Hyperfine, Inc.

The following is a discussion of our results of operations for the periods shown below, and our accounting policies are described under"Summary of Significant Accounting Policies"in Note 2 to our unaudited condensed consolidated financial statements included in this Quarterly Report on Form 10-Q.

Comparison of the Three Months Ended March 31, 2026 and 2025 ($ Amounts shown in tables in thousands)

NM - Not meaningful

Sales

Device sales increased by $1.7 million, or 114.0%, for the three months ended March 31, 2026 compared to the three months ended March 31, 2025. The increase was driven primarily by an increase in units sold and increase in average selling price.

Service sales increased 5.0% for the three months ended March 31, 2026 compared to the three months ended March 31, 2025.

Cost of sales

Cost of device sales increased by $0.7 million, or 67.1%, for the three months ended March 31, 2026 compared to the three months ended March 31, 2025. This increase was driven primarily by increased costs associated with higher sales volume.

Cost of service sales was relatively flat for the three months ended March 31, 2026 compared to the three months ended March 31, 2025.

Research and development

Research and development expenses decreased by $1.2 million, or 23.7%, for the three months ended March 31, 2026 compared to the three months ended March 31, 2025. This decrease was driven primarily by a $0.8 million decrease in salary and benefits, including stock-based compensation due to lower headcount and a $0.3 million increase in grant fulfillment credits.

General and administrative

General and administrative expenses were relatively flat for the three months ended March 31, 2026 compared to the three months ended March 31, 2025.

Sales and marketing

Sales and marketing expenses were relatively flat for the three months ended March 31, 2026 compared to the three months ended March 31, 2025.

Interest income

Interest income decreased by $0.1 million, or 19.9%, for the three months ended March 31, 2026 compared to the three months ended March 31, 2025. The decrease was driven primarily by lower effective yields on our money market funds and demand deposit accounts, partially offset by higher average investable cash balances.

Interest expense

Interest expense increased by $0.1 million for the three months ended March 31, 2026 compared to the three months ended March 31, 2025. The increase was driven primarily by interest incurred on the Loan Agreement (as defined below) entered into in March 2026, including stated interest and non-cash amortization of debt discount and issuance costs.

Change in fair value of warrant liabilities

Change in fair value of warrant liabilities decreased by $1.9 million for the three months ended March 31, 2026 compared to the three months ended March 31, 2025. This decrease was driven by non-cash change in fair value of warrant liabilities related to warrants issued in connection with the February 2025 Offering.

Other income (expense), net

Other income (expense), net decreased by $0.5 million for the three months ended March 31, 2026 compared to the three months ended March 31, 2025. This decrease was mainly driven by financing costs allocated to warrant liabilities during the three months ended March 31, 2025.

Liquidity and Capital Resources

We have funded our operations primarily with proceeds from the issuance of common stock, preferred stock, and warrants and the establishment of a debt facility. We have incurred significant cash burn and recurring net losses, which includes a net loss of $8.6 million for the three months ended March 31, 2026, and an accumulated deficit of $338.6 million as of March 31, 2026. As of March 31, 2026, we had cash and cash equivalents of $40.8 million. As we continue to invest in research and development of our products and sales and marketing, we expect to continue to incur negative cash flows from operations and recurring net losses for the foreseeable future until such time that our product and services sales generate enough gross profit to cover our operating expenses. However, we can provide no assurance that our product and service sales will generate a net profit in the future or that our cash resources will be sufficient to continue our commercialization and development activities.

In November 2023, we filed a shelf registration statement on Form S-3 (the “Shelf Registration Statement”) with the SEC pursuant to which we registered for sale up to $150 million of any combination of our Class A common stock, preferred stock, debt securities, warrants, rights and/or units from time to time and at prices and on terms that we may determine. The Shelf Registration Statement also included a prospectus covering up to an aggregate of $50.0 million in shares of Class A common stock that we could issue and sell from time to time, through B. Riley Securities, Inc. (“B. Riley”), acting as our sales agent, pursuant to the Sales Agreement for our “at-the-market” equity program (“ATM”). In December 2025, the Sales Agreement with B. Riley was amended and restated (“Amended Sales Agreement”) to add BTIG, LLC (“BTIG”) as an additional sales agent and we filed a new prospectus supplement covering up to an aggregate of $50.0 million in shares of Class A common stock that we may issue and sell from time to time, through B. Riley and BTIG acting as our sales agents. The offering of our Class A common stock pursuant to the prospectus supplement dated November 22, 2023 was also terminated such that no further offers or sales will be made pursuant to such prospectus supplement, effective as of December 29, 2025. We are not obligated to make any sales of Class A common stock under the ATM. Prior to the termination of the prospectus supplement dated November 22, 2023, effective as of December 29, 2025, we had issued and sold an aggregate of 3,464,325 shares of our Class A common stock under the Sales Agreement, for total gross proceeds of $4.4 million, before deducting commissions and other offering expenses, and net proceeds of $4.2 million, after deducting such commissions and expenses. As of March 31, 2026, an aggregate of 678,012 shares of Class A common stock had been issued and sold under the Amended Sales Agreement, for gross proceeds of $0.8 million, before deducting commissions and other offering expenses, resulting in net proceeds of $0.8 million, after deducting commissions and other offering expenses. We issued and sold an aggregate of 678,012 shares of Class A common stock under the Amended Sales Agreement during the three months ended March 31, 2026 for gross proceeds of $0.8 million, before deducting commissions and other offering expenses, resulting in net proceeds of $0.8 million, after deducting commissions and other expenses.

On February 12, 2025, we closed the transactions pursuant to a securities purchase agreement with certain institutional investors (the “Investors”), in which we issued and sold, in a registered direct offering directly to the Investors (the “February 2025 Offering”): (i) 4,511,278 shares of our Class A common stock and (ii) warrants to purchase up to 4,511,278 shares of our Class A common stock (the “February 2025 Warrants”). Each share and accompanying February 2025 Warrant were sold together at a combined offering price of $1.33. The aggregate gross proceeds from the February 2025 Offering were $6.0 million before deducting the placement agent’s fees and offering expenses, and net proceeds of $5.2 million, after deducting placement agent's fees and offering expenses.

On October 17, 2025, we closed an underwritten public offering (the “October 2025 Offering”), in which we issued and sold 14,000,000 shares of our Class A common stock at a public offering price of $1.25 per share, pursuant to an Underwriting Agreement (the “Underwriting Agreement”) with Lake Street Capital Markets, LLC, as the underwriter. On October 17, 2025, we received gross proceeds of $17.5 million from the October 2025 Offering, before deducting underwriting discounts and commissions and other offering expenses, and net proceeds of approximately $15.8 million, after deducting underwriting discounts and commissions and other offering expenses.

Under the terms of the Underwriting Agreement, the underwriter was granted a 30-day option to purchase up to an additional 2,100,000 shares of Class A common stock at the public offering price, less underwriting discounts and commissions (the “Underwriter Option”). The underwriter exercised the Underwriter Option on October 21, 2025, and on October 23, 2025 we received additional gross proceeds of $2.6 million and additional net proceeds of approximately $2.4 million, after deducting underwriting discounts and commissions and other offering expenses.

In the aggregate, we issued and sold 16,100,000 shares of Class A common stock in the October 2025 Offering. In December 2025, our aggregate gross proceeds from the October 2025 Offering, including the gross proceeds from the exercise of the Underwriter Option, were $20.1 million, and aggregate net proceeds were approximately $18.2 million, after deducting underwriting discounts and commissions and other offering expenses.

On March 18, 2026 (the “Closing Date”), we entered into a Loan and Security Agreement (the “Loan Agreement”) with Horizon Technology Finance Corporation pursuant to which we obtained a senior secured term loan facility with aggregate principal availability of up to $40.0 million. At closing, we borrowed $15.0 million, and the remaining $25.0 million is available to draw prior to December 31, 2027, subject to the satisfaction of certain conditions set forth in the Loan Agreement. The proceeds from the term loan are intended to be used for working capital and general corporate purposes.

Borrowings under the term loan bear interest at a variable rate equal to the prime rate plus 4.25%, subject to a minimum interest rate of 10.75%. The term loan provides for interest-only payments for 48 months from the closing date, followed by equal monthly payments of principal and interest through the maturity date of March 18, 2031. Our obligations under the Loan Agreement are guaranteed by our wholly owned subsidiaries and are secured by substantially all of our assets, subject to customary exceptions, including that intellectual property is excluded from the collateral at closing and until the first funding of any additional loan tranche following the Closing Date. The Loan Agreement contains customary affirmative and negative covenants, including limitations on additional indebtedness and certain other transactions. As of March 31, 2026, we were in compliance with all applicable covenants.

In connection with the Loan Agreement, we issued warrants to purchase up to an aggregate of 562,500 shares of Class A common stock at an exercise price of $1.20 per share (the “Initial Warrants”), which are immediately exercisable, and warrants to purchase up to an aggregate of 520,835 shares of Class A common stock at an exercise price of $1.20 per share (the “Additional Warrants”), which are exercisable only upon the funding of future loan tranches. All of these warrants expire seven years from the Closing Date.

Our ability to access capital when needed is not assured and, if capital is not available when, and in the amounts needed, we could be required to delay, scale back or abandon some or all of our development programs, commercialization of our products, and other operations which could materially harm our operations, financial condition and operating results. We expect that our existing cash and cash equivalents, together with proceeds from the sales of our products and services, will enable us to conduct our planned operations for at least the next 12 months. Factors that could accelerate cash needs include: (i) delays in achieving scientific and technical milestones; (ii) unforeseen capital expenditures and fabrication costs related to manufacturing; (iii) changes we may make in our business or commercialization and hiring strategy; (iv) costs of running a public company; (v) higher inflation and increases in product transportation and labor costs; (vi) the effects of the tariffs; and (vii) other items affecting our forecasted level of expenditures and use of cash resources including potential acquisitions.

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

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

Cash

As of March 31, 2026, we had cash and cash equivalents of $40.8 million. Our future capital requirements may vary from those currently planned and will depend on various factors including further development costs, commercialization strategy, regulatory developments, supply constraints, manufacturing costs and international expansion. If we need additional funds and are unable to obtain funding on a timely basis, we may need to curtail significantly our product development and commercialization efforts to provide sufficient funds to continue our operations, which could adversely affect our business prospects.

Cash flows

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

Net cash used in operating activities

For the three months ended March 31, 2026, net cash used in operating activities of $9.0 million was due primarily to a net loss of $8.6 million and changes in operating assets and liabilities of $1.6 million, partially offset by non-cash items of $1.1 million. Non-cash items were primarily stock-based compensation expense of $0.6 million and depreciation expense of $0.3 million and loss on change in fair value of warrant liabilities of $0.2 million. Changes in operating assets and liabilities were driven primarily by a decrease in accrued expenses and other current liabilities of $1.7 million reflecting the timing of annual employee bonus payments, an increase in prepaid expenses and other current assets of $1.4 million primarily related to the timing of annual insurance premium renewals, a decrease in deferred grant funding of $0.5 million and an increase in other long term asset of $0.1 million, partially offset by a decrease in accounts receivable and unbilled receivables of $0.8 million, a decrease in inventory of $0.8 million and an increase in accounts payable of $0.5 million.

For the three months ended March 31, 2025, net cash used in operating activities of $9.2 million was due primarily to a net loss of $9.4 million and non-cash items of $0.4 million, partially offset by changes in operating assets and liabilities of $0.6 million. Non-cash items were primarily gain on change in fair value of warrant liabilities of $1.6 million, partially offset by stock-based compensation expense of $0.9 million and depreciation expense of $0.2 million. Changes in operating assets and liabilities were driven primarily by a decrease in inventory of $1.2 million, a decrease in accounts receivable and unbilled receivables of $1.0 million, an increase in accounts payable of $0.6 million, and an increase in deferred funding of $0.4 million, partially offset by a decrease in accrued expense and other current liabilities of $1.4 million primarily due to annual bonus payout and an increase in prepaid expenses and other current assets of $1.2 million, primarily due to the timing of payment of the directors and officers liability insurance.

Net cash used in investing activities

For the three months ended March 31, 2026, net cash used in investing activities of $0.2 million was from fixed assets purchased.

For the three months ended March 31, 2025, net cash used in investing activities of $0.5 million was from fixed assets purchased.

Net cash provided by financing activities

For the three months ended March 31, 2026, net cash provided by financing activities was $14.5 million which consisted primarily of proceeds from issuance of debt net of debt issuance costs of $13.6 million, proceeds from the issuance of Class A common stock under the Amended Sales Agreement of $0.8 million and proceeds from stock options exercises of $42 thousand.

For the three months ended March 31, 2025, net cash provided by financing activities of $5.6 million which consisted primarily of proceeds from issuance and sale of the shares and February 2025 Warrants in the February 2025 Offering, net of offering discounts and other costs of $5.4 million, proceeds from issuance of the shares under the Sales Agreement of $0.1 million and proceeds from stock option exercises of $33 thousand.

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, 2026 or 2025.

Through our engagement with the BMGF, we have deployed and continue to deploy the Swoop® system in low-middle income settings without readily-accessible MRI technology. The multiple grants provided by our research partnership with the BMGF, which commenced funding in the spring of 2020, support the deployment of 25 Swoop® 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. In November 2025, we were awarded an additional grant from the BMGF to support continued technical innovation using our AI-powered portable MRI platform, with a focus on neonatal brain imaging and objective assessment of neurodevelopment in resource-constrained settings, with funding extending into March 2028.

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

We had no other significant contractual obligations as of March 31, 2026.

For information on contingencies, refer to Note 14 in the notes to our unaudited condensed consolidated financial statements for the three months ended March 31, 2026 and 2025 included elsewhere in this Quarterly Report on Form 10-Q.

Critical Accounting Policies and Significant Judgments and Estimates

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

Except as described in Note 2 “Summary of Significant Accounting Policies – Recently Issued Accounting Pronouncements Adopted”, to our unaudited condensed consolidated financial statements included in this Quarterly Report on Form 10-Q, there have been no material changes to our critical accounting policies and estimates as compared to the critical accounting policies and estimates disclosed in our 2025 Annual Report on Form 10-K.

Recently Issued Accounting Pronouncements

A description of recently issued accounting pronouncements that may potentially impact our financial position and results of operations is disclosed in Note 2 to our unaudited condensed consolidated financial statements and notes thereto for the three months ended March 31, 2026 and 2025 included elsewhere in this Quarterly Report on Form 10-Q.