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Hyperfine, Inc. SEC 10-Q Report
Nov 12, 202417:55 EST
 HYPR+2.36%
Hyperfine, Inc., a leading innovator in medical imaging technology, has released its Form 10-Q report for the quarter ended September 30, 2024. The report highlights significant financial growth, strategic initiatives aimed at expanding market presence, and the challenges the company faces in its operational and regulatory environment.
Financial Highlights
Hyperfine, Inc. reported robust financial performance for the quarter and nine months ended September 30, 2024. Key financial metrics include:
- Total sales: $3.6 million for the quarter, a 56.4% increase from the same period in 2023. For the nine months ended September 30, 2024, total sales were $10.6 million, up 26.6% from the same period in 2023.
- Gross margin: $1.9 million for the quarter, a 69.8% increase from the same period in 2023. For the nine months ended September 30, 2024, gross margin was $5.1 million, up 36.0% from the same period in 2023.
- Loss from operations: $(11.0) million for the quarter, a 6.8% decrease from the same period in 2023. For the nine months ended September 30, 2024, loss from operations was $(32.5) million, a decrease of 11.0% from the same period in 2023.
- Net loss and comprehensive loss: $(10.3) million for the quarter, a 4.0% decrease from the same period in 2023. For the nine months ended September 30, 2024, net loss and comprehensive loss were $(30.3) million, a decrease of 9.6% from the same period in 2023.
- Net loss per common share attributable to common stockholders, basic and diluted: $(0.14) for the quarter, improved from $(0.15) in the same period in 2023. For the nine months ended September 30, 2024, net loss per share was $(0.42), improved from $(0.47) in the same period in 2023.
Business Highlights
Hyperfine, Inc. demonstrated strong operational performance and strategic advancements in its business segments:
- Revenue Segments: Device sales increased by 75.5% for the three months ended September 30, 2024, primarily due to an increase in units sold. For the nine months ended September 30, 2024, device sales increased by 30.5%, driven by higher unit sales. Service sales remained relatively flat for the quarter but increased by 11.1% for the nine months, attributed to an increased install base.
- Sales Units: Total Swoop® system units sold were 13 units for the three months ended September 30, 2024, an increase of 7 units from the same period in 2023. For the nine months ended September 30, 2024, 39 units were sold, an increase of 9 units from the same period in 2023.
- Geographical Performance: Revenue recognized in non-U.S. countries was $1,156 for the three months ended September 30, 2024, and $5,254 for the nine months ended September 30, 2024. This compares to $65 and $3,764 for the same periods in 2023, respectively.
- New Product Launches: In July 2024, the company received 510(k) clearance from the FDA for the ninth-generation AI-powered Swoop® system software, which significantly reduces scan times across multiple MR sequences without sacrificing image quality. In October 2024, the company received CE approval for the latest generation of software for the Swoop® system.
- Future Outlook: The company plans to continue investing in improving AI-powered image quality and leveraging each imaging-focused software release to further enhance the Swoop® system performance. Additionally, Hyperfine is executing on its international expansion plans by entering into agreements with experienced distributors, covering several countries across Europe and Asia Pacific, as well as Canada.
Strategic Initiatives
Hyperfine, Inc. is focused on expanding its market presence and product capabilities through several strategic initiatives:
- International Expansion: The company is executing on its international expansion plans by entering into agreements with experienced distributors in several countries across Europe, Asia Pacific, and Canada.
- Grant Funding: Hyperfine is leveraging grant funding from the Bill & Melinda Gates Foundation to deploy its Swoop® system in low-middle income settings, aiming to validate the use of the system in measuring the impact of maternal anemia, malnutrition, infection, and birth-related injury.
- Capital Management: The company filed a $150 million shelf registration statement on Form S-3, which includes a prospectus covering up to $50 million in shares of Class A common stock for its 'at-the-market' (ATM) equity program. As of September 30, 2024, Hyperfine issued and sold 728,188 shares of Class A common stock under the Sales Agreement, generating gross proceeds of $836,000 and net proceeds of $785,000. Additionally, the company raised $160,000 from the exercise of stock options. Hyperfine has also been managing its cash resources prudently, with cash and cash equivalents amounting to $45.8 million as of September 30, 2024.
- Future Outlook: Hyperfine plans to continue its strategic initiatives focused on international market expansion and product development. The company expects to use its cash to further invest in the development of its products and services, commercial expansion, and for working capital and general corporate purposes. Hyperfine anticipates that its existing cash and cash equivalents, together with proceeds from the sales of its products and services, will enable it to conduct planned operations for at least the next 12 months. The company is also monitoring the status of the SEC's stay on new climate-related disclosure rules and evaluating the impact of these rules on its future financial statements and disclosures.
Challenges and Risks
Hyperfine, Inc. faces several challenges and risks that could impact its business operations and financial performance:
- Market Risks: The company’s cash, cash equivalents, and restricted cash are subject to interest rate risk. A 0.5 percentage point decrease in interest rates would decrease earnings before income taxes by $0.2 million. While inflation has not had a material effect on the business, there is a risk that inflationary pressures could increase costs, which may not be fully offset by price increases, potentially harming the business, financial condition, and results of operations. The company operates primarily within the United States and executes most transactions in U.S. dollars, limiting foreign currency translation risk.
- Operational Risks: Continuous investment in research and development is crucial for maintaining and improving the Swoop® system. This includes enhancing AI-powered image quality and developing new imaging applications. These innovations may increase R&D expenses but are expected to positively impact future operations and profitability. The company is focused on increasing adoption of the Swoop® system in the U.S. and expanding into select international markets. Success in these efforts is critical for revenue growth. Regulatory approvals in these regions are essential for market entry and growth.
- Regulatory Risks: The Swoop® system has received multiple FDA 510(k) clearances and international marketing authorizations. Continued compliance with regulatory requirements is necessary to maintain these clearances and authorizations. The company has received significant grant funding from the Bill & Melinda Gates Foundation (BMGF) for deploying the Swoop® system in low-middle income settings. Fulfillment of grant deliverables and milestones is critical for continued funding and support.
- Financial Risks: The company has incurred significant cash burn and recurring net losses, with a net loss of $30.3 million for the nine months ended September 30, 2024. Cash and cash equivalents were $45.8 million as of September 30, 2024. The ability to raise additional funds through equity or debt financing is crucial for ongoing operations and growth. The company has a shelf registration statement on Form S-3, including an “at-the-market” (ATM) equity program with B. Riley Securities, Inc. The ability to raise funds under this program is subject to market conditions and regulatory limitations.
SEC Filing: Hyperfine, Inc. [ HYPR ] - 10-Q - Nov. 12, 2024 |
