Hyperfine, Inc.
For the period ended Dec 31, 2024. Filed Mar 17, 2025.
View on SEC.govAbout this filing
A company's yearly report to the SEC, with audited financial statements. It is the fullest account a company gives of its business, its finances and the risks it sees.
FY2024 · Filed Mar 17, 2025
HYPR$0.72+5.0%Stored close · as of Nov 6, 2026
What changed in Management’s Discussion and Analysis?
Read the current filingPrevious report: 10-K
Period ended 2023-12-31; filed 2024-03-22.
0000950170-24-035343
Item 7. Management’s Discussion and Analysis of Financial Condition and Results of OperationsCurrent report: 10-K
Period ended 2024-12-31; filed 2025-03-17.
0000950170-25-040281
Item 7. Management’s Discussion and Analysis of Financial Condition and Results of OperationsThe baseline is this issuer’s latest earlier reporting period of the same form that was filed before the current report. A previous 10-Q is a different quarter, not a year-over-year comparison. Amendments are excluded.
Compared 103 previous paragraphs and 106 current paragraphs.
70 unchanged; 26 reworded; 8 added; 4 removed; 3 previous and 2 current paragraphs rearranged.
Tables are not compared: 9 previous and 9 current tables excluded. Dates, whitespace, punctuation and numbering changes are ignored; changes to financial figures remain significant.
A changed paragraph is not evidence that risk increased or decreased. An unchanged paragraph does not establish that risk stayed the same.
Added paragraphs (8)
Current report
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.
Current report
Recent Developments
Current report
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. 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.
Current report
Key Performance Metrics
Current report
Research and development expenses in dollars remained flat for the year ended December 31, 2024 compared to the year ended December 31, 2023.
Current report
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. This decrease was driven primarily by a decrease in marketing research and advertising of $0.6 million, and a decrease in sales and marketing infrastructure of $0.4 million, while we continue to focus on sales and sales support activities.
Current report
On February 11, 2025, we entered into a securities purchase agreement with the Investors, pursuant to which we agreed to issue and sell, in a registered direct offering by us directly to the Investors the Shares and the Warrants. Each Share and accompanying Warrant were sold together at a combined offering price of $1.33. The aggregate gross proceeds to from the Offering were $6.0 million before deducting the placement agent’s fees and estimated offering expenses.
Current report
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.
Removed paragraphs (4)
Previous report
Key Performance Measures
Previous report
During each of the first quarters of 2023 and 2022, we have taken pricing actions by increasing the price of the device while lowering the price of the annual service and support charges. This has resulted in higher device revenue per unit and lower service revenue per unit for sales under this business model.
Previous report
Research and development expenses decreased by $5.7 million, or 20.1%, for the year ended December 31, 2023 compared to the year ended December 31, 2022. This decrease was driven primarily by a decrease in personnel related costs and stock-based compensation expenses of $5.3 million as a result of decreased headcount and a decrease in consulting costs of $1.6 million partially offset by $1.3 million of lower grant fulfilments recorded as credits to research and development expenses.
Previous report
Sales and marketing expenses decreased by $4.1 million, or 28.9%, for the year ended December 31, 2023 compared to the year ended December 31, 2022. This decrease was driven primarily by a decrease in personnel related costs and stock-based compensation expenses of $2.1 million as a result of decreased headcount, a decrease in digital marketing and marketing events costs of $1.3 million, a decrease in consulting costs of $0.4 million, and a decrease in recruitment costs of $0.3 million.
Reworded paragraphs (26)
Previous wording
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”).
Current wording
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. 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. 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 or when they are not readily available. 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”).
Previous wording
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.
Current wording
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. 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. We estimate in the United States alone that our total addressable market for Swoop® system device placements is more than $16 billion.
Previous wording
Despite its 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.
Current wording
Despite their advantages, many healthcare institutions worldwide lack the facilities, specialized operators, and capital necessary to acquire, maintain, and staff expensive conventional MRI devices. The Swoop® system is the first FDA-cleared, portable, ULF, MR brain imaging system 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 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.
Previous wording
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. Furthermore, 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 boosts 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.
Current wording
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. 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 AI-powered portable MRI, and the install base continues to expand. 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. 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.
Previous wording
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. 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.
Current wording
Our Swoop® system received initial 510(k) clearance for brain imaging from FDA in 2020. 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. 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. 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
Previous wording
In December 2022, we suspended our Liminal program to develop a device to non-invasively measure key vital signs in the brain. Also, in December 2022, we announced an organizational restructuring designed to decrease our operating costs and create a more streamlined organization to support our business. As a result, we terminated approximately 13% of our global workforce including, among others, the employees of our Liminal subsidiary. In connection with the restructuring, we incurred $1.0 million of costs consisting primarily of cash severance costs, other severance benefits, fixed asset impairment costs and other related restructuring costs. We completed the restructuring as of the first quarter of 2023.
Current wording
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 have terminated approximately 14% of our global workforce. The restructuring affects employees predominantly in technical positions. In connection with the restructuring, we estimated that we will incur up to $0.4 million of costs, consisting primarily of cash severance costs, other severance benefits and other related restructuring costs. We expect to substantially complete the restructuring in the first quarter of 2025.
Previous wording
Total revenues were $11.0 million for the year ended December 31, 2023, an increase of $4.2 million, or 61.9% from the year ended December 31, 2022, primarily driven by increases in Swoop® system average selling price, units sold and service revenues. See "Results of Operations - Sales" below for further information. Total Swoop® system units sold were 37 units for the year ended December 31, 2023, an increase of 2 units, or 5.7% from the year ended December 31, 2022.
Current wording
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. 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.
Previous wording
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.
Current wording
We have developed our Swoop® system through extensive research and development activities. Moreover, our team is dedicated to clinical support programs designed to integrate the Swoop® system into an array of diverse healthcare environments, workflow, and applications. We believe that, from our commercial and clinical experience, we are gaining invaluable insights into the Swoop® system’s clinical utility. We believe these learnings will enable us to further improve our product and develop new services and tools in the future. We are continuously improving our image quality and imaging capabilities. Building upon this foundation and our expertise in ULF brain imaging, we plan to develop new imaging applications, broadening the range of clinical uses for our proprietary technology. Additionally, we are leveraging our strengths in AI and cloud technology to explore the Swoop® system’s role as a brain imaging clinical decision support platform. While these technical innovations may increase our research and development expenses, we expect them to have a positive impact on our results of operations and profitability in the future.
Previous wording
While our results have included revenue from outside the United States, our primary commercial focus is on 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.
Current wording
Our results have included revenue from the United States and outside the United States. Our Swoop® system received initial 510(k) clearance from the FDA in 2020. Initially, we have been focused on executing contracts with U.S. hospitals and hospital systems. We have built a direct sales and field support organization in the United States who are working in strong collaboration to increase adoption, support successful implementations and support routine use at expanded customer sites. 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.
Previous wording
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.
Current wording
The countries in which we have begun commercializing our Swoop® system include Canada, certain European markets, Australia, and New Zealand. 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. 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. 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.
Previous wording
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 December 31, 2023, 22 Swoop® system units were provisioned and delivered to the BMGF and the majority of the milestones for service deliverables were also met. 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. As of February 15, 2024, we completed the delivery and deployment of a total of 25 Swoop® system devices related to BMGF grants.
Current wording
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. Through our engagement with the BMGF, we have deployed the Swoop® system in low-middle income settings without readily-accessible MRI technology. During 2020 and 2021, we were awarded multiple grants totaling $4.9 million from the BMGF for the provision and equipping of sites with our portable MR brain imaging system to enable the performance of a multi-site study focused on optimizing diagnostic image quality. These grants were designed to provide data to validate the use of the Swoop® system in measuring the impact of maternal anemia, malnutrition, infection and birth related injury. These grants were designed to support the deployment of a total of 25 Swoop® system devices and other services to investigators, which commenced in the spring of 2021 and was completed by February 2024. In May 2023, we were awarded an additional $3.4 million grant from the BMGF to continue to develop a scalable approach to measuring neurodevelopment via low-field MRI in neonates, infants, and young children in low-to-middle income countries through February 2026. 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.
Previous wording
Device sales increased by $3.5 million, or 66.7%, for the year ended December 31, 2023 compared to the year ended December 31, 2022. The increase in device revenue is mainly due to an increase in unit average selling price as well as an increase in units sold.
Current wording
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. The increase in device revenue is mainly due an increase in units sold.
Previous wording
Service sales increased by $0.7 million, or 45.8%, for the year ended December 31, 2023 compared to the year ended December 31, 2022. The increase is mainly due to the increased unit install-base.
Current wording
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.
Previous wording
Cost of device sales increased by $0.2 million, or 5.5%, for the year ended December 31, 2023 compared to the year ended December 31, 2022. This increase was driven primarily by an increase in overhead and product costs of $0.1 million due to an increase of units sold, and an increase of $0.1 million in personnel and related costs.
Current wording
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. This increase was driven primarily by increased units sold.
Previous wording
Cost of service sales increased by $0.1 million, or 8.2%, for the year ended December 31, 2023 compared to the year ended December 31, 2022. This increase is due to an increased install base.
Current wording
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.
Previous wording
General and administrative expenses decreased by $12.1 million, or 37.4%, for the year ended December 31, 2023 compared to the year ended December 31, 2022. This decrease was driven primarily by a decrease in personnel related costs and stock-based compensation expenses of $6.8 million as a result of a lean executive team and decreased headcount, a decrease in accounting, auditing and SEC expenses of $1.7 million, a decrease in insurance expenses of $1.3 million, a decrease in restructuring expenses of $0.7 million which was completed in the first quarter of 2023, a decrease in legal expenses and patent fees of $0.7 million, and a decrease in recruitment expenses of $0.4 million.
Current wording
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. 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.
Previous wording
Interest income increased by $3.1 million, for the year ended December 31, 2023 compared to the year ended December 31, 2022. The increase was driven primarily by a higher interest rates and higher cash balances in money market funds and demand deposit accounts during the year ended December 31, 2023 compared to the year ended December 31, 2022.
Current wording
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. The decrease was driven primarily by a lower interest rates and lower cash balances in money market funds and demand deposit accounts.
Previous wording
Other income (expense), net had a favorable increase in other income of $86 thousand for the year ended December 31, 2023 compared to the year ended December 31, 2022. This favorable increase in other income was driven primarily by an increase in net realized gain on foreign currencies of approximately $47 thousand and an increase in interest income from customer financing of approximately $38 thousand.
Current wording
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. 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.
Previous wording
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 $44.2 million for the year ended December 31, 2023, and an accumulated deficit of $253.7 million as of December 31, 2023. As of December 31, 2023, we had cash and cash equivalents of $75.2 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.
Current wording
We have funded our operations primarily with proceeds from the issuance of common and preferred stock. 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. 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. 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.
Previous wording
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 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 December 31, 2023, the Company had not sold any Class A common stock pursuant to the Sales Agreement. As of the filing of this Annual Report on Form 10-K, we will be 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 will be 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.
Current wording
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. 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”). We are not obligated to make any sales of Class A common stock under the Sales Agreement. 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.
Previous wording
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. As part of the prioritization of our projects and expenditures, in December 2022, we suspended and ceased business operations for the development of our Liminal brain sensing platform, which was the focus of Liminal and was in the early stages of development to non-invasively measure key vital signs in the brain.
Current wording
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.
Previous wording
As of December 31, 2023, we had cash and cash equivalents of $75.2 million. Our future capital requirements may vary from those currently planned and will depend on various factors including further development costs, commercialization strategy, regulatory developments, supply constraints, manufacturing costs and international expansion. If we need additional funds and are unable to obtain funding on a timely basis, we may need to curtail significantly our product development and commercialization efforts to provide sufficient funds to continue our operations, which could adversely affect our business prospects.
Current wording
As of December 31, 2024, we had cash and cash equivalents of $37.6 million. Our future capital requirements may vary from those currently planned and will depend on various factors including further development costs, commercialization strategy, regulatory developments, supply constraints, manufacturing costs and international expansion. If we need additional funds and are unable to obtain funding on a timely basis, we may need to curtail significantly our product development and commercialization efforts to provide sufficient funds to continue our operations, which could adversely affect our business prospects.
Previous wording
For the year ended December 31, 2022, net cash used in operating activities of $72.3 million was due primarily to a net loss of $73.2 million, non-cash items of $11.8 million and changes in operating assets and liabilities of $10.9 million. Non-cash items were primarily stock based compensation expense of $10.7 million, including $0.1 million of stock-based compensation related to severance, and $0.1 million fixed asset impairment costs and other related restructuring costs. Changes in operating assets and liabilities were driven primarily by a decrease in accrued expenses and other current liabilities of $2.2 million, a decrease in due to related parties of $2.0 million, a decrease in deferred grant funding of $1.9 million, an increase in prepaid expenses and other current assets of $1.8 million, a decrease in accounts payable of $1.6 million, an increase in accounts receivables of $1.6 million, an increase in other long term assets of $0.6 million, an increase in unbilled receivables of $0.4 million, an increase in inventory of $0.3 million, and an increase in prepaid inventory of $0.3 million, partially offset by an increase in deferred revenue of $1.7 million.
Current wording
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. 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. 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.
Previous wording
For the year ended December 31, 2022, net cash used in investing activities of $0.6 million was from fixed assets purchased.
Current wording
For the year ended December 31, 2024, net cash used in investing activities of $0.4 million was from fixed assets purchased.
Previous wording
Any grant funds, plus any income, that have not been used for, or committed to, the project must be returned promptly to the BMGF upon expiration of or termination of the agreement. Refer to Note 13 in the notes to our consolidated financial statements for the years ended December 31, 2023, and 2022 included elsewhere in this Annual Report on Form 10-K for a discussion of the BMGF grants.
Current wording
Any grant funds, plus any income, that have not been used for, or committed to, the project must be returned promptly to the BMGF upon expiration of or termination of the agreement. Refer to Note 13 in the notes to our consolidated financial statements for the years ended December 31, 2024, and 2023 included elsewhere in this Annual Report on Form 10-K for a further discussion of the BMGF grants.
Previous wording
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 from Device-as-a-Service ("DaaS") contracts are within the scope of ASC 842 and ASC 606. Upon adoption of ASC 842, for contracts in which we act as a lessor and in which the lease component is an operating lease, we apply the practical expedient in ASC 842 to combine the lease component (the device itself in DaaS contracts) and non-lease (maintenance and SaaS) components, and to account for the combined components as a single lease component. Accordingly, we account for the monthly payments as lease revenue. For contracts in which the lease component is a sales-type lease, we derecognize the asset (the MRI device) and recognize a lease receivable in an amount that represents the present value of the lease payments.
Current wording
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 from Device-as-a-Service ("DaaS") contracts are within the scope of ASC 842 and ASC 606. Upon adoption of ASC 842, for contracts in which we act as a lessor and in which the lease component is an operating lease, we apply the practical expedient in ASC 842 to combine the lease component (the device itself in DaaS contracts) and non-lease (maintenance and SaaS) components, and to account for the combined components as a single lease component. Accordingly, we account for the monthly payments as lease revenue. For contracts in which the lease component is a sales-type lease, we derecognize the asset (the MRI device) and recognize a lease receivable in an amount that represents the present value of the lease payments. The bargain purchase option of the device at the end of the lease term is immaterial.
Rearranged current paragraphs (2)
Current report — wording carried from elsewhere
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. The ongoing investigation is designed to provide data to validate the potential use of the Swoop® system in measuring the impact of maternal anemia, malnutrition, infection, and birth-related injury. In May 2023, we were awarded an additional three-year grant from the BMGF to continue to develop a scalable approach to measuring neurodevelopment via ULF brain imaging in neonates, infants, and young children in low-to-middle income countries.
Current report — wording carried from elsewhere
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.
Rearranged previous paragraphs (3)
Previous report — wording carried elsewhere
For the year ended December 31, 2022, net cash provided by financing activities of $7 thousand was proceeds from option exercises.
Previous report — wording carried elsewhere
During 2020 and 2021 we received multiple grants totaling $4.9 million from the BMGF for the provision and equipping of sites with our portable MR brain imaging system to enable the performance of a multi-site study focused on optimizing diagnostic image quality. These grants are designed to provide data to validate the use of our Swoop® system in measuring the impact of maternal anemia, malnutrition, infection and birth related injury. All of these grants are designed to support the deployment of a total of 25 Swoop® system devices and other services to investigators, which commenced in the spring of 2021. In March 2023 the term of the BMGF grant agreement was extended to February 2024. As of December 31, 2023, 22 Swoop® system units have been provisioned and delivered to the BMGF and certain milestones for service deliverables were met. All system units and grant project deliverables have been completed as of February 2024.
Previous report — wording carried elsewhere
In May 2023, we were awarded an additional $3.4 million grant from the BMGF to continue to develop a scalable approach to measuring neurodevelopment via low-field MRI in neonates, infants, and young children in low-to-middle income countries through February 2026.