Recognition](index=12&type=section&id=3.%20REVENUE%20RECOGNITION) This section details the Company's revenue streams, disaggregated by product type, and remaining performance obligations Disaggregated Revenue (in thousands) | Product Type | Three Months Ended Sep 30, 2023 | Three Months Ended Sep 30, 2022 | Nine Months Ended Sep 30, 2023 | Nine Months Ended Sep 30, 2022 | | :----------- | :------------------------------ | :------------------------------ | :----------------------------- | :----------------------------- | | Device | $1,728 | $1,945 | $6,670 | $4,305 | | Service | $602 | $403 | $1,676 | $1,085 | | **Total Revenue** | **$2,330** | **$2,348** | **$8,346** | **$5,390** | - Revenue recognized from deferred revenue balances at the beginning of the period was **$477 thousand** for the three months and **$1,119 thousand** for the nine months ended September 30, 2023[48](index=48&type=chunk) - As of September 30, 2023, remaining performance obligations amounted to **$5,499 thousand**, with approximately **11%** expected to be recognized in fiscal year 2023 and **89%** in fiscal year 2024 and thereafter[53](index=53&type=chunk) [4. Fair Value of Financial Instruments](index=13&type=section&id=4.%20FAIR%20VALUE%20OF%20FINANCIAL%20INSTRUMENTS) This section explains the Company's fair value measurement hierarchy for financial instruments - The Company measures fair value using a **three-tier hierarchy**, with all classified assets being **Level 1** (quoted prices in active markets)[55](index=55&type=chunk)[57](index=57&type=chunk) - As of September 30, 2023, **$85.96 million** in money market funds, demand deposit, and savings accounts were classified as **Level 1 assets**[59](index=59&type=chunk) [5. Inventories](index=14&type=section&id=5.%20INVENTORIES) This section provides a breakdown of the Company's inventory components, including raw materials and finished goods Inventories (in thousands) | Category | September 30, 2023 | December 31, 2022 | | :------------ | :----------------- | :---------------- | | Raw materials | $2,725 | $2,241 | | Finished goods | $4,215 | $2,381 | | **Total Inventories** | **$6,940** | **$4,622** | [6. Property and Equipment, Net](index=14&type=section&id=6.%20PROPERTY%20AND%20EQUIPMENT,%20NET) This section details the Company's property and equipment, net of accumulated depreciation and amortization Property and Equipment, Net (in thousands) | Category | September 30, 2023 | December 31, 2022 | | :------------------------ | :----------------- | :---------------- | | Total historical cost | $6,106 | $5,570 | | Less: Accumulated depreciation and amortization | $(2,948) | $(2,322) | | **Property and equipment, net** | **$3,158** | **$3,248** | - Depreciation expense was **$278 thousand** for the three months and **$791 thousand** for the nine months ended September 30, 2023[61](index=61&type=chunk) [7. Accrued Expenses and Other Current Liabilities](index=15&type=section&id=7.%20ACCRUED%20EXPENSES%20AND%20OTHER%20CURRENT%20LIABILITIES) This section itemizes the Company's accrued expenses and other current liabilities at period-end Accrued Expenses and Other Current Liabilities (in thousands) | Category | September 30, 2023 | December 31, 2022 | | :------------------------ | :----------------- | :---------------- | | Bonus | $2,340 | $2,674 | | Contracted services | $964 | $1,127 | | Legal fees | $284 | $261 | | Payroll and related benefits | $1,290 | $1,876 | | Other | $375 | $38 | | **Total** | **$5,253** | **$5,976** | [8. Equity Incentive Plan](index=15&type=section&id=8.%20EQUITY%20INCENTIVE%20PLAN) This section outlines the Company's stock option and restricted stock unit activity and related compensation expense Stock Option Activity (Number of Options) | Activity | Nine Months Ended Sep 30, 2023 | | :------------------------ | :----------------------------- | | Outstanding at January 1, 2023 | 10,719,564 | | Granted | 4,974,648 | | Exercised | (160,787) | | Forfeited / Cancelled / Expired | (879,190) | | **Outstanding at September 30, 2023** | **14,654,235** | Restricted Stock Unit (RSU) Activity (Number of RSUs) | Activity | Nine Months Ended Sep 30, 2023 | | :------------------------ | :----------------------------- | | Outstanding at January 1, 2023 | 1,585,359 | | Granted | 29,000 | | Vested | (754,679) | | Forfeited | (173,165) | | **Outstanding at September 30, 2023** | **686,515** | Stock-Based Compensation Expense by Functional Line Item (in thousands) | Category | Three Months Ended Sep 30, 2023 | Three Months Ended Sep 30, 2022 | Nine Months Ended Sep 30, 2023 | Nine Months Ended Sep 30, 2022 | | :------------------------ | :------------------------------ | :------------------------------ | :----------------------------- | :----------------------------- | | Cost of sales | $26 | $34 | $77 | $85 | | Research and development | $371 | $339 | $805 | $1,851 | | Sales and marketing | $44 | $79 | $139 | $291 | | General and administrative | $753 | $(2,806) | $2,432 | $6,632 | | **Total** | **$1,194** | **$(2,354)** | **$3,453** | **$8,859** | [9. Net Loss Per Share](index=16&type=section&id=9.%20NET%20LOSS%20PER%20SHARE) This section presents the calculation of basic and diluted net loss per common share and anti-dilutive shares Net Loss Per Common Share (Basic and Diluted) | Metric | Three Months Ended Sep 30, 2023 | Three Months Ended Sep 30, 2022 | Nine Months Ended Sep 30, 2023 | Nine Months Ended Sep 30, 2022 | | :------------------------ | :------------------------------ | :------------------------------ | :----------------------------- | :----------------------------- | | Net Loss (in thousands) | $(10,757) | $(13,171) | $(33,554) | $(60,105) | | Weighted-average shares | 71,464,315 | 70,509,639 | 71,178,769 | 70,398,103 | | **Basic and dilutive net loss per share** | **$(0.15)** | **$(0.19)** | **$(0.47)** | **$(0.85)** | Anti-Dilutive Common Equivalent Shares | Category | September 30, 2023 | September 30, 2022 | | :------------------------ | :----------------- | :----------------- | | Outstanding options | 14,654,235 | 8,544,480 | | Outstanding RSUs | 686,515 | 2,037,517 | | Earn-Out Shares | 9,357,835 | 9,450,862 | | **Total anti-dilutive common equivalent shares** | **24,698,585** | **20,032,859** | [10. Income Taxes](index=17&type=section&id=10.%20INCOME%20TAXES) This section discusses the Company's income tax rate and the valuation allowance against deferred tax assets - The Company's estimated annual effective income tax rate was **0.0%** for the three and nine months ended September 30, 2023 and 2022[73](index=73&type=chunk) - A **full valuation allowance** has been recorded against net deferred tax assets, as management believes it is more likely than not that the benefits will not be realized[74](index=74&type=chunk) [11. Related Party Transactions](index=18&type=section&id=11.%20RELATED%20PARTY%20TRANSACTIONS) This section discloses transactions with related parties, including sublease agreements and service arrangements - The Company subleases office and lab space from **4Catalyzer Corporation (4C)**, a related party, paying approximately **$122 thousand** (3 months) and **$255 thousand** (9 months) in rent during 2023[75](index=75&type=chunk) - The Company incurred expenses from **4C** of **$26 thousand** (3 months) and **$71 thousand** (9 months) in 2023 for services under a **Master Services Agreement**[78](index=78&type=chunk) - **Technology and Services Exchange Agreements (TSEA)** exist with other participant companies controlled by the Rothbergs, allowing use of non-core technologies[79](index=79&type=chunk) [12. Commitments and Contingencies](index=19&type=section&id=12.%20COMMITMENTS%20AND%20CONTINGENCIES) This section details the Company's commitments, grant funding, and absence of material legal proceedings - The Company did not make any matching contributions to its **401(k) plan** for the three and nine months ended September 30, 2023 or 2022[80](index=80&type=chunk) - The Company received an additional **$3.35 million grant** from the **Bill & Melinda Gates Foundation (BMGF)** in **May 2023** to develop a scalable approach to measuring neurodevelopment via low-field MRI in children in low-to-middle income countries[81](index=81&type=chunk) - The Company is **not currently a party to any material legal proceedings** and has **not recorded any liability** under indemnification provisions[84](index=84&type=chunk)[85](index=85&type=chunk) [13. Subsequent Events](index=20&type=section&id=13.%20SUBSEQUENT%20EVENTS) This section confirms the evaluation of events occurring after the balance sheet date for disclosure requirements - The Company has evaluated subsequent events through the financial statement issuance date and determined **no events require disclosure**[87](index=87&type=chunk) [Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations](index=21&type=section&id=Item%202.%20Management's%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) This section provides management's perspective on the Company's financial condition and results of operations, including an overview of the business, key performance metrics, factors affecting results, and a detailed analysis of financial performance and liquidity [Overview](index=21&type=section&id=Overview) This section introduces Hyperfine's mission, the Swoop® system's market impact, and recent organizational changes - Hyperfine's mission is to revolutionize patient care globally with its **Swoop® Portable MR Imaging® System**, an **ultra-low-field (ULF)** magnetic resonance diagnostic brain imaging device[89](index=89&type=chunk) - The **Swoop® system** addresses the increasing demand for MR imaging, aiming to expand the **$35 billion imaging market** by providing accessible, cost-effective MRI in various care settings[90](index=90&type=chunk)[91](index=91&type=chunk) - The Company suspended its **Liminal brain sensing platform** development and underwent an **organizational restructuring** in **December 2022**, terminating approximately **13% of its global workforce** to decrease costs[95](index=95&type=chunk) [Key Performance Metrics](index=22&type=section&id=Key%20Performance%20Metrics) This section highlights the total installed base of Swoop® systems as a crucial indicator of business growth - The **total installed base of Swoop® systems** is a key metric for business growth, comprising commercial, grant fulfillment, and research units[97](index=97&type=chunk) Total Swoop® Systems Installed Units | Category | As of September 30, 2023 | As of September 30, 2022 | | :------------------------ | :----------------------- | :----------------------- | | Commercial system units | 91 | 57 | | Grant fulfillment units | 21 | 20 | | Research units | 21 | 23 | | **Total Installed Units** | **133** | **100** | [Factors Affecting Results of Operations](index=23&type=section&id=Factors%20Affecting%20Results%20of%20Operations) This section discusses the impact of technical innovation, commercialization strategies, and international expansion on financial performance - The Company continuously invests in **technical innovation**, improving **AI-powered image quality** and developing new imaging applications to broaden clinical uses and explore the **Swoop® system's** role as a clinical decision support platform[101](index=101&type=chunk) - Commercialization efforts are primarily focused on the **United States**, building direct sales and field support to increase adoption and routine use in hospital systems[102](index=102&type=chunk) - International expansion includes commercialization in **Canada, Australia, New Zealand, and Pakistan**, with grant funding from the **BMGF** supporting deployments in low-to-middle income countries[103](index=103&type=chunk)[104](index=104&type=chunk) [Results of Operations](index=24&type=section&id=Results%20of%20Operations) This section provides a detailed analysis of the Company's revenues, costs, expenses, and net loss for the reporting periods Consolidated Statement of Operations Summary (in thousands) | Metric | Three Months Ended Sep 30, 2023 | Three Months Ended Sep 30, 2022 | Change % (3M) | Nine Months Ended Sep 30, 2023 | Nine Months Ended Sep 30, 2022 | Change % (9M) | | :------------------------ | :------------------------------ | :------------------------------ | :------------ | :----------------------------- | :----------------------------- | :------------ | | Device Sales | $1,728 | $1,945 | (11.2)% | $6,670 | $4,305 | 54.9% | | Service Sales | $602 | $403 | 49.4% | $1,676 | $1,085 | 54.5% | | **Total Sales** | **$2,330** | **$2,348** | **(0.8)%** | **$8,346** | **$5,390** | **54.8%** | | Cost of Sales | $1,206 | $1,660 | (27.3)% | $4,623 | $4,783 | (3.3)% | | Gross Margin | $1,124 | $688 | 63.37% | $3,723 | $607 | 513.34% | | Research and development | $5,739 | $7,338 | (21.8)% | $16,531 | $22,937 | (27.9)% | | General and administrative | $4,615 | $3,198 | 44.3% | $16,103 | $26,570 | (39.4)% | | Sales and marketing | $2,529 | $3,434 | (26.4)% | $7,575 | $11,345 | (33.2)% | | **Total Operating Expenses** | **$12,883** | **$13,970** | **(7.8)%** | **$40,209** | **$60,852** | **(33.9)%** | | Loss from Operations | $(11,759) | $(13,282) | (11.5)% | $(36,486) | $(60,245) | (39.4)% | | Interest income | $1,021 | $170 | 500.6% | $2,920 | $203 | 1,338.4% | | Net Loss | $(10,757) | $(13,171) | (18.3)% | $(33,554) | $(60,105) | (44.2)% | - Device sales decreased by **$0.2 million (11.2%)** for the three months ended September 30, 2023, primarily due to decreased volume, but increased by **$2.4 million (54.9%)** for the nine months, driven by higher sales prices[106](index=106&type=chunk)[108](index=108&type=chunk) - Service sales increased by **$0.2 million (49.4%)** for the three months and **$0.6 million (54.5%)** for the nine months ended September 30, 2023, driven by an increase in commercial system units installed[107](index=107&type=chunk)[109](index=109&type=chunk) - Interest income significantly increased by **$0.9 million (500.6%)** for the three months and **$2.7 million (1,338.4%)** for the nine months ended September 30, 2023, due to higher interest rates and cash balances[120](index=120&type=chunk)[121](index=121&type=chunk) [Liquidity and Capital Resources](index=27&type=section&id=Liquidity%20and%20Capital%20Resources) This section assesses the Company's cash position, funding outlook, and cash flow from operating activities - As of September 30, 2023, the Company had cash and cash equivalents of **$85.4 million**, with an accumulated deficit of **$243.0 million**[125](index=125&type=chunk) - The Company expects to incur **significant cash burn and recurring net losses**, but anticipates existing cash and sales proceeds will fund operations for at least the **next 12 months**[125](index=125&type=chunk)[126](index=126&type=chunk) - Net cash used in operating activities decreased to **$31.9 million** for the nine months ended September 30, 2023, from **$57.0 million** in the prior year, primarily due to a lower net loss and non-cash adjustments[132](index=132&type=chunk)[133](index=133&type=chunk) [Critical Accounting Policies and Significant Judgments and Estimates](index=30&type=section&id=Critical%20Accounting%20Policies%20and%20Significant%20Judgments%20and%20Estimates) This section confirms no material changes to the Company's critical accounting policies and estimates - There have been **no material changes** to the Company's critical accounting policies and estimates as compared to those disclosed in its Annual Report on Form 10-K for the year ended December 31, 2022[143](index=143&type=chunk) [Recently Issued Accounting Pronouncements](index=30&type=section&id=Recently%20Issued%20Accounting%20Pronouncements) This section refers to disclosures regarding recently issued accounting pronouncements in the financial statement notes - A description of recently issued accounting pronouncements is provided in **Note 2** to the unaudited condensed consolidated financial statements[144](index=144&type=chunk) [Item 3. Quantitative and Qualitative Disclosures About Market Risk](index=31&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) This section outlines the Company's exposure to market risks, including interest rate risk, inflation risk, and foreign exchange risk, and management's approach to these exposures - The Company's primary market risk exposure is from fluctuations in **interest rates, inflation, and foreign exchange**[146](index=146&type=chunk) - A **0.5 percentage point decrease** in interest rates would decrease earnings before income taxes by **$0.4 million**, based on the balance sheet position at September 30, 2023[147](index=147&type=chunk) - Inflation affects manufacturing costs, and the Company may not be able to fully offset higher costs through price increases or efficiencies. Foreign exchange risk is **limited**, and **no hedging strategies** are utilized[148](index=148&type=chunk)[149](index=149&type=chunk) [Item 4. Controls and Procedures](index=31&type=section&id=Item%204.%20Controls%20and%20Procedures) This section details the evaluation of the Company's disclosure controls and procedures and reports on any changes in internal control over financial reporting - The principal executive officer and principal financial officer concluded that the Company's **disclosure controls and procedures were effective** at a reasonable assurance level as of September 30, 2023[150](index=150&type=chunk) - There were **no material changes** in the Company's internal control over financial reporting during the three months ended September 30, 2023[151](index=151&type=chunk) [PART II — OTHER INFORMATION](index=32&type=section&id=PART%20II%20%E2%80%94%20OTHER%20INFORMATION) This section contains additional information not included in the financial statements, such as legal proceedings and risk factors [Item 1. Legal Proceedings](index=32&type=section&id=Item%201.%20Legal%20Proceedings) This section confirms the Company's current status regarding legal proceedings - The Company is **not currently a party to any material legal proceedings**[153](index=153&type=chunk) [Item 1A. Risk Factors](index=32&type=section&id=Item%201A.%20Risk%20Factors) This section refers to the Company's risk factors as previously disclosed - There have been **no material changes** to the risk factors described in the Company's 2022 Annual Report on Form 10-K[154](index=154&type=chunk) [Item 2. Unregistered Sales of Equity Securities, Use of Proceeds, and Issuer Purchases of Equity Securities](index=32&type=section&id=Item%202.%20Unregistered%20Sales%20of%20Equity%20Securities,%20Use%20of%20Proceeds,%20and%20Issuer%20Purchases%20of%20Equity%20Securities) This section reports on any unregistered sales of equity securities, use of proceeds, and issuer purchases of equity securities - The Company did not have any **unregistered sales of equity securities** or **issuer purchases of equity securities** during the three months ended September 30, 2023[155](index=155&type=chunk)[156](index=156&type=chunk) [Item 3. Defaults Upon Senior Securities](index=32&type=section&id=Item%203.%20Defaults%20Upon%20Senior%20Securities) This section addresses any defaults upon senior securities - This item is **not applicable** to the Company[157](index=157&type=chunk) [Item 4. Mine Safety Disclosures](index=32&type=section&id=Item%204.%20Mine%20Safety%20Disclosures) This section provides mine safety disclosures - This item is **not applicable** to the Company[158](index=158&type=chunk) [Item 5. Other Information](index=32&type=section&id=Item%205.%20Other%20Information) This section covers other information not disclosed elsewhere - This item is **not applicable** to the Company[159](index=159&type=chunk) [Item 6. Exhibits](index=33&type=section&id=Item%206.%20Exhibits) This section lists all exhibits filed as part of the Quarterly Report on Form 10-Q Exhibit Index Highlights | Exhibit Number | Exhibit Description | Filed Herewith | | :------------- | :------------------------------------------------------------------------------- | :------------- | | 10.1+ | Letter Agreement with Thomas Teisseyre, Ph.D. (July 17, 2023) | | | 10.4+ | Separation Agreement with Khan Siddiqui, M.D. (September 30, 2023) | | | 31.1 | Certification of the Principal Executive Officer pursuant to Section 302 | X | | 31.2 | Certification of the Principal Financial Officer pursuant to Section 302 | X | | 32* | Certifications of CEO and CFO pursuant to Section 906 | X | [Signatures](index=35&type=section&id=SIGNATURES) This section provides the official signatures for the Quarterly Report on Form 10-Q - The report was signed on **November 9, 2023**, by **Maria Sainz**, **President and Chief Executive Officer**, and **Brett Hale**, **Chief Administrative Officer, Chief Financial Officer, Treasurer and Corporate Secretary**[166](index=166&type=chunk)

Financial Performance - Device sales for the three months ended June 30, 2023, increased by $1.6 million, or 140.6%, compared to the same period in 2022, driven by strong international sales and higher sales prices [106]. - Total sales for the six months ended June 30, 2023, were $6.016 million, a 97.8% increase from $3.042 million in the same period of 2022 [106]. - The gross margin for the three months ended June 30, 2023, was $1.444 million, compared to a loss of $165, indicating a significant improvement in profitability [106]. - Service sales increased by $0.4 million, or 57.5%, for the six months ended June 30, 2023 compared to the same period in 2022, driven by an increase in the install base [108]. - Device sales increased by $2.6 million, or 109.4%, for the six months ended June 30, 2023 compared to the same period in 2022, attributed to higher sales volume and increased sales prices [108]. - The net loss for the three months ended June 30, 2023, was $10.637 million, a 54.1% reduction from a net loss of $23.159 million in the same period of 2022 [106]. - The company reported a net loss of $22.8 million for the six months ended June 30, 2023, with an accumulated deficit of $232.3 million as of the same date [124]. - The net loss for the six months ended June 30, 2023, was $22.8 million, compared to a net loss of $46.9 million for the same period in 2022 [131][132]. Expenses and Cost Management - Research and development expenses decreased by 31% to $10.792 million for the six months ended June 30, 2023, down from $15.599 million in the same period of 2022 [106]. - Operating expenses for the three months ended June 30, 2023, were reduced by 43% to $13.136 million compared to $23.027 million in the same period of 2022 [106]. - Research and development expenses decreased by $4.8 million, or 30.8%, for the six months ended June 30, 2023 compared to the same period in 2022, primarily due to reduced personnel and consulting costs [113]. - General and administrative expenses decreased by $11.9 million, or 50.8%, for the six months ended June 30, 2023 compared to the same period in 2022, driven by a reduction in personnel-related costs [116]. - Sales and marketing expenses decreased by $2.9 million, or 36.2%, for the six months ended June 30, 2023 compared to the same period in 2022, mainly due to lower personnel and marketing event costs [118]. - Total cost of sales increased by $294 thousand, or 9.4%, for the six months ended June 30, 2023 compared to the same period in 2022, with device sales costs rising by 14.1% [109]. Cash Flow and Financial Position - As of June 30, 2023, the company had cash and cash equivalents of $93.9 million, which is expected to support operations for at least the next 12 months [125]. - For the six months ended June 30, 2023, net cash used in operating activities was $23.2 million, a decrease from $44.2 million in the same period of 2022 [131][132]. - Net cash used in investing activities remained consistent at $0.3 million for both the six months ended June 30, 2023, and 2022, attributed to fixed asset purchases [133][134]. - Net cash provided by financing activities increased to $0.1 million in the first half of 2023 from $2,000 in the same period of 2022, primarily from option exercises [135][136]. - As of June 30, 2023, the company had $95 million in cash, cash equivalents, and restricted cash, primarily in money market funds and savings accounts [146]. Market and Product Development - The total installed base of the Swoop® system reached 131 units as of June 30, 2023, up from 92 units in the same period of 2022, representing a growth of 42.4% [97]. - The company received FDA clearance for the latest update of the Swoop® system software in February 2023, which significantly improves diffusion-weighted imaging (DWI) quality [94]. - The Swoop® system is positioned to expand the $32 billion imaging market by increasing access to MRI technology in various healthcare settings [91]. - The company has deployed 20 Swoop® system units to hospitals in low-middle income settings through funding from the Bill & Melinda Gates Foundation [104]. - The company received a $3.4 million grant from the BMGF in May 2023 to develop a scalable approach to measuring neurodevelopment in low-to-middle income countries, with $0.5 million received by June 30, 2023 [138]. Risks and Future Outlook - The company anticipates continued cash burn and net losses until product and service sales generate sufficient gross profit to cover operating expenses [124]. - A 0.5 percentage point decrease in interest rates would decrease earnings before income taxes by $0.5 million based on the balance sheet position at June 30, 2023 [146]. - Inflationary pressures may increase manufacturing costs, which could adversely affect the company's financial condition and results of operations [147]. - The company operates primarily in U.S. dollars and does not have significant exposure to foreign exchange risk [148].

Hyperfine, Inc. (NASDAQ:HYPR) Q1 2023 Earnings Conference Call May 11, 2023 6:00 PM ET Company Participants Maria Sainz - President, Chief Executive Officer Brett Hale - Chief Administrative Officer, Incoming Chief Financial Officer Marissa Bych - Investor Relations, The Gilmartin Group Conference Call Participants Larry Biegelsen - Wells Fargo Vijay Kumar - Evercore ISI Neil Chatterji - B. Riley Operator At this time all participants are in listen-only mode. After the speakers presentation there will be a ...

UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 _________________ FORM 10-Q _________________ (Mark One) ☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended March 31, 2023 or ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from to Commission File Number: 001-39949 _________________ Hyperfine, Inc. (Exact name of registrant as specified in its chart ...

Market Opportunity - The Swoop® system targets a $28 billion imaging market, expected to grow at a 4.9% CAGR from 2022 to 2030[29] - The global imaging market is estimated to exceed $20 billion, with over 100,000 potential installation sites for the Swoop® system[40] - The aging population and rising prevalence of neurological conditions are driving increased demand for MRI technology[40] - The Swoop® system aims to improve access to MRI for 90% of the world's population who have limited or no access to conventional MRI[59] Product Features and Benefits - The Swoop® system reduces the average conventional MRI process time from 11.7 hours to between 0.5 to 5.3 hours, achieving a workflow time reduction of 55% or greater[35] - The Swoop® system can potentially improve access to MRI for approximately 15 million new stroke sufferers annually, avoiding the risks associated with ionizing radiation from CT scans[34] - The use of the Swoop® system has resulted in a 20% increase in the utilization of existing MRI suites for additional outpatient procedures[35] - The Swoop® system is designed to be user-friendly, requiring minimal training and allowing operation via a tablet or smartphone[35] - The Swoop® system provides diagnostic-quality images with higher contrast resolution than conventional portable medical neuroimaging systems, achieving image resolution of 1.5 x 1.5 x 5 mm compared to 1.0 x 1.0 x 5 mm for traditional MRI[59] - The Swoop® system operates with an ultra-low-field magnet of 0.064T, allowing for portable MRI without the need for specialized facilities[52] - Approximately 30% of conventional MRI scans suffer from moderate to severe image quality issues due to patient motion, which the Swoop® system addresses with motion compensation technology[55] - The Swoop® system's design allows for easy mobility within hospitals, featuring a powered drive system and a zero-turn radius for positioning in tight spaces[65] Regulatory Approvals and Compliance - The company has received multiple regulatory approvals, including Medical Device License from Health Canada and CE marking in the EU, to expand its international market presence[38] - The company must develop a diversity action plan for clinical trials as mandated by the Consolidated Appropriations Act for 2023[131] - The medical devices developed by the company are subject to extensive regulation by the FDA and other international regulatory agencies, requiring compliance with various laws governing development and marketing[110][111] - The company is subject to the Physician Payments Sunshine Act, requiring annual reporting of payments to U.S.-licensed physicians, with significant penalties for violations[149] Financial Performance and Funding - The company has raised over $160 million in equity investments and partnership milestones from institutional investors and grants, including a $1.6 million grant from the Bill & Melinda Gates Foundation[28] - The company incurred net losses of $73.2 million and $64.9 million for the years ended December 31, 2022 and 2021, respectively, with an accumulated deficit of $209.5 million as of December 31, 2022[175] - The company has generated limited revenue from product sales to date and has not achieved wide market acceptance for its products, making future performance predictions uncertain[176] - The company may need to raise additional capital to fund commercialization plans, including manufacturing and sales activities, as well as research and development[178] Competition and Market Position - The company views competition in the medical imaging market as significant, with major players like General Electric and Siemens, but sees its technology as complementary to existing high-field MRI systems[99] - The company faces significant competition from established players in the medical imaging market, including General Electric, Siemens, and Philips, which may affect its market position[190] - The company’s future success depends on the acceptance of its products in the healthcare market, which may not be receptive compared to conventional MRI systems[184] Supply Chain and Manufacturing Risks - The company relies on a limited number of suppliers, increasing risks associated with potential interruptions in supply[211] - The company relies on a single contract manufacturer, Benchmark Electronics, which poses risks if they fail to meet obligations[210] - The company has incurred increased costs for the magnet, a key component in the Swoop® system, due to reliance on a single source supplier in Europe[196] - The company is working to add an additional magnet supplier to mitigate risks associated with reliance on a single supplier[93] Research and Development - The company plans to continue developing its technology to expand into new imaging applications and enhance its MRI system for broader diagnostic capabilities[37] - The market is characterized by rapid technological changes and evolving customer demands, necessitating substantial investment in research and development[222] - The introduction of new technologies may render existing products obsolete, impacting marketability and revenue[222] Compliance and Legal Risks - Non-compliance with various state and federal fraud and abuse laws can lead to substantial fines and criminal sanctions, increasing the risk of litigation[146] - The federal Anti-Kickback Statute prohibits remuneration to induce referrals for services payable under government healthcare programs, with penalties including imprisonment and fines up to $100,000 per violation[141] - The company must maintain a robust compliance program to meet diverse regulatory requirements, which increases the risk of potential violations and associated penalties[150] Workforce and Organizational Changes - As of February 15, 2023, the company employed 136 full-time employees, with 92 in research, development, manufacturing, and operations, and 133 located in the United States[72] - Approximately 13% of the global workforce was terminated as part of an organizational restructuring aimed at decreasing costs and streamlining operations[203] - Attracting and retaining key personnel is critical for the company's future success, given the intense competition in the medical device industry[204]

Hyperfine, Inc. (NASDAQ:HYPR) Q4 2022 Earnings Conference Call March 21, 2023 4:30 PM ET Company Participants Maria Sainz - President, Chief Executive Officer Brett Hale - Chief Administrative Officer, Incoming Chief Financial Officer Marissa Bych - Investor Relations, The Gilmartin Group Conference Call Participants Larry Biegelsen - Wells Fargo Kevin Joaquin - Evercore ISI Neil Chatterji - B. Riley Operator Thank you for standing by and welcome to Hyperfine’s Fourth Quarter and Full Year 2022 Conference C ...

Financial Data and Key Metrics Changes - Revenue for Q3 2022 was $2.3 million, a significant increase from $0.37 million in Q3 2021 [28] - Gross profit for Q3 2022 was $0.69 million, reflecting a gross margin of 29.3%, compared to a gross loss of $0.34 million in Q3 2021 [28] - Net loss for Q3 2022 was $13.2 million, equating to a net loss of $0.19 per share, an improvement from a net loss of $16.4 million or $8.70 per share in the same period of the prior year [29] - Cash burn in Q3 was $12.6 million, with cash and cash equivalents at $132.5 million at the end of the quarter [30] Business Line Data and Key Metrics Changes - The company placed 10 Swoop systems in Q3 2022, contributing to record quarterly revenue [10][20] - The average selling price (ASP) for Q3 was $194,000, up from $130,000 in Q2, with expectations to reach $200,000 [68] Market Data and Key Metrics Changes - The company anticipates installing between 35 and 45 commercial systems in 2022, maintaining a full-year revenue expectation of $7 million to $8 million [31] - The company has received letters of intent for seven units from BJC HealthCare and 20 units from King's College, with shipments expected to occur over the next several quarters [24][45] Company Strategy and Development Direction - The company aims to transform healthcare by expanding access to diagnostics with its Swoop portable MRI system, focusing on neurocritical care and stroke [12][13] - The management is prioritizing R&D, clinical, and commercialization spending to drive near-term growth while extending the cash runway [25] - The company is actively assessing strategic options for its Liminal brain sensing platform to maximize shareholder value [26] Management's Comments on Operating Environment and Future Outlook - Management acknowledges the elongated sales cycle and staffing constraints in hospitals as challenges but remains confident in the pipeline and market opportunities [54] - The company expects continued growth in 2023 and 2024, with a focus on improving gross margins and expanding its clinical applications [74] Other Important Information - The company is refining its software programs and enhancing AI capabilities to optimize its MRI sequences [19] - Management is committed to being responsive to market feedback to drive adoption and use of Swoop across multiple applications [23] Q&A Session Summary Question: What are the priorities over the next 12 months? - Management is focusing on clinical use cases in neurocritical care and stroke, while scrutinizing operational complexity to extend cash runway [42] Question: What is the timing for the orders from BJC HealthCare and King's College? - Shipments for these units are expected to occur over the next several quarters, with a steady cadence throughout 2023 [45] Question: Is there any conservatism in the Q4 guidance? - The guidance reflects a realistic expectation given the elongated sales cycle and holiday schedules, not conservatism [52] Question: How does the elongated sales cycle impact workflow changes? - The company is focusing on training and implementation to facilitate workflow changes post-deployment [61] Question: What are the significant enhancements and approvals expected in the next six to nine months? - Key software improvements and AI tools aimed at enhancing image quality for stroke detection are anticipated [80]