Good afternoon, and welcome to Hyperfine’s Third Quarter 2022 Earnings Conference Call. At this time, all participants are in listen-only mode. We’ll be facilitating a question-and-answer session towards the end of today’s call. As a reminder, this call is being recorded for replay purposes. I would now like to turn the call over to Marissa Bych, Investor Relations for few introductory comments.

Thank you for joining today’s call. Earlier today, Hyperfine released financial results for the fiscal quarter ended September 30, 2022. A copy of the press release is available on the company’s website as well as sec.gov. Before we begin, I’d like to remind you that management will make statements during this call that include forward-looking statements within the meaning of the federal securities laws, which are made pursuant to the Safe Harbor provisions of the Private Securities Litigation Reform Act of 1995. Any statements contained in this call that relate to expectations or predictions of future events, results or performance are forward-looking statements. All forward-looking statements, including without limitation, those relating to our operating trends and future financial performance, expense management, expectations for hiring, physician training and adoption, growth in our organization, market opportunity, commercial and international expansion, regulatory approvals, and product development are based upon our current estimates and various assumptions. These statements involve material risks and uncertainties that could cause actual results or events to materially differ from those anticipated or implied by these forward-looking statements. Accordingly, you should not place undue reliance on these statements. For a list and description of the risks and uncertainties associated with our business, please refer to the Risk Factors section of our 10-Q filed with the Securities and Exchange Commission on August 11, 2022. This conference call contains time-sensitive information and is accurate only as of the live broadcast today, November 10, 2022. Hyperfine disclaims any intention or obligation except as required by law to update or revise any financial projections or forward-looking statements, whether because of new information, future events, or otherwise. And with that, I will turn the call over to Maria Sainz, President and Chief Executive Officer.

Good afternoon, and thank you all for joining us. I am honored to lead today’s call as the new President and Chief Executive Officer of Hyperfine. On the call with me is our Chief Financial Officer, Alok Gupta, and our Executive Chairman, Scott Huennekens. I will start my remarks by sharing the good news. We placed 10 Swoop systems in the third quarter driving all-time quarterly revenue of $2.3 million, and we drove great discipline in spending successes, which benefits from Scott who stepped in as interim CEO shortly after Dave’s departure and has enabled a very smooth transition in my first two weeks in the role and to our broader Hyperfine team. We will discuss this quarterly results in greater detail shortly. Before we do that, I would like to briefly share the reasons that compelled me to take this position with Hyperfine and lead the company into our next phase of growth. I have spent the better part of the last 30 years introducing disruptive and pioneering technologies to address large markets with significant unmet patient needs from the early days of metal sense and thrombectomy devices to cardiac resynchronization therapy for heart failure. I am no stranger to Hyperfine having served on the Board of Directors since late 2021. I believe our addressable market is very large and our initial clinical use focus in neurocritical care and stroke are significant global opportunities. I am confident our business is poised for expanding adoption with the right team in place and a strong foundation of independent clinical research, as well as a growing base of positive provider and patient experiences and testimonials with the Swoop system. Our vision is to transform healthcare by accelerating and broadening access to clinically valuable diagnostics and actionable data at the patient bedside. Today, brain diagnostics are costly, oftentimes not readily available and require planning and scheduling. Our mission is to expand imaging and diagnostic capacity with our Swoop portable bedside MRI system by providing a point of care tool, especially in critical care situations, circumstances in which magnetic resonance is superior to non-contrast computer tomography or CT scanning and in environments where patients do not have access to imaging. Although it remains early in our course of our commercial trajectory, I am confident we are taking the right steps to do so. As we have noted in the past, we see our greatest near-term opportunity to improve patient care in neurocritical care followed by stroke. Patients in the ICU for neurological conditions experience a variety of challenges when it comes to getting an MRI. Patients are typically too unstable to transport to the MRI suite for imaging, and the time it takes to get the imaging completed can be prohibitively long and the process can consume valuable resources, especially in the current staff-constrained healthcare environment. There’s simply not an effective way to perform MRI imaging for neuro ICU patients today. We have been working with our clinical partners to build strong clinical validation to support the neuro ICU use case. We also remain focused on building our base of clinical data in stroke. Data demonstrates that MRI scans can better detect ischemic stroke damage compared to CT scans, and we are continuing to leverage research to build awareness of the value of Swoop in the detection and evaluation of these devastating events in patients' lives. This stage of research includes the independent publication by our partners at Yale and Harvard Mass General in science advances earlier this year, which concluded that Swoop enabled highly accessible and dynamic bedside evaluation of ischemic stroke by obtaining actionable bedside neuroimaging in 50 confirmed patients. The authors highlighted the safety and convenience of affordable low-field MRI as a tool to expedite the stroke treatment pathway and concluded that results validated the use of low-field portable MRI to obtain clinically useful imaging of stroke setting the stage for broader use. We are continuing to engage multiple U.S. hospitals to collect data demonstrating the clinical value of Swoop in stroke patients. As we gather greater clinical data, we will increase our focus on driving awareness and educating the field about Swoop utilization for the stroke use case. We’re excited to share that we will soon be commencing a stroke study in three leading U.S. institutions and we look forward to sharing our progress over the coming quarters. In addition to these efforts, we are advancing important technology initiatives, including refining our software programs and enhancing our AI capabilities to optimize our sequences for our use cases. Our R&D team has been hard at work toward improvements already and we expect this to remain an area of focus into the year ahead. Turning to recent commercial progress, as I’ve mentioned earlier, we installed 10 commercial Swoop systems in the third quarter of 2022, driving record quarterly revenue of $2.3 million. We are pleased that we have continued to develop and enhance our customer relationships, working closely with critical care clinicians, interventional neuroradiologists and neurosurgeons alongside radiology and hospital executives, all influential stakeholders to roll out successful new programs and placements. It is worth mentioning that the introduction of Swoop creates an initial change in workflows and protocols for our customers, something that takes time and effort across stakeholders. We’re entering 2023 with a clear roadmap of technology iterations and enhancements from the experience of our initial users as well as ways to optimize our go-to-market strategy. Our team is aligned and ready to execute and we will continue to learn from our market experience and further refine our plans to improve our execution and drive continued success. To this end, we remain focused on our initial clinical use cases and as we grow and expand, we also learn. We are committed to being very responsive to market feedback to drive adoption and use of Swoop across multiple applications and clinical settings. Although the time to close sales has proven longer in the current operating environment, we continue to expand our commercial footprint and cultivate opportunities in our pipeline for quarters ahead. For example, in August, we announced that we had received a signed letter of intent for seven commercial units from BJC HealthCare in St. Louis, one of the leading hospital systems in the U.S. We are pleased to share that we have now begun delivering this system. We also shared that we received a letter of intent from King’s College, London to order 20 commercial systems in association with the Bill & Melinda Gates Foundation. We have now received the final purchase order for this 20 system and expect to begin shipping some of these units over upcoming months. Before I turn the call over to Alok, I would like to reiterate our stance from recent months, which has been that given market conditions and the elongated sales cycle we are focused on investing in our business thoughtfully, with a focus on driving near-term and intermediate-term growth, while extending our cash runway. We feel good about the momentum we are building for sales growth in 2023 and 2024 and we are continuing to prioritize our R&D, clinical, and commercialization spending in that order. We will be diligent in our OpEx planning while investing where we see potential for the greatest growth. And as part of the prioritization of all projects and expenditures, as we have previously communicated, we are actively assessing strategic options for Liminal, our brain sensing platform, which is in the early stages of development, with a view towards maximizing shareholder value creation across all of Hyperfine. In summary, we are pleased with our progress toward achieving our long-term goals. I will now turn the call over to Alok to review our third quarter performance and financial outlook in greater detail.

Thank you, Maria. Turning to our financial results for the third quarter of 2022, revenue for the quarter ended on September 30, 2022 was $2.3 million compared to $0.37 million in the third quarter of 2021. Gross profit for the third quarter of 2022 was $0.69 million, reflecting a gross margin of 29.3%. This compares to a negative $0.34 million of gross loss in the third quarter of 2021. R&D expense for the third quarter of 2022 was $7.3 million compared to $6.4 million in the third quarter of 2021. Sales, general and administrative expenses for the third quarter of 2022 were $6.6 million compared to $9.6 million in the third quarter of 2021. Net loss for the third quarter was $13.2 million, equating to a net loss of $0.19 per share as compared to a net loss of $16.4 million or a net loss of $8.70 per share for the same period of the prior year. Our cash burn in the third quarter was $12.6 million and we ended the third quarter of 2022 with $132.5 million in cash and cash equivalents. We expect our go-forward quarterly cash burn rate to be slightly higher as we take strategic steps to expand our base of clinical evidence in stroke and optimize the technology as Maria described, while rightsizing the organization and managing the business to maintain our cash runway through year-end 2024. Turning to our 2022 outlook. Based on our progress and current trends in the business, we continue to anticipate installing between 35 and 45 commercial systems in 2022. In conjunction with our system placement expectations, we are maintaining our full-year revenue expectation for revenue in the range of $7 million to $8 million. We now anticipate total net cash burn of $70 million to $75 million for the full year relative to the $70 million to $80 million expectations we had previously provided. We are pleased to continue prioritizing fiscal discipline as we focus on investments in our business, which offer the greatest growth return potential. At this point, I would like to turn the call back to Maria for closing comments.

Thank you, Alok. As I look out toward quarters and years ahead, I want to reiterate my confidence in the immense value of Hyperfine’s differentiated technology and the compelling future of our business. We believe in enabling better patient care through our portable Swoop point-of-care imaging tool, and we are determined to continue delivering high-quality imaging across multiple use cases, starting with neurocritical care and stroke. With our early success marked by a total global installed base of 100 Swoop systems to date, we are setting the stage for affordable point-of-care imaging to transform life and enhance patient care around the world. With that, I want to thank you all for your time today and open it up to any questions.

Our first question comes from Larry Biegelsen with Wells Fargo. Your line is open.

Good afternoon. Thanks for taking the question. Can you hear me okay?

Yes, we can.

Great. Maria, welcome and congratulations on the new role and on a strong start here.

Thank you.

So I guess, this is your first call. I’ll ask you the high-level question. What are your priorities over the next 12 months or so? And what changes are you making? I’d love to hear a little bit more color on the operating expense savings, which came in meaningfully below where you were last quarter. And then I had a couple of follow ups.

Sure. So we’re clearly narrowing down on our clinical use cases that are our highest priorities. I have the team focusing on making sure that we have the right programs anywhere from the R&D teams to clinical to commercial to really take full advantage of that neurocritical care opportunity followed by stroke. We are really prioritizing everything we’re doing in the company on those two clinical use cases and market opportunities. I’m also trying to scrutinize everything we’re doing to ensure that we don’t have unnecessary complexity that some of the other projects that in the past may have been supported need to be really deprioritized. So that we can allocate our resources and drive the discipline around our focus execution and spending so that we can extend our cash runway to be able to do all the great things that I think we can do with Swoop in the market in the quarters ahead.

That’s very helpful. And the status I wanted to ask about this – the seven orders from Barnes-Jewish and the 20 from King’s College. What’s the timing of those 27 units? Should we expect some in the fourth quarter and the rest in 2023? And could you add some color on the pipeline of deals in general? The press release talked about a strong pipeline. And I still have one follow-up if that’s okay.

Sure. So I don’t think we’re going to be very granular with really the makeup of our shipments and our revenue, but those two units are meaningful to us. And they will be executed here over the next several quarters. So we expect them to roll out over all of 2023 at a steady cadence of shipments.

That’s helpful. And just lastly, just on the guidance here, I’m sure you anticipated the question, but the guidance at the midpoint implies flat sequential system and revenue sales in the fourth quarter, which is typically the strongest capital quarter of the year. So should we be thinking about the high end of the guidance ranges here? Thanks so much for taking the questions.

Sure. Alok, I’ll let you comment on that if you want.

Yes. So Larry, that is correct that this is a high point in the capital cycle. But in our case, we still think that it’ll be flat and not on the high end for this particular fourth quarter, as the team is still learning a lot from customer requests, customer needs and clinical use cases, especially given the two holiday time visits of Thanksgiving and Christmas coming up.

All right. Thanks so much. I’ll let some others jump in here.

Sure.

Our next question comes from Vijay Kumar with Evercore ISI. Your line is open.

Hi, this is Kevin on for Vijay from Evercore. Wanted to follow up a little bit on the implied 4Q guidance. So you’re still expecting the midpoint of guidance. Is there any conservatism baked in there or are you seeing any changes in the market, especially given the 10 system placements in the quarter and the growth in revenues?

Kevin, as I mentioned on the previous question, we are not seeing any changes in the market. It’s just that the sales cycle for us continues to be a little bit elongated. And it’s not a conservative number. This is what we think is more realistic for two quarters back-to-back, where the midpoint shows that we’ll have another 10 units in Q4 and which will show sequentially 10 units for this quarter and 10 units for Q4. That makes us feel much more comfortable given the holiday schedules and the elongated sales cycle.

Got it. And to follow up on your sales pipeline, we continue to hear financial pressures on hospitals and hospital budgets. Are you hearing anything new from customers as we approach the new year or any changes in their purchasing priorities?

So, I mean, you’re hearing that from everyone because it is the reality they’re living with. Probably, the biggest challenge for us is around just the staffing constraints and the ability to get access to the accounts, go through evaluations and move the cycle along quickly. So it’s not about expecting more of a when, if I can phrase it that way. I’m very confident in our pipeline. It’s still early in our trajectory to be highly confident when every deal falls. We also have a relatively young team, so we’re trying to get our arms around how they also forecast and how they plan, but it is really staffing and really the access and the time they can give to some of the new technology valuations. And then also when we deploy a system, the implementation side. So not the use, but more the when in terms of capacity and attention.

Got it. Thank you.

Sure.

Our next question comes from Neil Chatterji with B. Riley. Your line is open.

Hi, and welcome Maria, and thanks for taking the questions. I guess, first off, could we – I was just curious in terms of the sales funnel and elongated sales cycle, I was just curious, how the complexity around kind of changing the workflows affects the cycle.

Let me make sure I understand your question correctly. How the elongated sales cycle affects our ability to change the workflow? Is that your question?

Kind of the other way around?

Okay.

In terms of just the planning for the change workflows.

So it comes on the back end of getting the PO and shipping the unit and getting the unit in place. We right now have a system. We go through something we call 'Hyper Week.' Remember, we have a dedicated team, which we call customer success, that follows behind the sales team to really be all about deploying and working with the staff in training them and slowly getting them to change their work orders and their workflow. I want to say this is probably the area where we are placing the most focus commercially speaking now. We are hiring additional people, we’re also hiring people with more MR backgrounds to be more effective in that implementation of the system so that we can get from deployment of a system to routine utilization faster. Does that address the question?

Yes, that’s helpful color. And then I guess separately, just a follow-up, just curious about if you have any updates regarding the AI partnership for the combined solution and any development on applications for stroke.

So at this point, we’re still working through the technical work to do an integration of the two systems and be able to have something that we can start presenting to customers. We are going to be on somewhat of a partner display at the upcoming RSNA Conference where our system is going to be referred to on these AIs and vice-versa. We are working towards hopefully having somewhat of a working prototype of how the two systems can talk to each other here relatively soon.

Great. That’s it for me.

Thank you.

Our next question is a follow-up from Larry Biegelsen with Wells Fargo. Your line is open.

Hey guys, thanks for taking the follow-up. Just two for me. One, low ASPs and gross margin were relatively high in Q3, much higher than Q2. Why were ASPs so high this quarter and how do we think about those two lines going forward? I had one additional question.

Yes, Larry, thanks for that question. Yes, you are right. Our ASP, if you recall that Q1 was $108,000, Q2, it went up to $130,000, but when we changed the pricing at the beginning of the year, we were consistently messaging that all the ASP transition would happen in Q3 and our average ASPs would be closer to $200,000 starting Q3, which is where we are close to it. I mean, the ASP for Q3 is $194,000, and if you recall from our last call I talked about the legacy system and new pricing systems, most of the legacy systems are out of our system at this point. There is no more legacy systems which we are working through with our customers. So you will see continued improvement on our ASP first hitting the $200,000 milestone and then continuing to go higher from there. Gross margin also, Larry, as we had projected at the beginning of the year, that our gross margins would turn positive in the second half of the year and this quarter proves that.

That’s helpful. And just the standard 2023 question here obviously I know you’re not giving guidance, but is there any – Maria or Alok, any framing questions or color commentary you can provide on how to think about next year growth – top line growth or margins, any reaction to consensus? Thanks so much.

So no, Larry, as you anticipate it at this point, we’re not ready to talk about 2023. You can expect obviously as our teams deliver on Q3 and – we already delivered on Q3, as we deliver on Q4. We do anticipate continued growth in 2023 as well, and continue improving the gross margins too.

Hey, Larry, Scott here, just kind of building on the comments from last quarter, handing the baton off to Maria here and that is that we see ourselves growing at nice rates next year. At the same time, we’re working in the early adoption phase of the market and basically ICU not yet really stroke. And so there are key product enhancements and approvals and software upgrades that will happen. You’ll see announcements over the next six to nine months. There’ll be new clinical studies starting and clinical data that will come out in the next 6, 9, 12 months. All of these things in combination with the continued maturity of the sales force mean that 2023 is a transition year and a growth of product clinical sales force maturity, but still growth for the company. And it’s after that we see really an inflection point for business as we go forward. As I talked about, during that period of time, we’re really managing expenses tightly to push our burn and our cash needs out to the end of 2024, if not 2025, and we’ll have more of an update on that with the guidance that we provide at the first of the year. The other thing that was mentioned was pricing and yes, capital markets and hospitals are tight, but I don’t see that as our biggest issue. It’s not really much of an issue. It’s more about we’re in the early adopter phase of the market. People really see the need. We just completed a big market research study with a third party that validates the size of these first two markets are substantial, and you can build a $1 billion company around those two markets alone. We have other applications beyond that. The research has come back that there is room for pricing expansion as well. People aren’t getting hung up on our pricing. We think there’s an opportunity, which we’ll look at to increase price, which along with our cost position means an expansion of gross margin into disposable kind of gross margins of medical device companies as we move forward.

That’s helpful. Let me…

The Board and kind of the prior acting CEO there for three or four months.

Let me just – thanks for that, Scott. Let me just ask one follow-up on your enhancements and approvals next six to nine months commentary. What are the kind of two or three enhancements and approvals that, that are most significant that we should be paying attention to? Thank you.

Sure. So the last approval that we got was a hardware approval, which is what we’ve called our 1.9 system. There are two pretty significant software improvements to that, which are right now in testing with some data sites. They are all about really getting as much radio as we need to be on our images for the detection of stroke. So after we go through this sort of position preference testing or better run, we’ll be able to give you better visibility, but expect those in the first half of next year. There is a set of deep learning and AI tools that continue to make further improvements to our – really it’s about image quality, image consistency, and image reliability, but primarily towards the stroke use case. So those will continue at a pretty good cadence all throughout 2023. And that’s part of the – my focus and priorities to ensure that all of those projects are appropriately resourced and prioritized. So, that’s what – so it’s less on the hardware side, it’s more around software and AI, which have the merit of being relatively rapid enhancements. We have a good set of data sites so we get very quick direct feedback on clinical use and clinical utility and can feed that right back to engineers and keep moving the ball along. We also have a really strong track record with the FDA on the quality of our submissions and the predictability of our submissions. So I really feel very good about our capability there, it’s just making sure that all the right people are working on just the right things.

Yes. And the good thing here is these are not our projects. These are team projects. There’s a high degree of competence from our engineering teams on these improvements. The other good thing is it’s not linear like you do a stent trial or a valve trial, hey, I come up with a new valve, now I got to go do this trial. No, you just take the data from images you already have and you run it through and you kind of have it before and after and can do the assessments and show the improvements and sensitivity and specificity of diagnosis, so things can move much faster with these software upgrades.

All right. Thanks for all the color and taking all the questions.

Yes.

Sure. Thank you.

There are no further questions. I’d like to turn the call back over to Maria Sainz for any closing remarks.

Thank you. Thank you for joining us today and look forward to speaking with you all next quarter.

Thank you for participating in today’s program. You may now disconnect. Everyone, have a great day.