# Hyperfine, Inc.: Form 10-Q for the period ended Mar 31, 2024

- Company: [Hyperfine, Inc.](/companies/hypr.md) (CIK 1833769)
- Form: 10-Q
- Filed: 2024-05-14
- Accepted by EDGAR: May 14, 2024, 20:01 ET
- Period: 2024-03-31
- Accession: 0000950170-24-059482
- Inline XBRL: yes
- Main document: https://www.sec.gov/Archives/edgar/data/1833769/000095017024059482/hypr-20240331.htm
- All documents and exhibits: https://www.sec.gov/Archives/edgar/data/1833769/000095017024059482/

## Figures reported in this filing

Standardized XBRL line items for the period ended 2024-03-31.

| Line item | Period | Value | XBRL concept |
| --- | --- | ---: | --- |
| Revenue | 3 months, 2024-01-01 to 2024-03-31 | $3.3m | us-gaap:RevenueFromContractWithCustomerExcludingAssessedTax |
| Cost of revenue | 3 months, 2024-01-01 to 2024-03-31 | $1.9m | us-gaap:CostOfGoodsAndServicesSold |
| Gross profit | 3 months, 2024-01-01 to 2024-03-31 | $1.4m | us-gaap:GrossProfit |
| Research and development | 3 months, 2024-01-01 to 2024-03-31 | $5.6m | us-gaap:ResearchAndDevelopmentExpense |
| Operating income | 3 months, 2024-01-01 to 2024-03-31 | −$10.7m | us-gaap:OperatingIncomeLoss |
| Income tax | 3 months, 2024-01-01 to 2024-03-31 | $0 | us-gaap:IncomeTaxExpenseBenefit |
| Net income | 3 months, 2024-01-01 to 2024-03-31 | −$9.8m | us-gaap:NetIncomeLoss |
| Diluted EPS | 3 months, 2024-01-01 to 2024-03-31 | −$0.14 | us-gaap:EarningsPerShareDiluted |
| Basic EPS | 3 months, 2024-01-01 to 2024-03-31 | −$0.14 | us-gaap:EarningsPerShareBasic |
| Diluted shares (weighted) | 3 months, 2024-01-01 to 2024-03-31 | 71,934,045 shares | us-gaap:WeightedAverageNumberOfDilutedSharesOutstanding |
| Operating cash flow | 3 months, 2024-01-01 to 2024-03-31 | −$12.5m | us-gaap:NetCashProvidedByUsedInOperatingActivities |
| Capital expenditure | 3 months, 2024-01-01 to 2024-03-31 | $145.0k | us-gaap:PaymentsToAcquirePropertyPlantAndEquipment |
| Cash and equivalents | at 2024-03-31 | $63.2m | us-gaap:CashAndCashEquivalentsAtCarryingValue |
| Current assets | at 2024-03-31 | $79.7m | us-gaap:AssetsCurrent |
| Total assets | at 2024-03-31 | $85.4m | us-gaap:Assets |
| Current liabilities | at 2024-03-31 | $8.8m | us-gaap:LiabilitiesCurrent |
| Total liabilities | at 2024-03-31 | $9.8m | us-gaap:Liabilities |
| Shareholders' equity | at 2024-03-31 | $75.6m | us-gaap:StockholdersEquity |

## Management's discussion and analysis

As filed, 32,040 characters.

*The following discussion and analysis provides information which management believes is relevant to an assessment and understanding of our condensed consolidated results of operations and financial condition. The discussion should be read in conjunction with the unaudited condensed consolidated financial statements and notes thereto contained in this Quarterly Report on Form 10-Q and the consolidated financial statements and notes thereto for the year ended December 31, 2023 contained in our Annual Report on Form 10-K filed with the Securities and Exchange Commission (the “SEC”) on March 22, 2024. This discussion contains forward-looking statements and involves numerous risks and uncertainties, including, but not limited to, those described in the “Risk Factors” sections of our Annual Report on Form 10-K for the year ended December 31, 2023, and of this Quarterly Report on Form 10-Q. Actual results may differ materially from those contained in any forward-looking statements. Unless the context otherwise requires, references to “we”, “us”, “our”, and “the Company” are intended to mean the business and operations of Hyperfine, Inc. and its consolidated subsidiaries. The unaudited condensed consolidated financial statements for the three months ended March 31, 2024 and 2023, respectively, present the financial position and results of operations of Hyperfine, Inc. and its wholly owned subsidiaries.*

### Overview

We are an innovative health technology business with a mission to revolutionize patient care globally through accessible, affordable, clinically relevant 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. Our Swoop® system is designed to transform brain MR for the patient, the clinician and the provider, and to provide a highly differentiated experience for patients, timely imaging to clinicians, and favorable economics for hospital administrators. The Swoop® system is a portable, ULF MRI device for producing images that display the internal structures of the head where full diagnostic examination is not clinically practical. When interpreted by a trained physician, these images provide information that can be useful in determining a diagnosis. Healthcare professionals can use the Swoop® system to make effective clinical diagnoses and decisions in various care settings where conventional MRI devices are inaccessible. 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. ULF MR does not expose patients to harmful ionizing radiation and compares favorably in this regard to X-ray computed tomography (“CT”) or positron emission tomography (“PET”).

The demand for MR imaging has been increasing due to the aging population and the rising prevalence of neurological, neurodegenerative, and cardiovascular conditions, as well as the trends towards decentralized healthcare in mature as well as low- and middle-income countries. 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 and expand the current $35 billion imaging market.

Despite their advantages, many healthcare institutions worldwide lack the facilities, specialized operators, and capital necessary to acquire and maintain expensive conventional MRI devices. The Swoop® system is the first U.S. Food and Drug Administration (“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. We designed the Swoop® system to address the limitations of conventional imaging technologies and make MR brain 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.

The Swoop® system is AI-powered and integrates deep learning, a form of AI, for the reconstruction and denoising of T1, T2, and fluid-attenuated inversion recovery (“FLAIR”) sequences. The Swoop® system also incorporates deep learning denoising in the diffusion-weighted imaging (“DWI”) sequences for image post-processing. 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. 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. The Swoop® system is used clinically every day as the first mover in the field of portable ULF MRI, and with an install base that continues to expand. The learnings from this field experience has served to improve our software, AI, and denoising algorithms resulting in the image quality and performance improvements of our product over the eight software releases since our initial clearance. As we move forward, we are continuously investing in improving our AI-powered image quality and leveraging each imaging-focused software release to further improve the Swoop® system performance.

Legacy Hyperfine received initial 510(k) clearance for brain imaging of patients of all ages from the FDA in 2020 and has now received eight subsequent clearances from the FDA after the initial clearance. We received our most recent clearance from the FDA in October 2023 for the latest update of our Swoop® system AI-powered software. This updated software expanded the Swoop® system’s AI denoising capabilities by incorporating deep learning denoising in the DWI sequence for image post-processing. In February and October 2023, we received 510(k) clearances from the FDA for the latest updates to our Swoop® system AI-powered software. The combination of these two software updates significantly improved DWI, incorporated deep-learning based denoising in the post-processing of DWI images for crisper images, and improved image quality for all Swoop® system sequences. The Swoop® system has also received marketing authorization for brain imaging in several countries, including the European Union (CE), the United Kingdom (UKCA), Canada, Australia and New Zealand.

### Key Performance Measures

Management reviews and analyzes several key performance measures including Total revenues and Total Swoop® system units sold. These measures are reviewed and analyzed to evaluate our business performance, identify trends affecting our business, allocate capital, and make strategic decisions.

Total revenues were $3.3 million for the three months ended March 31, 2024, an increase of $0.7 million, or 25.0% from the three months ended March 31, 2023, primarily driven by increases in Swoop® system units sold and service revenues. See "Results of Operations - Sales" below for further information. Total Swoop® system units sold were 13 units for the three months ended March 31, 2024, an increase of 3 units, or 30.0% from the three months ended March 31, 2023.

### Factors Affecting Results of Operations

The following factors have been important to our business and we expect them to impact our results of operations and financial condition in future periods:

### Technical innovation

We have developed our Swoop® system through extensive research and development activities. Moreover, our team is dedicated to clinical support programs designed to integrate the Swoop® system into an array of diverse healthcare environments and applications. We believe that, from our commercial and clinical experience, we are gaining invaluable insights into the Swoop® system’s feasibility. 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 technology. Additionally, we are leveraging our strengths in AI and cloud technology to explore the Swoop® system’s role as a brain imaging clinical decision support platform. While these technical innovations may increase our research and development expenses, we expect them to have a positive impact on our results of operations and profitability in the future.

### Commercialization efforts of the Swoop® system

Our results have included revenue from outside the United States and outside the United States. Legacy Hyperfine received initial 510(k) clearance from the FDA in 2020. We are focused on building relationships and executing contracts with U.S. hospital systems. We are building a direct sales and field support organization in the United States and have recently made changes within our sales and clinical support teams who are working in strong collaboration to increase adoption, support successful implementations and support routine use at customer sites. As of 2024, we have targeted a select number of international markets to add to our commercial efforts operating through distributors.

### Expand sales in international markets

The countries in which we have begun commercializing our Swoop® system include Canada, Australia, and New Zealand. We obtained a Medical Device License issued by Health Canada, UKCA certification in the United Kingdom, CE certification in the EU and regulatory authorization in Australia and New Zealand. In 2024, we have plans to expand our international commercial focus to select international countries.

While we will maintain our commercial focus in the United States in 2024, our commitment to the vision of providing affordable and accessible imaging that enables earlier detection and timely management of health conditions worldwide is currently made possible by grant funding from the BMGF. Through our engagement with the BMGF, we have deployed and continue to deploy the Swoop® system in low-middle income settings without readily-accessible MRI technology. The multiple grants provided by our research partnership with the BMGF, which commenced funding in the spring of 2020, support the deployment of 25 Swoop® system and accessories to investigators. As of March 31, 2024 and December 31, 2023, 25 and 22 Swoop® system units, respectively, have been delivered to the BMGF. The ongoing investigation is designed to provide data to validate the potential use of the Swoop® system in measuring the impact of maternal anemia, malnutrition, infection, and birth-related injury. In May 2023, we were awarded an additional 3-year grant from the BMGF to continue to develop a scalable approach to measuring neurodevelopment via ULF brain imaging in neonates, infants, and young children in low-to-middle income countries. During the three months ended March 31, 2024, we completed and delivered the remaining Swoop system® devices and delivered a grant milestone of a software update that provides faster scan times, additional system quality control tests, and other minor enhancements, we released $0.6 million of restricted cash and recorded grant receivable of $0.5 million excluding interest earned, in prepaid expenses and other current assets in our condensed consolidated balance sheet.

### Results of Operations

The following is a discussion of our results of operations for the three months ended March 31, 2024 and 2023. Our accounting policies are described under *"Summary of Significant Accounting Policies"* in Note 2 to our unaudited condensed consolidated financial statements included in this Quarterly Report on Form 10-Q.

|  | Three Months Ended March 31, | Change |
| --- | ---: | ---: |
| **($ Amounts in thousands)** | **2024** | **2023%** |
| Sales |  |  |
| Device | $2,704 | $2,132 26.8% |
| Service | 591 | 503 17.5% |
| Total sales | 3,295 | 2,635 25.0% |
| Cost of Sales |  |  |
| Device | 1,499 | 1,071 40.0% |
| Service | 442 | 409 8.1% |
| Cost of sales | 1,941 | 1,480 31.1% |
| **Gross margin** | **1,354** | **1,155** 17.2% |
| Operating expenses: |  |  |
| Research and development | 5,570 | 5,461 2.0% |
| General and administrative | 4,430 | 6,182 (28.3)% |
| Sales and marketing | 2,004 | 2,547 (21.3)% |
| **Total operating expenses** | **12,004** | **14,190** (15.4)% |
| **Loss from operations** | **(10,650)** | **(13,035)** (18.3)% |
| Interest income | 796 | 869 (8.4)% |
| Other income, net | 6 | 6 —% |
| **Loss before provision for income taxes** | **(9,848)** | **(12,160)** (19.0)% |
| Provision for income taxes | — | — |
| **Net loss and comprehensive loss** | **$(9,848)** | **$(12,160)** (19.0)% |

22

### Comparison of the Three Months Ended March 31, 2024 and 2023 ($ Amounts shown in tables in thousands)

### Sales

|  | Three Months Ended March 31, 2024 | 2023 | Change Amount% |  |
| --- | ---: | ---: | ---: | ---: |
| Device | $2,704 | $2,132 | $572 | 26.8% |
| Service | 591 | 503 | 88 | 17.5% |
| Total sales | $3,295 | $2,635 | $660 | 25.0% |

Device sales increased by $0.6 million, or 26.8%, for the three months ended March 31, 2024 compared to the three months ended March 31, 2023. This increase was driven primarily by an increase in the volume of device sales.

Service sales increased by $0.1 million, or 17.5%, for the three months ended March 31, 2024 compared to the three months ended March 31, 2023. This increase was driven by an increase in the volume of commercial system units installed as generally all commercial systems installations generate recurring service revenue. Service sales revenue is generally recognized over time as we are providing the customer with ongoing access to our resources and software upgrades throughout the subscription period. This type of revenue is recurring in nature and we expect will continue to grow as more devices are sold.

### Cost of sales

|  | Three Months Ended March 31, 2024 | 2023 | Change Amount% |  |
| --- | ---: | ---: | ---: | ---: |
| Device | $1,499 | $1,071 | $428 | 40.0% |
| Service | 442 | 409 | 33 | 8.1% |
| Total cost of sales | $1,941 | $1,480 | $461 | 31.1% |

Cost of device sales increased by $0.4 million, or 40.0%, for the three months ended March 31, 2024 compared to the three months ended March 31, 2023. This increase was driven primarily by an increase in units sold.

Cost of service sales increased by $33 thousand, or 8.1%, for the three months ended March 31, 2024 compared to the three months ended March 31, 2023. This increase is due to the increased install base.

### Research and development

|  | Three Months Ended March 31, 2024 | 2023 | Change Amount% |  |
| --- | ---: | ---: | ---: | ---: |
| Research and development | $5,570 | $5,461 | $109 | 2.0% |

Research and development expenses increased by $0.1 million, or 2.0%, for the three months ended March 31, 2024 compared to the three months ended March 31, 2023. This increase was driven primarily by an increase in personnel related costs of $0.7 million as a result of increased headcount and an increase in consulting costs of $0.3 million, partially offset by $0.9 million of higher grant fulfilments recorded as credits to research and development expenses.

### General and administrative

|  | Three Months Ended March 31, 2024 | 2023 | Change Amount% |  |
| --- | ---: | ---: | ---: | ---: |
| General and administrative | $4,430 | $6,182 | $(1,752) | (28.3)% |

23

General and administrative expenses decreased by $1.8 million, or 28.3%, for the three months ended March 31, 2024 compared to the three months ended March 31, 2023. This decrease was driven primarily by a decrease in personnel related costs and stock-based compensation expenses of $1.0 million as a result of a lean executive team, a decrease in accounting, auditing and SEC expenses of $0.3 million, a decrease in insurance expenses of $0.1 million, a decrease in legal expenses and legal related expenses of $0.3 million, and a decrease in recruitment expenses of $0.1 million.

### Sales and marketing

|  | Three Months Ended March 31, 2024 | 2023 | Change Amount% |  |
| --- | ---: | ---: | ---: | ---: |
| Sales and marketing | $2,004 | $2,547 | $(543) | (21.3)% |

Sales and marketing expenses decreased by $0.5 million, or 21.3%, for the three months ended March 31, 2024 compared to the three months ended March 31, 2023. This decrease was driven primarily by a decrease in personnel related costs of $0.2 million, a decrease in digital marketing and marketing events costs of $0.2 million, and a decrease in software related expenses of $0.1 million.

### Interest income

|  | Three Months Ended March 31, 2024 | 2023 | Change Amount% |  |
| --- | ---: | ---: | ---: | ---: |
| Interest income | $796 | $869 | $(73) | (8.4)% |

Interest income decreased by $73 thousand for the three months ended March 31, 2024 compared to the three months ended March 31, 2023. The decrease was driven primarily by lower cash balances in money market funds and demand deposit accounts during the three months ended March 31, 2024 compared to the three months ended March 31, 2023.

### Other income, net

|  | Three Months Ended March 31, 2024 | 2023 | Change Amount% |  |
| --- | ---: | ---: | ---: | ---: |
| Other income, net | $6 | $6 | $— | —% |

Other income, net was unchanged for the three months ended March 31, 2024 compared to the three months ended March 31, 2023. Other income, net during the three months ended March 31, 2024 was $6 thousand consisting primarily of interest income from customer financing of approximately $24 thousand, offset by a net realized loss on foreign currencies of approximately $14 thousand and other expenses of $4 thousand.

### Liquidity and Capital Resources

We have funded our operations primarily with proceeds from the issuance of common and preferred stock. We have incurred significant cash burn and recurring net losses, which includes a net loss of $9.8 million for the three months ended March 31, 2024, and an accumulated deficit of $263.6 million as of March 31, 2024. As of March 31, 2024, we had cash and cash equivalents of $63.2 million. As we continue to invest in research and development of our products and sales and marketing, we expect to continue to incur a significant 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. However, we can provide no assurance that our product and service sales will generate a net profit in the future or that our cash resources will be sufficient to continue our commercialization and development activities.

In November 2023, we filed a shelf registration statement on Form S-3 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. Our shelf registration statement on Form S-3 also included a prospectus (the “Sales Agreement 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 Securities, Inc. (“B. Riley”) acting as our sales agent, pursuant to the sales agreement that we entered into with B. Riley in November 2023 (the “Sales Agreement”), for our “at-the-market” equity program. We are not obligated to make any sales of Class A common stock under the Sales Agreement. As of March 31, 2024, we had not sold any Class A common stock pursuant to the Sales Agreement. As of the filing of our Annual Report on Form 10-K for the fiscal year ended December 31, 2023, we are subject to the SEC general instructions of Form S-3 known as the “baby shelf rules.” Under these instructions, the amount of funds we can raise through primary public offerings of securities in any 12-month period using our registration statement on Form S-3 is limited to one-third of the aggregate market value of the shares of our common stock held by non-affiliates. Therefore, we are limited in the amount of proceeds we are able to raise by selling shares of our common stock using our Form S-3, including under the Sales Agreement, until such time as our public float exceeds $75 million. On March 22, 2024, we filed an amendment to the Sales Agreement Prospectus, pursuant to which, as of such date, we may offer and sell shares of our Class A common stock having an aggregate offering price of up to $22.8 million from time to time through or to B. Riley.

Our ability to access capital when needed is not assured and, if capital is not available when, and in the amounts needed, we could be required to delay, scale back or abandon some or all of our development programs, commercialization of our products, and other operations which could materially harm our operations, financial condition and operating results. We expect that our existing cash and cash equivalents, together with proceeds from the sales of our products and services, will enable us to conduct our planned operations for at least the next 12 months. Factors that could accelerate cash needs include: (i) delays in achieving scientific and technical milestones; (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.

We expect to use our cash to further invest in the development of our products and services, commercial expansion, and for working capital and general corporate purposes.

Our future cash requirements will depend on many factors, including market adoption of our products; the cost and timing of establishing additional sales, marketing and distribution capabilities; the cost of our research and development activities; our ability to enter into and maintain collaborations; the cost and timing of potential future regulatory clearances or approvals for our products; and the effect of competing technological and market developments. We cannot assure you that we will be able to obtain additional funds on acceptable terms, or at all. If we raise additional funds by issuing equity or equity-linked securities, our stockholders may experience dilution. Future debt financing, if available, may involve covenants restricting our operations or our ability to incur additional debt. Any debt or equity financing that we raise may contain terms that are not favorable to us or our stockholders. If we raise additional funds through collaboration and licensing arrangements with third parties, it may be necessary to relinquish some rights to our technologies or our products, or grant licenses on terms that are not favorable to us. If we do not have or are not able to obtain sufficient funds, we may have to delay development or commercialization of our products. We also may have to reduce marketing, customer support or other resources devoted to our products and services or cease operations.

### Cash

As of March 31, 2024, we had cash and cash equivalents of $63.2 million. Our future capital requirements may vary from those currently planned and will depend on various factors including further development costs, commercialization strategy, international expansion, and regulatory costs. If we need additional funds and are unable to obtain funding on a timely basis, we may need to curtail significantly our product development and commercialization efforts to provide sufficient funds to continue our operations, which could adversely affect our business prospects.

### Cash flows

The following table summarizes our cash flows for the periods indicated:

*(In thousands)*

|  | Three Months Ended March 31, 2024 | 2023 |
| --- | ---: | ---: |
| Net cash used in operating activities | $(12,510) | $(13,491) |
| Net cash used in investing activities | (145) | (61) |
| Net cash provided by financing activities | 55 | 49 |
| **Net decrease in cash, cash equivalents, and restricted cash** | **$(12,600)** | **$(13,503)** |

#### Net cash used in operating activities

For the three months ended March 31, 2024, net cash used in operating activities of $12.5 million was due primarily to a net loss of $9.8 million and changes in operating assets and liabilities of $4.0 million, partially offset by non-cash items of $1.3 million. Non-cash items were primarily stock-based compensation expense of $1.0 million and depreciation expense of $0.3 million. Changes in operating assets and liabilities were driven primarily by an increase in accounts receivable of $2.1 million due to timing of billing and collection, a decrease in accrued expenses and other current liabilities of $1.4 million mainly due to annual bonus payout, an increase in prepaid expenses and other current assets of $1.3 million mainly due to the timing of payment of the directors and officers insurance and the recording of a grant receivable, an increase in inventory of $0.8 million, a decrease in deferred grant funding of $0.6 million due to fulfillment and delivery of a BMGF grant milestone related to a delivery of an enhanced version of our software, partially offset by an increase in accounts payable of $1.2 million, a decrease in prepaid inventory of $0.7 million, a decrease in other long term assets of $0.2 million, and an increase in deferred revenue of $0.1 million.

For the three months ended March 31, 2023, net cash used in operating activities of $13.5 million was due primarily to a net loss of $12.2 million and changes in operating assets and liabilities of $2.7 million, partially offset by non-cash items of $1.4 million. Non-cash items were primarily stock-based compensation expense of $1.1 million and depreciation expense of $0.3 million. Changes in operating assets and liabilities were driven primarily by a decrease in accrued expenses and other liabilities of $1.8 million mainly driven by annual bonus payout and lower payroll and related benefits accrual, an increase in inventory of $1.1 million, an increase in accounts receivable of $0.9 million, an increase in unbilled receivables of $0.3 million, a decrease in deferred grant funding of $0.1 million, a decrease in deferred revenue of $0.1 million, partially offset by an increase in accounts payable of $1.0 million, a decrease in prepaid expenses and other current assets of $0.3 million, a decrease in prepaid inventory of $0.3 million.

#### Net cash used in investing activities

For the three months ended March 31, 2024, net cash used in investing activities of $142 thousand was from fixed assets purchased.

For the three months ended March 31, 2023, net cash used in investing activities of $61 thousand was from fixed assets purchased.

#### Net cash provided by financing activities

For the three months ended March 31, 2024, net cash provided by financing activities of $55 thousand was proceeds from option exercises.

For the three months ended March 31, 2023, net cash provided by financing activities of $49 thousand was proceeds from option exercises.

### Contractual obligations

We sponsor a 401(k) defined contribution plan covering all eligible U.S. employees. Contributions to the 401(k) plan are discretionary. We did not make any matching contributions to the 401(k) plan for the three months ended March 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. The multiple grants provided by our research partnership with the BMGF, which commenced funding in the spring of 2020, support the deployment of 25 Swoop® system and accessories to investigators. As of March 31, 2024 and December 31, 2023, 25 and 22 Swoop® system units, respectively, were delivered to the BMGF. The ongoing investigation is designed to provide data to validate the potential use of the Swoop® system in measuring the impact of maternal anemia, malnutrition, infection, and birth-related injury. In May 2023, we were awarded an additional 3-year grant from the BMGF to continue to develop a scalable approach to measuring neurodevelopment via ULF brain imaging in neonates, infants, and young children in low-to-middle income countries.

Our purchase commitments and obligations include all open purchase orders and contractual obligations in the ordinary course of business, including commitments with contract manufacturers and suppliers, for which we have not received the goods or services. A majority of these purchase obligations are due within a year. Although open purchase orders are considered enforceable and legally binding, the terms generally allow us the option to cancel, reschedule, and adjust our requirements based on our business needs prior to the delivery of goods or performance of services.

We had no other significant contractual obligations as of March 31, 2024.

For information on contingencies, refer to Note 13 in the notes to our unaudited condensed consolidated financial statements for the three months ended March 31, 2024 and 2023 included elsewhere in this Quarterly Report on Form 10-Q.

### Critical Accounting Policies and Significant Judgments and Estimates

Our management's discussion and analysis of our financial condition and results of operations is based on our condensed consolidated financial statements, which have been prepared in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”). The preparation of these condensed consolidated financial statements requires us to make estimates and assumptions that affect the reported amounts of assets and liabilities and the disclosure of contingent assets and liabilities at the date of the condensed consolidated financial statements, as well as the reported revenue generated and expenses incurred during the reporting periods. Our estimates are based on our historical experience and various other factors that we believe are reasonable under the circumstances, the results of which form the basis for making judgments about items that are not readily apparent from other sources. Actual results may differ from these estimates under different assumptions or conditions.

Except as described in Note 2 “Summary of Significant Accounting Policies – Recently Issued Accounting Pronouncements”, to our unaudited condensed consolidated financial statements included in this Quarterly Report on Form 10-Q, there have been no material changes to our critical accounting policies and estimates as compared to the critical accounting policies and estimates disclosed in our Annual Report on Form 10-K for the year ended December 31, 2023 filed with the SEC on March 22, 2024.

### Recently Issued Accounting Pronouncements

A description of recently issued accounting pronouncements that may potentially impact our financial position and results of operations is disclosed in Note 2 to our unaudited condensed consolidated financial statements and notes thereto for the three months ended March 31, 2024 and 2023 included elsewhere in this Quarterly Report on Form 10-Q.

## Market risk

As filed, 2,065 characters.

We are exposed to market risk in the ordinary course of business. Market risk represents the risk of loss that may impact our results of operations or financial position due to adverse changes in financial market prices and rates. Our market risk exposure is primarily a result of fluctuations in interest rates, inflation risk, and foreign exchange risk. We do not hold, issue or enter into any financial instruments for speculative or trading purposes. We do not have significant exposure to foreign currencies.

### Interest Rate Risk

Our cash, cash equivalents and restricted cash as of March 31, 2024 consisted of $63.2 million in money market funds, demand deposit and savings accounts. Such interest-earning instruments carry a degree of interest rate risk. The goals of our investment policy are liquidity and capital preservation. We believe that we do not have any material exposure to changes in the fair value of these assets as a result of changes in interest rates due to the short-term nature of our cash equivalents. Based on our balance sheet position at March 31, 2024, the annualized effect of a 0.5 percentage point decrease in interest rates would be to decrease earnings before income taxes by $0.3 million.

### Inflation Risk

We do not believe that inflation has had a material effect on our business, financial condition, or results of operations, other than its impact on the general economy. Nonetheless, if our costs were to become subject to inflationary pressures, we might not be able to fully offset such higher costs through price increases. Our inability or failure to do so could harm our business, financial condition, and results of operations.

### Foreign Exchange Risk

We operate our business primarily within the United States and currently execute the majority of our transactions in U.S. dollars. We have not utilized hedging strategies with respect to such foreign exchange exposure. This limited foreign currency translation risk is not expected to have a material impact on our condensed consolidated financial statements.

## Controls and procedures

As filed, 1,516 characters.

### Evaluation of Disclosure Controls and Procedures

Our principal executive officer and principal financial officer evaluated the effectiveness of our disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) as of March 31, 2024. Based upon that evaluation, our principal executive officer and principal financial officer have concluded that, as of March 31, 2024, the end of the period covered by this report, our disclosure controls and procedures were effective at a reasonable assurance level to ensure that information required to be disclosed by us in the reports that we file or submit under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in the SEC’s rules and forms, and is accumulated and communicated to our management, including our principal executive officer and principal financial officer, or persons performing similar functions, as appropriate, to allow timely decisions regarding required disclosure.

### Changes in Internal Control Over Financial Reporting

There were no changes in our internal control over financial reporting, identified in connection with the evaluation of such internal control that occurred during the three months ended March 31, 2024, that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

### PART II — OTHER INFORMATION

### Item1. Legal Proceedings

We are not currently a party to any material legal proceedings.

## Risk factors

As filed, 407 characters.

Our business, results of operations and financial condition are subject to various risks and uncertainties including the risk factors described under the caption “Risk Factors” in our most recent Annual Report on Form 10-K, filed with the SEC on March 22, 2024 (the “2023 Annual Report on Form 10-K”). There have been no material changes to the risk factors described in the 2023 Annual Report on Form 10-K.

Filed May 14, 2024.
Source: SEC EDGAR, the filing index for accession 0000950170-24-059482. Last ingested by Listed: Oct 24, 2026, 15:15 ET. No prices; not investment advice.