Hyperfine(HYPR) - 2023 Q2 - Quarterly Report

Financial Performance - Device sales for the three months ended June 30, 2023, increased by $1.6 million, or 140.6$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$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$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$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$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$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].