Hyperfine Q3 2026 net loss narrows to $5.98M
Financing activities provided $25.260 million in the first nine months, including $13.626 million in net debt proceeds.
Sentiment and the balance of points
Rhea-AI Sentiment reads the wording of the document, how positive or negative its language is on a 1 to 5 scale. The balance of points shown with the takes weighs what the document actually discloses, so the two can disagree, for example when a trial that missed its main goal is described in upbeat language.
Hyperfine, Inc. (HYPR) reported third-quarter 2026 revenue of $5.960 million, compared with $3.437 million a year earlier, and sold 14 Swoop system units versus 8. Device revenue was $5.243 million and service revenue $717,000. Net loss narrowed to $5.981 million from $11.019 million, while gross profit rose to $3.382 million from $1.848 million. For the first nine months, revenue was $13.767 million versus $8.270 million and net loss was $23.902 million versus $29.662 million.
At September 30, 2026, cash and cash equivalents were $37.872 million and restricted cash was $778,000; operating activities used $22.359 million in cash over nine months. The company had $13.352 million of long-term debt, net, following a $15 million borrowing under a senior secured term loan in March. It also issued 7,809,779 shares through its ATM program for $11.375 million in net proceeds during the nine months. In August, Hyperfine received FDA clearance for an updated Optive AI software release for the Swoop portable brain-imaging system. Management expected existing capital resources, including recent offerings, to fund operations for at least twelve months from issuance of the financial statements.
How this balance works
Rhea-AI gives every point it takes from this document a weight. Minor counts 1, Moderate 3 and Major 9, so one Major point outweighs several Minor ones. The bar adds up the weights on each side, and when neither side holds more than 65% of the total the balance reads Mixed.
It reads the document as published, with the same rules for every company, and it does not look at what the market expected or at how the stock traded, so a point can be objectively good on a day the stock falls.
Rhea-AI Sentiment measures something else, the tone of the wording.
Positive
- Moderate pointThird-quarter revenue reached $5.960 million, versus $3.437 million a year earlier.
- Moderate pointThird-quarter net loss narrowed to $5.981 million, from $11.019 million.
Negative
- None.
Filing Explained
The remaining loan capacity is conditional, and drawing it could make warrants for up to five hundred twenty thousand eight hundred thirty-five shares exercisable.
Form 10-Q is the unaudited quarterly report; its debt note reports dollar amounts in thousands and says that at
The loan’s rate is variable at prime plus 4.25%, with a 6.50% prime-rate floor and a 10.75% minimum; its effective rate was 16.21% as of
The lender received immediately exercisable Initial Warrants for 562,500 Class A shares and Additional Warrants for 520,835 shares that become exercisable only if Hyperfine draws future loan tranches; the filing says none of the Initial Warrants were exercised during the quarter or nine months ended
Key Figures
Key Terms
ultra-low-field (“ULF”) technical
510(k) clearance regulatory
remaining performance obligations financial
at-the-market financial
effective interest method financial
FAQ
AI-generated questions and answers. How Rhea-AI works. Not financial advice.
What was HYPR's revenue in the third quarter of 2026?
What was HYPR's net loss in the third quarter of 2026?
How many Swoop system units did HYPR sell in the first nine months of 2026?
How much more can HYPR borrow under its loan facility?
AI-generated analysis. How Rhea-AI works. Not financial advice.
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
_________________
FORM
_________________
(Mark One)
EXCHANGE ACT OF 1934
For the quarterly period ended
or
EXCHANGE ACT OF 1934
For the transition period from ___________to_________
Commission File Number:
_________________
(Exact name of registrant as specified in its charter)
_________________
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(State or other jurisdiction of incorporation or organization) |
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(IRS Employer Identification No.)
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(Address of principal executive offices) |
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(Zip Code) |
(
(Registrant’s telephone number, including area code)
Securities registered pursuant to Section 12(b) of the Act:
Title of Each Class |
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Trading Symbol(s) |
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Name of each exchange |
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Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.
Large accelerated filer ☐ |
Accelerated filer ☐ |
Smaller reporting company |
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Emerging growth company |
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No
As of November 4, 2026, the registrant had
TABLE OF CONTENTS
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Page |
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Cautionary Statement Regarding Forward-Looking Statements |
3 |
PART I |
FINANCIAL INFORMATION |
5 |
Item 1. |
Financial Statements |
5 |
|
Condensed Consolidated Balance Sheets (unaudited) |
5 |
|
Condensed Consolidated Statements of Operations and Comprehensive Loss (unaudited) |
6 |
|
Condensed Consolidated Statements of Changes in Stockholders’ Equity (unaudited) |
7 |
|
Condensed Consolidated Statements of Cash Flows (unaudited) |
8 |
|
Notes to Condensed Consolidated Financial Statements (unaudited) |
9 |
Item 2. |
Management’s Discussion and Analysis of Financial Condition and Results of Operations |
24 |
Item 3. |
Quantitative and Qualitative Disclosures About Market Risk |
36 |
Item 4. |
Controls and Procedures |
36 |
PART II |
OTHER INFORMATION |
37 |
Item 1. |
Legal Proceedings |
37 |
Item 1A. |
Risk Factors |
37 |
Item 2. |
Unregistered Sales of Equity Securities and Use of Proceeds |
37 |
Item 3. |
Defaults Upon Senior Securities |
37 |
Item 4. |
Mine Safety Disclosures |
37 |
Item 5. |
Other Information |
37 |
Item 6. |
Exhibits |
39 |
|
Signatures |
40 |
All brand names or trademarks appearing in this report are the property of their respective holders. Use or display by us of other parties’ trademarks, trade dress, or products in this report is not intended to, and does not, imply a relationship with, or endorsements or sponsorship of, us by the trademark or trade dress owners. Unless the context requires otherwise, references in this report to the “Company,” “we,” “us,” and “our” refer to Hyperfine, Inc. and its wholly-owned subsidiaries, including Hyperfine Operations, Inc., and Liminal Sciences, Inc., as the case may be.
2
CAUTIONARY STATEMENT REGARDING FORWARD-LOOKING STATEMENTS
This Quarterly Report on Form 10-Q includes forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended (the “Securities Act”), and Section 21E of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), that relate to future events or our future financial performance regarding, among other things, the plans, strategies and prospects, both business and financial, of the Company. These statements are based on the beliefs and assumptions of our management team. Although we believe that our plans, intentions and expectations reflected in or suggested by these forward-looking statements are reasonable, we cannot assure you that we will achieve or realize these plans, intentions or expectations. Forward-looking statements are inherently subject to risks, uncertainties and assumptions. Generally, statements that are not historical facts, including statements concerning possible or assumed future actions, business strategies, events or results of operations, are forward-looking statements. These statements may be preceded by, followed by or include the words “believes,” “estimates,” “expects,” “projects,” “forecasts,” “may,” “will,” “should,” “seeks,” “plans,” “scheduled,” “anticipates” or “intends” or similar expressions. Forward-looking statements contained in this Quarterly Report on Form 10-Q include, but are not limited to, statements about:
3
These and other risks and uncertainties are described in greater detail under the caption “Risk Factors” in Item 1A of Part I of our Annual Report on Form 10-K for the fiscal year ended December 31, 2025 (the “2025 Annual Report on Form 10-K”), filed with the Securities and Exchange Commission (the “SEC”) on March 18, 2026, and this Quarterly Report on Form 10-Q, as updated and/or supplemented in subsequent filings with the SEC. The risks described under the heading “Risk Factors” are not exhaustive. New risk factors emerge from time to time, and it is not possible to predict all such risk factors, nor can we assess the impact of all such risk factors on our business or the extent to which any factor or combination of factors may cause actual results to differ materially from those contained in any forward-looking statements. Forward-looking statements are not guarantees of performance. You should not put undue reliance on these statements, which speak only as of the date hereof. All forward-looking statements attributable to the Company or persons acting on the Company's behalf are expressly qualified in their entirety by the foregoing cautionary statements. We undertake no obligation to update or revise publicly any forward-looking statements, whether as a result of new information, future events or otherwise, except as required by law.
4
PART I — FINANCIAL INFORMATION
Item 1. Financial Statements
HYPERFINE, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
(Unaudited)
(in thousands, except share and per share amounts)
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September 30, |
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December 31, |
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ASSETS |
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CURRENT ASSETS: |
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Cash and cash equivalents |
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$ |
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$ |
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Restricted cash |
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Accounts receivable, less allowance of $ |
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Unbilled receivables |
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Inventories |
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Prepaid expenses and other current assets |
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Total current assets |
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Property and equipment, net |
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Other long-term assets |
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Total assets |
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$ |
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$ |
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LIABILITIES AND STOCKHOLDERS’ EQUITY |
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CURRENT LIABILITIES: |
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Accounts payable |
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$ |
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$ |
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Deferred grant funding |
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Deferred revenue |
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Due to related parties |
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Accrued expenses and other current liabilities |
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Total current liabilities |
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Long-term debt, net |
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Warrant liabilities |
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Long term deferred revenue |
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Other noncurrent liabilities |
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Total liabilities |
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COMMITMENTS AND CONTINGENCIES (NOTE 14) |
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STOCKHOLDERS’ EQUITY |
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Class A Common stock, $ |
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Class B Common stock, $ |
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Additional paid-in capital |
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Accumulated deficit |
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( |
) |
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( |
) |
Total stockholders’ equity |
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TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY |
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$ |
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$ |
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The accompanying notes are an integral part of these condensed consolidated financial statements.
5
HYPERFINE, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS (Unaudited)
(in thousands, except share and per share amounts)
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Three Months Ended |
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Nine Months Ended |
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2026 |
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2025 |
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2026 |
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2025 |
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Sales |
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Device |
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$ |
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$ |
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$ |
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$ |
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Service |
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Total sales |
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$ |
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$ |
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$ |
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$ |
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Cost of sales |
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Device |
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$ |
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$ |
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$ |
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$ |
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||||
Service |
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Total cost of sales |
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$ |
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$ |
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$ |
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$ |
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||||
Gross profit |
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Operating Expenses: |
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Research and development |
|
$ |
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$ |
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$ |
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$ |
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||||
General and administrative |
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Sales and marketing |
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||||
Total operating expenses |
|
$ |
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$ |
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$ |
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$ |
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||||
Loss from operations |
|
$ |
( |
) |
|
$ |
( |
) |
|
$ |
( |
) |
|
$ |
( |
) |
Interest income |
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||||
Interest expense |
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|
( |
) |
|
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( |
) |
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Change in fair value of warrant liabilities |
|
|
|
|
|
( |
) |
|
|
|
|
|
( |
) |
||
Other income (expense), net |
|
|
|
|
|
|
|
|
|
|
|
( |
) |
|||
Loss before provision for income taxes |
|
$ |
( |
) |
|
$ |
( |
) |
|
$ |
( |
) |
|
$ |
( |
) |
Provision for income taxes |
|
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||||
Net loss and comprehensive loss |
|
$ |
( |
) |
|
$ |
( |
) |
|
$ |
( |
) |
|
$ |
( |
) |
Net loss per common share attributable to common stockholders, basic and diluted |
|
$ |
( |
) |
|
$ |
( |
) |
|
$ |
( |
) |
|
$ |
( |
) |
Weighted-average shares used to compute net loss per share attributable to common stockholders, basic and diluted |
|
|
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|
|
|
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|
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||||
The accompanying notes are an integral part of these condensed consolidated financial statements.
6
HYPERFINE, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS’ EQUITY (Unaudited)
(in thousands, except share amounts)
|
|
Class A Common Stock |
|
|
Class B Common Stock |
|
|
Additional |
|
|
Accumulated |
|
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Total |
|
|||||||||||||
|
|
Shares |
|
|
Amount |
|
|
Shares |
|
|
Amount |
|
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Paid-in Capital |
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|
Deficit |
|
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Equity |
|
|||||||
Balance, December 31, 2025 |
|
|
|
|
$ |
|
|
|
|
|
$ |
|
|
$ |
|
|
$ |
( |
) |
|
$ |
|
||||||
Net loss |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
( |
) |
|
|
( |
) |
Issuance of Class A common stock upon release of restricted stock units |
|
|
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
Issuance of Class A common stock upon exercise of stock options |
|
|
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
|
|
|
— |
|
|
|
|
|||
Issuance of Class A common stock under “at-the-market” (ATM) Sales Agreement, net |
|
|
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
|
|
|
— |
|
|
|
|
|||
Issuance of warrants in connection with Loan Agreement, net |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
|
|
|
— |
|
|
|
|
||
Stock-based compensation expense |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
|
|
|
— |
|
|
|
|
||
Balance, March 31, 2026 |
|
|
|
|
$ |
|
|
|
|
|
$ |
|
|
$ |
|
|
$ |
( |
) |
|
$ |
|
||||||
Net loss |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
( |
) |
|
|
( |
) |
Issuance of Class A common stock upon release of restricted stock units |
|
|
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
Issuance of Class A common stock upon exercise of stock options |
|
|
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
|
|
|
— |
|
|
|
|
|||
Issuance of Class A common stock under “at-the-market” (ATM) Sales Agreement, net |
|
|
|
|
|
|
|
|
— |
|
|
|
— |
|
|
|
|
|
|
— |
|
|
|
|
||||
Stock-based compensation expense |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
|
|
|
— |
|
|
|
|
||
Balance, June 30, 2026 |
|
|
|
|
$ |
|
|
|
|
|
$ |
|
|
$ |
|
|
$ |
( |
) |
|
$ |
|
||||||
Net loss |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
( |
) |
|
|
( |
) |
Issuance of Class A common stock upon release of restricted stock units |
|
|
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
Issuance of Class A common stock upon exercise of stock options |
|
|
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
|
|
|
— |
|
|
|
|
|||
Stock-based compensation expense |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
|
|
|
— |
|
|
|
|
||
Balance, September 30, 2026 |
|
|
|
|
$ |
|
|
|
|
|
$ |
|
|
$ |
|
|
$ |
( |
) |
|
$ |
|
||||||
|
|
|
|
|
|
|
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|
|
|
|
|
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|
|||||||
|
|
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|
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|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||
|
|
Class A Common Stock |
|
|
Class B Common Stock |
|
|
Additional |
|
|
Accumulated |
|
|
Total |
|
|||||||||||||
|
|
Shares |
|
|
Amount |
|
|
Shares |
|
|
Amount |
|
|
Paid-in Capital |
|
|
Deficit |
|
|
Equity |
|
|||||||
Balance, December 31, 2024 |
|
|
|
|
$ |
|
|
|
|
|
$ |
|
|
$ |
|
|
$ |
( |
) |
|
$ |
|
||||||
Net loss |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
( |
) |
|
|
( |
) |
Issuance of Class A common stock upon release of restricted stock units |
|
|
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
Issuance of Class A common stock upon exercise of stock options |
|
|
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
|
|
|
— |
|
|
|
|
|||
Issuance of Class A common stock under “at-the-market” (ATM) Sales Agreement, net |
|
|
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
|
|
|
— |
|
|
|
|
|||
Issuance of Class A common stock with warrants under February 2025 Offering, net |
|
|
|
|
|
|
|
|
— |
|
|
|
— |
|
|
|
|
|
|
— |
|
|
|
|
||||
Issuance of Class A common stock in connection with warrant exercise |
|
|
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
Stock-based compensation expense |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
|
|
|
— |
|
|
|
|
||
Balance, March 31, 2025 |
|
|
|
|
$ |
|
|
|
|
|
$ |
|
|
$ |
|
|
$ |
( |
) |
|
$ |
|
||||||
Net loss |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
( |
) |
|
|
( |
) |
Issuance of Class A common stock upon release of restricted stock units |
|
|
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
Issuance of Class A common stock upon exercise of stock options |
|
|
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
|
|
|
— |
|
|
|
|
|||
Issuance of Class A common stock under “at-the-market” (ATM) Sales Agreement, net |
|
|
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
|
|
|
— |
|
|
|
|
|||
Stock-based compensation expense |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
|
|
|
— |
|
|
|
|
||
Balance, June 30, 2025 |
|
|
|
|
$ |
|
|
|
|
|
$ |
|
|
$ |
|
|
$ |
( |
) |
|
$ |
|
||||||
Net loss |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
( |
) |
|
|
( |
) |
Issuance of Class A common stock upon release of restricted stock units |
|
|
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
Issuance of Class A common stock upon exercise of stock options |
|
|
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
|
|
|
— |
|
|
|
|
|||
Issuance of Class A common stock under “at-the-market” (ATM) Sales Agreement, net |
|
|
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
|
|
|
— |
|
|
|
|
|||
Stock-based compensation expense |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
|
|
|
— |
|
|
|
|
||
Balance, September 30, 2025 |
|
|
|
|
$ |
|
|
|
|
|
$ |
|
|
$ |
|
|
$ |
( |
) |
|
$ |
|
||||||
The accompanying notes are an integral part of these condensed consolidated financial statements.
7
HYPERFINE, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
(in thousands)
|
|
Nine Months Ended |
|
|||||
|
|
2026 |
|
|
2025 |
|
||
Cash flows from operating activities: |
|
|
|
|
|
|
||
Net loss |
|
$ |
( |
) |
|
$ |
( |
) |
Adjustments to reconcile net loss to net cash used in operating activities: |
|
|
|
|
|
|
||
Depreciation |
|
|
|
|
|
|
||
Stock-based compensation expense |
|
|
|
|
|
|
||
Loss on disposal of property and equipment, net |
|
|
|
|
|
|
||
Change in fair value of warrant liabilities |
|
|
( |
) |
|
|
|
|
Amortization of debt discount and issuance costs |
|
|
|
|
|
— |
|
|
Other |
|
|
|
|
|
|
||
Changes in assets and liabilities: |
|
|
|
|
|
|
||
Accounts receivable, net |
|
|
|
|
|
|
||
Unbilled receivables |
|
|
( |
) |
|
|
|
|
Inventory |
|
|
|
|
|
( |
) |
|
Prepaid expenses and other current assets |
|
|
( |
) |
|
|
( |
) |
Other long term assets |
|
|
|
|
|
|
||
Accounts payable |
|
|
( |
) |
|
|
|
|
Deferred grant funding |
|
|
( |
) |
|
|
|
|
Deferred revenue |
|
|
|
|
|
( |
) |
|
Due to related parties |
|
|
( |
) |
|
|
( |
) |
Accrued expenses and other current liabilities |
|
|
|
|
|
( |
) |
|
Operating lease liabilities, net |
|
|
|
|
|
( |
) |
|
Net cash used in operating activities |
|
$ |
( |
) |
|
$ |
( |
) |
Cash flows from investing activities: |
|
|
|
|
|
|
||
Purchases of property and equipment |
|
|
( |
) |
|
|
( |
) |
Net cash used in investing activities |
|
$ |
( |
) |
|
$ |
( |
) |
Cash flows from financing activities: |
|
|
|
|
|
|
||
Proceeds from issuance of debt, net |
|
$ |
|
|
$ |
— |
|
|
Proceeds from exercise of stock options |
|
|
|
|
|
|
||
Proceeds from issuance of Class A common stock under “at-the-market” offering program, net |
|
|
|
|
|
|
||
Proceeds from issuance of Class A common stock with warrants under February 2025 Offering, net |
|
|
— |
|
|
|
|
|
Net cash provided by financing activities |
|
$ |
|
|
$ |
|
||
Net increase (decrease) in cash and cash equivalents and restricted cash |
|
|
|
|
|
( |
) |
|
Cash, cash equivalents and restricted cash, beginning of period |
|
|
|
|
|
|
||
Cash, cash equivalents and restricted cash, end of period |
|
$ |
|
|
$ |
|
||
Reconciliation of cash, cash equivalents, and restricted cash reported in the balance sheets |
|
|
|
|
|
|
||
Cash and cash equivalents |
|
$ |
|
|
$ |
|
||
Restricted cash |
|
|
|
|
|
|
||
Total cash, cash equivalents and restricted cash |
|
$ |
|
|
$ |
|
||
Supplemental disclosure of noncash information: |
|
|
|
|
|
|
||
Issuance of warrants in connection with Loan Agreement, net |
|
$ |
|
|
$ |
— |
|
|
Initial measurement of warrant liabilities |
|
$ |
— |
|
|
$ |
|
|
Unpaid purchase of property and equipment |
|
$ |
|
|
$ |
|
||
Noncash acquisition of fixed assets |
|
$ |
|
|
$ |
— |
|
|
Right-of-use assets obtained in exchange for new operating lease liabilities |
|
$ |
|
|
$ |
— |
|
|
The accompanying notes are an integral part of these condensed consolidated financial statements.
8
HYPERFINE, INC. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)
(all amounts are in thousands, except share and per share amounts)
1. ORGANIZATION AND DESCRIPTION OF BUSINESS
Hyperfine, Inc. (together with its subsidiaries, as applicable, “Hyperfine” or the “Company”), formerly known as HealthCor Catalio Acquisition Corp. (“HealthCor”), was incorporated as a Cayman Islands exempted company on November 18, 2020. The Company’s legal name became Hyperfine, Inc. in connection with the closing (the “Closing”) of the business combination with HealthCor on December 22, 2021. In connection with the Closing, Hyperfine, Inc., a Delaware corporation (“Legacy Hyperfine”), and Liminal Sciences, Inc., a Delaware corporation (“Liminal”), merged with and into separate wholly owned subsidiaries of HealthCor and became wholly-owned subsidiaries of the Company (the “Mergers”), and changed their names to Hyperfine Operations, Inc. and Liminal Operations, Inc., respectively. Liminal subsequently changed its name to Liminal Sciences, Inc.
The Company is an innovative health technology business with a mission to revolutionize patient care globally through accessible, affordable, clinically relevant artificial intelligence (“AI”)-powered portable ultra-low-field (“ULF”) magnetic resonance (“MR”) brain imaging. The Swoop® Portable MR Imaging® System (“Swoop® system”) produces high-quality images at a significantly lower magnetic field strength than conventional magnetic resonance imaging (“MRI”) scanners. The Swoop® system is designed to transform brain MR for the patient, the clinician and the provider, enabling a highly differentiated patient-friendly experience, timely imaging for clinicians, and favorable economics for healthcare administrators. The Swoop® system is a portable, ULF MRI device for producing images that display the internal structures of the head where full diagnostic examination is not clinically practical. When interpreted by a trained physician, these images provide information that can be useful in determining a diagnosis. Healthcare professionals can use the Swoop® system efficiently to make effective clinical diagnoses and decisions in various care settings where conventional MRI devices are inaccessible and/or when they are not readily available. The portable design of the Company's Swoop® system makes it safely and readily accessible anywhere in a hospital, clinic, physician’s office, or patient care site and it does not require any special facilities accommodations. The easy to use, iPad-based interface makes its operation easy to learn and it does not require specialized MRI technicians to operate safely. ULF MR does not expose patients to harmful ionizing radiation and compares favorably in this regard to X-ray computed tomography or positron emission tomography.
The Company’s Swoop® system received initial 510(k) clearance for brain imaging from the U.S. Food and Drug Administration (the “FDA”) in 2020. In May 2025, the Company received 510(k) clearance from the FDA of its tenth-generation AI-powered software, Optive AI™ software. The tenth-generation software enhances each stage of image processing from noise cancellation and image acquisition to reconstruction and post processing and produces brain images with greater clarity, uniformity and sharper anatomical detail.
Obtaining 510(k) clearance from the FDA in late May 2025 for its new next-generation Swoop® scanner powered by Optive AITM software was a very important milestone for the Company. The next-generation Swoop® system incorporates learnings from five years of real-world experience, features new hardware and is powered by Optive AITM software. The next-generation Swoop® system incorporates innovations specifically engineered to deliver the highest signal-to-noise ratio, which, when paired with the Optive AI™ software, achieves exceptional image quality at low-field MRI, including improved resolution and uniformity, as well as faster acquisition times.
In December 2025, the Company received FDA clearance for the eleventh-generation AI-powered software. The eleventh-generation software includes a new multi-direction DWI sequence in its Optive AITM software, and this software enhancement expands the Swoop® system’s clinical capabilities by improving image quality and diagnostic confidence for stroke detection, including clearer visualization of smaller lesions and more reliable differentiation of infarcts. The multi-direction DWI sequence uses multi-direction signal acquisition, similar to techniques used in high-field MRI, and is designed to reduce artifacts that may obscure stroke pathology, while the existing single-direction DWI sequence remains available for extremely time-sensitive imaging where rapid acquisition is critical to meeting stroke treatment protocols.
In August 2026, the Company received FDA clearance for its latest Optive AI™ software update for the Swoop® system. The software update includes enhanced image quality across imaging sequences, user interface and workflow improvements designed to simplify operation of the system, and a new isotropic T1 imaging sequence intended to expand the clinical utility of the Swoop® system.
9
HYPERFINE, INC. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)
(all amounts are in thousands, except share and per share amounts)
Outside of the United States, the first-generation Swoop® system has received marketing authorization for brain imaging in several countries, including the European Union (“CE Mark”), the United Kingdom (UK Conformity Assessment (“UKCA Mark”)), Canada, Australia, New Zealand and India. In October 2024 and February 2025, the Company received CE Mark and UKCA Mark approval for the ninth-generation of software, respectively. In August 2025, the Company received both CE Mark and UKCA Mark approvals for the Optive AITM software. In March 2026, the Company achieved an important milestone and received both CE Mark and UKCA Mark approval for both the next-generation Swoop® scanner and the eleventh-generation Optive AI™ software. In October 2026, the Company received CE Mark and UKCA Mark approvals for the latest Optive AI™ software. In December 2025, the Company received regulatory approval in India from the Central Drugs Standard Control Organization, authorizing commercialization of the first-generation Swoop® system throughout India. The Company's Optive AITM software is currently available in the United States, Canada, United Kingdom, Europe, Australia, New Zealand and India markets and the next-generation Swoop® system is currently available in the United States and European markets.
All of the Company’s revenue to date has been generated from sales of the Swoop® system and related services. The Company has an indirect wholly-owned subsidiary in the United Kingdom that did not have any significant operations during the three and nine months ended September 30, 2026.
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Basis of Presentation and Principles of Consolidation
The accompanying condensed consolidated financial statements include the accounts of the Company and have been prepared in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”) and pursuant to the accounting disclosure rules and regulations of the Securities and Exchange Commission (the “SEC”) on a going concern basis, which contemplates the realization of assets and liquidation of liabilities in the normal course of business. However, the Company has limited revenues and a history of negative working capital. The Company’s existing capital resources, including the net proceeds from the recent offerings described below, are expected to be sufficient to fund the Company’s operations for at least twelve months from the issuance date of these condensed consolidated financial statements. Unless and until the Company is able to generate a sufficient amount of revenue and generate positive operating cash flows, the Company expects to finance future cash needs through public and/or private offerings of equity securities and/or debt financings. If the Company is not able to obtain additional financing and/or substantially increase revenue from sales, in the longer term, it could result in a substantial doubt about the Company's ability to continue as a going concern.
Management believes the net proceeds from the recent offerings and borrowings, described under Note 9 – “Debt” and Note 10 – “Stockholders’ Equity”, and the Company’s anticipated revenue, provide sufficient liquidity to continue as a going concern. If additional funding is required, the Company plans to obtain working capital from either debt or equity financings from the sale of common stock, preferred stock, and/or convertible debentures. There can be no assurance that the Company will be able to obtain such working capital on acceptable terms or at all which could result in management concluding in the future that there is substantial doubt about the Company's ability to continue as a going concern.
The financial statements do not include any adjustments to the amount and classification of assets and liabilities that may be necessary should the Company not continue as a going concern.
These condensed consolidated financial statements should be read in conjunction with the financial statements and notes included in the Company’s audited consolidated financial statements as of and for the years ended December 31, 2025 and 2024. The condensed consolidated balance sheet as of December 31, 2025 included herein was derived from the audited consolidated financial statements as of that date.
The accompanying unaudited condensed consolidated financial statements reflect all normal recurring adjustments necessary to present fairly the financial position, results of operations, and cash flows for the interim periods. The results for the three and nine months ended September 30, 2026 are not necessarily indicative of the results to be expected for the year ending December 31, 2026 or any other period.
10
HYPERFINE, INC. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)
(all amounts are in thousands, except share and per share amounts)
Except for the adoption of Accounting Standard Update (“ASU”) 2025-05 as described under “Recently Issued Accounting Pronouncements Adopted” in this Note 2, there have been no material changes to the Company’s significant accounting policies as described in the audited consolidated financial statements as of December 31, 2025 and 2024.
Risks and Uncertainties
The Company is subject to risks and uncertainties caused by events with significant geopolitical and macroeconomic impacts, including, but not limited to, the conflicts in Ukraine and the Middle East, inflation, tariffs and actions taken to counter such impacts.
The Company relies on single source manufacturers and suppliers for the supply of its products, including a single exclusive manufacturer for its Swoop® system. Additionally, the Company purchases raw materials from this manufacturer. Disruption from these manufacturers or suppliers has and could have a negative impact on the Company’s business, financial position and results of operations in its condensed consolidated financial statements. The Company continues to critically review its liquidity and anticipated capital requirements in light of the significant uncertainty created by geopolitical and macroeconomic conditions.
Concentrations of Credit Risk
Financial instruments that potentially subject the Company to concentration of credit risk consist principally of cash and cash equivalents. At September 30, 2026 and December 31, 2025, substantially all the Company’s cash and cash equivalents were invested in three financial institutions. The Company also maintains balances in various operating accounts above federally insured limits. The Company has not experienced any losses on such accounts and does not believe it is exposed to any significant credit risk on cash and cash equivalents.
For the three months ended September 30, 2026, there was
As of September 30, 2026, there were
Use of Estimates
The preparation of the condensed consolidated financial statements in conformity with U.S. GAAP requires the Company to make estimates and assumptions about future events that affect the amounts reported in its condensed consolidated financial statements and accompanying notes. Future events and their effects cannot be determined with certainty. On an ongoing basis, management evaluates these estimates and assumptions. Significant estimates and assumptions included:
11
HYPERFINE, INC. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)
(all amounts are in thousands, except share and per share amounts)
The Company bases these estimates on historical and anticipated results and trends and on various other assumptions that the Company believes are reasonable under the circumstances, including assumptions as to future events. Changes in estimates are recorded in the period in which they become known. Actual results could differ from those estimates, and any such differences may be material to the Company’s condensed consolidated financial statements.
Recently Issued Accounting Pronouncements Adopted
In July 2025, the Financial Accounting Standards Board (“FASB”) issued ASU 2025-05, Financial Instruments—Credit Losses (Topic 326): Measurement of Credit Losses for Accounts Receivable and Contract Assets (“ASU 2025-05”), which provides a practical expedient and an accounting policy election related to the estimation of expected credit losses for current accounts receivable and current contract assets. The Company adopted this ASU on a prospective basis effective January 1, 2026 and elected the practical expedient, which permits the Company to assume that current economic conditions as of the balance sheet date will remain unchanged for the remaining life of current accounts receivable and current contract assets when estimating expected credit losses. The adoption did not have a material impact on its condensed consolidated financial statements and related disclosures.
Recently Issued Accounting Pronouncements Not Yet Adopted
In December 2025, the FASB issued ASU 2025-11, Interim Reporting (Topic 270) Narrow—Scope Improvements, which is intended to improve the navigability of the guidance in Accounting Standards Codification (“ASC”) 270, Interim Reporting, and clarify when it applies. Under the amendments, an entity is subject to ASC 270 if it provides interim financial statements and notes in accordance with U.S. GAAP. ASU 2025-11 also addresses the form and content of such financial statements, interim disclosure requirements, and establishes a principle under which an entity must disclose events since the end of the last annual reporting period that have a material impact on the entity. ASU 2025-11 is effective for interim reporting periods within annual reporting periods beginning after December 15, 2027, with early adoption permitted. The Company does not expect the adoption of this ASU to have a material impact on its financial statements.
In September 2025, the FASB issued ASU 2025-06, Intangibles—Goodwill and Other-Internal-Use Software (Subtopic 350-40): Targeted Improvements to the Accounting for Internal-Use Software (“ASU 2025-06”). ASU 2025-06 amends the existing standard to remove all references to prescriptive and sequential software development project stages. Under this guidance, eligible software development costs will begin capitalization when (i) management has authorized and committed to funding the software project and (ii) it is probable that the project will be completed and the software will be used to perform the function intended. In evaluating whether it is probable the project will be completed, management is required to consider whether there is significant uncertainty associated with the development activities of the software. This guidance is effective for fiscal years beginning after December 15, 2027, and for interim periods beginning after December 15, 2027, with early adoption permitted. ASU 2025-06 may be applied on a prospective basis, a modified basis for in-process projects, or a retrospective basis. The Company is currently in the process of evaluating the impact of this pronouncement on its condensed consolidated financial statements and related disclosures.
In November 2024, the FASB issued ASU 2024-03, Income Statement—Reporting Comprehensive Income—Expense Disaggregation Disclosures (Subtopic 220-40): Disaggregation of Income Statement Expenses (“ASU 2024-03”), which requires public entities to disclose additional information about specific expense categories in the notes to the financial statements on an interim and annual basis. ASU 2024-03 is effective for fiscal years beginning after December 15, 2026, and for interim periods beginning after December 15, 2026, with early adoption permitted.
12
HYPERFINE, INC. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)
(all amounts are in thousands, except share and per share amounts)
The Company is currently in the process of evaluating the impact of this pronouncement on its condensed consolidated financial statements and related disclosures.
3. REVENUE RECOGNITION
Disaggregation of Revenue
The Company disaggregates revenue from contracts with customers by product type. The Company believes that these categories best represent the payor types by nature, amount, timing and uncertainty of its revenue streams.
|
|
|
|
Three Months Ended |
|
|
Nine Months Ended |
|
||||||||||
|
|
Pattern of Recognition |
|
2026 |
|
|
2025 |
|
|
2026 |
|
|
2025 |
|
||||
Device |
|
Point in time |
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
||||
Service |
|
Over time |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Total revenue |
|
|
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
||||
Contract Balances
Contract balances represent amounts presented in the condensed consolidated balance sheets when either the Company has transferred goods or services to the customer, or the customer has paid consideration to the Company under the contract. These contract balances include trade accounts receivable, unbilled receivables and deferred revenue. Deferred revenue represents consideration received from customers at the beginning of the service and support period for services that are transferred to the customer over the respective service and support period. The accounts receivable balances represent amounts billed to customers for goods and services where the Company has an unconditional right to payment of the amount billed. Unbilled receivables arise when performance obligations are satisfied for which revenue has been recognized but the customers have not been billed.
The following table provides information about receivables and deferred revenue from contracts with customers:
|
|
September 30, |
|
|
December 31, |
|
||
Accounts receivable, net |
|
$ |
|
|
$ |
|
||
Unbilled receivables - current |
|
|
|
|
|
|
||
Unbilled receivables - noncurrent(1) |
|
|
|
|
|
|
||
Deferred revenue |
|
|
|
|
|
|
||
Long term deferred revenue |
|
|
|
|
|
|
||
______________________
(1)
The Company recognizes a receivable when it has an unconditional right to payment, and payment terms range from
Accounts Receivable, Unbilled Services, and Deferred Revenue
Accounts receivable are recorded at net realizable value. The Company maintains an allowance for credit losses to reflect expected credit losses on current accounts receivable and current contract assets. In connection with the adoption of ASU 2025-05, Financial Instruments—Credit Losses (Topic 326): Measurement of Credit Losses for Accounts Receivable and Contract Assets, effective January 1, 2026, the Company elected the practical expedient that permits it to assume that current economic conditions as of the balance sheet date will remain unchanged for the remaining life of current accounts receivable and current contract assets when estimating expected credit losses. Unbilled receivables arise when performance obligations are satisfied for which revenue has been recognized but the customers have not been billed. Contractual provisions and payment schedules may or may not correspond to the timing of the performance of services under the contract.
13
HYPERFINE, INC. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)
(all amounts are in thousands, except share and per share amounts)
Deferred revenue is a contract liability that consists of customer payments received in advance of performance and billings in excess of revenue recognized, net of revenue recognized from the balance at the beginning of the period.
The amount of revenue recognized during the three and nine months ended September 30, 2026 that was included in the deferred revenue balance at the beginning of the period was $
The amount of revenue recognized during the three and nine months ended September 30, 2025 that was included in the deferred revenue balance at the beginning of the period was $
Timing of Billing and Performance
Differences in the timing of revenue recognition and associated billings and cash collections result in recording of billed accounts receivable, unbilled accounts receivable (including contract assets), and deferred revenue on the consolidated balance sheet. Amounts are billed in accordance with the agreed-upon contractual terms, resulting in recording unbilled accounts receivable in instances where the right to bill is contingent solely on the passage of time, and contract assets in instances where the right to consideration is conditional on something other than the passage of time.
Revenue from Leasing Arrangements
Revenue from leasing arrangements is not subject to the revenue standard for contracts with customers and remains separately accounted for under ASC 842, “Leases” including leases for the three and nine months ended September 30, 2026 and 2025. The Company recorded service revenue from lease arrangements of $
Costs of Obtaining or Fulfilling Contracts
The Company incurs incremental costs of obtaining contracts with customers. Incremental costs of obtaining contracts, which include commissions paid as a result of obtaining contracts with customers, are capitalized to the extent that the Company expects to recover such costs. Capitalized costs are amortized in a pattern that is consistent with the Company’s transfer to the customer of the related goods and services. Such costs are recorded in Other long term assets and were $
Transaction Price Allocated to Remaining Performance Obligations
As of September 30, 2026 and December 31, 2025, the Company had remaining performance obligations amounting to $
14
HYPERFINE, INC. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)
(all amounts are in thousands, except share and per share amounts)
4. FAIR VALUE OF FINANCIAL INSTRUMENTS
Fair value estimates of financial instruments are made at a specific point in time, based on relevant information about financial markets and specific financial instruments. As these estimates are subjective in nature, involving uncertainties and matters of significant judgment, they cannot be determined with precision. Changes in assumptions can significantly affect estimated fair value.
The Company measures fair value as the price that would be received to sell an asset or paid to transfer a liability (an exit price) in an orderly transaction between market participants at the reporting date. The Company utilizes a three-tier hierarchy, which prioritizes the inputs used in the valuation methodologies in measuring fair value:
Level 1 — Valuations based on quoted prices in active markets for identical assets or liabilities that an entity has the ability to access.
Level 2 — Valuations based on quoted prices for similar assets or liabilities, quoted prices for identical assets or liabilities in markets that are not active, or other inputs that are observable or can be corroborated by observable data for substantially the full term of the assets or liabilities.
Level 3 — Valuations based on inputs that are supported by little or no market activity and that are significant to the fair value of the assets or liabilities.
The carrying value of cash and cash equivalents, accounts payable and accrued expenses and other current liabilities approximates their fair values due to the short-term or on demand nature of these instruments.
Cash is measured at fair value on a recurring basis using Level 1 inputs. The Company had $
The key assumptions used in the Black-Scholes option pricing model to fair value the common stock warrants liability are as follows:
|
|
September 30, |
|
|
December 31, 2025 |
|
||
Stock Price |
|
$ |
|
|
$ |
|
||
Risk Free interest rate |
|
|
% |
|
|
% |
||
Expected dividend yield |
|
|
|
|
|
|
||
Term (years) |
|
|
|
|
|
|
||
Expected volatility |
|
|
% |
|
|
% |
||
5. INVENTORIES
A summary of inventories is as follows:
|
|
September 30, |
|
|
December 31, |
|
||
Raw materials |
|
$ |
|
|
$ |
|
||
Finished goods |
|
|
|
|
|
|
||
Total inventories |
|
$ |
|
|
$ |
|
||
Manufacturing overhead costs primarily include management’s best estimate and allocation of the labor costs incurred related to acquiring finished goods from the Company’s contract manufacturer. Labor costs include wages,
15
HYPERFINE, INC. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)
(all amounts are in thousands, except share and per share amounts)
taxes and benefits for employees involved in warehousing, logistics coordination, material sourcing, and production planning activities.
6. PROPERTY AND EQUIPMENT, NET
Property and equipment, net, is recorded at historical cost and consists of the following:
|
|
September 30, |
|
|
December 31, |
|
||
Laboratory equipment |
|
$ |
|
|
$ |
|
||
Research devices |
|
|
|
|
|
|
||
Sales and marketing devices |
|
|
|
|
|
|
||
Computer equipment |
|
|
|
|
|
|
||
Construction in progress |
|
|
|
|
|
|
||
Tooling |
|
|
|
|
|
|
||
Trade show assets |
|
|
|
|
|
|
||
Leased devices |
|
|
|
|
|
|
||
Other |
|
|
|
|
|
|
||
Gross property and equipment |
|
|
|
|
|
|
||
Less: Accumulated depreciation and amortization |
|
|
( |
) |
|
|
( |
) |
Property and equipment, net |
|
$ |
|
|
$ |
|
||
Depreciation expense amounted to $
7. RIGHT-OF-USE (“ROU”) ASSETS AND LEASE LIABILITIES
The Company has operating leases for its corporate offices, including its Palo Alto, California lease agreement which was extended by an amendment in December 2025 and now expires on
Rent expense recognized for the Company’s operating leases was $
The weighted-average remaining lease term associated with the measurement of the Company’s operating lease obligations is
Maturities of lease liabilities as of September 30, 2026 are as follows:
16
HYPERFINE, INC. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)
(all amounts are in thousands, except share and per share amounts)
Undiscounted lease payments |
|
September 30, 2026 |
|
|
Remaining in 2026 |
|
$ |
|
|
2027 |
|
|
|
|
2028 |
|
|
|
|
Total undiscounted payments |
|
|
|
|
Less: imputed interest |
|
|
( |
) |
Operating lease liabilities |
|
$ |
|
|
8. ACCRUED EXPENSES AND OTHER CURRENT LIABILITIES
Accrued expenses and other current liabilities consist of the following:
|
|
|
|
|
|
|
||
|
|
September 30, |
|
|
December 31, |
|
||
Bonuses |
|
$ |
|
|
$ |
|
||
Contracted services |
|
|
|
|
|
|
||
Payroll and related benefits |
|
|
|
|
|
|
||
Operating lease liabilities |
|
|
|
|
|
|
||
Legal fees |
|
|
|
|
|
|
||
Other |
|
|
|
|
|
|
||
Total accrued expenses and other current liabilities |
|
$ |
|
|
$ |
|
||
9. DEBT
On March 18, 2026 (the “Closing Date”), the Company entered into a Loan and Security Agreement (the “Loan Agreement”) with Horizon Technology Finance Corporation (the “Lender”), as lender and collateral agent, providing for a senior secured term loan facility with an aggregate principal amount of up to $
Borrowings under the Loan Agreement bear interest at a variable rate equal to the prime rate plus
The Company paid a commitment fee of $
Interest expense related to the term loan includes stated interest, the amortization of debt issuance costs and debt discount, and the accretion of the final payment fee, each of which is recognized using the effective interest method over the contractual term of the loan.
The obligations under the Loan Agreement are guaranteed by the Company's wholly owned subsidiaries, Hyperfine Operations, Inc. and Liminal Sciences, Inc., and are secured by substantially all of the Company's and the guarantors' assets, subject to customary exceptions, including that intellectual property is excluded from the collateral at closing and until the first funding of any additional loan tranche following the Closing Date.
17
HYPERFINE, INC. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)
(all amounts are in thousands, except share and per share amounts)
The Loan Agreement contains customary affirmative and negative covenants, including restrictions on indebtedness, liens, asset dispositions, investments and dividends. As of September 30, 2026, the Company was in compliance with all applicable covenants.
In connection with the Loan Agreement, on the Closing Date the Company executed and delivered to the Lender (i) warrants to purchase up to an aggregate of
The Initial Warrants were evaluated and classified as equity. Proceeds received at closing under the Loan Agreement were allocated between the term loan and the Initial Warrants using the relative fair value method. Accordingly, the relative fair value of the Initial Warrants at issuance of $
Upon issuance, the Initial Warrants were recorded at their relative fair value using the Black-Scholes option-pricing model and the following assumptions:
The net carrying amount of the term loan was as follows:
|
|
As of September 30, 2026 |
|
|
Principal |
|
$ |
|
|
Add: accrued final payment fee |
|
|
|
|
Less: unamortized debt discount |
|
|
( |
) |
Long-term debt, net |
|
$ |
|
|
Current portion |
|
$ |
|
|
Long-term portion |
|
$ |
|
|
10. STOCKHOLDERS' EQUITY
Common Stock At-the-Market Offering Program
On November 9, 2023, the Company filed a shelf registration statement on Form S-3 (File No. 333-275449), which became effective on November 22, 2023. The shelf registration statement permits the Company to sell, from time to time, up to $
The shelf registration statement also included a prospectus supplement covering up to an aggregate of $
18
HYPERFINE, INC. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)
(all amounts are in thousands, except share and per share amounts)
supplement dated November 22, 2023, effective as of December 29, 2025, the Company had issued and sold an aggregate of
February 2025 Common Stock and Common Stock Warrants
On February 12, 2025, the Company closed the transactions pursuant to a securities purchase agreement with certain institutional investors (the “Investors”), in which the Company issued and sold, in a registered direct offering by the Company directly to the Investors (the “February 2025 Offering”): (i)
During the three and nine months ended September 30, 2026, holders did not exercise any of the February 2025 Warrants.
March 2026 Common Stock Warrants
In connection with the Loan Agreement, on the Closing Date, the Company issued the Initial Warrants, which are immediately exercisable, and the Additional Warrants, which are exercisable only upon the funding of future loan tranches. The Initial Warrants and the Additional Warrants expire
During the three and nine months ended September 30, 2026, holders did not exercise any of the Initial Warrants.
Equity Incentive Plans
Hyperfine, Inc. 2021 Equity Incentive Plan and Inducement Option Grant
The Company’s equity incentive plans include the Company’s 2021 Equity Incentive Plan (the “Hyperfine Plan”). The Hyperfine Plan is administered by the Company's board of directors. The board of directors may grant restricted stock and options to purchase shares either as incentive stock options or non-qualified stock options. The option grants are subject to certain terms and conditions, option periods and conditions, exercise rights and privileges as set forth in the Hyperfine Plan. Effective January 1, 2026, the number of shares available for grant increased by
In addition, the Company has made an inducement option grant outside of the Hyperfine Plan in accordance with Nasdaq Listing Rule 5635(c)(4).
19
HYPERFINE, INC. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)
(all amounts are in thousands, except share and per share amounts)
Stock option activity
The following table summarizes the changes in the Company’s outstanding stock options for the nine months ended September 30, 2026:
|
|
Number of |
|
|
Weighted Average Exercise Price |
|
||
Outstanding at January 1, 2026 |
|
|
|
|
$ |
|
||
Granted |
|
|
|
|
$ |
|
||
Exercised |
|
|
( |
) |
|
$ |
|
|
Forfeited / Cancelled / Expired |
|
|
( |
) |
|
$ |
|
|
Outstanding at September 30, 2026 |
|
|
|
|
$ |
|
||
The Company utilized the Black-Scholes option pricing model for determining the estimated fair value for service awards. The Black-Scholes model requires the use of subjective assumptions which determine the fair value of stock-based awards.
|
|
September 30, |
Risk Free interest rate |
|
|
Expected dividend yield |
|
|
Expected term |
|
|
Expected volatility |
|
Restricted stock unit activity
The following table summarizes the changes in the Company’s outstanding restricted stock units (“RSUs”) for the nine months ended September 30, 2026:
|
|
Number of |
|
|
Weighted Average Grant Date Fair Value |
|
||
Outstanding at January 1, 2026 |
|
|
|
|
$ |
|
||
Granted |
|
|
|
|
$ |
|
||
Released |
|
|
( |
) |
|
$ |
|
|
Forfeited |
|
|
( |
) |
|
$ |
|
|
Outstanding at September 30, 2026 |
|
|
|
|
$ |
|
||
The Company’s stock-based compensation expenses for the periods presented were as follows:
|
|
Three Months Ended |
|
|
Nine Months Ended |
|
||||||||||
|
|
2026 |
|
|
2025 |
|
|
2026 |
|
|
2025 |
|
||||
Cost of sales |
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
||||
Research and development |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Sales and marketing |
|
|
|
|
|
|
|
|
|
|
|
|
||||
General and administrative |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Total stock-based compensation expense |
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
||||
20
HYPERFINE, INC. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)
(all amounts are in thousands, except share and per share amounts)
11. NET LOSS PER SHARE
Basic net loss per share is computed by dividing the net loss by the weighted-average number of shares of common stock of the Company outstanding during the period. Diluted net loss per share is computed by giving effect to all common equivalent shares of the Company, including outstanding stock options, RSUs, and warrants to the extent dilutive. Basic and diluted net loss per share was the same for each period presented as the inclusion of all common equivalent shares of the Company outstanding would have been anti-dilutive.
The following table presents the calculation of basic and diluted net loss per share for the Company’s common stock:
|
|
Three Months Ended |
|
|
Nine Months Ended |
|
||||||||||
|
|
2026 |
|
|
2025 |
|
|
2026 |
|
|
2025 |
|
||||
Numerator: |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Net Loss |
|
$ |
( |
) |
|
$ |
( |
) |
|
$ |
( |
) |
|
$ |
( |
) |
Numerator for Basic and Dilutive EPS – Loss available to common stockholders |
|
$ |
( |
) |
|
$ |
( |
) |
|
$ |
( |
) |
|
$ |
( |
) |
Denominator: |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Common Stock |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Denominator for Basic and Dilutive EPS - Weighted-average common stock |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Basic and dilutive net loss per share |
|
$ |
( |
) |
|
$ |
( |
) |
|
$ |
( |
) |
|
$ |
( |
) |
Since the Company was in a net loss position for all periods presented, net loss per share attributable to Class A and Class B common stockholders was the same on a basic and diluted basis, as the inclusion of all common equivalent shares outstanding would have been anti-dilutive.
|
|
Three Months Ended |
|
|
Nine Months Ended |
|
||||||||||
|
|
2026 |
|
|
2025 |
|
|
2026 |
|
|
2025 |
|
||||
Outstanding options to purchase common stock |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Outstanding RSUs |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Warrants issued in connection with February 2025 Offering |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Warrants issued in connection with Loan Agreement |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Total anti-dilutive common equivalent shares |
|
|
|
|
|
|
|
|
|
|
|
|
||||
The Loan Agreement also provides for Additional Warrants to purchase up to an aggregate of
12. INCOME TAXES
The Company accounts for income taxes under ASC 740, “Income Taxes” (“ASC 740”). ASC 740 requires the recognition of deferred tax assets and liabilities for both the expected impact of differences between the financial statement and tax basis of assets and liabilities and for the expected future tax benefit to be derived from tax loss and tax credit carry forwards. ASC 740 additionally requires a valuation allowance to be established when it is more likely than not that all or a portion of deferred tax assets will not be realized.
Income taxes for the three and nine months ended September 30, 2026 are recorded at the Company’s estimated annual effective income tax rate, subject to adjustments for discrete events, if they occur. The Company’s estimated annual effective tax rate was
21
HYPERFINE, INC. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)
(all amounts are in thousands, except share and per share amounts)
tax rate of
A valuation allowance is required when it is more likely than not that some portion or all of the Company’s deferred tax assets will not be realized. The realization of deferred tax assets depends on the generation of sufficient future taxable income during the period in which the Company’s related temporary differences become deductible. The Company has recorded a full valuation allowance against its net deferred tax assets as of September 30, 2026 and December 31, 2025 since management believes that, based on the earnings history of the Company, it is more likely than not that the benefits of these assets will not be realized.
13. RELATED PARTY TRANSACTIONS
The Company utilized and subleased office and lab space in Connecticut from 4Catalyzer Corporation (“4C”), a related party, under a month-to-month arrangement that continued through August 31, 2026. Effective September 1, 2026, the space occupied under this arrangement was incorporated into the Company's amended and restated lease agreement for its Guilford, Connecticut facility, consolidating the Company's Guilford operations under a single lease with the unrelated third-party landlord. A total of approximately $
Hyperfine entered into a Master Services Agreement (the “Master Services Agreement”) with 4C effective as of July 7, 2021 pursuant to which Hyperfine may engage 4C to provide services such as general administration, facilities, information technology, financing, legal, human resources and other services, through future statements of work and under terms and conditions to be determined by the parties with respect to any services to be provided. The Company paid an aggregate of $
14. COMMITMENTS AND CONTINGENCIES
Commitments
The Company sponsors a 401(k) defined contribution plan covering all eligible U.S. employees. Contributions to the 401(k) plan are discretionary. The Company did
During 2020 and 2021, the Company was awarded multiple grants totaling $
22
HYPERFINE, INC. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)
(all amounts are in thousands, except share and per share amounts)
sheet. As of September 30, 2026 and December 31, 2025, there were
Purchase Commitments
The Company’s purchase commitments and obligations include all open purchase orders and contractual obligations in the ordinary course of business, including commitments with contract manufacturers and suppliers, for which the Company has not received the goods or services. A majority of these purchase obligations are due within a year. Although open purchase orders are considered enforceable and legally binding, the terms generally allow the Company the option to cancel, reschedule, and adjust its requirements based on the Company’s business needs prior to the delivery of goods or performance of services.
Contingencies
The Company is, from time to time, a party to litigation that arises in the normal course of its business operations. The Company is not presently a party to any litigation for which it believes a loss is probable requiring an amount to be accrued or a possible loss contingency requiring disclosure.
The Company has indemnification obligations under some agreements that the Company enters into with other parties in the ordinary course of business, including business partners, investors, contractors, and the Company’s officers, directors and certain employees. The Company has agreed to indemnify and defend the indemnified party against claims and related losses suffered or incurred by the indemnified party from actual or threatened third-party claims because of the Company’s activities or non-compliance with certain representations and warranties made by the Company. It is not possible to determine the maximum potential loss under these indemnification provisions due to the Company’s limited history of prior indemnification claims and the unique facts and circumstances involved in any particular case. The Company has
15. REPORTABLE SEGMENTS AND GEOGRAPHIC INFORMATION
The Company operates in one business segment, which includes all activities related to production, supply, service and commercialization of the Swoop® system. The determination of a single business segment is consistent with the consolidated financial information regularly provided to the Company’s chief operating decision maker (“CODM”).
All of the Company’s long-lived assets are located in the United States. Non-U.S. revenue is attributed to revenue from customers located in foreign countries. Other than revenue recognized in non-U.S. countries of $
16. SUBSEQUENT EVENTS
The Company has evaluated subsequent events through the date the condensed consolidated financial statements were issued and has determined that there were no subsequent events required to be disclosed.
23
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations
The following discussion and analysis provides information which management believes is relevant to an assessment and understanding of our condensed consolidated results of operations and financial condition. The discussion should be read in conjunction with the unaudited condensed consolidated financial statements and notes thereto contained in this Quarterly Report on Form 10-Q and the consolidated financial statements and notes thereto for the year ended December 31, 2025 contained in our 2025 Annual Report on Form 10-K. This discussion contains forward-looking statements and involves numerous risks and uncertainties, including, but not limited to, those described in the “Risk Factors” sections of our 2025 Annual Report on Form 10-K, and of this Quarterly Report on Form 10-Q, as updated and/or supplemented in subsequent filings with the SEC. Actual results may differ materially from those contained in any forward-looking statements. Unless the context otherwise requires, references to “we,” “us,” “our,” and “the Company” are intended to mean the business and operations of Hyperfine, Inc. and its consolidated subsidiaries. The unaudited condensed consolidated financial statements for the three and nine months ended September 30, 2026 and 2025, present the financial position and results of operations of Hyperfine, Inc. and its wholly owned subsidiaries.
Overview
We are an innovative health technology business with a mission to revolutionize patient care globally through accessible, affordable, clinically relevant artificial intelligence (“AI”)-powered portable ultra-low-field (“ULF”) magnetic resonance (“MR”) brain imaging. Our Swoop® Portable MR Imaging® System (“Swoop® system”) produces high-quality images at a significantly lower magnetic field strength than conventional magnetic resonance imaging (“MRI”) scanners. Our Swoop® system is designed to transform brain MR for the patient, the clinician and the provider, enabling a highly differentiated patient-friendly experience, timely imaging for clinicians, and favorable economics for healthcare administrators. The Swoop® system is a portable, ULF MRI device for producing images that display the internal structures of the head where full diagnostic examination is not clinically practical. When interpreted by a trained physician, these images provide information that can be useful in determining a diagnosis. Healthcare professionals can use the Swoop® system efficiently to make effective clinical diagnoses and decisions in various care settings where conventional MRI devices are inaccessible and/or when they are not readily available. The portable design of our Swoop® system makes it safely and readily accessible anywhere in a hospital, clinic, physician’s office, or patient care site and it does not require any special facilities accommodations. The easy to use, iPad-based interface makes its operation easy to learn and it does not require specialized MRI technicians to operate safely. ULF MR does not expose patients to harmful ionizing radiation and compares favorably in this regard to X-ray computed tomography (“CT”) or positron emission tomography (“PET”).
The demand for MR imaging has been increasing due to the aging population and the rising prevalence of neurological, neurodegenerative, and cardiovascular conditions, and also the trends towards decentralized healthcare in mature, as well as low- and middle-income countries. Healthcare professionals and insurers recognize MR imaging as an effective, non-invasive diagnostic tool for evaluating and ongoing monitoring of patients at risk of or with neurological conditions. The Swoop® system is the next-generation brain imaging scanner designed to increase access to MRI in a cost-effective and workflow efficient manner. We believe our market opportunity is significant considering the multiple sites of care where the Swoop® system brings clinical and economic value. We estimate in the United States alone that our total addressable market for Swoop® system device placements is more than $16 billion. As adoption of our portable imaging technology expands, we believe AI-enabled workflows may help extend timely brain imaging beyond traditional medical settings and uses, potentially supporting applications in preventive care, routine monitoring, and emerging areas of brain health and wellness.
Despite their advantages, many healthcare institutions worldwide lack the facilities, specialized technicians, and capital necessary to acquire, maintain, and staff expensive conventional MRI devices. The Swoop® system is the first FDA-cleared, portable, ULF, MR brain imaging system that is capable of providing imaging at multiple sites of care, such as intensive care units (“ICUs”), emergency departments, procedural rooms, clinics or physicians’ offices, and can inform the timely detection, diagnosis, monitoring, and treatment of acute and chronic neurological conditions inside and outside the hospital. We designed the Swoop® system to address the limitations of conventional MRI technologies and make brain MR imaging accessible nearly anywhere in a timely manner, closer to the patient, across professional healthcare settings. We believe the adoption of the Swoop® system by healthcare professionals has potential clinical and economic benefits throughout healthcare systems in both high and low resource settings.
The Swoop® system is AI-powered and integrates deep learning, Optive AITM, a form of AI in the denoising and reconstruction pipeline of the sequences. We offer T1, T2, diffusion-weighted imaging (“DWI”), and
24
fluid-attenuated inversion recovery (“FLAIR”) sequences, in both fast and high resolution modes. Scanning time varies based on protocols but on average a full brain scan takes around 25 minutes. The integration of deep learning does not require any additional steps from the user. As a result, deep learning can enhance the image quality and, consequently, the diagnostic value of images generated at ULF. Our proprietary Optive AITM models are designed to improve ULF image quality, while reducing the impact of scan artifacts. The Optive AITM models are validated by expert radiologists. The Swoop® system is used clinically every day as the first mover in the field of AI-powered portable MRI, and the installed base continues to expand globally. The learnings from this market experience have served to improve our hardware, software, AI, and denoising algorithms resulting in the image quality and performance improvements of our product over the eleven generations of software since our initial clearance. As we move forward, we are continuously investing in improving our AI-powered image quality and leveraging each imaging-focused software release to further improve the Swoop® system performance and clinical utility.
Our Swoop® system received initial 510(k) clearance for brain imaging from the U.S. Food and Drug Administration (the “FDA”) in 2020. In May 2025, we received 510(k) clearance from the FDA for our tenth-generation AI-powered software, Optive AI™ software. The tenth-generation software enhances each stage of image processing from noise cancellation and image acquisition to reconstruction and post processing and produces brain images with greater clarity, uniformity and sharper anatomical detail.
Obtaining 510(k) clearance from the FDA in late May 2025 for our new next-generation Swoop® scanner powered by Optive AITM software was a very important milestone for us. The next-generation Swoop® system incorporates learnings from five years of real-world experience, features new hardware and is powered by Optive AI™ software. The next-generation Swoop® system incorporates innovations specifically engineered to deliver the highest signal-to-noise ratio, which, when paired with the Optive AI™ software, achieves exceptional image quality at low-field MRI, including improved resolution and uniformity, as well as faster acquisition times.
In December 2025, we received FDA clearance for the eleventh-generation AI-powered software. The eleventh-generation software includes a new multi-direction DWI sequence in our Optive AITM software, and this software enhancement expands the Swoop® system’s clinical capabilities by improving image quality and diagnostic confidence for stroke detection, including clearer visualization of smaller lesions and more reliable differentiation of infarcts. The multi-direction DWI sequence uses multi-direction signal acquisition, similar to techniques used in high-field MRI, and is designed to reduce artifacts that may obscure stroke pathology, while the existing single-direction DWI sequence remains available for extremely time-sensitive imaging where rapid acquisition is critical to meeting stroke treatment protocols.
In August 2026, we received FDA clearance for the latest Optive AI™ software update for the Swoop® system. This software enhancement expands the Swoop® system's clinical utility through improved image quality across imaging sequences, user interface and workflow enhancements designed to simplify system operation, and a new isotropic T1 imaging sequence. The software update also includes advanced noise correction capabilities intended to deliver clearer and more consistent images across a range of care environments.
Outside of the United States, the first-generation Swoop® system has received marketing authorization for brain imaging in several countries, including the European Union (“CE Mark”), the United Kingdom (UK Conformity Assessment (“UKCA Mark”)), Canada, Australia, New Zealand and India. In October 2024 and February 2025, we received CE Mark and UKCA Mark approval for the ninth-generation of software, respectively. In August 2025, we received both CE Mark and UKCA Mark approvals for our Optive AI™ software. In March 2026, we achieved an important milestone and received both CE Mark and UKCA Mark approval for both the next-generation Swoop® scanner and the eleventh-generation Optive AI™ software. In October 2026, we received CE Mark and UKCA Mark approvals for the latest Optive AI™ software. In December 2025, we received regulatory approval in India from the Central Drugs Standard Control Organization (“CDSCO”), authorizing commercialization of the first-generation Swoop® system throughout India.
Key Performance Metrics
Management reviews and analyzes several key performance measures, including total revenues and total Swoop® system units sold. These measures are reviewed and analyzed to evaluate our business performance, identify trends affecting our business, allocate capital, and make strategic decisions.
Total revenues were $6.0 million and $13.8 million for the three and nine months ended September 30, 2026, respectively, as compared to revenue of $3.4 million and $8.3 million for the three and nine months ended
25
September 30, 2025, respectively, primarily driven by an increase in units sold and an increase in average selling price. See “Results of Operations - Sales” below for further information. Total Swoop® system units sold were 14 units and 36 units for the three and nine months ended September 30, 2026, respectively, as compared to 8 units and 22 units for the three and nine months ended September 30, 2025, respectively. Our revenue growth reflects accelerated commercial adoption, continued growth in our installed base and service revenue, expansion into neurology offices and other outpatient settings, broader adoption across sites within hospitals and health systems, growth in international markets and higher average selling prices driven by the mid-2025 launch of our next-generation Swoop® system powered by Optive AI™ software.
Factors Affecting Results of Operations
The following factors have been important to our business and we expect them to impact our results of operations and financial condition in future periods:
Technical innovation
We have developed our Swoop® system through extensive research and development activities. Moreover, our team is dedicated to clinical support programs designed to integrate the Swoop® system into an array of diverse healthcare environments, workflow, and applications. We believe that, from our commercial and clinical experience, we are gaining invaluable insights into the Swoop® system’s clinical utility. We believe these learnings will enable us to further improve our product and develop new services and tools in the future. We are continuously improving our image quality and imaging capabilities. Building upon this foundation and our expertise in ULF brain imaging, we plan to develop new imaging applications, broadening the range of clinical uses for our proprietary technology. Additionally, we are leveraging our strengths in AI and cloud technology to explore the Swoop® system’s role as a brain imaging clinical decision support platform. While these technical innovations may increase our research and development expenses, we expect them to have a positive impact on our results of operations and profitability in the future.
Commercialization efforts of the Swoop® system
Our results have included revenue from the United States and outside the United States. Our Swoop® system received initial 510(k) clearance from the FDA in 2020. Initially, we have been focused on executing contracts with U.S. hospitals and hospital systems. We have built a direct sales and field support organization in the United States that works in strong collaboration to increase adoption, support successful implementations and support routine use at customer sites. We are expanding our commercial focus beyond our initial call point of critical care in the hospital into hospital emergency departments, hospital-based neurology clinics and outside the hospital in neurology offices. This commercial expansion is supported by the product launch of our next-generation Swoop® system powered by our Optive AITM software.
Expand sales in international markets
The countries outside of the United States in which we are commercializing our first-generation Swoop® system include Canada, certain European and Middle Eastern markets, Australia, New Zealand and India. We obtained a Medical Device License issued by Health Canada, UKCA Mark in the United Kingdom, CE Mark in the EU, and regulatory authorization in Australia and New Zealand. The Swoop® system CE Mark and UKCA Mark approval of the ninth-generation AI-powered Swoop® system software in October 2024 and February 2025, and CE Mark and UKCA Mark approval for our Optive AITM software in August 2025, enable a broader international commercial expansion of the Swoop® system, bringing cutting-edge brain imaging technology to new global markets. The Swoop® system received CE Mark and UKCA Mark approval in March 2026 for both the next-generation Swoop® scanner and the eleventh-generation Optive AI™ software, enabling commercialization in Europe of the exceptional low-field MRI image quality recently commercialized in the United States. Further, we are executing on a global expansion strategy, broadening access to MR brain imaging in regions with large populations, low penetration of MRI, and significant unmet healthcare needs. In December 2025, we received regulatory approval in India from the CDSCO, authorizing commercialization of the first-generation Swoop® system throughout India.
Our commitment to the vision of providing affordable and accessible imaging that enables earlier detection and timely management of health conditions worldwide is furthermore advanced by grant funding from the Bill and
26
Melinda Gates Foundation (“BMGF”). Through our engagement with the BMGF, we have deployed the Swoop® system in low-middle income settings without readily-accessible MRI technology. During 2020 and 2021, we were awarded multiple grants totaling $4.9 million from the BMGF for the provision and equipping of sites with our portable MR brain imaging system to enable the performance of a multi-site study focused on optimizing diagnostic image quality. These grants were designed to provide data to validate the use of the Swoop® system in measuring the impact of maternal anemia, malnutrition, infection and birth-related injury. These grants were designed to support the deployment of a total of 25 Swoop® system devices and other services to investigators, which commenced in the spring of 2021 and was completed by February 2024. In May 2023, we were awarded an additional $3.4 million grant from the BMGF to continue to develop a scalable approach to measuring neurodevelopment via low-field MRI in neonates, infants, and young children in low-to-middle income countries through February 2026. In November 2025, we were awarded a further $3.7 million grant from the BMGF to support continued technical innovation using our AI-powered portable MRI platform, with a focus on neonatal brain imaging and objective assessment of neurodevelopment in resource-constrained settings through March 2028. This funding supports ongoing collaboration with academic and clinical partners to advance AI-based image processing and analysis capabilities designed to improve image quality and diagnostic reliability in neonatal and early childhood imaging. During the three and nine months ended September 30, 2026, we completed and fulfilled grant deliverables and milestones amounting to $0.5 million and $1.6 million, respectively.
Results of Operations
The following is a discussion of our results of operations for the periods shown below, and our accounting policies are described under "Summary of Significant Accounting Policies" in Note 2 to our unaudited condensed consolidated financial statements included in this Quarterly Report on Form 10-Q.
Comparison of the three and nine months ended September 30, 2026 and 2025 ($ Amounts shown in tables in thousands)
|
|
Three Months Ended |
|
|
Change |
|
|
Nine Months Ended |
|
|
Change |
|
||||||||||||
($ Amounts in thousands) |
|
2026 |
|
|
2025 |
|
|
% |
|
|
2026 |
|
|
2025 |
|
|
% |
|
||||||
Sales |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Device |
|
$ |
5,243 |
|
|
$ |
2,891 |
|
|
|
81.4 |
% |
|
$ |
11,670 |
|
|
$ |
6,541 |
|
|
|
78.4 |
% |
Service |
|
|
717 |
|
|
|
546 |
|
|
|
31.3 |
% |
|
|
2,097 |
|
|
|
1,729 |
|
|
|
21.3 |
% |
Total sales |
|
$ |
5,960 |
|
|
$ |
3,437 |
|
|
|
73.4 |
% |
|
$ |
13,767 |
|
|
$ |
8,270 |
|
|
|
66.5 |
% |
Cost of Sales |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Device |
|
$ |
2,290 |
|
|
$ |
1,328 |
|
|
|
72.4 |
% |
|
$ |
5,539 |
|
|
$ |
3,410 |
|
|
|
62.4 |
% |
Service |
|
|
288 |
|
|
|
261 |
|
|
|
10.3 |
% |
|
|
887 |
|
|
|
801 |
|
|
|
10.7 |
% |
Cost of sales |
|
$ |
2,578 |
|
|
$ |
1,589 |
|
|
|
62.2 |
% |
|
$ |
6,426 |
|
|
$ |
4,211 |
|
|
|
52.6 |
% |
Gross profit |
|
|
3,382 |
|
|
|
1,848 |
|
|
|
83.0 |
% |
|
|
7,341 |
|
|
|
4,059 |
|
|
|
80.9 |
% |
Operating expenses: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Research and development |
|
$ |
3,913 |
|
|
$ |
4,048 |
|
|
|
(3.3 |
)% |
|
$ |
11,623 |
|
|
$ |
13,626 |
|
|
|
(14.7 |
)% |
General and administrative |
|
|
4,051 |
|
|
|
4,152 |
|
|
|
(2.4 |
)% |
|
|
12,088 |
|
|
|
12,219 |
|
|
|
(1.1 |
)% |
Sales and marketing |
|
|
2,675 |
|
|
|
2,568 |
|
|
|
4.2 |
% |
|
|
7,914 |
|
|
|
7,631 |
|
|
|
3.7 |
% |
Total operating expenses |
|
$ |
10,639 |
|
|
$ |
10,768 |
|
|
|
(1.2 |
)% |
|
$ |
31,625 |
|
|
$ |
33,476 |
|
|
|
(5.5 |
)% |
Loss from operations |
|
|
(7,257 |
) |
|
|
(8,920 |
) |
|
|
(18.6 |
)% |
|
|
(24,284 |
) |
|
|
(29,417 |
) |
|
|
(17.4 |
)% |
Interest income |
|
|
291 |
|
|
|
187 |
|
|
|
55.6 |
% |
|
|
817 |
|
|
|
743 |
|
|
|
10.0 |
% |
Interest expense |
|
|
(549 |
) |
|
|
— |
|
|
NM |
|
|
|
(1,165 |
) |
|
|
— |
|
|
NM |
|
||
Change in fair value of warrant liabilities |
|
|
1,516 |
|
|
|
(2,303 |
) |
|
NM |
|
|
|
704 |
|
|
|
(639 |
) |
|
NM |
|
||
Other income (expense), net |
|
|
18 |
|
|
|
17 |
|
|
NM |
|
|
|
26 |
|
|
|
(349 |
) |
|
NM |
|
||
Loss before provision for income taxes |
|
$ |
(5,981 |
) |
|
$ |
(11,019 |
) |
|
|
(45.7 |
)% |
|
$ |
(23,902 |
) |
|
$ |
(29,662 |
) |
|
|
(19.4 |
)% |
Provision for income taxes |
|
|
— |
|
|
|
— |
|
|
NM |
|
|
|
— |
|
|
|
— |
|
|
NM |
|
||
Net loss and comprehensive loss |
|
$ |
(5,981 |
) |
|
$ |
(11,019 |
) |
|
|
(45.7 |
)% |
|
$ |
(23,902 |
) |
|
$ |
(29,662 |
) |
|
|
(19.4 |
)% |
NM - Not meaningful
27
Sales
|
|
Three Months Ended |
|
|
Change |
|
|
Nine Months Ended |
|
|
Change |
|
||||||||||||||||||||
|
|
2026 |
|
|
2025 |
|
|
Amount |
|
|
% |
|
|
2026 |
|
|
2025 |
|
|
Amount |
|
|
% |
|
||||||||
Device |
|
$ |
5,243 |
|
|
$ |
2,891 |
|
|
$ |
2,352 |
|
|
|
81.4 |
% |
|
$ |
11,670 |
|
|
$ |
6,541 |
|
|
$ |
5,129 |
|
|
|
78.4 |
% |
Service |
|
|
717 |
|
|
|
546 |
|
|
|
171 |
|
|
|
31.3 |
% |
|
|
2,097 |
|
|
|
1,729 |
|
|
|
368 |
|
|
|
21.3 |
% |
Total sales |
|
$ |
5,960 |
|
|
$ |
3,437 |
|
|
$ |
2,523 |
|
|
|
73.4 |
% |
|
$ |
13,767 |
|
|
$ |
8,270 |
|
|
$ |
5,497 |
|
|
|
66.5 |
% |
Device sales increased by $2.4 million, or 81.4%, for the three months ended September 30, 2026 compared to the three months ended September 30, 2025. The increase was driven primarily by an increase in units sold and an increase in average selling price.
Service sales increased by $0.2 million, or 31.3%, for the three months ended September 30, 2026 compared to the three months ended September 30, 2025. The increase was driven primarily by continued growth in the installed base.
Device sales increased by $5.1 million, or 78.4%, for the nine months ended September 30, 2026 compared to the nine months ended September 30, 2025. The increase was driven primarily by an increase in units sold and an increase in average selling price.
Service sales increased by $0.4 million, or 21.3%, for the nine months ended September 30, 2026 compared to the nine months ended September 30, 2025. The increase was driven primarily by continued growth in the installed base.
Cost of sales
|
|
Three Months Ended |
|
|
Change |
|
|
Nine Months Ended |
|
|
Change |
|
||||||||||||||||||||
|
|
2026 |
|
|
2025 |
|
|
Amount |
|
|
% |
|
|
2026 |
|
|
2025 |
|
|
Amount |
|
|
% |
|
||||||||
Device |
|
$ |
2,290 |
|
|
$ |
1,328 |
|
|
$ |
962 |
|
|
|
72.4 |
% |
|
$ |
5,539 |
|
|
$ |
3,410 |
|
|
$ |
2,129 |
|
|
|
62.4 |
% |
Service |
|
|
288 |
|
|
|
261 |
|
|
|
27 |
|
|
|
10.3 |
% |
|
|
887 |
|
|
|
801 |
|
|
|
86 |
|
|
|
10.7 |
% |
Total cost of sales |
|
$ |
2,578 |
|
|
$ |
1,589 |
|
|
$ |
989 |
|
|
|
62.2 |
% |
|
$ |
6,426 |
|
|
$ |
4,211 |
|
|
$ |
2,215 |
|
|
|
52.6 |
% |
Cost of sales as percentage of revenue |
|
|
43.3 |
% |
|
|
46.2 |
% |
|
|
|
|
|
|
|
|
46.7 |
% |
|
|
50.9 |
% |
|
|
|
|
|
|
||||
Gross margin |
|
|
56.7 |
% |
|
|
53.8 |
% |
|
|
|
|
|
|
|
|
53.3 |
% |
|
|
49.1 |
% |
|
|
|
|
|
|
||||
Cost of device sales increased by $1.0 million, or 72.4%, for the three months ended September 30, 2026 compared to the three months ended September 30, 2025. This increase was driven primarily by increased costs associated with higher sales volume.
Cost of service sales was relatively flat for the three months ended September 30, 2026 compared to the three months ended September 30, 2025.
Cost of device sales increased by $2.1 million, or 62.4%, for the nine months ended September 30, 2026 compared to the nine months ended September 30, 2025. This increase was driven primarily by increased costs associated with higher sales volume.
Cost of service sales was relatively flat for the nine months ended September 30, 2026 compared to the nine months ended September 30, 2025.
Gross profit and gross margin
Gross profit increased by $1.5 million, or 83.0%, to $3.4 million for the three months ended September 30, 2026, compared to $1.8 million for the three months ended September 30, 2025. Gross margin increased to 56.7% for the three months ended September 30, 2026 from 53.8% for the three months ended September 30, 2025. The increase in gross margin was primarily attributable to higher sales volumes and average selling prices, which outpaced growth in cost of sales.
28
Gross profit increased by $3.3 million, or 80.9%, to $7.3 million for the nine months ended September 30, 2026, compared to $4.1 million for the nine months ended September 30, 2025. Gross margin increased to 53.3% for the nine months ended September 30, 2026 from 49.1% for the nine months ended September 30, 2025. The increase in gross margin was primarily attributable to higher sales volumes and average selling prices, which outpaced growth in cost of sales.
Research and development
|
|
Three Months Ended |
|
|
Change |
|
|
Nine Months Ended |
|
|
Change |
|
||||||||||||||||||||
|
|
2026 |
|
|
2025 |
|
|
Amount |
|
|
% |
|
|
2026 |
|
|
2025 |
|
|
Amount |
|
|
% |
|
||||||||
Research and development |
|
$ |
3,913 |
|
|
$ |
4,048 |
|
|
$ |
(135 |
) |
|
|
(3.3 |
)% |
|
$ |
11,623 |
|
|
$ |
13,626 |
|
|
$ |
(2,003 |
) |
|
|
(14.7 |
)% |
Research and development expenses were relatively flat for the three months ended September 30, 2026 compared to the three months ended September 30, 2025.
Research and development expenses decreased by $2.0 million, or 14.7%, for the nine months ended September 30, 2026 compared to the nine months ended September 30, 2025. This decrease was driven primarily by a $1.1 million decrease in salaries and benefits, including stock-based compensation, due to lower headcount and a $0.9 million increase in grant fulfillment credits.
General and administrative
|
|
Three Months Ended |
|
|
Change |
|
|
Nine Months Ended |
|
|
Change |
|
||||||||||||||||||||
|
|
2026 |
|
|
2025 |
|
|
Amount |
|
|
% |
|
|
2026 |
|
|
2025 |
|
|
Amount |
|
|
% |
|
||||||||
General and administrative |
|
$ |
4,051 |
|
|
$ |
4,152 |
|
|
$ |
(101 |
) |
|
|
(2.4 |
)% |
|
$ |
12,088 |
|
|
$ |
12,219 |
|
|
$ |
(131 |
) |
|
|
(1.1 |
)% |
General and administrative expenses decreased by $0.1 million, or 2.4%, for the three months ended September 30, 2026 compared to the three months ended September 30, 2025. This decrease was driven primarily by a $0.5 million decrease in allowance for credit losses, partially offset by a $0.4 million increase in salaries and benefits, including stock-based compensation.
General and administrative expenses decreased by $0.1 million, or 1.1%, for the nine months ended September 30, 2026 compared to the nine months ended September 30, 2025. This decrease was driven primarily by a $0.8 million decrease in allowance for credit losses, partially offset by a $0.7 million increase in salaries and benefits, including stock-based compensation.
Sales and marketing
|
|
Three Months Ended |
|
|
Change |
|
|
Nine Months Ended |
|
|
Change |
|
||||||||||||||||||||
|
|
2026 |
|
|
2025 |
|
|
Amount |
|
|
% |
|
|
2026 |
|
|
2025 |
|
|
Amount |
|
|
% |
|
||||||||
Sales and marketing |
|
$ |
2,675 |
|
|
$ |
2,568 |
|
|
$ |
107 |
|
|
|
4.2 |
% |
|
$ |
7,914 |
|
|
$ |
7,631 |
|
|
$ |
283 |
|
|
|
3.7 |
% |
Sales and marketing expenses were relatively flat for the three months ended September 30, 2026 compared to the three months ended September 30, 2025.
Sales and marketing expenses were relatively flat for the nine months ended September 30, 2026 compared to the nine months ended September 30, 2025.
Loss from operations
Loss from operations decreased by $1.7 million, or 18.6%, for the three months ended September 30, 2026 compared to the three months ended September 30, 2025. The improvement reflected an 83.0% increase in gross profit, while total operating expenses decreased by 1.2%, as sales growth and gross margin expansion outpaced operating expenses.
29
Loss from operations decreased by $5.1 million, or 17.4%, for the nine months ended September 30, 2026 compared to the nine months ended September 30, 2025. The improvement reflected an 80.9% increase in gross profit and a 5.5% decrease in total operating expenses, including lower research and development expenses, as sales growth and gross margin expansion outpaced operating expenses.
Interest income
|
|
Three Months Ended |
|
|
Change |
|
|
Nine Months Ended |
|
|
Change |
|
||||||||||||||||||||
|
|
2026 |
|
|
2025 |
|
|
Amount |
|
|
% |
|
|
2026 |
|
|
2025 |
|
|
Amount |
|
|
% |
|
||||||||
Interest income |
|
$ |
291 |
|
|
$ |
187 |
|
|
$ |
104 |
|
|
|
55.6 |
% |
|
$ |
817 |
|
|
$ |
743 |
|
|
$ |
74 |
|
|
|
10.0 |
% |
Interest income was relatively flat for the three months ended September 30, 2026 compared to the three months ended September 30, 2025.
Interest income was relatively flat for the nine months ended September 30, 2026 compared to the nine months ended September 30, 2025.
Interest expense
|
|
Three Months Ended |
|
|
Change |
|
Nine Months Ended |
|
|
Change |
||||||||||||||||||
|
|
2026 |
|
|
2025 |
|
|
Amount |
|
|
% |
|
2026 |
|
|
2025 |
|
|
Amount |
|
|
% |
||||||
Interest expense |
|
$ |
(549 |
) |
|
$ |
— |
|
|
$ |
(549 |
) |
|
NM |
|
$ |
(1,165 |
) |
|
$ |
— |
|
|
$ |
(1,165 |
) |
|
NM |
Interest expense increased by $0.5 million for the three months ended September 30, 2026 compared to the three months ended September 30, 2025. The increase was driven primarily by interest incurred on the Loan Agreement (as defined below) entered into in March 2026, including stated interest and non-cash amortization of debt discount and issuance costs.
Interest expense increased by $1.2 million for the nine months ended September 30, 2026 compared to the nine months ended September 30, 2025. The increase was driven primarily by interest incurred on the Loan Agreement entered into in March 2026, including stated interest and non-cash amortization of debt discount and issuance costs.
Change in fair value of warrant liabilities
|
|
Three Months Ended |
|
|
Change |
|
Nine Months Ended |
|
|
Change |
||||||||||||||||||
|
|
2026 |
|
|
2025 |
|
|
Amount |
|
|
% |
|
2026 |
|
|
2025 |
|
|
Amount |
|
|
% |
||||||
Change in fair value of warrant liabilities |
|
$ |
1,516 |
|
|
$ |
(2,303 |
) |
|
$ |
3,819 |
|
|
NM |
|
$ |
704 |
|
|
$ |
(639 |
) |
|
$ |
1,343 |
|
|
NM |
Change in fair value of warrant liabilities increased by $3.8 million for the three months ended September 30, 2026 compared to the three months ended September 30, 2025. This increase was driven by non-cash change in fair value of warrant liabilities related to warrants issued in connection with the February 2025 Offering.
Change in fair value of warrant liabilities increased by $1.3 million for the nine months ended September 30, 2026 compared to the nine months ended September 30, 2025. This increase was driven by non-cash change in fair value of warrant liabilities related to warrants issued in connection with the February 2025 Offering.
Other income (expense), net
|
|
Three Months Ended |
|
|
Change |
|
Nine Months Ended |
|
|
Change |
||||||||||||||||||
|
|
2026 |
|
|
2025 |
|
|
Amount |
|
|
% |
|
2026 |
|
|
2025 |
|
|
Amount |
|
|
% |
||||||
Other income (expense), net |
|
$ |
18 |
|
|
$ |
17 |
|
|
$ |
1 |
|
|
NM |
|
$ |
26 |
|
|
$ |
(349 |
) |
|
$ |
375 |
|
|
NM |
30
Other income (expense), net was relatively flat for the three months ended September 30, 2026 compared to the three months ended September 30, 2025.
Other income (expense), net increased by $0.4 million for the nine months ended September 30, 2026 compared to the nine months ended September 30, 2025. This increase was mainly driven by financing costs allocated to warrant liabilities during the nine months ended September 30, 2025.
Liquidity and Capital Resources
We have funded our operations primarily with proceeds from the issuance of common stock, preferred stock, and warrants and the establishment of a debt facility. We have incurred significant cash burn and recurring net losses, which include a net loss of $6.0 million and $23.9 million for the three and nine months ended September 30, 2026, respectively, and an accumulated deficit of $353.9 million as of September 30, 2026. As of September 30, 2026, we had cash and cash equivalents of $37.9 million. As we continue to invest in research and development of our products and sales and marketing, we expect to continue to incur negative cash flows from operations and recurring net losses for the foreseeable future until such time that our product and services sales generate enough gross profit to cover our operating expenses. However, we can provide no assurance that our product and service sales will generate a net profit in the future or that our cash resources will be sufficient to continue our commercialization and development activities.
In November 2023, we filed a shelf registration statement on Form S-3 (the “Shelf Registration Statement”) with the SEC pursuant to which we registered for sale up to $150 million of any combination of our Class A common stock, preferred stock, debt securities, warrants, rights and/or units from time to time and at prices and on terms that we may determine. The Shelf Registration Statement also included a prospectus covering up to an aggregate of $50.0 million in shares of Class A common stock that we could issue and sell from time to time, through B. Riley Securities, Inc. (“B. Riley”), acting as our sales agent, pursuant to the sales agreement (the “Sales Agreement”) for our “at-the-market” equity program (“ATM”). In December 2025, the Sales Agreement with B. Riley was amended and restated (the “Amended Sales Agreement”) to add BTIG, LLC (“BTIG”) as an additional sales agent and we filed a new prospectus supplement covering up to an aggregate of $50.0 million in shares of Class A common stock that we may issue and sell from time to time, through B. Riley and BTIG acting as our sales agents. The offering of our Class A common stock pursuant to the prospectus supplement dated November 22, 2023 was also terminated such that no further offers or sales will be made pursuant to such prospectus supplement, effective as of December 29, 2025. We are not obligated to make any sales of Class A common stock under the ATM. Prior to the termination of the prospectus supplement dated November 22, 2023, effective as of December 29, 2025, we had issued and sold an aggregate of 3,464,325 shares of our Class A common stock under the Sales Agreement, for total gross proceeds of $4.4 million, before deducting commissions and other offering expenses, and net proceeds of $4.2 million, after deducting such commissions and expenses. As of September 30, 2026, an aggregate of 7,809,779 shares of Class A common stock had been issued and sold under the Amended Sales Agreement, for gross proceeds of $11.7 million, before deducting commissions and other offering expenses, resulting in net proceeds of $11.4 million, after deducting commissions and other offering expenses. We issued and sold an aggregate of 7,809,779 shares of Class A common stock under the Amended Sales Agreement during the nine months ended September 30, 2026, for gross proceeds of $11.7 million, before deducting commissions and other offering expenses, resulting in net proceeds of $11.4 million, after deducting commissions and other offering expenses. No shares of our Class A common stock were issued or sold under the Amended Sales Agreement during the three months ended September 30, 2026.
On November 9, 2026, we plan to file a shelf registration statement on Form S-3 with the SEC to replace our existing shelf registration statement on Form S-3 (File No. 333-275449), which was declared effective on November 22, 2023 and is scheduled to expire on November 22, 2026 (the “Prior Shelf”), pursuant to which we expect to register for sale up to $150.0 million of any combination of our Class A common stock, preferred stock, debt securities, warrants, rights and/or units from time to time and at prices and on terms that we may determine (the “2026 Shelf”), which is the same aggregate amount registered under the Prior Shelf. The 2026 Shelf is expected to include a prospectus supplement covering up to an aggregate of $50.0 million in shares of Class A common stock, which amount is included within, and not in addition to, the $150.0 million registered under the 2026 Shelf, that we may issue and sell from time to time, through B. Riley and BTIG, acting as our sales agents, pursuant to the Amended Sales Agreement, consistent with the at-the-market program under the Prior Shelf. Upon effectiveness of the 2026 Shelf, the Prior Shelf will be deemed terminated and will no longer be available for sales of securities.
31
On February 12, 2025, we closed the transactions pursuant to a securities purchase agreement with certain institutional investors (the “Investors”), in which we issued and sold, in a registered direct offering directly to the Investors (the “February 2025 Offering”): (i) 4,511,278 shares of our Class A common stock and (ii) warrants to purchase up to 4,511,278 shares of our Class A common stock (the “February 2025 Warrants”). Each share and accompanying February 2025 Warrant were sold together at a combined offering price of $1.33. The aggregate gross proceeds from the February 2025 Offering were $6.0 million before deducting the placement agent’s fees and offering expenses, and the net proceeds were $5.2 million, after deducting the placement agent's fees and offering expenses.
On October 17, 2025, we closed an underwritten public offering (the “October 2025 Offering”), in which we issued and sold 14,000,000 shares of our Class A common stock at a public offering price of $1.25 per share, pursuant to an Underwriting Agreement (the “Underwriting Agreement”) with Lake Street Capital Markets, LLC, as the underwriter. On October 17, 2025, we received gross proceeds of $17.5 million from the October 2025 Offering, before deducting underwriting discounts and commissions and other offering expenses, and net proceeds of approximately $15.8 million, after deducting underwriting discounts and commissions and other offering expenses.
Under the terms of the Underwriting Agreement, the underwriter was granted a 30-day option to purchase up to an additional 2,100,000 shares of Class A common stock at the public offering price, less underwriting discounts and commissions (the “Underwriter Option”). The underwriter exercised the Underwriter Option on October 21, 2025, and on October 23, 2025 we received additional gross proceeds of $2.6 million and additional net proceeds of approximately $2.4 million, after deducting underwriting discounts and commissions and other offering expenses.
In the aggregate, we issued and sold 16,100,000 shares of Class A common stock in the October 2025 Offering. Our aggregate gross proceeds from the October 2025 Offering, including the gross proceeds from the exercise of the Underwriter Option, were $20.1 million, and aggregate net proceeds were approximately $18.2 million, after deducting underwriting discounts and commissions and other offering expenses.
On March 18, 2026 (the “Closing Date”), we entered into a Loan and Security Agreement (the “Loan Agreement”) with Horizon Technology Finance Corporation pursuant to which we obtained a senior secured term loan facility with aggregate principal availability of up to $40.0 million. At closing, we borrowed $15.0 million, and the remaining $25.0 million is available to draw prior to December 31, 2027, subject to the satisfaction of certain conditions set forth in the Loan Agreement. The proceeds from the term loan are intended to be used for working capital and general corporate purposes.
Borrowings under the term loan bear interest at a variable rate equal to the prime rate plus 4.25%, subject to a minimum interest rate of 10.75%. The term loan provides for interest-only payments for 48 months from the Closing Date, followed by equal monthly payments of principal and interest through the maturity date of March 18, 2031. Our obligations under the Loan Agreement are guaranteed by our wholly owned subsidiaries and are secured by substantially all of our assets, subject to customary exceptions, including that intellectual property is excluded from the collateral at closing and until the first funding of any additional loan tranche following the Closing Date. The Loan Agreement contains customary affirmative and negative covenants, including limitations on additional indebtedness and certain other transactions. As of September 30, 2026, we were in compliance with all applicable covenants.
In connection with the Loan Agreement, we issued warrants to purchase up to an aggregate of 562,500 shares of Class A common stock at an exercise price of $1.20 per share (the “Initial Warrants”), which are immediately exercisable, and warrants to purchase up to an aggregate of 520,835 shares of Class A common stock at an exercise price of $1.20 per share (the “Additional Warrants”), which are exercisable only upon the funding of future loan tranches. All of these warrants expire seven years from the Closing Date.
Our ability to access capital when needed is not assured and, if capital is not available when, and in the amounts needed, we could be required to delay, scale back or abandon some or all of our development programs, commercialization of our products, and other operations which could materially harm our operations, financial condition and operating results. We expect that our existing cash and cash equivalents, together with proceeds from the sales of our products and services, will enable us to conduct our planned operations for at least the next 12 months. Factors that could accelerate cash needs include: (i) delays in achieving scientific and technical milestones;
32
(ii) unforeseen capital expenditures and fabrication costs related to manufacturing; (iii) changes we may make in our business or commercialization and hiring strategy; (iv) costs of running a public company; (v) higher inflation and increases in product transportation and labor costs; (vi) the effects of the tariffs; and (vii) other items affecting our forecasted level of expenditures and use of cash resources including potential acquisitions.
We expect to use our cash to further invest in the development of our products and services, commercial expansion, and for working capital and general corporate purposes.
Our future cash requirements will depend on many factors, including market adoption of our products; the cost and timing of establishing additional sales, marketing and distribution capabilities; the cost of our research and development activities; our ability to enter into and maintain collaborations; the cost and timing of potential future regulatory clearances or approvals for our products; and the effect of competing technological and market developments. We cannot assure you that we will be able to obtain additional funds on acceptable terms, or at all. If we raise additional funds by issuing equity or equity-linked securities, our stockholders may experience dilution. Future debt financing, if available, may involve covenants restricting our operations or our ability to incur additional debt. Any debt or equity financing that we raise may contain terms that are not favorable to us or our stockholders. If we raise additional funds through collaboration and licensing arrangements with third parties, it may be necessary to relinquish some rights to our technologies or our products, or grant licenses on terms that are not favorable to us. If we do not have or are not able to obtain sufficient funds, we may have to delay development or commercialization of our products. We also may have to reduce marketing, customer support or other resources devoted to our products and services or cease operations.
Cash
As of September 30, 2026, we had cash and cash equivalents of $37.9 million. Our future capital requirements may vary from those currently planned and will depend on various factors including further development costs, commercialization strategy, regulatory developments, supply constraints, manufacturing costs and international expansion. If we need additional funds and are unable to obtain funding on a timely basis, we may need to curtail significantly our product development and commercialization efforts to provide sufficient funds to continue our operations, which could adversely affect our business prospects.
Cash flows
The following table summarizes our cash flows for the periods indicated:
|
|
Nine Months Ended |
|
|||||
(In thousands) |
|
2026 |
|
|
2025 |
|
||
Net cash used in operating activities |
|
$ |
(22,359 |
) |
|
$ |
(22,741 |
) |
Net cash used in investing activities |
|
|
(293 |
) |
|
|
(1,122 |
) |
Net cash provided by financing activities |
|
|
25,260 |
|
|
|
8,220 |
|
Net increase (decrease) in cash, cash equivalents, and restricted cash |
|
$ |
2,608 |
|
|
$ |
(15,643 |
) |
33
Net cash used in operating activities
For the nine months ended September 30, 2026, net cash used in operating activities of $22.4 million was due primarily to a net loss of $23.9 million and changes in operating assets and liabilities of $1.3 million, partially offset by non-cash items of $2.8 million. Non-cash items were primarily stock-based compensation expense of $2.5 million, depreciation expense of $0.8 million and amortization of debt discount and issuance costs of $0.2 million, partially offset by gain on change in fair value of warrant liabilities of $0.7 million. Changes in operating assets and liabilities were driven primarily by a decrease in accounts payable of $2.4 million, an increase in prepaid expenses and other current assets of $1.0 million primarily related to the timing of annual insurance premium renewals, and a decrease in deferred grant funding of $0.2 million, partially offset by an increase in accrued expenses and other current liabilities of $1.0 million reflecting the timing of annual employee bonus payments, a decrease in inventory of $0.7 million, a decrease in other long-term assets of $0.3 million, and an increase in deferred revenue of $0.3 million.
For the nine months ended September 30, 2025, net cash used in operating activities of $22.7 million was due primarily to a net loss of $29.7 million, partially offset by non-cash items of $3.7 million and changes in operating assets and liabilities of $3.2 million. Non-cash items were primarily stock-based compensation expense of $2.1 million, depreciation expense of $0.8 million, loss on change in fair value of warrant liabilities of $0.6 million and loss on disposal of property and equipment of $0.1 million. Changes in operating assets and liabilities were driven primarily by an increase in accounts payable of $2.1 million, a decrease in accounts receivable and unbilled receivables of $2.0 million and an increase in deferred grant funding of $0.4 million, partially offset by an increase in prepaid expenses and other current assets of $0.8 million, an increase in inventory of $0.2 million, a decrease in accrued expenses and other current liabilities of $0.2 million, and a decrease in deferred revenue of $0.1 million.
Net cash used in investing activities
For the nine months ended September 30, 2026, net cash used in investing activities of $0.3 million was from fixed assets purchased.
For the nine months ended September 30, 2025, net cash used in investing activities of $1.1 million was from fixed assets purchased.
Net cash provided by financing activities
For the nine months ended September 30, 2026, net cash provided by financing activities was $25.3 million which consisted primarily of proceeds from issuance of debt net of debt issuance costs of $13.6 million, proceeds from the issuance of Class A common stock under the Amended Sales Agreement of $11.4 million and proceeds from stock option exercises of $0.3 million.
For the nine months ended September 30, 2025, net cash provided by financing activities was $8.2 million which consisted primarily of proceeds from the issuance and sale of the shares and warrants in the February 2025 Offering, net of offering discounts and other costs of $5.2 million, net proceeds from the issuance of Class A common stock under the Sales Agreement of $2.9 million and proceeds from stock option exercises of $0.1 million.
Contractual obligations
We sponsor a 401(k) defined contribution plan covering all eligible U.S. employees. Contributions to the 401(k) plan are discretionary. We did not make any matching contributions to the 401(k) plan for the three and nine months ended September 30, 2026 or 2025.
Through our engagement with the BMGF, we have deployed and continue to deploy the Swoop® system in low-middle income settings without readily-accessible MRI technology. The multiple grants provided by our research partnership with the BMGF, which commenced funding in the spring of 2020, support the deployment of 25 Swoop® systems and accessories to investigators. The ongoing investigation is designed to provide data to validate the potential use of the Swoop® system in measuring the impact of maternal anemia, malnutrition, infection, and birth-related injury. In May 2023, we were awarded an additional three-year grant from the BMGF to continue to develop a scalable approach to measuring neurodevelopment via ULF brain imaging in neonates, infants, and young children in low-to-middle income countries. In November 2025, we were awarded an additional grant from the
34
BMGF to support continued technical innovation using our AI-powered portable MRI platform, with a focus on neonatal brain imaging and objective assessment of neurodevelopment in resource-constrained settings, with funding extending into March 2028.
Our purchase commitments and obligations include all open purchase orders and contractual obligations in the ordinary course of business, including commitments with contract manufacturers and suppliers, for which we have not received the goods or services. A majority of these purchase obligations are due within a year. Although open purchase orders are considered enforceable and legally binding, the terms generally allow us the option to cancel, reschedule, and adjust our requirements based on our business needs prior to the delivery of goods or performance of services.
We had no other significant contractual obligations as of September 30, 2026.
For information on contingencies, refer to Note 14 in the notes to our unaudited condensed consolidated financial statements for the three and nine months ended September 30, 2026 and 2025 included elsewhere in this Quarterly Report on Form 10-Q.
Critical Accounting Policies and Significant Judgments and Estimates
Our management's discussion and analysis of our financial condition and results of operations is based on our condensed consolidated financial statements, which have been prepared in accordance with accounting principles generally accepted in the United States of America. The preparation of these condensed consolidated financial statements requires us to make estimates and assumptions that affect the reported amounts of assets and liabilities and the disclosure of contingent assets and liabilities at the date of the condensed consolidated financial statements, as well as the reported revenue generated, and expenses incurred during the reporting periods. Our estimates are based on our historical experience and various other factors that we believe are reasonable under the circumstances, the results of which form the basis for making judgments about items that are not readily apparent from other sources. Actual results may differ from these estimates under different assumptions or conditions.
Except as described in Note 2 “Summary of Significant Accounting Policies – Recently Issued Accounting Pronouncements Adopted”, to our unaudited condensed consolidated financial statements included in this Quarterly Report on Form 10-Q, there have been no material changes to our critical accounting policies and estimates as compared to the critical accounting policies and estimates disclosed in our 2025 Annual Report on Form 10-K.
Recently Issued Accounting Pronouncements
A description of recently issued accounting pronouncements that may potentially impact our financial position and results of operations is disclosed in Note 2 to our unaudited condensed consolidated financial statements and notes thereto for the three and nine months ended September 30, 2026 and 2025 included elsewhere in this Quarterly Report on Form 10-Q.
35
Item 3. Quantitative and Qualitative Disclosures About Market Risk
We are exposed to market risk in the ordinary course of business. Market risk represents the risk of loss that may impact our results of operations or financial position due to adverse changes in financial market prices and rates. Our market risk exposure is primarily a result of fluctuations in interest rates, inflation risk, and foreign exchange risk. We do not hold, issue or enter into any financial instruments for speculative or trading purposes. We do not have significant exposure to foreign currencies.
Interest Rate Risk
Our cash, cash equivalents and restricted cash as of September 30, 2026 consisted of $38.7 million in money market funds, demand deposit and savings accounts. Such interest-earning instruments carry a degree of interest rate risk. The goals of our investment policy are liquidity and capital preservation. We believe that we do not have any material exposure to changes in the fair value of these assets as a result of changes in interest rates due to the short-term nature of our cash equivalents. Based on our balance sheet position at September 30, 2026, the annualized effect of a 0.5 percentage point decrease in interest rates would be to decrease earnings before income taxes by $0.2 million.
In March 2026, we entered into a $15.0 million variable-rate term loan bearing interest at the prime rate plus 4.25 percentage points, subject to a prime rate floor of 6.50 percentage points, resulting in a minimum interest rate of 10.75%. As of September 30, 2026, the outstanding principal balance was $15.0 million. Based on our balance sheet position at September 30, 2026, a 0.5 percentage point increase in the prime rate above the floor would increase annual interest expense on the term loan by approximately $0.1 million. We do not currently use interest rate hedging instruments to manage this exposure.
Inflation Risk
We do not believe that inflation has had a material effect on our business, financial condition, or results of operations, other than its impact on the general economy. Nonetheless, if our costs were to become subject to inflationary pressures, we might not be able to fully offset such higher costs through price increases. Our inability or failure to do so could harm our business, financial condition, and results of operations.
Foreign Exchange Risk
We operate our business primarily within the United States and currently execute the majority of our transactions in U.S. dollars. We have not utilized hedging strategies with respect to such foreign exchange exposure. This limited foreign currency translation risk is not expected to have a material impact on our condensed consolidated financial statements.
Item 4. Controls and Procedures
Evaluation of Disclosure Controls and Procedures
Our principal executive officer and principal financial officer evaluated the effectiveness of our disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) as of September 30, 2026. Based upon that evaluation, our principal executive officer and principal financial officer have concluded that, as of September 30, 2026, the end of the period covered by this report, our disclosure controls and procedures were effective at a reasonable assurance level to ensure that information required to be disclosed by us in the reports that we file or submit under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in the SEC’s rules and forms, and is accumulated and communicated to our management, including our principal executive officer and principal financial officer, or persons performing similar functions, as appropriate, to allow timely decisions regarding required disclosure.
Changes in Internal Control Over Financial Reporting
There were no changes in our internal control over financial reporting identified in connection with the evaluation of such internal control that occurred during the quarter ended September 30, 2026 that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.
36
PART II — OTHER INFORMATION
Item 1. Legal Proceedings
We are not currently a party to any material legal proceedings.
Item 1A. Risk Factors
Our business, results of operations and financial condition are subject to various risks and uncertainties including the risk factors described under the caption “Risk Factors” in our 2025 Annual Report on Form 10-K. Except as set forth below, there have been no material changes in our risk factors from those described in our 2025 Annual Report on Form 10-K. We may disclose changes to risk factors or additional risk factors from time to time in our future filings with the SEC.
We could fail to maintain the listing of our Class A common stock on Nasdaq, which could seriously harm the liquidity of our shares and our ability to raise capital or complete a strategic transaction.
The Nasdaq Stock Market has established continued listing requirements, including a requirement to maintain a minimum closing bid price of at least $1.00 per share. On September 17, 2026, we received a written notice from the Listing Qualifications Department of Nasdaq notifying us that, because the closing bid price for our Class A common stock had fallen below $1.00 per share for 30 consecutive business days, we no longer met the minimum bid price requirement for continued inclusion on The Nasdaq Global Market pursuant to Nasdaq Listing Rule 5450(a)(1) (the “Bid Price Requirement”). The notice has no immediate effect on the listing or trading of our Class A common stock. Under Nasdaq Listing Rule 5810(c)(3)(A), we have a 180-calendar day period, or until March 16, 2027 (the “Compliance Date”), to regain compliance with the Bid Price Requirement. The Bid Price Requirement will be met if our Class A common stock has a minimum closing bid price of at least $1.00 per share for a minimum of 10 consecutive business days during the 180-calendar day period, unless Nasdaq exercises its discretion to extend such 10‑day period. If we do not regain compliance by the Compliance Date, we may be eligible for an additional 180-calendar day period, subject to satisfying the conditions in the applicable Nasdaq Listing Rules. There can be no assurance that we will be able to regain compliance with the Bid Price Requirement within the 180-calendar day compliance period provided by Nasdaq rules or maintain compliance with other Nasdaq requirements in the future. If we are not able to maintain compliance with Nasdaq requirements, our Class A common stock may be delisted from Nasdaq, which could have a material adverse effect on us and our stockholders, including by reducing the liquidity of our shares and having a material adverse effect on our ability to raise capital or complete a strategic transaction.
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds
Recent Unregistered Sales of Equity Securities
Not applicable.
Issuer Purchases of Equity Securities
Not applicable.
Item 3. Defaults Upon Senior Securities
Not applicable.
Item 4. Mine Safety Disclosures
Not applicable.
Item 5. Other Information
10b5-1 Trading Arrangements
37
From time to time, our officers (as defined in Rule 16a-1(f) of the Exchange Act) and directors may enter into Rule 10b5-1 or non-Rule 10b5-1 trading arrangements (as each such term is defined in Item 408 of Regulation S-K). During the three months ended September 30, 2026, none of our officers or directors
38
Item 6. Exhibits
See Exhibit Index.
EXHIBIT INDEX
Exhibit Number |
|
Exhibit Description |
|
Filed Herewith |
|
Incorporated by Reference herein from Form or Schedule |
|
Filing Date |
|
SEC File/ Reg. Number |
31.1 |
|
Certification of the Principal Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002. |
|
X |
|
|
|
|
|
|
31.2 |
|
Certification of the Principal Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002. |
|
X |
|
|
|
|
|
|
32** |
|
Certifications of the Chief Executive Officer and Chief Financial Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002. |
|
X |
|
|
|
|
|
|
101.INS |
|
Inline XBRL Instance Document - The instance document does not appear in the Interactive Data File because its Inline XBRL tags are embedded within the Inline XBRL document. |
|
X |
|
|
|
|
|
|
101.SCH |
|
Inline XBRL Taxonomy Extension Schema Document. |
|
X |
|
|
|
|
|
|
104 |
|
Cover Page Interactive Data File (formatted in Inline XBRL and contained in Exhibit 101). |
|
X |
|
|
|
|
|
|
** The certifications attached as Exhibit 32 that accompany this Quarterly Report on Form 10-Q are not deemed filed with the Securities and Exchange Commission and are not to be incorporated by reference into any filing of Hyperfine, Inc. under the Securities Act of 1933, as amended, or the Securities Exchange Act of 1934, as amended, whether made before or after the date of this Form 10-Q, irrespective of any general incorporation language contained in such filing.
39
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.
|
|
HYPERFINE, INC. |
|
Date: November 9, 2026 |
|
By: /s/ Maria Sainz |
|
|
|
Maria Sainz |
|
|
|
President and Chief Executive Officer |
|
|
|
|
|
Date: November 9, 2026 |
|
By: /s/ Brett Hale |
|
|
|
Brett Hale |
|
|
|
Chief Administrative Officer, Chief Financial Officer, Treasurer and Corporate Secretary |
|
40