Hyperfine(HYPR) - 2022 Q1 - Quarterly Report

FORM 10-Q Filing Information Summarizes the company's quarterly report filing details, classification, and outstanding common stock Filing Details Details Hyperfine, Inc.'s Quarterly Report on Form 10-Q filing for Q1 2022 and its regulatory classifications - Hyperfine, Inc. filed a Quarterly Report on Form 10-Q for the period ended March 31, 2022[2] - The company is classified as a non-accelerated filer, a smaller reporting company, and an emerging growth company[4] Outstanding Common Stock as of May 10, 2022 | Class | Shares Outstanding | | :------------------------------- | :----------------- | | Class A common stock | 55,277,061 | | Class B common stock | 15,055,288 | Explanatory Note Provides context on the business combination that led to Hyperfine, Inc.'s formation and Nasdaq listing Business Combination Overview Outlines the December 2021 business combination forming Hyperfine, Inc. and its subsequent Nasdaq listing under 'HYPR' - HealthCor Catalio Acquisition Corp. (now Hyperfine, Inc.) completed a business combination with Legacy Hyperfine and Liminal Sciences, Inc. on December 22, 2021[8] - Following the business combination, HealthCor changed its name to Hyperfine, Inc., and its Class A common stock is listed on the Nasdaq Global Market under the symbol 'HYPR'[8] Cautionary Statement Regarding Forward-Looking Statements Highlights the inherent risks and uncertainties associated with the company's forward-looking statements regarding future performance Forward-Looking Statements and Risks Discusses the company's forward-looking statements on future events and financial performance, subject to inherent risks and uncertainties - The report includes forward-looking statements concerning future events and financial performance, based on management's beliefs and assumptions[10] - Key areas of forward-looking statements include product development, commercialization, regulatory approval, market size, pricing, financing, competition, and the impact of COVID-19[11][13] - These statements are subject to risks and uncertainties, detailed in the 'Risk Factors' sections of the Annual Report on Form 10-K and this quarterly report[10][12] PART I — FINANCIAL INFORMATION Presents the company's unaudited condensed combined and consolidated financial statements and management's discussion and analysis Item 1. Financial Statements Presents Hyperfine, Inc.'s unaudited condensed combined and consolidated financial statements, including balance sheets and cash flows Condensed Combined and Consolidated Balance Sheets (Unaudited) Provides a snapshot of the company's financial position, detailing assets, liabilities, and equity at specific reporting dates Condensed Combined and Consolidated Balance Sheets (in thousands) | Metric | March 31, 2022 | December 31, 2021 | | :---------------------------------- | :------------- | :---------------- | | Total current assets | $173,729 | $197,485 | | Total assets | $178,828 | $202,473 | | Total current liabilities | $11,414 | $15,736 | | Total liabilities | $12,265 | $16,246 | | Total stockholders' equity | $166,563 | $186,227 | - Total assets decreased from $202.5 million at December 31, 2021, to $178.8 million at March 31, 2022[16] - Total stockholders' equity decreased from $186.2 million at December 31, 2021, to $166.6 million at March 31, 2022[16] Condensed Combined and Consolidated Statements of Operations and Comprehensive Loss (Unaudited) Details the company's financial performance over the period, including sales, expenses, and net loss Condensed Combined and Consolidated Statements of Operations and Comprehensive Loss (in thousands) | Metric | Three Months Ended March 31, 2022 | Three Months Ended March 31, 2021 | | :------------------------------------------ | :-------------------------------- | :-------------------------------- | | Total sales | $1,509 | $331 | | Total cost of sales | $1,425 | $608 | | Gross margin | $84 | $(277) | | Total operating expenses | $23,855 | $7,528 | | Loss from operations | $(23,771) | $(7,805) | | Net loss and comprehensive loss | $(23,775) | $(7,794) | | Net loss per common share (basic and diluted) | $(0.34) | $(4.86) | - Total sales increased significantly by 355.9% from $331 thousand in Q1 2021 to $1.509 million in Q1 2022[18] - The company achieved a positive gross margin of $84 thousand in Q1 2022, compared to a negative gross margin of $(277) thousand in Q1 2021[18] - Net loss increased from $(7.794) million in Q1 2021 to $(23.775) million in Q1 2022, primarily due to increased operating expenses[18] Condensed Combined and Consolidated Statements of Changes in Convertible Preferred Stock and Stockholders' Equity (Deficit) (Unaudited) Outlines changes in the company's equity, reflecting net loss and stock-based compensation impacts Changes in Stockholders' Equity (in thousands) | Metric | Balance, Dec 31, 2021 | Net Loss | Stock-based Compensation Expense | Balance, Mar 31, 2022 | | :-------------------------- | :-------------------- | :------- | :------------------------------- | :-------------------- | | Additional Paid-in Capital | $322,540 | — | $4,111 | $326,651 | | Accumulated Deficit | $(136,320) | $(23,775) | — | $(160,095) | | Total Stockholders' Equity | $186,227 | $(23,775) | $4,111 | $166,563 | - Accumulated deficit increased by $23.8 million due to the net loss for the quarter[20] - Stock-based compensation expense contributed $4.1 million to additional paid-in capital during the quarter[20] Condensed Combined and Consolidated Statements of Cash Flows (Unaudited) Summarizes the inflows and outflows of cash from operating, investing, and financing activities Condensed Combined and Consolidated Statements of Cash Flows (in thousands) | Cash Flow Activity | Three Months Ended March 31, 2022 | Three Months Ended March 31, 2021 | | :-------------------------------- | :-------------------------------- | :-------------------------------- | | Net cash used in operating activities | $(27,289) | $(7,486) | | Net cash used in investing activities | $(308) | $(170) | | Net cash provided by financing activities | — | $31,210 | | Net (decrease) increase in cash and cash equivalents and restricted cash | $(27,597) | $23,554 | | Cash, cash equivalents and restricted cash, end of period | $163,563 | $87,840 | - Net cash used in operating activities significantly increased from $(7.5) million in Q1 2021 to $(27.3) million in Q1 2022[24] - Cash, cash equivalents, and restricted cash decreased by $27.6 million in Q1 2022, ending the period at $163.6 million[24] Notes to Condensed Combined and Consolidated Financial Statements (Unaudited) Provides detailed explanations and disclosures supporting the condensed financial statements, including accounting policies and business context 1. Organization and Description of Business Describes Hyperfine, Inc.'s formation through a business combination, its mission, and the commercial status of its Swoop® Portable MR Imaging SystemTM - Hyperfine, Inc. aims to provide affordable and accessible MRI imaging and monitoring globally[27] - The Swoop® Portable MR Imaging SystemTM received FDA 510(k) clearance in 2020 and is commercially available in the U.S., Canada, New Zealand, and Pakistan[27] Swoop System Installations as of March 31, 2022 | Category | Number of Units | | :---------------- | :-------------- | | Total Installed | 85 | | Research Units | 27 | 2. Summary of Significant Accounting Policies Outlines the company's accounting policies, including basis of presentation, COVID-19 impact, segment information, and new accounting pronouncements - The financial statements are prepared in accordance with U.S. GAAP and reflect all normal recurring adjustments for interim periods[28][30] - The COVID-19 pandemic has adversely impacted operations, particularly salesforce access, hospital spending, and supply chain, leading to increased product costs and extended lead times for components[32] - The company aggregates Legacy Hyperfine and Liminal into a single operating segment due to similar qualitative and economic characteristics[38] - The company is evaluating the impact of ASU 2016-02 (Leases) and ASU No. 2016-13 (Credit Losses), effective for annual periods beginning January 1, 2022, and January 1, 2023, respectively, but does not expect a material impact from the lease standard[42][43] 3. Revenue Recognition Details revenue recognition policies, disaggregated by device and service, and outlines contract balances and remaining performance obligations Disaggregated Revenue (in thousands) | Product Type | Pattern of Recognition | Three Months Ended March 31, 2022 | Three Months Ended March 31, 2021 | | :----------- | :--------------------- | :-------------------------------- | :-------------------------------- | | Device | Point in time | $1,192 | $169 | | Service | Over time | $317 | $162 | | Total revenue| | $1,509 | $331 | Contract Balances (in thousands) | Metric | March 31, 2022 | December 31, 2021 | | :-------------------- | :------------- | :---------------- | | Accounts receivable, net | $1,944 | $553 | | Unbilled receivables | $478 | $91 | | Deferred revenue | $973 | $730 | | Long term deferred revenue | $851 | $510 | - Remaining performance obligations totaled $3.975 million as of March 31, 2022, with 39% expected in FY2022 and 61% in FY2023 and beyond[52] 4. Fair Value of Financial Instruments Explains the company's fair value measurement hierarchy and the valuation of financial instruments, including money market funds - The company uses a three-tier hierarchy for fair value measurement, with no Level 3 inputs[54][57] - Money market funds, valued using quoted market prices (Level 1), totaled $41.417 million as of March 31, 2022[58] 5. Inventories Details inventory composition and changes, noting no significant adjustments for net realizable value or obsolescence in Q1 2022 Inventory Summary (in thousands) | Category | March 31, 2022 | December 31, 2021 | | :--------------- | :------------- | :---------------- | | Raw materials | $2,356 | $2,355 | | Finished goods | $2,182 | $1,955 | | Total inventories| $4,538 | $4,310 | - No inventory adjustments for net realizable value or excess/obsolete inventory were recorded in Q1 2022, compared to $75 thousand in Q1 2021[60] 6. Property and Equipment, Net Reports on the company's property and equipment, net, and the significant increase in depreciation and amortization expense for Q1 2022 Property and Equipment, Net (in thousands) | Category | March 31, 2022 | December 31, 2021 | | :-------------------------- | :------------- | :---------------- | | Total historical cost | $5,521 | $5,163 | | Less: Accumulated depreciation | $(1,644) | $(1,410) | | Property and equipment, net | $3,877 | $3,753 | - Depreciation and amortization expense increased by 163.5% from $96 thousand in Q1 2021 to $253 thousand in Q1 2022[61] 7. Accrued Expenses and Other Current Liabilities Details the decrease in accrued expenses and other current liabilities, driven by reductions in bonus and contracted services accruals Accrued Expenses and Other Current Liabilities (in thousands) | Category | March 31, 2022 | December 31, 2021 | | :-------------------------------- | :------------- | :---------------- | | Bonus | $2,724 | $3,421 | | Contracted services | $1,842 | $2,711 | | SPAC bonus and other costs | $250 | $1,071 | | Payroll and related benefits | $1,321 | $441 | | Total accrued expenses and other current liabilities | $6,616 | $8,115 | - Accrued expenses and other current liabilities decreased by $1.499 million (18.5%) from December 31, 2021, to March 31, 2022[62] 8. Equity Incentive Plan Describes the equity incentive plan, outstanding stock options and RSUs, and the significant increase in stock-based compensation expense in Q1 2022 Equity Incentive Plan Activity (Q1 2022) | Metric | Stock Options | Restricted Stock Units | | :------------------------ | :------------ | :--------------------- | | Outstanding at Jan 1, 2022 | 7,522,136 | 117,516 | | Granted | 4,231,693 | 1,660,535 | | Forfeited | (271,368) | — | | Outstanding at Mar 31, 2022| 11,482,461 | 1,778,051 | Stock-Based Compensation Expense by Functional Line Item (in thousands) | Functional Line Item | Three Months Ended March 31, 2022 | Three Months Ended March 31, 2021 | | :------------------- | :-------------------------------- | :-------------------------------- | | Cost of sales - Device | $16 | — | | Research and development | $781 | $209 | | Sales and marketing | $96 | $6 | | General and administrative | $3,218 | $52 | | Total | $4,111 | $267 | - Total stock-based compensation expense increased by $3.844 million (1439.7%) year-over-year[68] 9. Net Loss Per Share Reports basic and diluted net loss per share, noting the exclusion of anti-dilutive common equivalent shares due to the net loss position Net Loss Per Share Calculation | Metric | Three Months Ended March 31, 2022 | Three Months Ended March 31, 2021 | | :---------------------------------------------------------------- | :-------------------------------- | :-------------------------------- | | Net Loss (in thousands) | $(23,775) | $(7,794) | | Weighted-average shares used to compute net loss per share | 70,332,349 | 1,602,732 | | Basic and dilutive loss per share | $(0.34) | $(4.86) | Anti-Dilutive Common Equivalent Shares | Category | March 31, 2022 | March 31, 2021 | | :------------------------------------------ | :------------- | :------------- | | Outstanding options to purchase common stock | 11,482,461 | 1,851,656 | | Outstanding RSUs | 1,778,051 | — | | Earn-Out Shares | 10,000,000 | — | | Total anti-dilutive common equivalent shares | 23,260,512 | 37,608,824 | - Earn-Out Shares of up to 10,000,000 Class A common stock are contingent on the stock price reaching $15.00 for 20 trading days within a 30-day period or a transaction with a value greater than or equal to $15.00 per share within three years of the Closing Date[71] 10. Income Taxes States the company's 0.0% effective income tax rate and the full valuation allowance against deferred tax assets due to historical losses - The estimated annual effective income tax rate was 0.0% for Q1 2022 and Q1 2021[74] - A full valuation allowance is recorded against net deferred tax assets, indicating that the company does not expect to realize these benefits in the near future[75] 11. Related Party Transactions Details related party transactions, including subleasing from 4Catalyzer Corporation and a significant decrease in service expenses from 4C - The company subleases office and lab space from 4Catalyzer Corporation (4C), a related party[76] - Expenses from 4C for services decreased from $870 thousand in Q1 2021 to $154 thousand in Q1 2022[79] - Legacy Hyperfine and Liminal terminated the ARTSA and entered into Master Services Agreements with 4C for general administration, facilities, IT, financing, legal, and HR services[79] 12. Commitments and Contingencies Outlines commitments for 401(k) and Bill & Melinda Gates Foundation grants, with no material legal proceedings or earn-out liabilities - No matching contributions were made to the 401(k) plan for the three months ended March 31, 2022 and 2021[83] - The company received grants totaling $4.91 million from the Bill & Melinda Gates Foundation for deploying 25 Swoop systems for research, with $1.983 million in restricted cash as of March 31, 2022[84] - No liability has been recognized for a potential $1.000 million payment to a third-party service provider related to Earn-Out Shares, as the criteria have not been met[88] Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations Management discusses Hyperfine's financial condition, operational results, and future outlook, focusing on the Swoop system, COVID-19 impact, and liquidity needs Overview Introduces Hyperfine's mission to democratize MRI with its Swoop system, emphasizing bedside use, AI integration, and future brain sensing platform - Hyperfine's mission is to provide affordable and accessible MRI imaging and monitoring globally[90] - The Swoop system is designed for bedside use, offering high-quality images at lower magnetic field strength, and is commercially available in the U.S., Canada, New Zealand, and Pakistan[90][93] - The company is optimizing its software ecosystem with AI to improve image quality, aid analysis, and reduce diagnosis time, with future plans for an enhanced MRI system and a brain sensing platform[92][110] COVID-19 Impact Discusses the ongoing adverse impact of COVID-19 on sales, hospital spending, and supply chain, leading to potential cost increases and lead time extensions - COVID-19 continues to create commercial challenges, restricting salesforce visits, decreasing hospital spending, and limiting physical access to facilities, slowing Swoop device demonstrations and sales[97] - The company anticipates potential negative impacts on its supply chain, including increased product costs and extended lead times for components, particularly semiconductors, due to raw material demand surges and labor/transportation constraints[99] - Mitigation efforts include shifting to domestic suppliers, increasing communication with suppliers, and providing advanced forecasts[99] Key Performance Metrics Highlights the total installed base of Swoop systems as a key growth metric, showing a significant increase to 85 units by March 31, 2022 - The total installed base of Swoop devices is a key metric for business growth[104] Swoop Total Installed Units | Category | As of March 31, 2022 | As of March 31, 2021 | | :-------------------------- | :------------------- | :------------------- | | Commercial systems installations | 38 | 9 | | Grant fulfillment installations | 20 | 2 | | Research units | 27 | 17 | | Total Installed Units | 85 | 28 | - Total installed units increased by 203.6% year-over-year[105] Factors Affecting Results of Operations Discusses strategic partnerships, international expansion, and technical innovation as key drivers, expecting increased R&D expenses to lead to future profitability - Market expansion is a key growth driver, with plans for direct sales and distribution partners in target regions like the UK and Australia[108] - Partnerships, such as with the Bill & Melinda Gates Foundation, support deploying Swoop systems in low-middle resource settings for research and clinical use, with 20 units provisioned to BMGF as of March 31, 2022[109] - Technical innovation focuses on enhancing the Swoop system's user interface, integrating AI for automated image analysis, and developing new imaging applications and a brain sensing platform, which is expected to increase R&D expenses but positively impact future profitability[110] Results of Operations Analyzes Hyperfine's Q1 2022 financial performance, noting significant sales growth, increased costs, and a substantial rise in net loss Key Financial Highlights (in thousands) | Metric | Three Months Ended March 31, 2022 | Three Months Ended March 31, 2021 | Change % | | :-------------------------- | :-------------------------------- | :-------------------------------- | :------- | | Total sales | $1,509 | $331 | 355.9% | | Total cost of sales | $1,425 | $608 | 134.4% | | Gross margin | $84 | $(277) | NM | | Total operating expenses | $23,855 | $7,528 | 216.9% | | Loss from operations | $(23,771) | $(7,805) | 204.6% | | Net loss | $(23,775) | $(7,794) | 205.0% | Sales Reports a 355.9% increase in total sales to $1.5 million in Q1 2022, driven by device sales growth and increased service revenue Sales Performance (in thousands) | Category | Three Months Ended March 31, 2022 | Three Months Ended March 31, 2021 | Amount Change | % Change | | :------- | :-------------------------------- | :-------------------------------- | :------------ | :------- | | Device | $1,192 | $169 | $1,023 | 605.3% | | Service | $317 | $162 | $155 | 95.7% | | Total | $1,509 | $331 | $1,178 | 355.9% | - Device sales increased due to higher volume and a pricing strategy that increased device price and lowered subscription price[115] - Service sales growth is attributed to an increase in the installed base of commercial systems, generating recurring revenue[116] Cost of Sales Details a 134.4% increase in total cost of sales to $1.4 million in Q1 2022, driven by higher device manufacturing and service labor costs Cost of Sales Performance (in thousands) | Category | Three Months Ended March 31, 2022 | Three Months Ended March 31, 2021 | Amount Change | % Change | | :------- | :-------------------------------- | :-------------------------------- | :------------ | :------- | | Device | $1,037 | $548 | $489 | 89.2% | | Service | $388 | $60 | $328 | 546.7% | | Total | $1,425 | $608 | $817 | 134.4% | - Cost of device sales increased due to higher third-party manufacturing costs and increased product hardware and labor costs from higher sales volume[119] - Cost of service sales increased primarily due to higher internal overheads and labor costs[120] Research and Development Expenses Reports an 86.3% increase in R&D expenses to $8.3 million in Q1 2022, driven by higher personnel, stock-based compensation, and professional service costs Research and Development Expenses (in thousands) | Metric | Three Months Ended March 31, 2022 | Three Months Ended March 31, 2021 | Amount Change | % Change | | :-------------------------- | :-------------------------------- | :-------------------------------- | :------------ | :------- | | Research and development | $8,334 | $4,474 | $3,860 | 86.3% | - The increase was driven by a $3.5 million rise in personnel costs, a $0.6 million increase in stock-based compensation, and higher professional services and depreciation[121] General and Administrative Expenses Highlights a 511.4% surge in G&A expenses to $11.4 million in Q1 2022, primarily due to increased personnel, stock-based compensation, and professional service costs General and Administrative Expenses (in thousands) | Metric | Three Months Ended March 31, 2022 | Three Months Ended March 31, 2021 | Amount Change | % Change | | :-------------------------- | :-------------------------------- | :-------------------------------- | :------------ | :------- | | General and administrative | $11,360 | $1,858 | $9,502 | 511.4% | - The increase was primarily due to a $3.2 million rise in personnel costs, a $3.2 million increase in stock-based compensation, and higher professional services ($1.2 million), insurance ($0.8 million), and technology costs ($0.5 million)[122] Sales and Marketing Expenses Reports a 247.9% increase in sales and marketing expenses to $4.2 million in Q1 2022, driven by higher personnel, stock-based compensation, and advertising costs Sales and Marketing Expenses (in thousands) | Metric | Three Months Ended March 31, 2022 | Three Months Ended March 31, 2021 | Amount Change | % Change | | :-------------------------- | :-------------------------------- | :-------------------------------- | :------------ | :------- | | Sales and marketing | $4,161 | $1,196 | $2,965 | 247.9% | - The increase was primarily due to a $1.9 million rise in personnel expenses, a $0.1 million increase in stock-based compensation, and higher product advertising/marketing ($0.6 million) and travel expenses ($0.2 million)[124] Interest Income Notes a decrease in interest income to $1 thousand in Q1 2022, primarily due to lower money market balances and reduced interest rates Interest Income (in thousands) | Metric | Three Months Ended March 31, 2022 | Three Months Ended March 31, 2021 | Amount Change | % Change | | :------------- | :-------------------------------- | :-------------------------------- | :------------ | :------- | | Interest income| $1 | $5 | $(4) | (80.0)% | Other Income (Expense), Net Reports an unfavorable decrease in other income (expense), net, to $(5) thousand in Q1 2022, mainly due to prior period foreign currency gains Other Income (Expense), Net (in thousands) | Metric | Three Months Ended March 31, 2022 | Three Months Ended March 31, 2021 | Amount Change | % Change | | :-------------------------- | :-------------------------------- | :-------------------------------- | :------------ | :------- | | Other income (expense), net | $(5) | $6 | $(11) | (183.3)% | Liquidity and Capital Resources Discusses Hyperfine's funding history, significant cash burn, and net losses, highlighting current cash position and future capital requirements - The company has funded operations primarily through equity issuances and has incurred significant cash burn and recurring net losses[127] Liquidity Overview (in thousands) | Metric | March 31, 2022 | | :-------------------------- | :------------- | | Net loss (Q1 2022) | $(23,775) | | Accumulated deficit | $(160,095) | | Net proceeds from Business Combination | $141,500 | | Cash and cash equivalents | $161,580 | - Future cash requirements are expected to be substantial for sales and marketing, product development, and inventory, with potential need for additional financing[129][131] Cash Flows Analyzes cash flows, noting a significant increase in cash used in operating activities and no cash provided by financing activities in Q1 2022 Summary of Cash Flows (in thousands) | Cash Flow Activity | Three Months Ended March 31, 2022 | Three Months Ended March 31, 2021 | | :-------------------------------- | :-------------------------------- | :-------------------------------- | | Net cash used in operating activities | $(27,289) | $(7,486) | | Net cash used in investing activities | $(308) | $(170) | | Net cash provided by financing activities | — | $31,210 | | Net (decrease) increase in cash, cash equivalents, and restricted cash | $(27,597) | $23,554 | - Net cash used in operating activities in Q1 2022 was driven by a net loss of $23.8 million and a $7.9 million impact from changes in operating assets and liabilities[134] - Financing activities provided no cash in Q1 2022, a significant change from $31.2 million provided in Q1 2021, which included proceeds from Series D convertible preferred stock and an investment from 4Bionics, LLC[139] Contractual Obligations Outlines contractual obligations, including 401(k) plan and Bill & Melinda Gates Foundation grants for Swoop device deployments - No matching contributions were made to the 401(k) plan for the three months ended March 31, 2022 and 2021[140] - BMGF grants totaling $4.91 million are designed to support the deployment of 25 Swoop devices and other services for research over approximately two years[141] - As of March 31, 2022, 20 Swoop system units and 10 baby cradles were provisioned and delivered to BMGF[141] Critical Accounting Policies and Significant Judgments and Estimates Discusses the reliance on estimates and assumptions in financial statements, noting no material changes to critical accounting policies since the 2021 Annual Report - The preparation of financial statements requires management to make estimates and assumptions that affect reported amounts[143][144] - No material changes to critical accounting policies and estimates have occurred since the 2021 Annual Report on Form 10-K, except for those related to recently issued accounting pronouncements[145][146] Item 3. Quantitative and Qualitative Disclosures About Market Risk Identifies interest rate fluctuations as the primary market risk, with no material impact expected from a 10% change due to short-term cash equivalents - The company's primary market risk is from interest rate fluctuations[147] - Cash equivalents included $41.4 million in money market funds as of March 31, 2022[148] - Due to the short-term nature of cash equivalents, a hypothetical 10% change in interest rates is not expected to materially affect cash flows or operating results[148] Item 4. Controls and Procedures Reports ineffective disclosure controls and procedures due to material weaknesses in internal control over financial reporting, with ongoing remediation efforts - Disclosure controls and procedures were not effective as of March 31, 2022, due to material weaknesses in internal control over financial reporting[149] - Material weaknesses include limited accounting personnel and inadequate supervision of outsourced financial reporting prior to the Business Combination[151] - Another material weakness involved the misclassification of Class A ordinary shares subject to possible redemption, leading to a restatement[152] - Management is implementing a remediation plan, including hiring experienced accounting and finance resources and enhancing internal controls[154] PART II — OTHER INFORMATION Presents additional information not covered in the financial statements, including legal proceedings, risk factors, and exhibits Item 1. Legal Proceedings States that Hyperfine, Inc. is not currently involved in any material legal proceedings - The company is not involved in any material legal proceedings[157] Item 1A. Risk Factors Confirms no material changes to the risk factors previously disclosed in the company's Annual Report on Form 10-K - No material changes to risk factors have occurred since the 2021 Annual Report on Form 10-K[158] Item 2. Unregistered Sales of Equity Securities and Use of Proceeds Reports no unregistered sales of equity securities or share repurchases during Q1 2022 - No unregistered sales of equity securities occurred[159] - The company did not repurchase any equity securities during Q1 2022[160] Item 3. Defaults Upon Senior Securities States that this item is not applicable to the company for the reporting period - This item is not applicable[161] Item 4. Mine Safety Disclosures States that this item is not applicable to the company for the reporting period - This item is not applicable[162] Item 5. Other Information States that this item is not applicable to the company for the reporting period - This item is not applicable[163] Item 6. Exhibits Lists the exhibits filed with the Form 10-Q, including agreements, officer certifications, and Inline XBRL documents - Exhibits include the Amended and Restated Registration Rights Agreement and Form of Restricted Stock Unit Agreement[165] - Certifications from the Principal Executive Officer and Principal Financial Officer (Sections 302 and 906 of Sarbanes-Oxley Act) are filed as exhibits[165] - Inline XBRL documents (Instance, Schema, Calculation, Definition, Label, Presentation Linkbase) are also included[165][166][168] Signatures Contains the official signatures for the Quarterly Report on Form 10-Q Report Signatures Confirms the signing of the Quarterly Report on Form 10-Q by the President, CEO, and CFO on May 12, 2022 - The report was signed by Dave Scott, President and CEO, and Alok Gupta, CFO, on May 12, 2022[171]