Hyperfine, Inc.

Thank you for standing by and welcome to Hyperfine's fourth quarter 2021 earnings conference call. At this time, all participants are in a listen-only mode. After the speaker presentation, there will be a question and answer session. To ask a question during the session, you will need to press star 1 on your telephone. Please be advised that today's call may be recorded. Should you require any further assistance, please press star 0. I would now like to hand the call over to Marissa Byche, Investor Relations.

Thank you and thank you all for joining today's call. Joining me are Dave Scott, President and Chief Executive Officer, and Alok Gupta, Chief Financial Officer of Hyperfine. Earlier today, Hyperfine released financial results for the three and 12 months ended December 31, 2021. 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, The impact of COVID-19 or geopolitical conflict, such as the war in Ukraine, on our business and prospects for recovery, 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 risks factors section of our S-1 filed with the Securities and Exchange Commission on January 24, 2022. This conference call contains time-sensitive information It's accurate only as of the live broadcast today, March 23, 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 Dave Scott, President and Chief Executive Officer.

Good afternoon and thank you all for joining us in our first earnings call as a public company. We're tremendously excited to be here and to share the vision of Hyperfine with you. On the call with me is our Chief Financial Officer, Alok Gupta. We will review our fourth quarter and full year 21 results shortly, but first I would like to introduce you to Hyperfine. Hyperfine's vision is to transform healthcare by creating access to life-saving diagnostics and actionable data at the patient bedside. Today, brain diagnostics are a single point in time and delay the time from door to discharge. Our mission is to transform that experience, first and foremost, with our portable bedside MRI system. Our initial product, our portable MRI system called SWOOP, was FDA cleared in 2020. Today, we are focused on launching that system into the hospital setting to solve significant unmet patient and provider needs. In addition, we are developing a brain sensing technology designed to use ultrasound to measure noninvasive blood pressure and flow in the brain. With these technologies, we aim to create an ecosystem of solutions over time, all based on a backbone of machine learning and artificial intelligence to drive diagnostic decision making. We have an immense market opportunity. The imaging segment alone offers a $23 billion market opportunity with potential for installations across numerous hospitals, clinics, and outpatient centers over time. The medical imaging market opportunity is our primary focus today. In addition, noninvasive brain sensing offers a $22 billion market across similar locations, including ICUs, emergency departments, ambulances, and outpatient settings. In total, we see over a $40 billion addressable market opportunity. Let me take a step back to highlight the tremendous innovation behind our swoop portable MRI system, our commercial stage technology. MRI was first developed in the 1980s, and despite progress and iterations of the technology over the 90s and through today, the issues of cost, workflow, complexity, and access remain significant challenges. Our goal is to make MRI more accessible and bring this life-saving diagnostic technology to more people worldwide. We started seven years ago with the vision to create an MRI system that was an order of magnitude lower cost, could roll on wheels, could fit through a doorway, and plug into a normal wall outlet to address the challenges of conventional MRI and reduce the barriers to access. Over the past year and a half, we have successfully brought that solution to market. One of the first challenges of conventional MRI is its cost. Upfront capital cost is typically $2 to $4 million, complemented by the cost to build specialized facilities and shielded rooms to install the system, and followed by expenses associated with site upgrades, maintenance requirements, and extensive staff training to support the system. Scheduling and workflow are another significant challenge. Patients in the ICU or emergency department often need an immediate MRI scan but it takes an extremely long time to prepare that patient for transport and to move them to an MRI suite. In addition, the transport process is complicated, consumes valuable resources, and can be unsafe for unstable patients or those on life support equipment, which is not always MRI compatible. Data shows that, unfortunately, 22% to 46% of patient transport cases to an MRI suite result in an adverse event. The time between an MRI being ordered for a patient to the time the scan is done can range up to 26 hours based on our data. Much of that time is due to the patient preparation, the intra-hospital transfer, and the transfer back to the unit. This immense amount of time is just not allowing providers to deliver on the need for immediate answers to urgent patient conditions. With our SWOOP system, similar data showed a 90-minute end-to-end process from the time the MRI is ordered to the time the scan is complete. There are many settings in which portable MRI addresses a significant unmet clinical need while significantly improving patient and provider workflow. These may be settings in which conventional MRI workflow is too lengthy or too cumbersome to support a diagnosis that's needed right away. These include acute care settings, such as ICUs and emergency departments, operating rooms, for example, to complete post-operative follow-up from a brain surgery, or in locations where the nearest MRI machine may be hundreds or even thousands of miles away, including rural America or in the context of global health. Today, just 10% of the world's population has access to MRI, and we are committed to improving that. So where have we identified an opportunity to make the greatest difference and address a tremendous need in the near term? The answer is threefold. One, in the neuro ICU. Two, in pediatric hospitals to address hydrocephalus. And three, in stroke. When patients are in the ICU for neurologic conditions, patients are typically too unstable to transport to the MRI suite for imaging. As a result, there is simply not an effective way to perform imaging in the neuro-ICU today. Most neuro-ICU patients require a brain scan once they're stable to be stepped down into a standard med-surg bed. We have seen many cases in which patients are staying in the ICU for days longer than needed, simply because the hospital can't get them to the MRI suite and ensure they're safe for a transition into a lower staff-to-patient ratio environment. We've been working with our clinical partners to build strong clinical validation to support the ICU use case. In 2021, a paper published by researchers at Yale in Nature addressed detection of brain hemorrhage in ICU patients and showed 90% accuracy in swoop imaging results compared to conventional MRI. This is great validation of our technology in exactly the market we're most focused on right now. and we continue to see a very positive response in this setting today. Secondly, hydrocephalus is an excellent use case for portable MRI. The problem of hydrocephalus is there's a buildup of fluid in the brain, in the ventricles, and this is addressed by introducing a shunt and tubing to drain that fluid from the brain to the patient's belly. Children receive this treatment for hydrocephalus and unfortunately they have to come back for scans because the tubing can become clogged. These children are receiving anywhere from 1 to 12 CT scans each year and anywhere from 20 to 50 CT scans before they turn 18. This greatly increases their chances for brain tumors and cancers due to radiation exposure. MRI is the preferred approach for imaging these children instead of CT. However, MRI is infrequently available, and as a result, the best option is to take these pediatric patients for CT scans. Our mission is to scan these children with bedside MRI as the better solution. It doesn't deliver radiation, and our technology enables a quick, simple diagnosis by showing whether these shunts have failed or are operating properly. These are just two examples of use cases where we have received overwhelming early responses to the SWOOP system. Beyond neuro ICU and pediatric hospital launch settings, we see massive potential in additional use cases and settings over the immediate and longer term. We are collecting extensive validation data on our technology and our platform in many of those additional use cases today. We currently have over 40 conference presentations and publications across stroke, hydrocephalus, MS, tumor resection, and use in ECMO, or extracorporeal membrane oxygenation. And we have systems located at leading institutions across the country with ongoing studies to add even greater validation to the utility and to the clinical efficacy of our technology. One use case in which we are intently focused on continuing to build our base of clinical data is in stroke. As many of you know, 15 million people worldwide suffer from stroke annually. It's the second leading cause of death globally. 87% of these strokes are ischemic strokes. Data demonstrates that MRI scans can better detect ischemic stroke damage compared to CTs. However, providers rely heavily on CT due to the time to transport patients from an ICU or emergency department to the MRI suite and the limited accessibility of conventional MRI more broadly. Our vision is to transform that experience by delivering bedside MRI where it is needed the most. As part of executing on that vision, we are pleased to share that we are currently in the process of engaging 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 through our direct sales team. We look forward to sharing our progress on advancing our stroke focus later this year. Now let me turn to our pipeline opportunities. We are already hard at work on our next generation SWOOP platform to expand our use cases beyond neuro ICU, hydrocephalus, and stroke into C-spine and extremities over time. We are also hard at work developing our non-invasive brain monitoring system, which uses ultrasound technology to measure intracranial pressure and blood flow in the brain. Like a vital sign monitor for the heart, such as an EKG or a pulse oximeter, This is intended to operate as a vital sign monitor for the brain. We intend to generate an ultrasound image through leads that are put on either side of the head, and from that image, extract intracranial pressure and flow noninvasively. This will be a groundbreaking technology in the measurement of vital signs for the brain. Now I've introduced our vision, our market opportunity, and the transformational potential of SWOOP. Let's talk about the progress we made in 21 and the foundation we're building into 2022. We entered into and completed our business combination with Health Corps Cattalio Acquisition Corporation, generating over 160 million in gross proceeds to our business to support our growth initiatives and leading to our listing on the NASDAQ as a publicly traded company with the ticker symbol HYPR. We brought together a management team with decades of collective leadership experience, to drive our next phase of expansion as we continue to build and develop the portable MRI market and execute strong go-forward growth. We grew our team substantially, with roughly 50 employees at the beginning of the year and nearly 200 employees of Hyperfine by the end of 2021. We are continuing to grow our sales team and broader organization in early 2022 and look forward to continuing to expand throughout the year in support of driving awareness and delivering on our commercial objectives. We laid the groundwork for commercial expansion outside of the U.S., including securing regulatory authorization to sell our swoop device in Australia, New Zealand, Canada, and Pakistan. Today, we are also in the process of seeking necessary regulatory authorizations in the U.K. and the European Union via the CE-Mark process. These are additional markets which we believe offer significant opportunity. Over the course of the year, we installed 23 commercial swoop systems, bringing our total commercial installed base to 27 units at the end of the year and our total global installed base to 70 units. We are immensely proud of our progress. and we continue to see a robust opportunity for growth and expansion into further hospitals and care settings going forward. That brings me to our 2022 expectations. Based on current trends in our business and our outlook for the remainder of the year, we are initiating revenue guidance of $10 to $12 million for fiscal year 2022. We expect to install 50 to 60 commercial units for the year roughly tripling our existing commercial installed base from 27 systems at the end of 21 to 77 to 87 systems at the end of this fiscal year. In line with our current clinical and strategic focus, we expect the majority of these systems to be placed in neuro-ICUs and pediatric hospitals in the U.S. Alloc will provide greater detail on the assumptions underpinning our outlook shortly. Before I turn the call to Alok, I would like to touch on the impact of the COVID-19 pandemic to the healthcare system and to our launch experience. First of all, the entire healthcare system, including physicians, administrators, and supporting staff, have been put under incredible pressure over the course of the past two years, and I want to recognize the resilience, hard work, and dedication of these frontline workers. I also want to recognize the commitment and persistence of our team as we initiated and expanded our commercial launch and continued to advance patient care despite meaningful time and resource constraints driven by the pandemic. These constraints, in some ways, created an imperfect launch backdrop, but they have also highlighted and, in some cases, exacerbated the challenges of conventional MRI workflows. underscoring the need for more timely and flexible solutions. For example, today, a shortage in MRI technicians, even at some large academic hospitals, has contributed to ongoing delays in MRI workflow and limited MRI availability. And over the past two years, the need for MRI scans to verify the status of patients who could be transferred from an ICU to the med-surg unit has become increasingly important as ICUs have sought to maintain and improve capacity for COVID-19 patients. These situations emphasize the need for a solution that can scan patients conveniently and deliver results quickly. Of course, our launch progress has not been without pandemic-associated challenges. One of the clearest examples has been an impact to certain hospital budgets for newer technologies due to the higher cost of care for COVID-related illness. Separately, staff shortages and remote work across nursing and hospital contracting personnel have delayed the process from initial SWOOP demo through contracting and installation. Nonetheless, our team remains very hard at work stimulating awareness of our technology and placing SWOOP systems across U.S. hospitals and at various sites around the globe in 21. And we are pleased to share that we have successfully engaged with many new hospitals year to date. In addition, we are observing that overall access to hospitals is improving as we emerge from Delta and Omicron waves with lifting limitations on visitor and industry representative attendance, for example. We are optimistic that the outlook for the healthcare industry will continue to improve gradually over the course of 2022 and that against that backdrop, we can meet our growth objectives and continue to ramp up our commercial business given our strong value propositions. I will now turn the call over to Alok Gupta, our Chief Financial Officer. Thank you, Dave.