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What changed in Hyperfine, Inc.'s 10-K — 2024 vs 2025

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Paragraph-level year-over-year comparison of Hyperfine, Inc.'s 2024 and 2025 10-K annual filings, covering the Business, Risk Factors, Legal Proceedings, Cybersecurity, MD&A and Market Risk sections. Every new, removed and edited paragraph is highlighted side-by-side so you can see exactly what management changed in the 2025 report.

+500 added−432 removedSource: 10-K (2026-03-18) vs 10-K (2025-03-17)

Top changes in Hyperfine, Inc.'s 2025 10-K

500 paragraphs added · 432 removed · 355 edited across 8 sections

Item 1. Business

Business — how the company describes what it does

141 edited+62 added−38 removed259 unchanged
Biggest changeMarketing, Sales and Pricing Marketing Our marketing efforts are focused on accelerating awareness of our products and capabilities in order to create a strong reputation with clinicians and healthcare administrators. Our go-to-market approach features a targeted sales organization complemented by an array of promotional activities including media coverage, tradeshow exhibition, advertising, and live product demonstration.
Biggest changeOur go-to-market approach features a targeted sales organization complemented by an array of promotional activities including digital marketing, lead generation, multi-channel campaigns, clinical marketing, media coverage, tradeshow exhibition, advertising, and live product demonstration. We principally target ICUs, emergency departments, neurology offices, and comprehensive and primary stroke accredited facilities.
Healthcare professionals can use the Swoop® system to make effective clinical diagnoses and decisions in various care settings where conventional MRI devices are inaccessible or when they are not readily available.
Healthcare professionals can use the Swoop® system 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.
We have developed a new category of medical imaging, AI-powered portable MRI, that is smaller, lighter weight, and lower cost than conventional MRI scanners yet maintains the soft tissue visualization capabilities critical for brain imaging.
We have developed a new category of medical imaging, AI-powered portable brain MRI, that is smaller, lighter weight, and lower cost than conventional MRI scanners yet maintains the soft tissue visualization capabilities critical for brain imaging.
Comradery and community are at the core of who we are as a company and are integral components of our human capital management strategy. We are inspired by each other and the possibilities of what we can achieve together.
The comradery and community are at the core of who we are as a company and are integral components of our human capital management strategy. We are inspired by each other and the possibilities of what we can achieve together.
The commencement or completion of any of our clinical trials may be delayed or halted, or be inadequate to support approval of a PMA application (or FDA’s grant of a De Novo classification request or clearance of a 510(k) notification, as applicable), for numerous reasons, including, but not limited to, the following: • the FDA, the IRB(s), or other regulatory authorities do not approve a clinical trial protocol or a clinical trial, or place a clinical trial on hold; • participants do not enroll in clinical trials at the expected rate; • participants do not comply with trial protocols; • participant follow-up is not at the expected rate; • patients experience adverse side effects; • participants die during a clinical trial, even though their death may not be related to the investigational products; • IRBs and third-party clinical investigators may delay or reject the sponsor’s trial protocol; • third-party clinical investigators decline to participate in a trial or do not perform a trial on the sponsor’s anticipated schedule or consistent with the clinical trial protocol, GCPs or other FDA requirements; • the sponsor or third-party organizations do not perform data collection, monitoring and analysis in a timely or accurate manner or consistent with the clinical trial protocol or investigational or statistical plans; • third-party clinical investigators have significant financial interests related to the sponsor or the trial that the FDA deems to make the trial results unreliable, or the sponsor or investigators fail to disclose such interests; • unfavorable regulatory inspections of the sponsor’s clinical trial sites or manufacturing facilities, which may, among other things, require the sponsor to undertake corrective action or suspend or terminate the sponsor’s clinical trials; • changes in governmental regulations or administrative actions applicable to the sponsor’s trial protocols; • the interim or final results of the clinical trial are inconclusive or unfavorable as to safety or effectiveness; and • the FDA concludes that the results from the sponsor’s trial and/or trial design are inadequate to demonstrate safety and effectiveness of the product. 26 In the Consolidated Appropriations Act for 2023, Congress amended the FDCA to require the sponsor of any pivotal clinical trial to support marketing authorization of a medical device to develop a diversity action plan for such trial, and if submission of an IDE application is required, to submit such diversity action plan to the FDA.
The commencement or completion of any of our clinical trials may be delayed or halted, or be inadequate to support approval of a PMA application (or FDA’s grant of a De Novo classification request or clearance of a 510(k) notification, as applicable), for numerous reasons, including, but not limited to, the following: • the FDA, the IRB(s), or other regulatory authorities do not approve a clinical trial protocol or a clinical trial, or place a clinical trial on hold; • participants do not enroll in clinical trials at the expected rate; • participants do not comply with trial protocols; • participant follow-up is not at the expected rate; • patients experience adverse side effects; • participants die during a clinical trial, even though their death may not be related to the investigational products; • IRBs and third-party clinical investigators may delay or reject the sponsor’s trial protocol; • third-party clinical investigators decline to participate in a trial or do not perform a trial on the sponsor’s anticipated schedule or consistent with the clinical trial protocol, GCPs or other FDA requirements; • the sponsor or third-party organizations do not perform data collection, monitoring and analysis in a timely or accurate manner or consistent with the clinical trial protocol or investigational or statistical plans; • third-party clinical investigators have significant financial interests related to the sponsor or the trial that the FDA deems to make the trial results unreliable, or the sponsor or investigators fail to disclose such interests; • unfavorable regulatory inspections of the sponsor’s clinical trial sites or manufacturing facilities, which may, among other things, require the sponsor to undertake corrective action or suspend or terminate the sponsor’s clinical trials; • changes in governmental regulations or administrative actions applicable to the sponsor’s trial protocols; • the interim or final results of the clinical trial are inconclusive or unfavorable as to safety or effectiveness; and • the FDA concludes that the results from the sponsor’s trial and/or trial design are inadequate to demonstrate safety and effectiveness of the product. 29 In the Consolidated Appropriations Act for 2023, Congress amended the FDCA to require the sponsor of any pivotal clinical trial to support marketing authorization of a medical device to develop a diversity action plan for such trial, and if submission of an IDE application is required, to submit such diversity action plan to the FDA.
The Civil Monetary Penalties Law (“CMPL”) authorizes the imposition of substantial civil money penalties against an entity that engages in certain prohibited activities including but not limited to violations of the Stark Law or Anti-Kickback Statute, knowing submission of a false or fraudulent claim, employment of an excluded individual, and the provision or offer of anything of value to a Medicare or Medicaid beneficiary that the transferring party knows or should know is likely to influence beneficiary selection of a particular provider for which payment may be made in whole or part by a government healthcare program, unless an exception applies.
The Civil Monetary Penalties Law (“CMPL”) authorizes the imposition of substantial civil money penalties against an entity that engages in certain prohibited activities including but not limited to violations of the Stark Law or Anti-Kickback Statute, knowing submission of a false or fraudulent claim, employment of an excluded individual, and the provision or 32 offer of anything of value to a Medicare or Medicaid beneficiary that the transferring party knows or should know is likely to influence beneficiary selection of a particular provider for which payment may be made in whole or part by a government healthcare program, unless an exception applies.
The Swoop® system has the potential to address equity disparities as a portable and affordable brain imaging system that offers versatility for deployment. 13 • Complex site requirements and upgrades : Due to the use of strong (1.5−3.0T (Tesla)) magnetic fields in conventional MRI scanners, there are various requirements and restrictions on imaging facilities size, location, and ongoing maintenance, including the need to build a specialized radio frequency room to house the MRI scanner safely. • Scheduling delays : A high level of coordination is required between the MRI facility and patients scheduled for a conventional MRI scan.
The Swoop® system has the potential to address equity disparities as a portable and affordable brain imaging system that offers versatility for deployment. • Complex site requirements and upgrades : Due to the use of strong (1.5−3.0T (Tesla)) magnetic fields in conventional MRI scanners, there are various requirements and restrictions on imaging facilities size, location, and ongoing maintenance, including the need to build a specialized radio frequency room to house the MRI scanner safely. • Scheduling delays : A high level of coordination is required between the MRI facility and patients scheduled for a conventional MRI scan.
Since launching our FDA-cleared portable Swoop® system in 2020, brain imaging is now available for patients of all ages at practically any site of patient care in the United States. Ultra-Low-Field System To engineer this new category of portable MRI, we made several significant design changes with respect to conventional MRI, particularly the magnetic field strength.
Since launching our FDA-cleared portable Swoop® system in 2020, brain imaging is now available for patients of all ages at practically any site of patient care in the United States. Ultra-Low-Field System 18 To engineer this new category of portable MRI, we made several significant design changes with respect to conventional MRI, particularly the magnetic field strength.
However, on July 10, 2023, the European Commission adopted an adequacy decision for a new mechanism for transferring data from the EU to the United States – the EU-U.S. Data Privacy Framework, which provides EEA individuals with several new rights, including the right to obtain access to their data, or obtain correction or deletion of incorrect or unlawfully handled data.
On July 10, 2023, the European Commission adopted an adequacy decision for a new mechanism for transferring data from the EU to the United States – the EU-U.S. Data Privacy Framework, which provides EEA individuals with several new rights, including the right to obtain access to their data, or obtain correction or deletion of incorrect or unlawfully handled data.
In addition to data breach notification laws, some states have enacted statutes and rules requiring businesses to reasonably protect certain types of personal information they hold 31 or to otherwise comply with certain specified data security requirements for personal information. Congress has also been considering similar federal legislation relating to data privacy and data protection.
In addition to data breach notification laws, some states have enacted statutes and rules requiring businesses to reasonably protect certain types of personal information they hold or to otherwise comply with certain specified data security requirements for personal information. Congress has also been considering similar federal legislation relating to data privacy and data protection.
Our principal executive offices are located at 351 New Whitfield Street, Guilford, Connecticut 06437, and our telephone number is (866) 796-6767. Information Available on the Internet Our internet address is https://hyperfine.io, to which we regularly post copies of our press releases as well as additional information about us.
Our principal executive offices are located at 351 New Whitfield Street, Guilford, Connecticut 06437, and our telephone number is (866) 796-6767. 37 Information Available on the Internet Our internet address is https://hyperfine.io, to which we regularly post copies of our press releases as well as additional information about us.
The HIPAA breach notification regulations impose certain reporting requirements on Covered Entities and their Business Associates in the event of a breach of PHI. 30 Significant civil and criminal fines and other penalties may be imposed for violating HIPAA directly, and in connection with acts or omissions of any agents, including a downstream Business Associate.
The HIPAA breach notification regulations impose certain reporting requirements on Covered Entities and their Business Associates in the event of a breach of PHI. Significant civil and criminal fines and other penalties may be imposed for violating HIPAA directly, and in connection with acts or omissions of any agents, including a downstream Business Associate.
We are primarily commercializing our device through one business model, which is ownership accompanied by an annual service and support agreement. In this model, the Swoop® system is typically sold with a service and support agreement that begins after a one-year warranty and is sold initially in either 36- or 60-month terms.
We are primarily commercializing our device through one business model, which is ownership accompanied by an annual software, service and support agreement. In this model, the Swoop® system is typically sold with a software, service and support agreement that begins after a one-year warranty and is sold initially in either 36- or 60-month terms.
Our portable Swoop® system also helps avoid the risk of patient injury during transport through the ability to bring the system to the patient. By performing scans for urgent and critically ill patients at the bedside, we can help prevent the adverse incidents that 10 occur with approximately 26–79% of critically ill patients during transport.
Our portable Swoop® system also helps avoid the risk of patient injury during transport through the ability to bring the system to the patient. By performing scans for urgent and critically ill patients at the bedside, we can help prevent the adverse incidents that occur with approximately 26–79% of critically ill patients during transport.
The Swoop® system’s portability and accessibility at the bedside can further allow more time for healthcare professionals to focus on other important activities related to patient care, diagnosis, and treatment. • Our first in its class product can provide an attractive return on investment for various care settings.
The Swoop® system’s portability and accessibility at the 12 bedside can further allow more time for healthcare professionals to focus on other important activities related to patient care, diagnosis, and treatment. • Our first-in-its-class product can provide an attractive return on investment for various care settings.
Notified Body certificates of conformity are valid for a fixed duration (to a maximum of five years). Throughout the term of the certificate, the manufacturer is subject to periodic surveillance audits to verify continued compliance with applicable requirements. In particular, a new audit by the Notified Body is required before the manufacturer renews the relevant certificate.
Notified Body certificates of conformity are valid for a fixed duration (to a maximum of five years). 36 Throughout the term of the certificate, the manufacturer is subject to periodic surveillance audits to verify continued compliance with applicable requirements. In particular, a new audit by the Notified Body is required before the manufacturer renews the relevant certificate.
The laws and regulations govern, among other things, medical device 22 design and development, nonclinical and clinical testing, pre-market clearance, authorization or approval, establishment registration and product listing, product manufacturing, product packaging and labeling, product storage, advertising and promotion, product distribution, recalls and field actions, servicing and post-market clinical surveillance.
The laws and regulations govern, among other things, medical device design and development, nonclinical and clinical testing, pre-market clearance, authorization or approval, establishment registration and product listing, product manufacturing, product packaging and labeling, product storage, advertising and promotion, product distribution, recalls and field actions, servicing and post-market clinical surveillance.
Pre-market Approval Pathway 24 Our point-of-care MRI systems have been classified and are regulated as Class II devices, although future products that we develop may be classified as Class III devices. Products classified by FDA as Class III generally require marketing approval via the PMA process.
Pre-market Approval Pathway Our point-of-care MRI systems have been classified and are regulated as Class II devices, although future products that we develop may be classified as Class III devices. Products classified by FDA as Class III generally require marketing approval via the PMA process.
In order to conduct a clinical investigation involving human subjects for the purpose of 25 demonstrating the safety and effectiveness of a medical device, an investigator acting on behalf of the company must, among other things, apply for and obtain institutional review board (“IRB”) approval of the proposed investigation.
In order to conduct a clinical investigation involving human subjects for the purpose of demonstrating the safety and effectiveness of a medical device, an investigator acting on behalf of the company must, among other things, apply for and obtain institutional review board (“IRB”) approval of the proposed investigation.
They also set forth certain rights that an individual has with respect to his or her PHI maintained by a Covered Entity, including the right to access or amend certain records containing PHI, request an accounting of disclosures of PHI or to request restrictions on the use or disclosure of PHI.
They also set forth certain rights that an individual has with respect to his or her PHI maintained by a Covered Entity, including the right to access or 33 amend certain records containing PHI, request an accounting of disclosures of PHI or to request restrictions on the use or disclosure of PHI.
A PMA application must be supported by valid scientific evidence, which typically requires extensive data, including technical, nonclinical, clinical, manufacturing and labeling data, to demonstrate to the FDA’s satisfaction the safety and efficacy of the device for its intended use(s).
A PMA application must be supported by valid scientific evidence, which typically requires extensive data, including 27 technical, nonclinical, clinical, manufacturing and labeling data, to demonstrate to the FDA’s satisfaction the safety and efficacy of the device for its intended use(s).
Some countries have adopted medical device regulatory regimes, such as the Classification Rules for Medical Devices published by the Hong Kong Department of Health, the Health Sciences Authority of Singapore regulation of medical devices under 33 the Health Products Act, and Health Canada’s risk classification system for invasive devices, among others.
Some countries have adopted medical device regulatory regimes, such as the Classification Rules for Medical Devices published by the Hong Kong Department of Health, the Health Sciences Authority of Singapore regulation of medical devices under the Health Products Act, and Health Canada’s risk classification system for invasive devices, among others.
Sales and Pricing The Swoop® system is commercially available in the United States, Canada, United Kingdom, certain European and Middle Eastern markets, Australia, and New Zealand. We have built our direct commercial infrastructure in the United States and sell our products in other countries through distributors.
Sales and Pricing The Swoop® system is commercially available in the United States, Canada, United Kingdom, certain European and Middle Eastern markets, Australia, New Zealand and India. We have built our direct commercial infrastructure in the United States and sell our products in other countries through distributors.
In the EEA, medical devices were previously required to comply with the Essential Requirements defined in Annex I to the EU Medical Devices Directive (“MDD”) (applicable in 32 the non-EU EEA Member States via the Agreement on the European Economic Area), a coordinated system for the authorization of medical devices.
In the EEA, medical devices were previously required to comply with the Essential Requirements defined in Annex I to the EU Medical Devices Directive (“MDD”) (applicable in the non-EU EEA Member States via the Agreement on the European Economic Area), a coordinated system for the authorization of medical devices.
In addition, if the clinical trial involves a “significant risk” (as defined by the FDA) to human health, the company sponsoring the trial (referred to as the “sponsor”) must also submit and obtain FDA approval of an investigational device exemption (“IDE”) application.
In addition, if the clinical trial involves a “significant risk” (as defined by the FDA) to human health, the company sponsoring the trial (referred to as the “sponsor”) 28 must also submit and obtain FDA approval of an investigational device exemption (“IDE”) application.
Sanctions for violations of the CMPL include exclusion from participation in government healthcare programs, substantial fines, and payment of up to three times the amount billed, depending upon the nature of the offense. 29 State Analogs of Federal Fraud and Abuse Laws .
Sanctions for violations of the CMPL include exclusion from participation in government healthcare programs, substantial fines, and payment of up to three times the amount billed, depending upon the nature of the offense. State Analogs of Federal Fraud and Abuse Laws .
Device user facilities are not required to report device malfunctions that would likely cause or contribute to death or serious injury if the malfunction were to recur but may voluntarily report such malfunctions through MedWatch, the FDA’s Safety Information and Adverse Event Reporting Program. 27 To ensure compliance with regulatory requirements, medical device manufacturers are subject to market surveillance and periodic, pre-scheduled and unannounced inspections by the FDA and certain state authorities.
Device user facilities are not required to report device malfunctions that would likely cause or contribute to death or serious injury if the malfunction were to recur but may voluntarily report such malfunctions through MedWatch, the FDA’s Safety Information and Adverse Event Reporting Program. 30 To ensure compliance with regulatory requirements, medical device manufacturers are subject to market surveillance and periodic, pre-scheduled and unannounced inspections by the FDA and certain state authorities.
The system is quiet enough to allow constant verbal contact with the patient, which can create a considerably less distressing experience for the patient compared to that of a conventional MRI scanner. 17 Powered Using a Standard Wall Outlet Transportable throughout any hospital environment, our Swoop® system plugs into a standard wall outlet (100-230 VAC, 50/60 Hz, 15A) and uses less than 900W of electricity.
The system is quiet enough to allow constant verbal contact with the patient, which can create a considerably less distressing experience for the patient compared to that of a conventional MRI scanner. 20 Powered Using a Standard Wall Outlet Transportable throughout any hospital environment, our Swoop® system plugs into a standard wall outlet (100-230 VAC, 50/60 Hz, 15A) and uses less than 900W of electricity.
Any such action by the FDA would have a material adverse effect on our business. We may be unable to comply with all applicable FDA regulations. U.S. Fraud and Abuse Laws and Other Compliance Requirements Successfully commercializing a medical device or technology depends not on only FDA approval, but also on broad health insurance or third-party payor coverage.
Any such action by the FDA would have a material adverse effect on our business. We may be unable to comply with all applicable FDA regulations. U.S. Fraud and Abuse Laws and Other Compliance Requirements Successfully commercializing a medical device or technology depends not on only FDA authorization, but also on broad health insurance or third-party payor coverage.
Manufacturers of all classes of devices must comply with FDA’s Quality System Regulation (“QSR”), establishment registration, medical device listing, labeling requirements, and medical device reporting (“MDR”) regulations, which are collectively referred to as medical device general controls. Class II devices may also be subject to special controls such as performance standards, post-market surveillance, FDA guidelines, or particularized labeling.
Manufacturers of all classes of devices must comply with FDA’s quality management system regulation, establishment registration, medical device listing, labeling requirements, and medical device reporting (“MDR”) regulations, which are collectively referred to as medical device general controls. Class II devices may also be subject to special controls such as performance standards, post-market surveillance, FDA guidelines, or particularized labeling.
In addition, we have a field team dedicated to support programs, who can help integrate the Swoop® system into hospital and clinic workflows. • Demonstrate our commitment to continuous technical innovation and leadership across the care continuum. Our advanced technology has been developed by an internal team of engineers and AI scientists dedicated to continuous innovation.
In addition, we have a field team dedicated to support programs, who can train staff and help integrate the Swoop® system into hospital and clinic workflows. • Demonstrate our commitment to continuous technical innovation and leadership across the care continuum. Our advanced technology has been developed by an internal team of engineers and AI scientists dedicated to continuous innovation.
In addition to being easy to use and the consequential acceleration of 16 hospital workflows that can result, our system provides standardized images across all placement sites due to our uniform manufacturing specifications and a consistent set of sequences that individual operators do not customize.
In addition to being easy to use and the consequential acceleration of 19 hospital workflows that can result, our system provides standardized images across all placement sites due to our uniform manufacturing specifications and a consistent set of sequences that individual operators do not customize.
We created the Swoop® system not to replace conventional MRI devices but to complement them and enable additional brain MR exams for patients and in settings not traditionally serviced by conventional MRI scanners, such as critical care units, emergency departments, clinics and physician offices.
We created the Swoop® system not to replace conventional MRI devices but to complement them and enable additional brain MR exams for patients and in settings not traditionally serviced by conventional MRI scanners, such as critical care units, emergency departments, clinics and physicians’ offices.
Jonathan Rothberg, a serial entrepreneur that received the Presidential Medal of Technology and Innovation in 2016 for inventing a novel next generation DNA sequencing method and has founded more than 10 healthcare and technology companies, including 454 Life Sciences, Ion Torrent, CuraGen, Butterfly Network and Quantum-Si. 18 Information About Our Executive Officers and Directors The following persons were our executive officers and directors as of February 15, 2025: Name Position Executive Officers Maria Sainz President, Chief Executive Officer and Director Brett Hale Chief Administrative Officer, Chief Financial Officer, Treasurer and Corporate Secretary Thomas Teisseyre, Ph.D.
Jonathan Rothberg, a serial entrepreneur that received the Presidential Medal of Technology and Innovation in 2016 for inventing a novel next-generation DNA sequencing method and has founded more than 10 healthcare and technology companies, including 454 Life Sciences, Ion Torrent, CuraGen, Butterfly Network and Quantum-Si. 21 Information About Our Executive Officers and Directors The following persons were our executive officers and directors as of February 15, 2026: Name Position Executive Officers Maria Sainz President, Chief Executive Officer and Director Brett Hale Chief Administrative Officer, Chief Financial Officer, Treasurer and Corporate Secretary Thomas Teisseyre, Ph.D.
Item 1. B USINESS 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 lower magnetic field strength than conventional magnetic resonance imaging (“MRI”) scanners.
Item 1. BUSINESS 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.
Over 250 conference presentations and peer reviewed journal articles, perspectives, case studies, and editorials on the Swoop® system have discussed the potential 11 clinical benefits of portable, ULF MRI for patients with stroke, hydrocephalus, hematoma, multiple sclerosis and tumor resection.
Over 250 conference presentations and peer reviewed journal articles, perspectives, case studies, and editorials on the Swoop® system have discussed the potential clinical benefits of portable, ULF MRI for patients with stroke, hydrocephalus, hematoma, multiple sclerosis, headaches, and tumor resection.
We rely on a combination of patents, trademarks, trade secrets and other intellectual property rights protections and contractual restrictions to protect our proprietary technologies. The patents owned and in-licensed by us are generally directed to the architecture of MRI systems and related technology.
We rely on a combination of patents, trademarks, trade secrets and other intellectual property rights protections and contractual restrictions to protect our proprietary technologies. The patents owned by us are generally directed to the architecture of MRI systems and related technology.
CE markings will continue to be recognized in the UK, and certificates issued by EU recognized Notified Bodies will be valid in the UK, until the earlier of June 30, 2028 or the expiration of the certificate for devices compliant with the Medical Device Directive or until June 30, 2030 for devices compliant with the Medical Device Regulation.
CE markings will continue to be recognized in the UK, and certificates issued by EU recognized Notified Bodies will be valid in the UK, until the earlier of June 30, 2028 or the expiration of the certificate for devices compliant with the MDD or until June 30, 2030 for devices compliant with the Medical Device Regulation.
FDA’s MDR requirements also extend to healthcare facilities that use medical devices in providing care to patients, or “device user facilities,” which include hospitals, ambulatory surgical facilities, nursing homes, outpatient diagnostic facilities, or outpatient treatment facilities, but not physician offices.
FDA’s MDR requirements also extend to healthcare facilities that use medical devices in providing care to patients, or “device user facilities,” which include hospitals, ambulatory surgical facilities, nursing homes, outpatient diagnostic facilities, or outpatient treatment facilities, but not physician’s offices.
We believe the Swoop® system can represent a valuable tool in the screening and monitoring of patients. The Swoop® system is designed to make the customer experience as easy as possible through our easy-to-use interface accessed through a Hyperfine-provided tablet.
We believe the Swoop® system can represent a valuable tool in the screening and monitoring of patients. The Swoop® system is designed to make the user experience as easy as possible through our easy-to-use interface accessed through a Hyperfine-provided tablet.
We have taken advantage of technological advances in electronics, computing and AI to develop an MRI device that is not only portable but also uses an ultra-low-field 64mT (0.064T) permanent magnet, which is much lower than the 1.5T or higher field strength of conventional MRI scanners, and does not require cryogenic cooling.
We have taken advantage of technological advances in electronics, computing and AI to develop an MRI device that is not only portable but also uses an ULF 64mT (0.064T) permanent magnet, which is much lower than the 1.5T or higher field strength of conventional MRI scanners, and does not require cryogenic cooling.
To support adoption of our product and in addition to our simplified product interface, we have built a team of clinically trained clinical support specialists to guide and coach clinicians on the unique features of our device and on the specific clinical application of our technologies.
To support adoption of our product and in addition to our simplified product interface, we have built a team of clinically trained support specialists to guide and coach clinicians and their staff on the unique features of our device and on the specific clinical application of our technologies.
Our solution is designed to complement conventional MRI and seamlessly integrates into the hospital workflow, by processing orders from the Hospital Information Systems (“HIS”) 9 and allowing users to upload images into their picture archiving and communication system (“PACS”), or directly onto our cloud PACS, which then makes images easily available for diagnostic purposes.
Our solution is designed to complement conventional MRI and seamlessly integrates into the hospital workflow, by processing orders from the Hospital Information Systems (“HIS”) and allowing users to manage images into their picture archiving and communication system (“PACS”), or directly onto our cloud PACS, which then makes images easily available for diagnostic purposes.
Typically, with a 55% or greater reduction in total workflow time, physicians can reduce the time to diagnoses for timely treatment, potentially resulting in improved health outcomes for the patient. Conventional MRI scanners require specially trained technicians fully dedicated to operating those systems and increase the time and cost related to nurses and porters transporting patients to the MRI unit.
Typically, with a reduction in total workflow time, physicians can reduce the time to diagnoses for timely treatment, potentially resulting in improved health outcomes for the patient. Conventional MRI scanners require specially trained technicians fully dedicated to operating those systems and increase the time and cost related to nurses and porters transporting patients to the MRI unit.
Market needs Despite MRI’s advantages to diagnose and monitor patients through treatment, access to MRI scanners can be challenging. Numerous challenges are associated with the use of conventional MRI devices: • High cost : The average cost of new conventional MRI scanners is $1.2 million and could cost as high as $3 million, significantly more than our Swoop® system.
Market needs 16 Despite MRI’s advantages to diagnose and monitor patients through treatment, access to MRI scanners can be difficult. Numerous challenges are associated with the use of conventional MRI devices: • High cost : The average cost of new conventional MRI scanners is $1.2 million and could cost as high as $3 million, significantly more than our Swoop® system.
Over the past 40 years, the goal for improving conventional MRI scanners has been to attain higher magnetic field strength. In 2017, the FDA cleared the first 7T MRI, after 20 years of development. It was noted that the added field strength allows for better visualization of smaller structures and subtle pathologies that may improve disease diagnosis.
Over the past 40 years, the goal for improving conventional MRI scanners has been to increase the magnetic field strength. In 2017, the FDA cleared the first 7T MRI, after 20 years of development. It was noted that the added field strength allows for better visualization of smaller structures and subtle pathologies that may improve disease diagnosis.
Our pace of AI-powered software iterations allows further improvements of image quality, consistency, and image sequences for the clinical uses of our technology. As the Swoop® system becomes integrated into intensive care units and other care workflows and care sites across medical practices, we are dedicated to gaining more insights into our product’s usability and clinical applications.
Our pace of AI-powered software iterations allows further improvements of image quality, consistency, and image sequences for the clinical uses of our technology. As the Swoop® system becomes integrated into ICUs and other care workflows and care sites across medical practices, we are dedicated to gaining more insights into our product’s usability and clinical applications.
Additionally, while HIPAA does not create a private right of action allowing individuals to file suit against us in civil court for violations of HIPAA, its standards have been used as the basis for duty of care cases in state civil suits such as those for negligence or recklessness in the misuse or breach of PHI.
Although HIPAA does not create a private right of action allowing individuals to file suit against us in civil court for violations of HIPAA, its standards have been used as the basis for duty of care cases in state civil suits such as those for negligence or recklessness in the misuse or breach of PHI.
Our Swoop® system is designed to transform brain MR for the patient, the clinician and the provider, enabling a highly differentiated experience for patients, timely imaging for clinicians, and favorable economics for hospital administrators.
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 hospital administrators.
We plan to continue developing our technology to expand into new imaging applications to enable us to reach the broader care continuum through diagnosis and treatment. 12 • Expand clinical validation data and publications.
We plan to 15 continue developing our technology to expand into new imaging applications to enable us to reach the broader care continuum through diagnosis and treatment. • Expand clinical validation data and publications.
We have commercially launched our Swoop® system, a portable AI-powered brain MRI device capable of producing diagnostic quality images at a lower magnetic field strength than conventional MRI scanners. Using an ultra-low-field magnetic force significantly reduces projectile safety concerns and, therefore, should reduce the length of pre-safety checks typically conducted by healthcare professionals.
We have commercially launched our Swoop® system, a portable AI-powered brain MRI device capable of producing diagnostic quality images at a lower magnetic field strength than conventional MRI scanners. Using ULF magnetic force significantly reduces projectile safety concerns and, therefore, should reduce the length of pre-safety checks typically conducted by healthcare professionals.
CT systems, while providing valuable information about hemorrhage and fractures, provide less soft tissue differentiation to inform clinical decisions when compared to MRI. As such, the Swoop® system is well positioned to augment critical care and emergency departments with existing CT capabilities; and • Portable ultra-low field brain MRI systems with similar attributes are currently in development.
CT systems, while providing valuable information about hemorrhage and fractures, provide less soft tissue differentiation to inform clinical decisions when compared to MRI. As such, the Swoop® system is well positioned to augment critical care and emergency departments with existing CT capabilities; and • Portable ULF brain MRI systems with similar attributes are currently in development.
Our patent estate covers various components and techniques incorporated into, and generally directed to our Swoop® system and its development, including: magnet design and manufacturing, electronics and circuitry, mechanical aspects, safety features, noise compensation, imaging, analysis software, and various other aspects of MRI systems. These pending and issued patents have expected expiration dates ranging between 2034 and 2045.
Our patent estate covers various components and techniques incorporated into, and generally directed to our Swoop® system and its development, including: magnet design and manufacturing, electronics and circuitry, mechanical aspects, safety features, noise compensation, imaging, analysis software, and various other aspects of MRI systems. These pending and issued patents have expected expiration dates ranging between 2035 and 2043.
Unlike conventional MRI, our Swoop® system is entirely contained in a system that is just 55 inches tall and 34 inches wide and is designed to scan patients in their beds. Parents, family, or caregivers can be close to the patient as they are scanned, with just their head in the transparent head RF coil.
Unlike conventional MRI, our Swoop® system is entirely contained in a system that is less than 59 inches tall and 34 inches wide and is designed to scan patients in their beds. Parents, family, or caregivers can be close to the patient as they are scanned, with just their head in the transparent head RF coil.
Some Class I and Class II devices may be exempted by regulation from the requirement of compliance with substantially all of the QSR. 510(k) Clearance Pathway A 510(k) pre-market notification must contain information sufficient to demonstrate that the new device is substantially equivalent to a predictive device.
Some Class I and Class II devices may be exempted by regulation from the requirement of compliance with substantially all of the quality management system. 510(k) Clearance Pathway A 510(k) pre-market notification must contain information sufficient to demonstrate that the new device is substantially equivalent to a predictive device.
The learnings from this market experience have served to improve our software, AI, and denoising algorithms resulting in the image quality and performance improvements of our product over the nine generations of software since our initial clearance.
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.
The Swoop® system is the first FDA-cleared, portable, ULF, MR brain imaging system and is capable of providing imaging at multiple sites of care, such as intensive care units, clinics, emergency departments or physicians’ offices, and can inform the timely detection, diagnosis, monitoring, and treatment of acute and chronic conditions inside and outside the hospital.
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.
To support information security reviews with customers we have obtained several certifications, including HITRUST CSF® v9.4 Risk-based, 2-year, SOC2 Type 1 and SOC2 Type 2. We estimate in the United States alone that our total addressable market for Swoop® system device placements is more than $16 billion.
To support information security, we have obtained several certifications, including HITRUST CSF® v9.4 Risk-based, 2-year, SOC2 Type 1 and SOC2 Type 2. We estimate in the United States alone that our total addressable market for Swoop® system device placements is larger than $16 billion.
Our MRI signal is produced at 0.064T compared to 1.5T or higher produced by conventional, fixed MRI scanners. We believe that the Swoop® system provides the potential to improve the quality of care for patients who have limited or no access to conventional MRI, which includes 90% of the world’s population.
Our MRI signal is produced at 0.064T compared to 1.5T or higher produced by conventional, fixed MRI scanners. We believe that the Swoop® system provides the potential to improve the quality of care for patients who have limited or no access to conventional MRI.
Outside of the United States, the 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 8 Mark”)), Canada, Australia and New Zealand. In October 2024 and February 2025, we received CE Mark and UKCA Mark approval for the latest generation of software.
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.
The new MRI standards issued by the IAC in November 2024 open the door for accredited neurology offices to secure CMS reimbursement for MRI scans using the Swoop® system. The new standards do not require MRI technologists to operate the Swoop® system in the office setting.
The MRI standards issued by the IAC in November 2024 enabled accredited neurology offices to secure CMS reimbursement for MRI scans using the Swoop® system. The standards do not require MRI technologists to operate the Swoop® system in the office setting.
We and any of our contract manufacturers, and some suppliers of components or device accessories, are required to manufacture medical device products in compliance with current good manufacturing practice requirements set forth in the QSR, unless explicitly exempted by regulation.
We and any of our contract manufacturers, and some suppliers of components or device accessories, are required to manufacture medical device products in compliance with current good manufacturing practice requirements set forth in the quality management system rules, unless explicitly exempted by regulation.
In addition, the FDA generally will conduct a pre-approval inspection of the manufacturing facility to evaluate compliance with the QSR, which requires manufacturers to implement and follow design, testing, control, documentation and other quality assurance procedures.
In addition, the FDA generally will conduct a pre-approval inspection of the manufacturing facility to evaluate compliance with the applicable quality management system regulations, which requires manufacturers to implement and follow design, testing, control, documentation and other quality assurance procedures.
As of February 15, 2025, 107 of our employees were located in the United States and, internationally, four were located in the United Kingdom and Europe. None of our employees are represented by a labor union or are subject to a collective bargaining agreement. Dr. Rothberg and our business have been recognized for leadership.
As of February 15, 2026, 99 of our employees were located in the United States and, internationally, three were located in the United Kingdom and Europe. None of our employees are represented by a labor union or are subject to a collective bargaining agreement. Dr. Rothberg and our business have been recognized for leadership.
These general controls that must be met for all device classes include: • establishment registration and device listing; • the QSR, which requires manufacturers, including third-party manufacturers, to follow design, testing, control, storage, supplier/contractor selection, complaint handling, documentation and other quality assurance procedures; • labeling regulations, which govern the mandatory elements of the device labels and packaging (including Unique Device Identifier markings for certain categories of products); • FDA’s prohibitions against the promotion of products for uncleared, unapproved or “off-label” uses and other requirements related to promotional activities; • the MDR regulations, which require that manufacturers report to the FDA if a device may have caused or contributed to a death or serious injury or malfunctioned in a way that would likely cause or contribute to a death or serious injury if the malfunction were to recur; • voluntary and mandatory device recalls to address problems when a device is defective and/or could be a risk to health; • correction and removal reporting regulations, which require that manufacturers report to the FDA field corrections and product recalls or removals if undertaken to reduce a risk to health posed by the device or to remedy a violation of the FDCA that may present a risk to health; and • post-market surveillance regulations, which apply to certain Class II or III devices when necessary to protect the public health or to provide additional safety and effectiveness data for the device.
These general controls that must be met for all device classes include: • establishment registration and device listing; • quality system management regulations; • labeling regulations, which govern the mandatory elements of the device labels and packaging (including Unique Device Identifier markings for certain categories of products); • FDA’s prohibitions against the promotion of products for uncleared, unapproved or “off-label” uses and other requirements related to promotional activities; • the MDR regulations, which require that manufacturers report to the FDA if a device may have caused or contributed to a death or serious injury or malfunctioned in a way that would likely cause or contribute to a death or serious injury if the malfunction were to recur; • voluntary and mandatory device recalls to address problems when a device is defective and/or could be a risk to health; • correction and removal reporting regulations, which require that manufacturers report to the FDA field corrections and product recalls or removals if undertaken to reduce a risk to health posed by the device or to remedy a violation of the FDCA that may present a risk to health; and • post-market surveillance regulations, which apply to certain Class II or III devices when necessary to protect the public health or to provide additional safety and effectiveness data for the device.
Devices lawfully placed on the market pursuant to the Medical Device Directive prior to May 26, 2021 could initially continue to be made available on the market or put into service until May 26, 2025.
Devices lawfully placed on the market pursuant to the MDD prior to May 26, 2021 could initially continue to be made available on the market or put into service until May 26, 2025.
The images from our Swoop® system are higher in contrast resolution than other portable medical brain imaging systems, such as portable CT scanners. Our portable Swoop® system also delivers images that are diagnostic and clinically relevant in many use cases when high field MRI is not available.
Image Quality We deliver diagnostic-quality images to healthcare professionals. The images from our Swoop® system are higher in contrast resolution than other portable medical brain imaging systems, such as portable CT scanners. Our portable Swoop® system also delivers images that are diagnostic and clinically relevant in many use cases when high field MRI is not available.
The demand for MR imaging has been increasing due to the aging population and the rising prevalence of neurological, neurodegenerative, and cardiovascular conditions, recent approval of new Alzheimer’s medications, as well as the trends towards decentralized healthcare in mature, as well as low- and middle-income countries.
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.
We have run several studies in these areas including SAFE-MRI ECMO (Assessing the Safety and Feasibility of bedside portable low-field brain Magnetic Resonance Imaging in patients with ECMO) which was published in the September 2024 Issue of Circulation and HOPE PMR (Portable MRI for Children with Neurological Injury—A Pilot Study using Hydrocephalus as an Index Condition).
Supporting the hospital business are several studies including SAFE-MRI ECMO (Assessing the Safety and Feasibility of bedside portable low-field brain Magnetic Resonance Imaging in patients with ECMO) which was published in the September 2024 Issue of Circulation and HOPE PMR (Portable MRI for Children with Neurological Injury—A Pilot Study using Hydrocephalus as an Index Condition).
Our Swoop® System and Related Technology As of February 15, 2025, we held a portfolio of 185 U.S. and foreign patents, and 150 U.S. and foreign patent applications. These issued patents and patent applications cover various aspects of our research and development efforts, as well as commercial aspects of our Swoop® system.
Our Swoop® System and Related Technology As of February 15, 2026, we held a portfolio of 197 U.S. and foreign patents, and 160 U.S. and foreign patent applications. These issued patents and patent applications cover various aspects of our research and development efforts, as well as commercial aspects of our Swoop® system.
We designed the Swoop® system to address the limitations of conventional imaging technologies and make brain MR imaging accessible nearly anytime and anywhere across professional healthcare settings. We believe the adoption of the Swoop® system by healthcare professionals has clinical and economic benefits throughout healthcare communities in both high and low resource settings.
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 communities in both high and low resource settings.
We have 15 taken a different approach by developing our Swoop® system to have an ultra-low-field magnet of 0.064T, which enables MRI to become portable because, unlike conventional MRI scanners, the field strength of the magnet in our system does not require a specialized room to house or use the MRI scanner safely.
We have taken a different approach by developing our Swoop® system to have an ultra-low-field magnet of 0.064T, which enables MRI to be small, portable and safe in multiple sites of care because, unlike conventional MRI scanners, the field strength of the magnet in our system does not require a specialized room to house or use the MRI scanner safely.
In December 2022, we suspended our Liminal program to develop a device to non-invasively measure key vital signs in the brain. We were founded in 2014 by Dr.
Our wholly-owned subsidiary, Liminal was founded in 2018. In December 2022, we suspended our Liminal program to develop a device to non-invasively measure key vital signs in the brain. 8 We were founded in 2014 by Dr.
Our hardware is powered using modern computational power and deep learning advances. Our software is designed to address the traditional ease-of-use and integration challenges often presented by specialized medical technologies. Our system operates from a Wi-Fi-capable tablet and integrates with PACS to enable fast and confident clinical decision-making.
Our software is designed to address the traditional ease-of-use and integration challenges often presented by specialized medical technologies. Our system operates from a Wi-Fi-capable tablet and integrates with PACS to enable fast and confident clinical decision-making.
We believe that this manufacturing strategy is efficient and conserves capital. However, in the event it becomes necessary to utilize a different contract manufacturer for our Swoop® system products, we would experience additional costs, delays and difficulties in doing so, and our business could be harmed. Key Agreements Manufacture and Supply Agreement with Benchmark Electronics, Inc.
However, in the event it becomes necessary to utilize a different contract manufacturer for our Swoop® system products, we would experience additional costs, delays and difficulties in doing so, and our business could be harmed. 23 Key Agreements Manufacture and Supply Agreement with Benchmark Electronics, Inc.
Favorable coverage decisions by government payors like Medicare or Medicaid is critical because private payors typically follow the government’s lead regarding reimbursement. However, manufacturers whose technology is reimbursed by government payors are subject to various U.S. federal and state laws pertaining to healthcare fraud and abuse. These laws can be implicated by inappropriate sales and marketing arrangements with healthcare providers.
Favorable coverage decisions by government payors like Medicare or Medicaid are critical because private payors typically follow the government’s lead regarding reimbursement. However, manufacturers whose technology is reimbursed by government payors are subject to various U.S. federal and state laws 31 pertaining to healthcare fraud and abuse.
The easy-to-use interface and portable design of our Swoop® system make it easily and readily accessible anywhere in a hospital, clinic, or patient care site and it does not require any special facilities accommodations nor specialized personnel to operate safely.
The portable design of our Swoop® system make 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 personnel to operate safely.
Many commonly accepted commercial practices are illegal in the healthcare industry and violations of these laws are punishable by criminal and civil sanctions, including, in some instances, exclusion from participation in U.S. federal and state healthcare programs, including Medicare and Medicaid. 28 Anti-kickback Laws.
These laws can be implicated by inappropriate sales and marketing arrangements with healthcare providers. Many commonly accepted commercial practices are illegal in the healthcare industry and violations of these laws are punishable by criminal and civil sanctions, including, in some instances, exclusion from participation in U.S. federal and state healthcare programs, including Medicare and Medicaid. Anti-kickback Laws.
The SEC maintains an internet site (http://www.sec.gov) that contains reports, proxy and information statements, and other information regarding issuers that file electronically with the SEC. We include our web site address in this report only as an inactive textual reference.
The SEC maintains an internet site (http://www.sec.gov) that contains reports, proxy and information statements, and other information regarding issuers that file electronically with the SEC. We include our web site address in this report only as an inactive textual reference. Information contained in our website does not constitute a part of this report or our other filings with the SEC.
Furthermore, we have started a utility study CARE PMR (Capturing ARIA Risk Equitably with Portable MR) for the use of the Swoop® system for the monitoring of Alzheimer’s patients for Amyloid related Imaging Abnormalities (“ARIA”), associated with the novel Amyloid targeted therapies being commercialized by biopharmaceutical companies.
Furthermore, we have started a utility study CARE PMR (Capturing ARIA Risk Equitably with Portable MR) for the use of the Swoop® system for the monitoring of Alzheimer’s patients for Amyloid related Imaging Abnormalities (“ARIA”).

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Item 1A. Risk Factors

Risk Factors — what could go wrong, per management

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Biggest changeWe cannot predict what other healthcare programs and regulations will ultimately be implemented in the United States, at the federal or state level, or in foreign jurisdictions where we market our devices, nor can we predict the effects of any such future legislation or regulation on our business, financial condition and results of operations.
Biggest changeWe cannot predict what other healthcare programs and regulations will ultimately be implemented in the United States, at the federal or state level, or in foreign jurisdictions where we market our devices, nor can we predict the effects of any such future legislation or regulation on our business, financial condition and results of operations. 61 Risks Related to our Intellectual Property If we are unable to obtain and maintain and enforce sufficient intellectual property protection for our products and technology, or if the scope of the intellectual property protection obtained is not sufficiently broad, our competitors could develop and commercialize products similar or identical to ours, and our ability to successfully commercialize our products may be impaired.
Many of these laws and regulations are subject to change and uncertain interpretation, and could result in claims, changes to our business practices, monetary penalties, increased cost of operations, declines in customer growth or engagement, or otherwise harm our business.
Many of these laws and regulations are subject to change and uncertain interpretation, and could result in claims or monetary penalties, changes to our business practices, increased cost of operations, or declines in customer growth or engagement, or otherwise harm our business.
Doing business internationally involves a number of risks, including: • difficulties in staffing and managing our international operations; • multiple, conflicting and changing laws and regulations such as tax laws, privacy laws, export and import restrictions, employment laws, regulatory requirements and other governmental approvals, permits and licenses; • reduced or varied protection for intellectual property rights in some countries; • obtaining regulatory clearance where required for our products in various countries; • requirements to maintain data and the processing of that data on servers located within such countries; • limits on our ability to penetrate international markets if we are required to manufacture our products locally; • financial risks, such as longer payment cycles, difficulty collecting accounts receivable, foreign tax laws and complexities of foreign value-added tax systems, the effect of local and regional financial pressures on demand and payment for our products and exposure to foreign currency exchange rate fluctuations; • restrictions on the site-of-service for use of our products and the economics related thereto for physicians and other healthcare practitioners; • natural disasters and economic instability, including outbreak of disease, boycotts, curtailment of trade and other market restrictions; • wars, terrorism and political unrest, such as the conflicts in Ukraine and the Middle East, which has resulted in instability in the global financial markets and export controls, and which could result in supply disruptions for us, including because one key custom-made component in our Swoop® system is the magnet, which is manufactured by a single source supplier in Europe, and which could also have a material adverse impact on our sales in affected markets; and • regulatory and compliance risks that relate to maintaining accurate information and control over activities subject to regulation under the U.S.
Doing business internationally involves a number of risks, including: • difficulties in staffing and managing our international operations; • multiple, conflicting and changing laws and regulations such as tax laws, privacy laws, export and import restrictions, employment laws, regulatory requirements and other governmental approvals, permits and licenses; • reduced or varied protection for intellectual property rights in some countries; • obtaining regulatory clearance where required for our products in various countries; • requirements to maintain data and the processing of that data on servers located within such countries; • limits on our ability to penetrate international markets if we are required to manufacture our products locally; 48 • financial risks, such as longer payment cycles, difficulty collecting accounts receivable, foreign tax laws and complexities of foreign value-added tax systems, the effect of local and regional financial pressures on demand and payment for our products and exposure to foreign currency exchange rate fluctuations; • restrictions on the site-of-service for use of our products and the economics related thereto for physicians and other healthcare practitioners; • natural disasters and economic instability, including outbreak of disease, boycotts, curtailment of trade and other market restrictions; • wars, terrorism and political unrest, such as the conflicts in Ukraine and the Middle East, which has resulted in instability in the global financial markets and export controls, and which could result in supply disruptions for us, including because one key custom-made component in our Swoop® system is the magnet, which is manufactured by a single source supplier in Europe, and which could also have a material adverse impact on our sales in affected markets; and • regulatory and compliance risks that relate to maintaining accurate information and control over activities subject to regulation under the U.S.
For example: • others may be able to make products that are similar to products and technologies we may develop or utilize similar technology that are not covered by the claims of the patents that we own or license now or in the future; • we, or our licensor(s), might not have been the first to make the inventions covered by the issued patent or pending patent application that we license or may own in the future; • we, or our licensor(s), might not have been the first to file patent applications covering certain of our or their inventions; • others may independently develop similar or alternative technologies or duplicate any of our technologies without infringing, misappropriating or otherwise violating our owned or licensed intellectual property rights; • it is possible that our pending licensed patent applications or those that we may own in the future will not lead to issued patents; 64 • issued patents that we own, in-license, or otherwise hold rights to may be held invalid or unenforceable or have their scope narrowed, including as a result of legal challenges by our competitors; • our competitors might conduct research and development activities in countries where we do not have patent rights and then use the information learned from such activities to develop competitive products for sale in our major commercial markets; • we may not develop additional proprietary technologies that are patentable; • the patents of others may harm our business; and • we may choose not to file a patent application for certain trade secrets or know-how, and a third party may subsequently file a patent application covering such intellectual property.
For example: • others may be able to make products that are similar to products and technologies we may develop or utilize similar technology that are not covered by the claims of the patents that we own or license now or in the future; • we, or our licensor(s), might not have been the first to make the inventions covered by the issued patent or pending patent application that we license or may own in the future; • we, or our licensor(s), might not have been the first to file patent applications covering certain of our or their inventions; • others may independently develop similar or alternative technologies or duplicate any of our technologies without infringing, misappropriating or otherwise violating our owned or licensed intellectual property rights; • it is possible that our pending licensed patent applications or those that we may own in the future will not lead to issued patents; • issued patents that we own, in-license, or otherwise hold rights to may be held invalid or unenforceable or have their scope narrowed, including as a result of legal challenges by our competitors; • our competitors might conduct research and development activities in countries where we do not have patent rights and then use the information learned from such activities to develop competitive products for sale in our major commercial markets; • we may not develop additional proprietary technologies that are patentable; • the patents of others may harm our business; and • we may choose not to file a patent application for certain trade secrets or know-how, and a third party may subsequently file a patent application covering such intellectual property.
These fluctuations may occur due to a variety of factors, many of which are outside our control, including, but not limited to: • the timing and amount of expenditures that we may incur to develop, commercialize or acquire additional products and technologies or for other purposes, such as the expansion of our sales team and our facilities; • the budgets, budget cycles and approval processes of our customers and potential customers and any changes affecting such budgets, budget cycles and approval processes; • pricing actions, such as pricing adjustments we make to our business model; • seasonal spending patterns of our customers; • the timing of when we recognize any revenues; • future accounting pronouncements or changes in our accounting policies; • the outcome of any future litigation or governmental investigations involving the Company, our industry or both; • higher than anticipated service, replacement and warranty costs; • the impact of political instability and military conflict, such as the conflicts in Ukraine and the Middle East, which has resulted in instability in the global financial markets and export controls, and which has contributed to the increased cost of the magnet that is a key custom-made component in our Swoop® system and is manufactured by a single source supplier in Europe, and could result in further supply impacts on our business and have a material adverse impact on our sales in affected markets; and • general industry, economic and market conditions and other factors, including factors unrelated to our operating performances or the operating performance of our competitors. 36 The cumulative effects of the factors discussed above could result in large fluctuations and unpredictability in our quarterly and annual operating results.
These fluctuations may occur due to a variety of factors, many of which are outside our control, including, but not limited to: • the timing and amount of expenditures that we may incur to develop, commercialize or acquire additional products and technologies or for other purposes, such as the expansion of our sales team and our facilities; • the budgets, budget cycles and approval processes of our customers and potential customers and any changes affecting such budgets, budget cycles and approval processes; • pricing actions, such as pricing adjustments we make to our business model; • seasonal spending patterns of our customers; • the timing of when we recognize any revenues; • future accounting pronouncements or changes in our accounting policies; • the outcome of any future litigation or governmental investigations involving the Company, our industry or both; • higher than anticipated service, replacement and warranty costs; • the impact of political instability and military conflict, such as the conflicts in Ukraine and the Middle East, which have resulted in instability in the global financial markets and export controls, and which has contributed to the increased cost of the magnet that is a key custom-made component in our Swoop® system and is manufactured by a single source supplier in Europe, and could result in further supply impacts on our business and have a material adverse impact on our sales in affected markets; and • general industry, economic and market conditions and other factors, including factors unrelated to our operating performances or the operating performance of our competitors. 40 The cumulative effects of the factors discussed above could result in large fluctuations and unpredictability in our quarterly and annual operating results.
If any such actions are instituted against us and we are not successful in defending ourselves or asserting our rights, those actions could result in the imposition of significant fines or other sanctions, including the imposition of civil, criminal and administrative penalties, damages, monetary fines, disgorgement, individual imprisonment, additional integrity reporting and oversight obligations, possible exclusion from participation in Medicare, Medicaid and other government healthcare programs, contractual damages, reputational harm, diminished profits and future earnings and curtailment of operations, any of which could adversely affect our ability to operate our business and our results of operations.
If any such actions are instituted against us and we are not successful in defending ourselves or asserting our rights, those actions could result in the imposition of significant fines or other sanctions, including the imposition of civil, criminal and administrative penalties, damages, monetary fines, disgorgement, individual imprisonment, additional 52 integrity reporting and oversight obligations, possible exclusion from participation in Medicare, Medicaid and other government healthcare programs, contractual damages, reputational harm, diminished profits and future earnings and curtailment of operations, any of which could adversely affect our ability to operate our business and our results of operations.
Moreover, disputes may also arise between us and our licensors regarding intellectual property subject to a license agreement, including: 62 • the scope of rights granted under the license agreement and other interpretation-related issues; • our financial or other obligations under the license agreement; • whether, and the extent to which, our products, technology and processes infringe on intellectual property of the licensor that is not subject to the licensing agreement; • our diligence obligations under the license agreement and what activities satisfy those diligence obligations; • the inventorship and ownership of inventions and know-how resulting from the joint creation or use of intellectual property by our licensor(s); and • the priority of invention of patented technology.
Moreover, disputes may also arise between us and our licensors regarding intellectual property subject to a license agreement, including: • the scope of rights granted under the license agreement and other interpretation-related issues; • our financial or other obligations under the license agreement; • whether, and the extent to which, our products, technology and processes infringe on intellectual property of the licensor that is not subject to the licensing agreement; • our diligence obligations under the license agreement and what activities satisfy those diligence obligations; • the inventorship and ownership of inventions and know-how resulting from the joint creation or use of intellectual property by our licensor(s); and • the priority of invention of patented technology.
Because we currently also rely on Benchmark to manufacture, test and ship all of the Swoop® systems and on a limited number of suppliers to supply our components, including Benchmark to purchase the magnet used in the scanner from a single source supplier, such pricing pressures from a third party such as Benchmark have and could increase our costs and could force us to increase the prices of our products if we are unable to enter into alternative arrangements with other suppliers or manufacturers, potentially leading to decreased customer demand.
Because we currently also rely on Benchmark to manufacture, test and ship all of the Swoop® systems and on a limited number of suppliers to supply our components, including Benchmark to purchase the magnet used in the scanner from a single source supplier, such pricing 45 pressures from a third party such as Benchmark have and could increase our costs and could force us to increase the prices of our products if we are unable to enter into alternative arrangements with other suppliers or manufacturers, potentially leading to decreased customer demand.
If we are held to have breached the terms of an open source software license, we could be subject to damages or be required to seek licenses from third parties to continue offering our products on terms that are not economically feasible, to re-engineer our products, to discontinue the sale of our products if re-engineering could not be accomplished on a timely basis, or to make generally available, in source code form, our proprietary code, any of which could adversely affect our business, financial condition, results of operations and prospects.
If we are held to have breached the terms of an open source software license, we could be subject to damages or be required to seek licenses from third parties to continue offering our products on terms that are not economically feasible, to re-engineer our products, to discontinue the sale of our products if re-engineering could not be accomplished on a timely basis, or to 69 make generally available, in source code form, our proprietary code, any of which could adversely affect our business, financial condition, results of operations and prospects.
Rothberg and his permitted transferees cease to beneficially own shares of Class B common stock representing 50% or more of the voting power of the outstanding shares of our capital stock; • certain limitations on convening special stockholder meetings; • advance notice for nominations of directors by stockholders and for stockholders to include matters to be considered at our annual meetings; • amendment of certain provisions of the organizational documents only by the affirmative vote of holders of (i) a majority of the voting power of the shares of our capital stock so long as Dr.
Rothberg and his permitted transferees cease to beneficially own shares of Class B common stock representing 50% or more of the voting power of the outstanding shares of our capital stock; • certain limitations on convening special stockholder meetings; • advance notice for nominations of directors by stockholders and for stockholders to include matters to be considered at our annual meetings; 73 • amendment of certain provisions of the organizational documents only by the affirmative vote of holders of (i) a majority of the voting power of the shares of our capital stock so long as Dr.
If our contract manufacturers or component suppliers do not successfully carry out their contractual duties, meet expected deadlines or manufacture our devices in accordance with regulatory requirements, if there are disagreements between us and such parties, or if such parties are unable to support the commercialization of any of our devices for which we have or may obtain marketing authorization, 50 we may not be able to produce, or may be delayed in producing devices sufficient to meet our supply requirements.
If our contract manufacturers or component suppliers do not successfully carry out their contractual duties, meet expected deadlines or manufacture our devices in accordance with regulatory requirements, if there are disagreements between us and such parties, or if such parties are unable to support the commercialization of any of our devices for which we have or may obtain marketing authorization, we may not be able to produce, or may be delayed in producing devices sufficient to meet our supply requirements.
In November 2023, we filed a shelf registration statement on Form S-3 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”).
In November 2023, we filed a shelf registration statement on Form S-3 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 71 time to time and at prices and on terms that we may determine (the “Shelf Registration Statement”).
Under the TSEA, we and the other participant companies may, in their discretion, permit the use of certain non-core technologies, which include any technologies, information or equipment owned or otherwise controlled by the participant company that are not specifically related to the core business area of the participant, such as software, hardware, electronics, fabrication and supplier information, vendor lists and contractor lists, with the other participant companies.
Under the TSEA, we and the other participant companies may, in their discretion, permit the use of certain non-core technologies, which include any technologies, information or equipment owned or otherwise controlled by 47 the participant company that are not specifically related to the core business area of the participant, such as software, hardware, electronics, fabrication and supplier information, vendor lists and contractor lists, with the other participant companies.
The FDA’s process for obtaining 510(k) clearance usually takes three to 12 months, but it can last longer. In the PMA approval process, the FDA must determine that a proposed device is safe and effective for its intended use based, in part, on extensive data, including but not limited to, technical, nonclinical, clinical trial, manufacturing and labeling data.
The FDA’s process for obtaining 510(k) clearance usually takes three to 12 months, but it can last longer. In the PMA process, the FDA must determine that a proposed device is safe and effective for its intended use based, in part, on extensive data, including but not limited to, technical, nonclinical, clinical trial, manufacturing and labeling data.
Such agreements may not be enforceable or may not provide meaningful protection for our trade secrets or other proprietary information in the event of unauthorized use or disclosure or other breaches of the agreements, and we may not be able to prevent such unauthorized disclosure, which could materially and adversely impact our ability to establish or maintain a competitive advantage in the market, and our business, financial condition, results of operations and prospects.
Such agreements may not be enforceable or may not provide meaningful protection for 64 our trade secrets or other proprietary information in the event of unauthorized use or disclosure or other breaches of the agreements, and we may not be able to prevent such unauthorized disclosure, which could materially and adversely impact our ability to establish or maintain a competitive advantage in the market, and our business, financial condition, results of operations and prospects.
As a result, we are a “controlled company” under the Nasdaq rules and are not subject to the requirements that would otherwise require us to have: (i) a majority of our board of directors consist of independent directors; (ii) director nominees selected, or recommended for our board of directors’ selection, either by a majority of the independent directors or a nominating committee comprised solely of independent directors; and (iii) a compensation committee comprised solely of independent directors.
As a result, we are a “controlled company” under the Nasdaq rules and are not subject to the requirements that would otherwise require us to have: (i) a majority of our board of directors consist of 72 independent directors; (ii) director nominees selected, or recommended for our board of directors’ selection, either by a majority of the independent directors or a nominating committee comprised solely of independent directors; and (iii) a compensation committee comprised solely of independent directors.
Unless IDE-exempt, nonsignificant risk devices are still subject to certain abbreviated IDE requirements, but an IDE application is not required if such abbreviated requirements are met. We may not be able to obtain any necessary FDA and/or IRB approval to undertake clinical trials in the United States for future devices we develop and intend to market in the United States.
IDE-exempt, nonsignificant risk devices are still subject to certain abbreviated IDE requirements, but an IDE application is not required if such abbreviated requirements are met. We may not be able to obtain any necessary FDA and/or IRB approval to undertake clinical trials in the United States for future devices we develop and intend to market in the United States.
In addition, many countries such as Canada and Japan have very specific additional regulatory requirements for quality assurance and manufacturing. If we fail to continue to comply with current good manufacturing requirements, as well as ISO or other regulatory standards, we may be required to cease all or part of our operations until we comply with these regulations.
In addition, many countries such as Canada and Japan have very specific additional regulatory requirements for quality assurance and manufacturing. If we fail to continue to comply with current good manufacturing practice requirements, as well as ISO or other regulatory standards, we may be required to cease all or part of our operations until we comply with these regulations.
We received marketing authorization for brain imaging in several countries, including the European Union (CE Mark), the United Kingdom (UKCA Mark), Canada, Australia and New Zealand. This strategy may include establishing and maintaining physician outreach and education capabilities outside of the United States and expanding our relationships with international customers.
We received marketing authorization for brain imaging in several countries, including the European Union (CE Mark), the United Kingdom (UKCA Mark), Canada, Australia, New Zealand and India. This strategy may include establishing and maintaining physician outreach and education capabilities outside of the United States and expanding our relationships with international customers.
We have elected not to opt out of such extended transition period which means that when a standard is issued or revised and it has different 69 application dates for public or private companies, we, as an emerging growth company, can adopt the new or revised standard at the time private companies adopt the new or revised standard.
We have elected not to opt out of such extended transition period which means that when a standard is issued or revised and it has different application dates for public or private companies, we, as an emerging growth company, can adopt the new or revised standard at the time private companies adopt the new or revised standard.
Should the scale of our international business activities expand, any changes in the U.S. taxation of such activities could increase our worldwide effective tax rate and harm our future financial position and results of operations. We may face exposure to foreign currency exchange rate fluctuations. While we have historically transacted in U.S.
Should the scale of our international business activities expand, any changes 49 in the U.S. taxation of such activities could increase our worldwide effective tax rate and harm our future financial position and results of operations. We may face exposure to foreign currency exchange rate fluctuations. While we have historically transacted in U.S.
Department of Health and Human Services (“HHS-OIG”), CMS, and the Department of Justice, or may be subject to whistleblower lawsuits under federal and state false claims laws. To ensure compliance with Medicare, Medicaid and other regulations, government agencies conduct periodic audits of the Company to ensure compliance with various supplier standards and billing requirements.
Department of Health and Human Services (“HHS-OIG”), CMS, and the Department of Justice, or may be subject to whistleblower lawsuits under federal and state false claims laws. To ensure compliance with Medicare, Medicaid and other 57 regulations, government agencies conduct periodic audits of the Company to ensure compliance with various supplier standards and billing requirements.
Any future determination to pay dividends will be at the discretion of our board of directors and will depend on our financial condition, results of operations, capital requirements, and future agreements and financing instruments, business prospects and such other factors as our board of directors deems relevant. Item 1B. UNRESOLVED S TAFF COMMENTS None.
Any future determination to pay dividends will be at the discretion of our board of directors and will depend on our financial condition, results of operations, capital requirements, and future agreements and financing instruments, business prospects and such other factors as our board of directors deems relevant. 76 Item 1B. UNRESOLVED S TAFF COMMENTS None.
Additionally, changes in laws and regulations could impact the usefulness of our products and could necessitate changes or modifications to our products to accommodate such changes. We invest substantial resources in researching and developing new products and enhancing existing products by incorporating additional features, improving 42 functionality, and adding other improvements to meet customers’ evolving needs.
Additionally, changes in laws and regulations could impact the usefulness of our products and could necessitate changes or modifications to our products to accommodate such changes. We invest substantial resources in researching and developing new products and enhancing existing products by incorporating additional features, improving functionality, and adding other improvements to meet customers’ evolving needs.
Foreign Corrupt Practices Act, and comparable laws and regulations in other countries. 44 Any of these factors could significantly harm our future international expansion and operations and, consequently, have a material adverse effect on our business, financial condition and results of operations. Unfavorable global economic conditions could adversely affect our business, financial condition or results of operations.
Foreign Corrupt Practices Act, and comparable laws and regulations in other countries. Any of these factors could significantly harm our future international expansion and operations and, consequently, have a material adverse effect on our business, financial condition and results of operations. Unfavorable global economic conditions could adversely affect our business, financial condition or results of operations.
We may be required to obtain a new 510(k) clearance or PMA approval for significant post-market modifications to our products, including any modifications made to our commercially marketed devices. Obtaining 510(k) clearance or PMA approval for medical devices can be expensive and time-consuming, and entails significant user fees, unless an exemption is available.
We may be required to obtain a new 510(k) clearance or a PMA for significant post-market modifications to our products, including any modifications made to our commercially marketed devices. Obtaining 510(k) clearance or a PMA for medical devices can be expensive and time-consuming, and entails significant user fees, unless an exemption is available.
Data localization laws in some countries generally mandate that certain types of data collected in a particular country be stored and/or 53 processed within that country. We could be subject to audits in Europe and around the world, particularly in the areas of consumer and data protection, as we continue to grow and expand our operations.
Data localization laws in some countries generally mandate that certain types of data collected in a particular country be stored and/or processed within that country. We could be subject to audits in Europe and around the world, particularly in the areas of consumer and data protection, as we continue to grow and expand our operations.
The America Invents Act and its implementation could increase the uncertainties and costs surrounding the prosecution of our patent applications and the enforcement or defense of our issued patents, all of which could have a material adverse effect on our business, financial condition, results of operations and prospects. Various courts, including the U.S.
The America Invents Act and its 62 implementation could increase the uncertainties and costs surrounding the prosecution of our patent applications and the enforcement or defense of our issued patents, all of which could have a material adverse effect on our business, financial condition, results of operations and prospects. Various courts, including the U.S.
Litigation proceedings may be necessary for us to enforce our patent and other intellectual property rights. In any such proceeding, a court may refuse to stop the other party from using the technology at issue on the grounds that our owned and in-licensed patents do 61 not cover the technology in question.
Litigation proceedings may be necessary for us to enforce our patent and other intellectual property rights. In any such proceeding, a court may refuse to stop the other party from using the technology at issue on the grounds that our owned and in-licensed patents do not cover the technology in question.
To the extent that we engage in enterprise sales, we may be subject to procurement discounts, which could have a negative impact on the prices of our products. We have undertaken internal restructuring activities that could result in disruptions to our business or otherwise materially harm our results of operations or financial condition.
To the extent that we engage in enterprise sales, we may be subject to procurement discounts, which could have a negative impact on the prices of our products. We have undertaken internal restructuring activities in the past that could result in disruptions to our business or otherwise materially harm our results of operations or financial condition.
Further, a prior ruling by the Court of Chancery in Delaware introduced uncertainty as to whether Section 242(b)(2) of the DGCL required a separate vote in favor of at least a majority of the outstanding shares of Class A common stock, in addition to a vote in favor of at least a majority of the outstanding shares of Class A and Class B common stock, voting together as a single class, to properly authorize shares of Class A common stock.
Further, a prior ruling by the Court of Chancery in Delaware introduced uncertainty as to whether Section 242(b)(2) of the DGCL required a separate vote in favor of at least a majority of the outstanding shares of Class A common stock, in addition to a vote in favor of at least a majority of the 74 outstanding shares of Class A and Class B common stock, voting together as a single class, to properly authorize shares of Class A common stock.
These problems could lead to the recall of, or the issuance of a safety alert relating to, our products, and could result in product liability claims and lawsuits. Additionally, the manufacture and production of our products must occur in a highly controlled and clean environment to minimize particles and other yield- and quality-limiting contaminants.
These problems could lead to the recall of, or the issuance of a safety alert relating to, our products, and could result in product liability claims and lawsuits. 46 Additionally, the manufacture and production of our products must occur in a highly controlled and clean environment to minimize particles and other yield- and quality-limiting contaminants.
For example, in August 2021 the FDA issued a final 51 rule revising the agency’s regulation governing the types of evidence relevant to determining the “intended use” of a drug or device under the FDCA, which has significant implications for when a manufacturer or distributor has engaged in off-label marketing.
For example, in August 2021 the FDA issued a final rule revising the agency’s regulation governing the types of evidence relevant to determining the “intended use” of a drug or device under the FDCA, which has significant implications for when a manufacturer or distributor has engaged in off-label marketing.
If we cannot license rights to use technologies on reasonable terms, we may not be able to commercialize new products in the future. We may identify third-party technology that we may need to license or acquire in order to develop or commercialize our products or technologies. However, we may be unable to secure such licenses or acquisitions.
If we cannot license rights to use technologies on reasonable terms, we may not be able to commercialize new products in the future. 68 We may identify third-party technology that we may need to license or acquire in order to develop or commercialize our products or technologies. However, we may be unable to secure such licenses or acquisitions.
We believe that our management team must be able to act decisively to apply and adapt our business model in the rapidly changing markets in which we compete. In addition, we rely upon technical and scientific employees or third-party contractors to effectively establish, manage and grow our business.
We believe that our management team must be able to act decisively to apply and adapt our business model in the rapidly changing markets in which we compete. In addition, we rely upon technical and scientific employees and third-party contractors to effectively establish, manage and grow our business.
We could also be required to pay damages, which could be significant, including treble damages and attorneys’ fees if we are found to have willfully infringed such patents. We could also be required to obtain a license to such patents in order to continue the development and commercialization of the infringing product or technology.
We could also be required to pay damages, which could be significant, including treble damages and attorneys’ fees if we are found to have 66 willfully infringed such patents. We could also be required to obtain a license to such patents in order to continue the development and commercialization of the infringing product or technology.
Without protection for the intellectual property we license, other companies might be able to offer substantially identical products and technologies for sale, which could materially adversely affect our competitive business position and harm our business, financial condition, results of operations and prospects.
Without protection for the intellectual property we may license, other companies might be able to offer substantially identical products and technologies for sale, which could materially adversely affect our competitive business position and harm our business, financial condition, results of operations and prospects.
These choice-of-forum provisions may limit a stockholder’s ability to bring a claim in a judicial forum that he, she or it believes to be favorable for disputes with our company or our directors, 68 officers or other employees or stockholders, which may discourage such lawsuits.
These choice-of-forum provisions may limit a stockholder’s ability to bring a claim in a judicial forum that he, she or it believes to be favorable for disputes with our company or our directors, officers or other employees or stockholders, which may discourage such lawsuits.
Over the long term, if we are unable to establish name recognition based on our trademarks and trade names, then we may not be able to compete effectively, and our business, financial condition, results of operations and prospects may be adversely affected.
Over the long term, if we are unable to establish name recognition based on our trademarks and trade names, 65 then we may not be able to compete effectively, and our business, financial condition, results of operations and prospects may be adversely affected.
Created IP under the TSEA may be relevant to our 43 business and created by our personnel but owned by the other participant companies. Furthermore, if the TSEA were to terminate, or if we were to lose access to the technologies and services available pursuant to the TSEA, our business could be adversely affected.
Created IP under the TSEA may be relevant to our business and created by our personnel but owned by the other participant companies. Furthermore, if the TSEA were to terminate, or if we were to lose access to the technologies and services available pursuant to the TSEA, our business could be adversely affected.
Consequently, we and our licensors may not be able to prevent third parties from practicing our or our licensors’ inventions in some or all countries 57 outside the United States, or from selling or importing products made using our or our licensors’ inventions in other jurisdictions.
Consequently, we and our licensors may not be able to prevent third parties from practicing our or our licensors’ inventions in some or all countries outside the United States, or from selling or importing products made using our or our licensors’ inventions in other jurisdictions.
Because of the technical nature of our products and the dynamic market in which we compete, any failure to attract, recruit, train, retain, motivate and integrate qualified personnel could materially harm our operating results and growth prospects.
Because of the technical nature of 44 our products and the dynamic market in which we compete, any failure to attract, recruit, train, retain, motivate and integrate qualified personnel could materially harm our operating results and growth prospects.
If our assumptions regarding these risks and uncertainties, which we will use to plan and operate our business, are incorrect or change, or if we do not address these risks successfully, our results of operations could differ materially from our expectations, and our business, financial condition and results of operations could be adversely affected. 35 We may need to raise additional capital to fund commercialization plans for our products, including manufacturing, sales and marketing activities, expand our investments in research and development, develop clinical evidence, and commercialize new products and applications.
If our assumptions regarding these risks and uncertainties, which we will use to plan and operate our business, are incorrect or change, or if we do not address these risks successfully, our results of operations could differ materially from our expectations, and our business, financial condition and results of operations could be adversely affected. 39 We may need to raise additional capital to fund commercialization plans for our products, including manufacturing, sales and marketing activities, expand our investments in research and development, develop clinical evidence, and commercialize new products and applications.
These regulatory efforts could lead to new FDA requirements in the future or additional product liability or other litigation risks if any of our products is considered to be 48 susceptible to third-party tampering.
These regulatory efforts could lead to new FDA requirements in the future or additional product liability or other litigation risks if any of our products is considered to be susceptible to third-party tampering.
In addition, government funding of the SEC and other government agencies on which our operations may rely, including those that fund research and development activities is subject to the political process, which is inherently fluid and unpredictable.
In addition, government funding of the SEC 53 and other government agencies on which our operations may rely, including those that fund research and development activities is subject to the political process, which is inherently fluid and unpredictable.
This reliance also results in our reduced control over the manufacture of our devices and the protection of our trade secrets and know-how from misappropriation or inadvertent disclosure, which may adversely affect our future business prospects.
This reliance also results in our reduced control over the 54 manufacture of our devices and the protection of our trade secrets and know-how from misappropriation or inadvertent disclosure, which may adversely affect our future business prospects.
Even if we are successful in defending against these claims, 60 litigation could result in substantial costs and be a distraction to our management team. If we are not successful, we could lose access or exclusive access to valuable intellectual property.
Even if we are successful in defending against these claims, litigation could result in substantial costs and be a distraction to our management team. If we are not successful, we could lose access or exclusive access to valuable intellectual property.
If our management is unable to effectively manage our growth, our expenses may increase more than expected. Our ability to generate and/or grow revenue could be 40 reduced and we may not be able to implement our business strategy.
If our management is unable to effectively manage our growth, our expenses may increase more than expected. Our ability to generate and/or grow revenue could be reduced and we may not be able to implement our business strategy.
If we fail to implement adequate safeguards, the use of AI may introduce additional operational vulnerabilities by producing inaccurate outcomes based on flaws in the underlying data or methodologies, or unintended results.
If we fail to implement adequate safeguards, the use of AI may 59 introduce additional operational vulnerabilities by producing inaccurate outcomes based on flaws in the underlying data or methodologies, or unintended results.
In certain circumstances, we rely on our licensors to pay these fees due to the U.S. and non-U.S. patent agencies and to take the necessary action to comply with these requirements with respect to our licensed intellectual property.
In certain circumstances, we 67 rely on our licensors to pay these fees due to the U.S. and non-U.S. patent agencies and to take the necessary action to comply with these requirements with respect to our licensed intellectual property.
The registration statement relating to all of the registration rights set forth above was initially filed on January 24, 2022 and declared effective by the SEC on February 1, 2022. The post-effective amendment to the registration statement filed on January 24, 2023 was 70 declared effective by the SEC on January 30, 2023.
The registration statement relating to all of the registration rights set forth above was initially filed on January 24, 2022 and declared effective by the SEC on February 1, 2022. The post-effective amendment to the registration statement filed on January 24, 2023 was declared effective by the SEC on January 30, 2023.
Technological advances by one or more competitors or future entrants into the field may result in our current products and services becoming non-competitive or obsolete, which may decrease revenues and profits and adversely affect our business and results of operations. 37 We may encounter significant competition across our existing and future planned products and services and in each market in which we sell or plan to sell our products and services from various companies, many of which have greater financial and marketing resources than us.
Technological advances by one or more competitors or future entrants into the field may result in our current products and services becoming non-competitive or obsolete, which may decrease revenues and profits and adversely affect our business and results of operations. 41 We may encounter significant competition across our existing and future planned products and services and in each market in which we sell or plan to sell our products and services from various companies, many of which have greater financial and marketing resources than us.
We are also subject to numerous post-marketing regulatory requirements, which include quality system regulations related to the manufacture of our devices, labeling regulations and medical device reporting (“MDR”) regulations.
We are also subject to numerous post-marketing regulatory requirements, which include quality management system regulations related to the manufacture of our devices, labeling regulations and medical device reporting (“MDR”) regulations.
If a change to a device addresses a risk to health associated with the device or a violation of the federal FDCA, that change would generally constitute a medical device recall and require submission of a recall report to the FDA.
If a change to a device addresses a risk to health 55 associated with the device or a violation of the federal FDCA, that change would generally constitute a medical device recall and require submission of a recall report to the FDA.
Furthermore, certain of our sponsored research agreements pursuant 59 to which we provide certain research services for third parties do not assign to us all intellectual property developed under such agreements.
Furthermore, certain of our sponsored research agreements pursuant to which we provide certain research services for third parties do not assign to us all intellectual property developed under such agreements.
We have recorded a full valuation allowance 45 related to our NOLs and other deferred tax assets due to the uncertainty of the ultimate realization of the future benefits of those assets.
We have recorded a full valuation allowance related to our NOLs and other deferred tax assets due to the uncertainty of the ultimate realization of the future benefits of those assets.
Regulatory authorization of a product in one country does not ensure regulatory approval in another, but a failure or delay in obtaining regulatory authorization in one country may negatively impact the 49 regulatory process in others.
Regulatory authorization of a product in one country does not ensure regulatory approval in another, but a failure or delay in obtaining regulatory authorization in one country may negatively impact the regulatory process in others.
There can be no assurance that our restructuring will achieve the cost savings, operating efficiencies or other benefits that we may have initially expected.
There can be no assurance that our restructuring will achieve the cost savings, operating efficiencies or other benefits that we may initially expected.
Failure by us or our third-party manufacturers or component suppliers to adhere to QSR requirements or take adequate and timely corrective action in response to an adverse quality system inspection finding could delay production of our products and lead to fines, difficulties in obtaining marketing authorizations for our products, recalls, or enforcement actions, including but not limited to injunctive relief or consent decrees, or other consequences, which could have a material adverse effect on our business, financial condition or results of operations.
Failure by us or our third-party manufacturers or component suppliers to adhere to quality management system requirements/QMSR requirements or take adequate and timely corrective action in response to an adverse quality system inspection finding could delay production of our products and lead to fines, difficulties in obtaining marketing authorizations for our products, recalls, or enforcement actions, including but not limited to injunctive relief or consent decrees, or other consequences, which could have a material adverse effect on our business, financial condition or results of operations.
Rothberg holds approximately 83% of the voting power of our capital stock and is able to control matters submitted to our stockholders for approval, including the election of directors, amendments of our organizational documents and any merger, consolidation, sale of all or substantially all of our assets or other major corporate transactions. Dr.
Rothberg holds approximately 79% of the voting power of our capital stock and is able to control matters submitted to our stockholders for approval, including the election of directors, amendments of our organizational documents and any merger, consolidation, sale of all or substantially all of our assets or other major corporate transactions. Dr.
In order for us to market our products in countries outside of the United States, we must comply with extensive safety and quality regulations in other countries regarding the quality, safety and efficacy of our products. These regulations, including the requirements for marketing authorizations, and the time required for regulatory review, vary from country to country.
In order for us to market our products in countries outside of the United States, we must comply with extensive safety and quality regulations in other countries regarding the quality, safety and efficacy of our products. These regulations, including the requirements for marketing authorization, and the time required for regulatory review, vary from country to country.
Government regulation of medical devices is meant to assure their safety and effectiveness, and includes requirements for, among other things: • design, development and manufacturing processes; • labeling, content and language of instructions for use and storage; • product testing, nonclinical studies and clinical trials; • regulatory clearances and approvals, including pre-market clearance or pre-market approval; • establishment registration, device listing and ongoing compliance with the QSR requirements; • advertising and promotion; • marketing, sales and distribution; • conformity assessment procedures; • product traceability and record-keeping procedures; • review of product complaints, complaint reporting, recalls and field safety corrective actions; • post-market surveillance, including reporting of deaths or serious injuries and malfunctions that, if they were to recur, could lead to death or serious injury; • post-market studies (if applicable); and • product import and export.
Government regulation of medical devices is meant to assure their safety and effectiveness, and includes requirements for, among other things: • design, development and manufacturing processes; 50 • labeling, content and language of instructions for use and storage; • product testing, nonclinical studies and clinical trials; • regulatory clearances and approvals, including pre-market clearance or pre-market approval; • establishment registration, device listing and ongoing compliance with the quality management system requirements; • advertising and promotion; • marketing, sales and distribution; • conformity assessment procedures; • product traceability and record-keeping procedures; • review of product complaints, complaint reporting, recalls and field safety corrective actions; • post-market surveillance, including reporting of deaths or serious injuries and malfunctions that, if they were to recur, could lead to death or serious injury; • post-market studies (if applicable); and • product import and export.
Certain of our future owned and in-licensed patents may be, subject to a reservation of rights by one or more third parties, including government march-in rights, that may limit our ability to exclude third parties from commercializing products similar or identical to ours. 63 In addition, our owned and in-licensed patents may be subject to a reservation of rights by one or more third parties.
Certain of our future owned and in-licensed patents may be, subject to a reservation of rights by one or more third parties, including government march-in rights, that may limit our ability to exclude third parties from commercializing products similar or identical to ours.
The primary regulatory environment in Europe is that of the European Economic Area (“EEA”), which is comprised of the Member States of the European Union, plus Iceland, Liechtenstein and Norway. In 2023, our Swoop® system received approval in the European Union (CE Mark).
The primary regulatory environment in Europe is that of the European Economic Area (“EEA”), which is comprised of the Member States of the European Union, plus Iceland, Liechtenstein and Norway. In 2023, our first-generation Swoop® system received approval in the European Union (CE Mark).
Each Share and accompanying Warrant were sold together at a combined offering price of $1.33. The aggregate gross proceeds from the Offering were approximately $6.0 million before deducting the placement agent’s fees and offering expenses. 66 Upon exercise or conversion, the shares underlying the Warrants and outstanding options may be resold into the public market.
Each share and accompanying Warrant were sold together at a combined offering price of $1.33. The aggregate gross proceeds from the February 2025 Offering were approximately $6.0 million before deducting the placement agent’s fees and offering expenses. Upon exercise or conversion, the shares underlying the Warrants and outstanding options may be resold into the public market.
We believe that a substantial percentage of our future revenue will come from international sources as we continue to commercialize our products and services, 38 having received marketing authorization for brain imaging in several countries, including the European Union (CE Mark), the United Kingdom (UKCA Mark), Canada, Australia and New Zealand.
We believe that a substantial percentage of our future revenue will come from international sources as we continue to commercialize our products and services, 42 having received marketing authorization for brain imaging in several countries, including the European Union (CE Mark), the United Kingdom (UKCA Mark), Canada, Australia, New Zealand and India.
Disruptions at the FDA and other agencies may also slow the time necessary for products to be reviewed and/or approved by necessary government agencies, which would adversely affect our business.
In addition, disruptions at the FDA and other agencies may also slow the time necessary for products to be reviewed and/or approved by necessary government agencies, which would adversely affect our business.
What constitutes a “sufficient” additional feature is somewhat uncertain. Furthermore, in view of these decisions, since December 2014, the USPTO has published and continues to publish revised guidelines for patent examiners to apply when examining process claims for patent eligibility. In addition, U.S.
What constitutes a “sufficient” additional feature is somewhat uncertain. Furthermore, in view of these decisions, the USPTO has published and continues to publish revised guidelines for patent examiners to apply when examining process claims for patent eligibility. In addition, U.S.
Some of our future products may require PMA approval. In addition, the FDA may demand that we obtain a PMA prior to marketing future changes of our existing products.
Some of our future products may require approval through the PMA process. In addition, the FDA may demand that we obtain a PMA prior to marketing future changes of our existing products.
We expect to generate a substantial portion of our revenue internationally in the future and may become subject to various additional risks relating to our international activities, which could adversely affect our business, operating results and financial condition. Revenue from non-U.S. countries was 51% of total revenue for the year ended December 31, 2024.
We expect to generate a substantial portion of our revenue internationally in the future and may become subject to various additional risks relating to our international activities, which could adversely affect our business, operating results and financial condition. Revenue from non-U.S. countries was 23% of total revenue for the year ended December 31, 2025.
So long as more than 50% of the voting power for the election of our directors is held by an individual, a group or another company, we will qualify as a “controlled company” under the Nasdaq listing rules. As of February 15, 2025, Dr. Rothberg controls approximately 83% of the voting power of our outstanding capital stock.
So long as more than 50% of the voting power for the election of our directors is held by an individual, a group or another company, we will qualify as a “controlled company” under the Nasdaq listing rules. As of February 15, 2026, Dr. Rothberg controls approximately 79% of the voting power of our outstanding capital stock.
Dr. Rothberg and his permitted transferees hold all of the issued and outstanding shares of our Class B common stock, and as of February 15, 2025, Dr.
Rothberg and his permitted transferees hold all of the issued and outstanding shares of our Class B common stock, and as of February 15, 2026, Dr.
Rothberg, Ph.D., the Founder of Legacy Hyperfine and Liminal and a member of our board of directors, which will limit an investor’s ability to influence the outcome of important transactions, including a change in control. Shares of our Class B common stock have 20 votes per share, while shares of our Class A common stock have one vote per share.
Rothberg, Ph.D., the Founder of Legacy Hyperfine and Liminal and a member of our board of directors, which limits an investor’s ability to influence the outcome of important transactions, including a change in control. Shares of our Class B common stock have 20 votes per share, while shares of our Class A common stock have one vote per share. Dr.
Risks Related to Our Securities and to Being a Public Company We have in the past experienced material weaknesses in our internal control over financial reporting, and if we experience such material weaknesses in our internal control over financial reporting in the future or otherwise fail to maintain an effective system of internal controls in the future, we may not be able to report our financial condition, results of operations or cash flows accurately or in a timely manner and we may be unable to maintain compliance with applicable stock exchange listing requirements, which may adversely affect investor confidence in us and, as a result, materially and adversely affect our business and the value of our Class A common stock. 65 We have in the past experienced material weaknesses in our internal controls over financial reporting that have required us to expend substantial time and effort to remediate.
Risks Related to Our Securities and to Being a Public Company We have in the past experienced material weaknesses in our internal control over financial reporting, and if we experience such material weaknesses in our internal control over financial reporting in the future or otherwise fail to maintain an effective system of internal controls in the future, we may not be able to report our financial condition, results of operations or cash flows accurately or in a timely manner and we may be unable to maintain compliance with applicable stock exchange listing requirements, which may adversely affect investor confidence in us and, as a result, materially and adversely affect our business and the value of our Class A common stock.
In May 2024, we received written notice from 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.
In May 2024 and April 2025, we received written notices from 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.
On January 28, 2025, we implemented an organizational restructuring designed to decrease our costs and create a more streamlined organization to support our business priorities. As a result, we terminated approximately 14% of our global workforce. The restructuring affects employees predominantly in technical positions and is largely focused on internally-facing roles as we evolve from development stage to commercial stage.
On January 28, 2025, we implemented an organizational restructuring designed to decrease our costs and create a more streamlined organization to support our business priorities. As a result, we terminated approximately 14% of our global workforce. The restructuring affected employees predominantly in technical positions and was largely focused on internally-facing roles as we evolved from development stage to commercial stage.
We are an early-stage health technology company, and have incurred significant losses since Legacy Hyperfine and Liminal formed in 2014 and 2018, respectively, and expect to continue to incur losses in the future. We incurred net losses of $40.7 million and $44.2 million for the years ended December 31, 2024 and 2023, respectively.
We are an early-stage health technology company, and have incurred significant losses since Legacy Hyperfine and Liminal formed in 2014 and 2018, respectively, and expect to continue to incur losses in the future. We incurred net losses of $35.6 million and $40.7 million for the years ended December 31, 2025 and 2024, respectively.
Jonathan Rothberg, our Chairperson, R. Scott Huennekens, and our President and Chief Executive Officer, Maria Sainz, as well as other members of our management team and our research and development, manufacturing, software engineering and sales and marketing personnel. As our development and commercialization plans and strategies develop, we will need additional managerial, operational, sales, marketing, financial, legal and other resources.
Jonathan Rothberg, our Chairperson, Daniel J. Wolterman, and our President and Chief Executive Officer, Maria Sainz, as well as other members of our management team and our research and development, manufacturing, software engineering and sales and marketing personnel. As our development and commercialization plans and strategies develop, we will need additional managerial, operational, sales, marketing, financial, legal and other resources.
If we fail to comply with present or future regulatory requirements that are applicable to us, we may be subject to enforcement action by the FDA, which may include any of the following sanctions: • untitled letters, warning letters, fines, injunctions, consent decrees and civil penalties; • customer notification, or orders for repair, replacement or refunds; • voluntary or mandatory recall or seizure of our current or future products; • administrative detention by the FDA of medical devices believed to be adulterated or misbranded; • operating restrictions, suspension or shutdown of production; • refusal of our requests for 510(k) clearance or PMA of new products, new intended uses or modifications to existing products; • rescission of 510(k) clearance or suspension or withdrawal of PMAs that have already been granted; and • criminal prosecution. 47 The occurrence of any of these events may have a material adverse effect on our business, financial condition and results of operations.
If we fail to comply with present or future regulatory requirements that are applicable to us, we may be subject to enforcement action by the FDA, which may include any of the following sanctions: • untitled letters, warning letters, fines, injunctions, consent decrees and civil penalties; • customer notification, or orders for repair, replacement or refunds; • voluntary or mandatory recall or seizure of our current or future products; • administrative detention by the FDA of medical devices believed to be adulterated or misbranded; • operating restrictions, suspension or shutdown of production; • refusal of our requests for 510(k) clearance or PMA of new products, new intended uses or modifications to existing products; • rescission of 510(k) clearance or suspension or withdrawal of PMAs that have already been granted; and • criminal prosecution.
Our current license agreements impose, and future agreements may impose, various diligence, commercialization, milestone payment, royalty, insurance and other obligations on us and require us to meet development timelines, or to exercise commercially reasonable efforts to develop and commercialize licensed products, in order to maintain the licenses.
Any future license agreements we enter into may impose various diligence, commercialization, milestone payment, royalty, insurance and other obligations on us and require us to meet development timelines, or to exercise commercially reasonable efforts to develop and commercialize licensed products, in order to maintain the licenses.

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Item 1C. Cybersecurity

Cybersecurity — threats and controls disclosure

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Biggest changeTo provide for the confidentiality, integrity, and availability of critical data and information systems, maintain regulatory compliance, manage our material risks from cybersecurity threats, and protect against and respond to cybersecurity incidents, we undertake the following internal security measures: • maintain a cybersecurity program through formally-defined documented policies, standards, processes, and procedures to ensure internal security measures are implemented to protect against cybersecurity threats, to assess emerging cybersecurity and data privacy laws, and to implement changes to our processes that are designed to comply with laws applicable to our organization; • implement policies and procedures to identity organizational assets, data and critical IT systems, assess (and periodically re-assess) those assets, data, and systems for cybersecurity risks, and to develop management plans for identifying and remediating identified risks; • through our policies, practices and contracts (as applicable), require employees, as well as third parties that provide services on our behalf, to handle confidential data and systems in a legally compliant and acceptable manner; • employ technical security tools that are designed to protect our critical data and information systems from cybersecurity threats, including network firewalls and access controls, vulnerability scanners, intrusion prevention and detection systems, anti-malware/endpoint protection systems, and identity and access management systems which are evaluated for effectiveness and improved through vulnerability assessments and cybersecurity threat intelligence; • provide quarterly, mandatory training for our employees regarding cybersecurity threats to equip them with effective tools to address cybersecurity threats, and to communicate our evolving information security policies, standards, processes and practices; • implement administrative processes and procedures to define acceptable security parameters and baselines of IT assets and information systems, and utilize access controls to prevent unauthorized alterations to system parameters and to maintain oversight over configuration changes and modifications to those systems; • conduct third party security reviews of critical and high-risk third-party suppliers and vendors; • conduct quarterly phishing email simulations for all employees with access to our email systems to enhance awareness and responsiveness to possible threats; • conduct cybersecurity management and incident training for employees involved in our systems and processes that handle sensitive data; • run annual tabletop exercises to simulate a response to a cybersecurity incident and use the findings to improve our processes and technologies; • implement a formal Incident Response Plan, based upon NIST, HITRUST, and SOC2 frameworks, to help us identify, protect, detect, respond and recover when there is an actual or potential cybersecurity incident, which Incident Response Plan includes processes to triage, assess severity for, escalate, contain, investigate and remediate the incident, as well as to comply with potentially applicable legal obligations and mitigate damage to our business and reputation; and • carry information security risk insurance to insure against potential losses arising from a cybersecurity incident. 72 As part of the above processes, we regularly engage with consultants, auditors and other third parties, including annually having a third-party independent Risk Assessor review our cybersecurity program to help identify areas for continued focus, improvement, and compliance.
Biggest changeTo provide for the confidentiality, integrity, and availability of critical data and information systems, maintain regulatory compliance, manage our material risks from cybersecurity threats, and protect against and respond to cybersecurity incidents, we undertake the following internal security measures: • maintain a cybersecurity program through formally-defined documented policies, standards, processes, and procedures to ensure internal security measures are implemented to protect against cybersecurity threats, to assess emerging cybersecurity and data privacy laws, and to implement changes to our processes that are designed to comply with laws applicable to our organization; 77 • implement policies and procedures to identity organizational assets, data and critical IT systems, assess (and periodically re-assess) those assets, data, and systems for cybersecurity risks, and to develop management plans for identifying and remediating identified risks; • through our policies, practices and contracts (as applicable), require employees, as well as third parties that provide services on our behalf, to handle confidential data and systems in a legally compliant and acceptable manner; • employ technical security tools that are designed to protect our critical data and information systems from cybersecurity threats, including network firewalls and access controls, vulnerability scanners, intrusion prevention and detection systems, anti-malware/endpoint protection systems, and identity and access management systems which are evaluated for effectiveness and improved through vulnerability assessments and cybersecurity threat intelligence; • provide quarterly, mandatory training for our employees regarding cybersecurity threats to equip them with effective tools to address cybersecurity threats, and to communicate our evolving information security policies, standards, processes and practices; • implement administrative processes and procedures to define acceptable security parameters and baselines of IT assets and information systems, and utilize access controls to prevent unauthorized alterations to system parameters and to maintain oversight over configuration changes and modifications to those systems; • conduct third party security reviews of critical and high-risk third-party suppliers and vendors; • conduct quarterly phishing email simulations for all employees with access to our email systems to enhance awareness and responsiveness to possible threats; • conduct cybersecurity management and incident training for employees involved in our systems and processes that handle sensitive data; • run annual tabletop exercises to simulate a response to a cybersecurity incident and use the findings to improve our processes and technologies; • implement a formal Incident Response Plan, based upon NIST, HITRUST, and SOC2 frameworks, to help us identify, protect, detect, respond and recover when there is an actual or potential cybersecurity incident, which Incident Response Plan includes processes to triage, assess severity for, escalate, contain, investigate and remediate the incident, as well as to comply with potentially applicable legal obligations and mitigate damage to our business and reputation; and • carry information security risk insurance to insure against potential losses arising from a cybersecurity incident.
We employ a range of technical security tools and external security services, including regular network and endpoint monitoring, compliance audits, vulnerability assessments, 71 penetration testing, threat modeling and tabletop exercises to inform our risk posture, remediation plans and cybersecurity investments. We consider risks from cybersecurity threats alongside other company risks as part of our overall risk assessment process.
We employ a range of technical security tools and external security services, including regular network and endpoint monitoring, compliance audits, vulnerability assessments, penetration testing, threat modeling and tabletop exercises to inform our risk posture, remediation plans and cybersecurity investments. We consider risks from cybersecurity threats alongside other company risks as part of our overall risk assessment process.
To date, we have concluded that there has not been any evidence of material concern involving malware, persistence mechanisms or other compromised exchange of on-premises accounts within the Company’s environment. Cybersecurity Governance; Management Cybersecurity is an important part of our risk management processes and an area of focus for our board of directors and management.
To date, 78 we have concluded that there has not been any evidence of material concern involving malware, persistence mechanisms or other compromised exchange of on-premises accounts within the Company’s environment. Cybersecurity Governance; Management Cybersecurity is an important part of our risk management processes and an area of focus for our board of directors and management.
Material cybersecurity threat risks are also considered during separate board meeting discussions of important matters like enterprise risk management, operational budgeting, business continuity planning, mergers and acquisitions, brand management, and other relevant matters. 73
Material cybersecurity threat risks are also considered during separate board meeting discussions of important matters like enterprise risk management, operational budgeting, business continuity planning, mergers and acquisitions, brand management, and other relevant matters. 79
Our audit committee generally receives materials that include a cybersecurity scorecard and other materials discussing current and emerging material cybersecurity threat risks, and describing our ability to mitigate those risks, as well as recent developments, evolving standards, technological developments and information security considerations arising with respect to our peers and third parties, and discusses such matters with our Chief Compliance Officer, Chief Administrative Officer, Chief Operating Officer, Security Officer, Data Protection Officer, Senior Director of Cybersecurity and IT, and Governance Risk and Compliance Manager.
Our audit committee generally receives materials that include a cybersecurity scorecard and other materials discussing current and emerging material cybersecurity threat risks, and describing our ability to mitigate those risks, as well as recent developments, evolving standards, technological developments and information security considerations arising with respect to our peers and third parties, and discusses such matters with our Chief Compliance Officer, Chief Administrative Officer, Chief Operating Officer, Security Officer, Data Protection Officer, Vice President of IT and Services , and Governance Risk and Compliance Manager.
As discussed in more detail under “Cybersecurity Governance; Management” below, our board of directors and our audit committee provide oversight of our cybersecurity risk management and strategy processes, which are led by our Chief Compliance Officer, Chief Administrative Officer, Chief Operating Officer, Security Officer, Data Protection Officer, Senior Director of Cybersecurity and IT, and Governance Risk and Compliance Manager.
As discussed in more detail under “Cybersecurity Governance; Management” below, our board of directors and our audit committee provide oversight of our cybersecurity risk management and strategy processes, which are led by our Chief Compliance Officer, Chief Administrative Officer, Chief Operating Officer, Security Officer, Data Protection Officer, Vice President of IT and Services, and Governance Risk and Compliance Manager.
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As part of the above processes, we regularly engage with consultants, auditors and other third parties, including annually having a third-party independent Risk Assessor review our cybersecurity program to help identify areas for continued focus, improvement, and compliance.

Item 2. Properties

Properties — owned and leased real estate

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Biggest changeItem 2. PROPERTIES We currently maintain our principal executive offices and a warehouse at 351 New Whitfield Street, Guilford, Connecticut 06437. We also occupy office space in Palo Alto, California. We lease office space under operating leases. We consider our current office space adequate for our current operations.
Biggest changeItem 2. PROPERTIES We currently maintain our principal executive offices and a warehouse at 351 New Whitfield Street, Guilford, Connecticut 06437. We also occupy office space in Palo Alto, California. We lease office space under operating leases. We consider our current office space adequate for our current operations. Item 3.
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LEGAL PROCEEDINGS We are not currently a party to any material legal proceedings. Item 4. MINE SAFETY DISCLOSURES Not applicable. 80 PAR T II

Item 4. Mine Safety Disclosures

Mine Safety Disclosures — required of mining issuers

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Biggest changeItem 4. Mine Safety Disclosures 74 PART II 75 Item 5. Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securitie s 75 Item 6. [Reserved] 75 Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations 76 Item 7A. Quantitative and Qualitative Disclosures About Market Risk 85 Item 8.
Biggest changeItem 4. Mine Safety Disclosures 80 PART II 81 Item 5. Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securitie s 81 Item 6. [Reserved] 81 Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations 82 Item 7A. Quantitative and Qualitative Disclosures About Market Risk 93 Item 8.

Item 5. Market for Registrant's Common Equity

Market for Common Equity — stock, dividends, buybacks

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Biggest changeStockholders As of March 3, 2025, we had 62,776,930 outstanding shares of Class A common stock held by approximately 98 holders of record, 15,055,288 outstanding shares of Class B common stock held by approximately six holders of record, and no outstanding shares of preferred stock. Unregistered Sales of Securities Not applicable. Issuer Purchases of Equity Securities Not applicable.
Biggest changeStockholders As of March 13, 2026, we had 82,902,422 outstanding shares of Class A common stock held by approximately 90 holders of record, 15,055,288 outstanding shares of Class B common stock held by approximately six holders of record, and no outstanding shares of preferred stock. Dividends We have never declared or paid any cash dividends on our common stock.
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We currently intend to retain any future earnings and do not expect to pay any dividends in the foreseeable future.
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Any future determination to declare cash dividends will be made at the discretion of our Board of Directors, subject to applicable laws, and will depend on a number of factors, including our financial condition, results of operations, capital requirements, general business conditions, and other factors that our Board of Directors may deem relevant. Unregistered Sales of Securities Not applicable.

Item 7. Management's Discussion & Analysis

Management's Discussion & Analysis (MD&A) — revenue / margin commentary

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Biggest changeComparison of the Years Ended December 31, 2024 and 2023 ($ Amounts in thousands) Year Ended December 31, Change ($ Amounts in thousands) 2024 2023 % Sales Device $ 10,450 $ 8,746 19.5 % Service 2,440 2,286 6.7 % Total sales $ 12,890 $ 11,032 16.8 % Cost of Sales Device $ 5,387 $ 4,463 20.7 % Service 1,612 1,812 (11.0 )% Total cost of sales $ 6,999 $ 6,275 11.5 % Gross margin 5,891 4,757 23.8 % Operating expenses: Research and development $ 22,499 $ 22,493 0.0 % General and administrative 17,494 20,276 (13.7 )% Sales and marketing 9,122 10,103 (9.7 )% Total operating expenses 49,115 52,872 (7.1 )% Loss from operations $ (43,224 ) $ (48,115 ) (10.2 )% Interest income $ 2,492 $ 3,842 (35.1 )% Other expense, net 12 35 (65.7 )% Loss before provision for income taxes $ (40,720 ) $ (44,238 ) (8.0 )% Provision for income taxes — — Net loss and comprehensive loss $ (40,720 ) $ (44,238 ) (8.0 )% 79 Sales Year Ended December 31, Change 2024 2023 Amount % Device $ 10,450 $ 8,746 $ 1,704 19.5 % Service 2,440 2,286 154 6.7 % Total sales $ 12,890 $ 11,032 $ 1,858 16.8 % Device sales increased by $1.7 million, or 19.5%, for the year ended December 31, 2024 compared to the year ended December 31, 2023.
Biggest changeComparison of the Years Ended December 31, 2025 and 2024 ($ Amounts in thousands) Year Ended December 31, Change ($ Amounts in thousands) 2025 2024 % Sales Device $ 11,398 $ 10,450 9.1 % Service 2,165 2,440 (11.3 )% Total sales $ 13,563 $ 12,890 5.2 % Cost of Sales Device $ 5,755 $ 5,387 6.8 % Service 1,055 1,612 (34.6 )% Total cost of sales $ 6,810 $ 6,999 (2.7 )% Gross profit 6,753 5,891 14.6 % Operating expenses: Research and development $ 17,451 $ 22,499 (22.4 )% General and administrative 16,253 17,494 (7.1 )% Sales and marketing 10,134 9,122 11.1 % Total operating expenses $ 43,838 $ 49,115 (10.7 )% Loss from operations $ (37,085 ) $ (43,224 ) (14.2 )% Interest income $ 1,023 $ 2,492 (58.9 )% Change in fair value of warrant liabilities 825 — NM Other income (expense), net (337 ) 12 NM Loss before provision for income taxes $ (35,574 ) $ (40,720 ) (12.6 )% Provision for income taxes — — Net loss and comprehensive loss $ (35,574 ) $ (40,720 ) (12.6 )% Sales Year Ended December 31, Change 2025 2024 Amount % Device $ 11,398 $ 10,450 $ 948 9.1 % Service 2,165 2,440 (275 ) (11.3 )% Total sales $ 13,563 $ 12,890 $ 673 5.2 % Device sales increased by $0.9 million, or 9.1%, for the year ended December 31, 2025 compared to the year ended December 31, 2024.
Healthcare professionals can use the Swoop® system to make effective clinical diagnoses and decisions in various care settings where conventional MRI devices are inaccessible or when they are not readily available.
Healthcare professionals can use the Swoop® system 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.
Research and development Research and development costs consist of production costs for prototype, test and pre-production units, lab supplies, clinical study cost, consulting and personnel costs, including salaries, stock-based compensation, bonuses and benefit costs. Most of our research and development expenses are related to developing new products and services as well as to enhancing our current product and software capabilities.
Research and development Research and development costs consist of production costs for prototype, test and pre-production units, lab supplies, clinical study cost, consulting and personnel costs, including salaries, stock-based compensation, bonuses and benefit costs. Most of our research and development expenses are related to developing new products and services as well as enhancing our current product and software capabilities.
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 lower magnetic field strength than conventional magnetic resonance imaging (“MRI”) scanners.
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.
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.
We believe these learnings will enable us to further improve our product and develop new services and tools 83 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.
The bargain purchase option of the device at the end of the lease term is immaterial. 83 Inventories Inventories primarily consist of finished goods which are produced by our third-party contract manufacturer and raw materials ordered in advance by the third-party contract manufacturer due to long delivery-lead time and were billed to the Company.
The bargain purchase option of the device at the end of the lease term is immaterial. Inventories Inventories primarily consist of finished goods which are produced by our third-party contract manufacturer and raw materials ordered in advance by the third-party contract manufacturer due to long delivery-lead time and were billed to the Company.
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 81 experience dilution. Future debt financing, if available, may involve covenants restricting our operations or our ability to incur additional debt.
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.
Changes in operating assets and liabilities were driven primarily by an increase in accounts receivable and unbilled receivables of $4.2 million, a decrease in accrued expense and other current liabilities of $0.6 million, and a decrease in deferred grant funding of $0.6 million, partially offset by a decrease in inventory and prepaid inventory of $1.3 million, an increase in accounts payable of $0.4 million, and a decrease in other long term assets of $0.3 million.
Changes in operating assets and liabilities were driven primarily by an increase in accounts receivable and unbilled receivables of $4.2 million, a decrease in accrued expense and other current liabilities of $0.6 million, and a decrease in 89 deferred grant funding of $0.6 million, partially offset by a decrease in inventory and prepaid inventory of $1.3 million, an increase in accounts payable of $0.4 million, and a decrease in other long term assets of $0.3 million.
Revenue recognition We make judgments including determination of the timing and pattern of satisfaction of performance obligations and determination of the standalone selling price (“SSP”) of performance obligations. We offer alternative payment structures and “as-a-service” offerings that are assessed to determine whether an embedded lease arrangement exists.
Revenue recognition We make judgments including determination of the timing and pattern of satisfaction of performance obligations and determination of the standalone selling price (“SSP”) of performance obligations. We offer alternative payment structures and “as-a-service” offerings 90 that are assessed to determine whether an embedded lease arrangement exists.
We have built a direct sales and field support organization in the United States who are working in strong collaboration to increase adoption, support successful implementations and support routine use at expanded customer sites.
We have built a direct sales and field support organization in the United States who are working in strong collaboration to increase adoption, support successful implementations and support routine use at customer sites.
Service: Service sales primarily consist of sales service and support including annual maintenance and cloud hosting. Cost of sales Cost of sales consists of product and service costs including personnel cost and benefits including stock-based compensation, product costs, production setup expenses, depreciation and amortization expenses, inventory excess and obsolescence expenses.
Service: Service sales primarily consist of sales service and support including annual maintenance and cloud hosting. Cost of sales 84 Cost of sales consists of product and service costs including personnel cost and benefits including stock-based compensation, product costs, production setup expenses, depreciation and amortization expenses, inventory excess and obsolescence expenses.
Consulting expenses are related to research and development activities as well as clinical and regulatory activities. Fabrication services include certain third-party engineering costs. Research and development expenses are expensed as incurred. We expect to continue to make substantial investments in research and development.
Consulting expenses are related to research and development activities as well as clinical and regulatory activities. Fabrication services include certain third-party engineering costs. Research and development expenses are expensed as incurred. We expect to continue to make investments in research and development.
MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS OF HYPERFINE The following discussion and analysis of the financial condition and results of operations Hyperfine, Inc. and its subsidiaries (for purposes of this section, collectively referred as the “Company”, “we,” “us” and “our”) should be read together with the audited consolidated financial statements as of and for the years ended December 31, 2024 and 2023, together with the related notes thereto, included elsewhere in this Annual Report on Form 10-K.
MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS OF HYPERFINE The following discussion and analysis of the financial condition and results of operations Hyperfine, Inc. and its subsidiaries (for purposes of this section, collectively referred as the “Company”, “we,” “us” and “our”) should be read together with the audited consolidated financial statements as of and for the years ended December 31, 2025 and 2024, together with the related notes thereto, included elsewhere in this Annual Report on Form 10-K.
We obtained a Medical Device License issued by Health Canada, UKCA Mark certification in the United Kingdom, CE Mark in the EU, and regulatory authorization in Australia and New Zealand.
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.
Our revenue recognition policies are discussed in more detail under “ Summary of Significant Accounting Policies ” in Note 2 to our consolidated financial statements and notes thereto for the years ended December 31, 2024 and 2023 included elsewhere in this Annual Report on Form 10-K. Device: Device sales primarily consist of sales of our MRI devices.
Our revenue recognition policies are discussed in more detail under “ Summary of Significant Accounting Policies ” in Note 2 to our consolidated financial statements and notes thereto for the years ended December 31, 2025 and 2024 included elsewhere in this Annual Report on Form 10-K. Device: Device sales primarily consist of sales of our MRI devices.
While our significant accounting policies are described in more detail in Note 2 in our consolidated financial statements for the years ended December 31, 2024 and 2023 included elsewhere in this Annual Report on Form 10-K, we believe that the following accounting policies are those most critical to the judgments and estimates used in the preparation of our financial statements.
While our significant accounting policies are described in more detail in Note 2 in our consolidated financial statements for the years ended December 31, 2025 and 2024 included elsewhere in this Annual Report on Form 10-K, we believe that the following accounting policies are those most critical to the judgments and estimates used in the preparation of our financial statements.
Market conditions are subject to change and if actual market conditions are less favorable than those projected by management, additional inventory write-downs may be required, which would have a negative impact on gross margin. Stock-based compensation Our stock-based compensation program includes restricted stock unit and stock option grants to our employees, directors and consultants.
Market conditions are subject to change and if actual market conditions are less favorable than those projected by management, additional inventory write-downs may be required, which would have a negative impact on gross margin. Stock-based compensation Our stock-based compensation program includes restricted stock units and stock option grants to our employees, directors and consultants.
A valuation allowance is established against net deferred tax assets if, based on the weight of available evidence, it is more-likely-than-not that some or all of the net deferred tax assets will not be realized. We recorded a full valuation allowance as of December 31, 2024 and 2023.
A valuation allowance is established against net deferred tax assets if, based on the weight of available evidence, it is more-likely-than-not that some or all of the net deferred tax assets will not be realized. We recorded a full valuation allowance as of December 31, 2025 and 2024.
Factors that could accelerate cash needs include: (i) delays in achieving scientific and technical milestones; (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; and (vi) other items affecting our forecasted level of expenditures and use of cash resources including potential acquisitions.
Factors that could accelerate cash needs include: (i) delays in achieving scientific and technical milestones; (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.
Our Swoop® system is designed to transform brain MR for the patient, the clinician and the provider, enabling a highly differentiated experience for patients, timely imaging for clinicians, and favorable economics for hospital administrators.
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 hospital administrators.
We expect to use our funds to further invest in the development of our products and services, commercial expansion, and for working capital and general corporate purposes.
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.
Non-cash items were primarily stock based compensation expense of $4.4 million, depreciation expense of $1.0 million, and loss on disposal of property and equipment of $0.2 million.
Non-cash items primarily consist of stock-based compensation expense of $4.4 million, depreciation expense of $1.0 million, and loss on disposal of property and equipment of $0.2 million.
We did not make any matching contributions to the 401(k) plan for the years ended December 31, 2024 and 2023. 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.
Contributions to the 401(k) plan are discretionary. We did not make any matching contributions to the 401(k) plan for the years ended December 31, 2025 and 2024. 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 learnings from this market experience have served to improve our software, AI, and denoising algorithms resulting in the image quality and performance improvements of our product over the nine generations of software since our initial clearance.
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.
In November 2023, we filed 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.
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 Swoop® system is the first FDA-cleared, portable, ULF, MR brain imaging system and is capable of providing imaging at multiple sites of care, such as intensive care units, clinics, emergency departments or physicians’ offices, and can inform the timely detection, diagnosis, monitoring, and treatment of acute and chronic conditions inside and outside the hospital.
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.
Revenue from Device-as-a-Service ("DaaS") contracts are within the scope of ASC 842 and ASC 606.
Revenue from Device-as-a-Service (“DaaS”) contracts are within the scope of ASC 842 and ASC 606.
We are not obligated to make any sales of Class A common stock under the Sales Agreement.
We are not obligated to make any sales of Class A common stock under the ATM.
As we continue to invest in research and development of our products and sales and marketing, we expect to continue to incur cash burn 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.
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.
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 December 31, 2024, we had cash and cash equivalents of $37.6 million.
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 December 31, 2025, we had cash and cash equivalents of $35.1 million.
Outside of the United States, the 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 76 Mark”)), Canada, Australia and New Zealand. In October 2024 and February 2025, we received CE Mark and UKCA Mark approval for the latest generation of software.
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.
The demand for MR imaging has been increasing due to the aging population and the rising prevalence of neurological, neurodegenerative, and cardiovascular conditions, recent approval of new Alzheimer’s medications, as well as the trends towards decentralized healthcare in mature, as well as low- and middle-income countries.
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.
We designed the Swoop® system to address the limitations of conventional imaging technologies and make brain MR imaging accessible nearly anytime and anywhere across professional healthcare settings. We believe the adoption of the Swoop® system by healthcare professionals has clinical and economic benefits throughout healthcare communities in both high and low resource settings.
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 communities in both high and low resource settings.
The decrease was driven primarily by a lower interest rates and lower cash balances in money market funds and demand deposit accounts.
The decrease was driven primarily by lower interest rates and lower average cash balances in money market funds and demand deposit accounts throughout the year.
Our shelf registration statement on Form S-3 also included a prospectus 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 acting as our sales agent, pursuant to the Sales Agreement, for our “at-the-market” equity program (“ATM”).
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 for our “at-the-market” equity program (“ATM”).
Net cash used for investing activities For the year ended December 31, 2024, net cash used in investing activities of $0.4 million was from fixed assets purchased. For the year ended December 31, 2023, net cash used in investing activities of $0.8 million was from fixed assets purchased.
Net cash used for investing activities For the year ended December 31, 2025, net cash used in investing activities of $1.2 million was from fixed assets purchased. For the year ended December 31, 2024, net cash used in investing activities of $0.4 million was from fixed assets purchased.
GAAP requires us to make estimates and assumptions that affect certain reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenue and expenses during the reporting period.
The preparation of our financial statements in conformity with U.S. GAAP requires us to make estimates and assumptions that affect certain reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenue and expenses during the reporting period.
The easy-to-use interface and portable design of our Swoop® system make it easily and readily accessible anywhere in a hospital, clinic, or patient care site and it does not require any special facilities accommodations nor specialized personnel to operate safely.
The portable design of our Swoop® system make 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 personnel to operate safely.
The Swoop® system CE mark and UKCA mark approval of the latest AI-powered Swoop® system software in October 2024 and February 2025, enables a broader European commercial expansion of the Swoop® system, bringing cutting-edge brain imaging technology to new global markets.
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 AI TM software in August 2025, enables a broader international commercial expansion of the Swoop® system, bringing cutting-edge brain imaging technology to new global markets.
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.
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 December 31, 2025.
In July 2024, we received 510(k) clearance from the FDA of the ninth-generation AI-powered Swoop® system software. This latest software update released to date significantly reduces scan times across multiple MR sequences without sacrificing image quality.
In July 2024, we received 510(k) clearance from FDA of the ninth-generation AI-powered Swoop® system software. The ninth-generation software significantly reduces scan times across multiple MR sequences without sacrificing image quality. In May 2025, we received 510(k) clearance from the FDA for our tenth-generation AI-powered software, Optive AI™ software.
Cash flows The following table summarizes our cash flows for the periods indicated: Year Ended December 31, (In thousands) 2024 2023 Net cash used in operating activities $ (38,767 ) $ (41,809 ) Net cash used in investing activities (383 ) (804 ) Net cash provided by financing activities 1,019 174 Net decrease in cash and cash equivalents and restricted cash $ (38,131 ) $ (42,439 ) Net cash used in operating activities For the year ended December 31, 2024, net cash used in operating activities of $38.8 million was due primarily to a net loss of $40.7 million, non-cash items of $5.6 million and changes in operating assets and liabilities of $3.6 million.
Cash flows The following table summarizes our cash flows for the periods indicated: Year Ended December 31, (In thousands) 2025 2024 Net cash used in operating activities $ (27,948 ) $ (38,767 ) Net cash used in investing activities (1,185 ) (383 ) Net cash provided by financing activities 27,502 1,019 Net decrease in cash and cash equivalents and restricted cash $ (1,631 ) $ (38,131 ) Net cash used in operating activities For the year ended December 31, 2025, net cash used in operating activities of $27.9 million was due primarily to a net loss of $35.6 million, non-cash items of $3.2 million and changes in operating assets and liabilities of $4.3 million.
We have incurred cash burn and recurring net losses, which includes a net loss of $40.7 million for the year ended December 31, 2024, and an accumulated deficit of $294.4 million as of December 31, 2024. As of December 31, 2024, we had cash and cash equivalents of $37.6 million.
We have incurred significant cash burn and recurring net losses, which includes a net loss of $35.6 million for the year ended December 31, 2025, and an accumulated deficit of $330.0 million as of December 31, 2025. As of December 31, 2025, we had cash and cash equivalents of $35.1 million.
Sales and marketing Year Ended December 31, Change 2024 2023 Amount % Sales and marketing $ 9,122 $ 10,103 $ (981 ) (9.7 )% Sales and marketing expenses decreased by $1.0 million, or 9.7%, for the year ended December 31, 2024 compared to the year ended December 31, 2023.
Sales and marketing Year Ended December 31, Change 2025 2024 Amount % Sales and marketing $ 10,134 $ 9,122 $ 1,012 11.1 % Sales and marketing expenses increased by $1.0 million, or 11.1%, for the year ended December 31, 2025 compared to the year ended December 31, 2024.
General and administrative General and administrative expenses primarily consist of personnel costs and benefits, including stock-based compensation, patent and filing fees, office expenses, technology expenses and outside services. Outside services consist of professional services, legal and other professional fees.
General and administrative General and administrative expenses primarily consist of personnel costs and benefits, including stock-based compensation, patent and filing fees, office expenses, technology expenses and outside services. Outside services consist of professional services, legal and other professional fees. Other related costs include additional facilities expenses and general corporate overhead to support the employee base.
General and administrative Year Ended December 31, Change 2024 2023 Amount % General and administrative $ 17,494 $ 20,276 $ (2,782 ) (13.7 )% General and administrative expenses decreased by $2.8 million, or 13.7%, for the year ended December 31, 2024 compared to the year ended December 31, 2023.
General and administrative Year Ended December 31, Change 2025 2024 Amount % General and administrative $ 16,253 $ 17,494 $ (1,241 ) (7.1 )% General and administrative expenses decreased by $1.2 million, or 7.1%, for the year ended December 31, 2025 compared to the year ended December 31, 2024.
Net cash provided by financing activities For the year ended December 31, 2024, net cash provided by financing activities of $1.0 million consisting primarily of proceeds from issuance of Class A common stock under the Sales Agreement of $0.8 million and proceeds from stock options exercises of $0.2 million.
For the year ended December 31, 2024, net cash provided by financing activities of $1.0 million consisted primarily of proceeds from the issuance of Class A common stock under the Sales Agreement of $0.8 million and proceeds from stock options exercises of $0.2 million. Contractual obligations We sponsor a 401(k) defined contribution plan covering all eligible U.S. employees.
For the year ended December 31, 2023, net cash used in operating activities of $41.8 million was due primarily to a net loss of $44.2 million, non-cash items of $6.0 million and changes in operating assets and liabilities of $3.6 million. Non-cash items were primarily stock based compensation expense of $4.7 million and depreciation expense of $1.1 million.
For the year ended December 31, 2024, net cash used in operating activities of $38.8 million was due primarily to a net loss of $40.7 million, non-cash items of $5.6 million and changes in operating assets and liabilities of $3.6 million.
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 in our consolidated financial statements for the years ended December 31, 2024 and 2023 included elsewhere in this Annual Report on Form 10-K.
Based on available evidence, we believe that it is more-likely-than-not that we will be unable to utilize all of our deferred tax assets in the future. 85 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 in our consolidated financial statements for the years ended December 31, 2025 and 2024 included elsewhere in this 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 consolidated financial statements and notes thereto for the years ended December 31, 2024 and 2023 included elsewhere in this Annual Report on Form 10-K. 84
Generally, stock options granted to employees fully vest four years from the grant date and have a contractual term of 10 years and stock options granted to non-employees fully vest one year from the grant date or upon performance of a service and have a contractual term of 10 years. 91 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 consolidated financial statements and notes thereto for the years ended December 31, 2025 and 2024 included elsewhere in this Annual Report on Form 10-K. 92
Other related costs include additional facilities expenses and general corporate overhead to support the employee base. 78 Sales and marketing Sales and marketing costs primarily consist of personnel costs and benefits including stock-based compensation, advertising and promotional costs, as well as costs for conferences, meetings, and other events.
Sales and marketing Sales and marketing costs primarily consist of personnel costs and benefits including stock-based compensation, advertising and promotional costs, as well as costs for conferences, meetings, and other events.
Changes in operating assets and liabilities were driven primarily by an increase in inventory of $2.2 million due to increased inventory units-on-hand, an increase in accounts receivable of $1.1 million due to increased revenue, a decrease in accrued expenses and other liabilities of $0.7 million, an increase in unbilled receivables of $0.5 million, an increase in prepaid inventory of $0.4 million and an increase of other long term assets of $0.2 million, partially offset by a decrease in prepaid expenses and other current assets of $1.5 million mainly due to the timing of directors and officers liability insurance prepayment.
Changes in operating assets and liabilities were driven primarily by an increase in accounts payable of $2.4 million, a decrease in accounts receivable and unbilled receivables of $1.8 million, an increase in deferred grant funding of $0.9 million, a decrease in prepaid expenses and other current assets of $0.4 million, an increase in accrued expense and other current liabilities of $0.3 million and a decrease in other long term assets of $0.2 million, and partially offset by an increase in inventory of $1.5 million and a decrease in deferred revenue of $0.2 million.
The Swoop® system is AI-powered and integrates deep learning, a form of AI in the reconstruction pipeline of T1, T2, diffusion-weighted Imaging (“DWI”), and fluid-attenuated inversion recovery (“FLAIR”) sequences. The integration of deep learning does not require any additional steps from the user.
The Swoop® system is AI-powered and integrates deep learning, Optive AI TM , a form of AI in the reconstruction pipeline of the sequences. We offer T1, T2, diffusion-weighted imaging (“DWI”), and fluid-attenuated inversion recovery (“FLAIR”) sequences, in both fast and high resolution modes.
Interest income 80 Year Ended December 31, Change 2024 2023 Amount % Interest income $ 2,492 $ 3,842 $ (1,350 ) (35.1 )% Interest income decreased by $1.4 million, or 35.1% for the year ended December 31, 2024 compared to the year ended December 31, 2023.
Interest income Year Ended December 31, Change 2025 2024 Amount % Interest income $ 1,023 $ 2,492 $ (1,469 ) (58.9 )% Interest income decreased by $1.5 million, or 58.9% for the year ended December 31, 2025 compared to the year ended December 31, 2024.
On February 11, 2025, we entered into a securities purchase agreement with the Investors, pursuant to which we agreed to issue and sell, in the 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.
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 “Warrants”).
Cost of sales Year Ended December 31, Change 2024 2023 Amount % Device $ 5,387 $ 4,463 $ 924 20.7 % Service 1,612 1,812 (200 ) (11.0 )% Total cost of sales $ 6,999 $ 6,275 $ 724 11.5 % Percentage of revenue 54.3 % 56.9 % Cost of device sales increased by $0.9 million, or 20.7%, for the year ended December 31, 2024 compared to the year ended December 31, 2023.
Cost of sales Year Ended December 31, Change 2025 2024 Amount % Device $ 5,755 $ 5,387 $ 368 6.8 % Service 1,055 1,612 (557 ) (34.6 )% Total cost of sales $ 6,810 $ 6,999 $ (189 ) (2.7 )% Percentage of revenue 50.2 % 54.3 % 86 Cost of device sales increased by $0.4 million, or 6.8%, for the year ended December 31, 2025 compared to the year ended December 31, 2024.
Each share and accompanying warrant were sold together at a combined offering price of $1.33. The aggregate gross proceeds to us from the Offering were $6.0 million before deducting the placement agent’s fees and offering expenses. Key Performance Metrics Management reviews and analyzes several key performance measures including Total revenues, and Total Swoop® system units sold.
Each share and accompanying Warrant were sold together at a combined offering price of $1.33. The aggregate gross proceeds to from the February 2025 Offering were $6.0 million before deducting the placement agent’s fees and offering expenses, and net proceeds of $5.2 million, after deducting placement agent's fees and offering expenses.
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.
As of December 31, 2025, 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. 88 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.
Healthcare professionals and insurers recognize imaging as an effective, non-invasive diagnostic tool for evaluation and ongoing monitoring. The Swoop® system is the next generation brain imaging device designed to increase access to MRI in a cost-effective manner. We believe our market opportunity is significant across the multiple sites of care where the Swoop® system brings clinical and economic value.
Healthcare professionals and insurers recognize MR imaging as an effective, non-invasive diagnostic tool for evaluation 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 manner.
During the year ended December 31, 2024, we completed and fulfilled grant deliverables and milestones amounting to $1.7 million and we received cash grant funding of $1.1 million. Description of Certain Components of Financial Data Sales We derive our sales from the following sources: device sales and service sales, as described in more detail below.
Description of Certain Components of Financial Data Sales We derive our sales from the following sources: device sales and service sales, as described in more detail below.
We had no other significant contractual obligations as of December 31, 2024. For information on contingencies, refer to Note 13 to our consolidated financial statements and notes thereto for the years ended December 31, 2024 and 2023 included elsewhere in this Annual Report on Form 10-K.
For information on contingencies, refer to Note 13 to our consolidated financial statements and notes thereto for the years ended December 31, 2025 and 2024 included elsewhere in this Annual Report on Form 10-K. Critical Accounting Estimates Our financial statements are prepared in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”).
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. Furthermore, as of February 15, 2025, we possess a portfolio of 185 issued patents worldwide and 150 patents pending. Our Swoop® system received initial 510(k) clearance for brain imaging from FDA in 2020.
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.
We will seek to control sales and marketing expenses while continuing to promote our brand through marketing and advertising initiatives and expand our market presence and awareness. Interest income Interest income primarily consists of interest earned on our cash equivalents invested in money market securities. Other expense, net Other expense, net primarily relates to foreign exchange gain or loss.
We expect to make investments in sales and marketing as we promote our brand through marketing and advertising initiatives and expand our market presence and awareness across our multiple commercial growth opportunities. Interest income Interest income primarily consists of interest earned on our cash equivalents invested in money market securities.
As of December 31, 2024, a total of 771,721 shares of our Class A common stock, for total gross proceeds of $881 thousand and net proceeds of $828 thousand, after deducting commissions and other offering expenses related to the ATM, have been issued and sold under the Sales Agreement.
As of December 31, 2025, an aggregate of 3,464,325 shares of Class A common stock had been issued and sold under the Sales Agreement, for gross proceeds of $4.3 million, before deducting commissions and other offering expenses, resulting in net proceeds of $4.2 million, after deducting commissions and other offering expenses.
This increase was driven primarily by increased units sold. Cost of service sales decreased by $0.2 million, or 11.0%, for the year ended December 31, 2024 compared to the year ended December 31, 2023. This decrease is due to a decrease in personnel-related costs driven by lower headcount and increased efficiency.
This increase was driven primarily by higher cost per unit, increased depreciation due to new tooling and fixtures and higher tariffs on products sold partially offset by lower units sold. Cost of service sales decreased by $0.6 million, or 34.6%, for the year ended December 31, 2025 compared to the year ended December 31, 2024.
The Swoop® system is used clinically every day as the first mover in the field of AI-powered portable MRI, and the install base continues to expand.
Our Optive AI TM models are designed to improve ULF image quality, while reducing the impact of scan artifacts. The Optive AI TM 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.
We estimate in the United States alone that our total addressable market for Swoop® system device placements is more than $16 billion. Despite their advantages, many healthcare institutions worldwide lack the facilities, specialized operators, and capital necessary to acquire, maintain, and staff expensive conventional MRI devices.
Despite their advantages, many healthcare institutions worldwide lack the facilities, specialized technicians, and capital necessary to acquire, maintain, and staff expensive conventional MRI devices.
In 2025, we plan to expand 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. Expand sales in international markets 77 The countries in which we have begun commercializing our Swoop® system include Canada, certain European markets, Australia, and New Zealand.
Expand sales in international markets The countries outside of the United States in which we have begun commercializing our first-generation Swoop® system include Canada, certain European and Middle Eastern markets, Australia, New Zealand and India.
This decrease in other income was driven primarily by a decrease in net realized gain on foreign currencies of approximately $67 thousand partially offset by an increase in interest income from customer financing and other of approximately $44 thousand. Liquidity and Capital Resources We have funded our operations primarily with proceeds from the issuance of common and preferred stock.
This decrease was driven mainly driven by financing costs allocated to warrant liabilities of $0.5 million, partially offset by favorable impact from foreign exchange of $0.1 million. Liquidity and Capital Resources We have funded our operations primarily with proceeds from the issuance of common stock, preferred stock and warrants.
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. 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 BMGF.
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 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.
The increase in device revenue is mainly due an increase in units sold. Service sales increased by $0.2 million, or 6.7%, for the year ended December 31, 2024 compared to the year ended December 31, 2023. The increase is mainly due to the increased unit install-base.
The increase in device sales revenue was driven primarily by an increase in average selling price partially offset by a decrease in units sold. Service sales decreased by $0.3 million, or 11.3%, for the year ended December 31, 2025 compared to the year ended December 31, 2024.
See "Results of Operations - Sales" below for further information. Total Swoop® system units sold were 48 units for the year ended December 31, 2024, an increase of 11 units, or 30%, from the year ended December 31, 2023.
Total revenues were $13.6 million for the year ended December 31, 2025, an increase of $0.7 million, or 5.2%, from the year ended December 31, 2024, primarily driven by an increase in average selling price. See "Results of Operations - Sales" below for further information.
Research and development 2024 2023 Amount % Research and development $ 22,499 $ 22,493 $ 6 NM Research and development expenses in dollars remained flat for the year ended December 31, 2024 compared to the year ended December 31, 2023.
Research and development Year Ended December 31, Change 2025 2024 Amount % Research and development $ 17,451 $ 22,499 $ (5,048 ) (22.4 )% Research and development expenses decreased by $5.0 million, or 22.4%, for the year ended December 31, 2025 compared to the year ended December 31, 2024.
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 $12.9 million for the year ended December 31, 2024, an increase of $1.9 million, or 17%, from the year ended December 31, 2023, primarily driven by increases in Swoop® system units sold and service revenues.
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.
Other income (expense), net Year Ended December 31, Change 2024 2023 Amount % Other income (expense), net $ 12 $ 35 $ (23 ) (65.7 )% Other income (expense), net had a decrease in other income of $23 thousand, or 65.7%, for the year ended December 31, 2024 compared to the year ended December 31, 2023.
Other income (expense), net 87 Year Ended December 31, Change 2025 2024 Amount % Other income (expense), net $ (337 ) $ 12 $ (349 ) NM Other income (expense), net decreased by $0.3 million, for the year ended December 31, 2025 compared to the year ended December 31, 2024.
This decrease was driven primarily by a decrease in personnel-related costs and stock-based compensation expenses of $1.5 million, a decrease in legal and patent expenses of $0.6 million, a decrease in insurance expenses of $0.4 million, a decrease in accounting, auditing and SEC expenses of $0.4 million, and a decrease in subscriptions of $0.2 million, partially offset by an increase in allowance for credit losses of $0.5 million.
This decrease was driven primarily by a $4.5 million decrease in salary and benefits including stock-based compensation due to lower headcount and a $0.8 million decrease in consulting expenses, partially offset by a $0.3 million lower in grant fulfillment credits.
Removed
As a result, deep learning can enhance the image quality and, consequently, the diagnostic value of images generated at ULF. The algorithms are designed to improve ULF image quality, while reducing the impact of scan artifacts. The images created with these algorithms were validated by expert radiologists.
Added
We believe our market opportunity is significant across 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.
Removed
In February and October 2023, we received 510(k) clearances from the FDA for our Swoop® system AI-powered software. The combination of these two software updates incorporated deep-learning based denoising in the post-processing of images for crisper images, and improved image quality for all Swoop® system sequences.
Added
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.

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Item 7A. Quantitative and Qualitative Disclosures About Market Risk

Market Risk — interest-rate, FX, commodity exposure

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Biggest changeInterest rate risk Our cash, cash equivalents and restricted cash as of December 31, 2024 consisted of $37.7 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.
Biggest changeInterest rate risk Our cash, cash equivalents and restricted cash as of December 31, 2025 consisted of $36.0 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.
Based on our balance sheet position at December 31, 2024, 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.
Based on our balance sheet position at December 31, 2025, 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.

Other HYPR 10-K year-over-year comparisons