10-K
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-K
(Mark One)
☒ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the fiscal year ended December 31, 2025
OR
☐TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from to
Commission file number: 001-39949
Hyperfine, Inc.
(Exact name of registrant as specified in its charter)
351 New Whitfield Street
Guilford, Connecticut06437
(Address of principal executive offices) (Zip Code)
Registrant’s telephone number, including area code: (866) 796-6767
Securities registered pursuant to Section 12(b) of the Exchange Act:
Title of each class TradingSymbol(s) Name of each exchange on which registered
Securities registered pursuant to Section 12(g) of the Exchange Act: None
Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act. Yes ☐ No ☒
Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Exchange Act. Yes ☐ No ☒
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☒ No ☐
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☒ No ☐
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company” and “emerging growth company” in Rule 12b-2 of the Exchange Act.
Large accelerated filer ☐ Accelerated filer ☐
Non-accelerated filer ☒ Smaller reporting company ☒
Emerging growth company ☒
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐
Indicate by check mark whether the registrant has filed a report on and attestation to its management’s assessment of the effectiveness of its internal control over financial reporting under Section 404(b) of the Sarbanes-Oxley Act (15 U.S.C. 7262(b)) by the registered public accounting firm that prepared or issued its audit report. ☐
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ☒
The aggregate market value of the registrant’s voting and non-voting common equity held by non-affiliates of the registrant (without admitting that any person whose shares are not included in such calculation is an affiliate) computed by reference to the price at which the common equity was last sold as of the last business day of the registrant’s most recently completed second fiscal quarter was approximately $44.2 million.
As of March 13, 2026, the registrant had 82,902,422 shares of Class A common stock outstanding and 15,055,288 shares of Class B common stock outstanding.
DOCUMENTS INCORPORATED BY REFERENCE
The following documents (or parts thereof) are incorporated by reference into the following parts of this Form 10-K:
Certain information required in Part III of this Annual Report on Form 10-K is incorporated by reference from the Registrant’s Proxy Statement for the 2026 Annual Meeting of Stockholders to be filed with the Securities and Exchange Commission.
TABLE OF CONTENTS
PART I 7
Item 1. Business 7
Item 1A. Risk Factors 39
Item 1B. Unresolved Staff Comments 77
Item 1C. Cybersecurity 77
Item 2. Properties 80
Item 3. Legal Proceedings 80
Item 4. Mine Safety Disclosures 80
Item 6. [Reserved] 81
Item 7A. Quantitative and Qualitative Disclosures About Market Risk 93
Item 8. Financial Statements and Supplementary Data 93
Item 9A. Controls and Procedures 93
Item 9B. Other Information 94
Item 9C. Disclosure Regarding Foreign Jurisdictions that Prevent Inspections 94
PART III 95
Item 10. Directors, Executive Officers and Corporate Governance 95
Item 11. Executive Compensation 95
Item 14. Principal Accountant Fees and Services 95
Item 15 Exhibits and Financial Statement Schedules 96
Signatures 99
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CAUTIONARY STATEMENT REGARDING FORWARD-LOOKING STATEMENTS
This Annual Report on Form 10-K includes forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended (the “Securities Act”), and Section 21E of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), that relate to future events or our future financial performance regarding, among other things, the plans, strategies and prospects, both business and financial, of the Company. These statements are based on the beliefs and assumptions of our management team. Although we believe that our plans, intentions and expectations reflected in or suggested by these forward-looking statements are reasonable, we cannot assure you that we will achieve or realize these plans, intentions or expectations. Forward-looking statements are inherently subject to risks, uncertainties and assumptions. Generally, statements that are not historical facts, including statements concerning possible or assumed future actions, business strategies, events or results of operations, are forward-looking statements. These statements may be preceded by, followed by or include the words “believes,” “estimates,” “expects,” “projects,” “forecasts,” “may,” “will,” “should,” “seeks,” “plans,” “scheduled,” “anticipates” or “intends” or similar expressions. Forward-looking statements contained in this Annual Report on Form 10-K include, but are not limited to, statements about:
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the success, cost and timing of our product development activities;
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the commercialization and adoption of our existing products and the success of our future product offerings, including the degree to which our products and services are accepted and used by healthcare professionals;
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the potential attributes and benefits of our products and services, including the clinical evidence supporting those benefits, and our ability to generate clinical evidence of the benefits of our products and services;
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our ability to obtain and maintain regulatory approval for our products, and any related restrictions and limitations of any approved product;
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our intellectual property rights;
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our ability to identify, in-license or acquire additional technology;
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our ability to maintain our existing licensing, manufacturing and supply agreements and to obtain adequate supply of products;
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our ability to compete with other companies currently marketing or engaged in the development of magnetic resonance imaging technologies, many of which have greater financial and marketing resources than us;
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the size and growth potential of the markets for our products and services, and the ability of our products and services to serve those markets, either alone or in partnership with others;
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our expansion plans and our ability to grow and manage growth profitably;
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the pricing of our products and services and reimbursement for medical procedures conducted using our products and services;
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changes in applicable laws or regulations;
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our history of losses and our ability to continue as a going concern;
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our estimates regarding expenses, revenue, capital requirements and needs for additional financing;
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our ability to raise financing in the future and the effects of future raises;
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our future performance, including our financial performance and performance obligations;
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our success in retaining or recruiting, or changes required in, our officers, key employees or directors;
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intense competition and competitive pressures from other companies in the industry in which we operate;
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market conditions and global and economic factors, such as inflation, geopolitical conflicts, and instability;
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the effect of legal, tax and regulatory changes;
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National Institutes of Health funding pressures; and
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the effect from U.S. export controls and tariffs
These and other factors that could cause actual results to differ from those implied by the forward-looking statements in this Annual Report on Form 10-K are more fully described in Item 1A under the heading “Risk Factors.” The risks described under the heading “Risk Factors” are not exhaustive. Other sections of this Annual Report on Form 10-K, such as the description of our Business set forth in Item 1 and our Management’s Discussion and Analysis of Financial Condition and Results of Operations set forth in Item 7 describe additional factors that could adversely affect our business, financial condition or results of operations. New risk factors emerge from time to time, and it is not possible to predict all such risk factors, nor can we assess the impact of all such risk factors on our business or the extent to which any factor or combination of factors may cause actual results to differ materially from those contained in any forward-looking statements. Forward-looking statements are not guarantees of performance. You should not put undue reliance on these statements, which speak only as of the date hereof. All forward-looking statements attributable to the Company or persons acting on the Company’s behalf are expressly qualified in their entirety by the foregoing cautionary statements. We undertake no obligation to update or revise publicly any forward-looking statements, whether as a result of new information, future events or otherwise, except as required by law.
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SUMMARY OF RISK FACTORS
Our business is subject to numerous risks and uncertainties that you should consider before investing in our securities. Some of the principal risk factors are summarized below:
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We are an early-stage health technology company with a history of net losses, which we expect to continue, and we may not be able to generate meaningful revenues or achieve and sustain profitability in the future.
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We may need to raise additional capital to fund commercialization plans for our products, including manufacturing, sales and marketing activities, expand our investments in research and development, develop clinical evidence, and commercialize new products and applications.
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Our success depends upon market acceptance of our products and services, our ability to develop and commercialize existing and new products and services and generate revenues, and our ability to identify new markets for our technology.
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Health technology development is costly and involves continual technological change, which may render our current or future products obsolete.
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We will be dependent upon the success of our sales and customer acquisition and retention strategies.
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We have a limited operating history, which may make it difficult to evaluate the prospects for our future viability and predict our future performance. As such, you cannot rely upon our historical operating performance to make an investment decision regarding us.
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If we are unable to attract, recruit, train, retain, motivate and integrate key personnel and expand our organization, our operations may be disrupted, and we may not achieve our goals.
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We have limited experience in marketing and selling our products and related services, and if we are unable to successfully commercialize our products and related services, our business and operating results will be adversely affected.
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We rely on a single contract manufacturer, Benchmark Electronics, Inc. (“Benchmark”), to test, assemble and supply our finished products. If Benchmark fails to fulfill its obligations under its existing contractual arrangements with us or does not perform satisfactorily, our ability to source our devices could be negatively and adversely affected.
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We rely on a limited number of suppliers for our products. A loss of any of these suppliers could negatively affect our business.
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We have experienced and may continue to experience pricing pressures from contract suppliers or manufacturers on which we rely.
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If we do not successfully optimize and operate our sales and potential future distribution channels or we do not effectively expand and update our infrastructure, our operating results and customer experience may be negatively impacted.
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The market for our products and services is new, rapidly evolving, and increasingly competitive, as the healthcare industry in the United States is undergoing significant structural change, which makes it difficult to forecast demand for our products and services.
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As international expansion of our business occurs, it will expose us to market, regulatory, political, operational, financial and economic risks associated with doing business outside of the United States.
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Unfavorable global economic conditions could adversely affect our business, financial condition or results of operations.
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We are subject to extensive government regulation, which could restrict the development, marketing, sale and distribution of our products and could cause us to incur significant costs.
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There is no guarantee that the U.S. Food and Drug Administration (the “FDA”) will grant 510(k) clearance or premarket approval of our future products, and failure to obtain necessary clearances or approvals for our future products would adversely affect our ability to grow our business.
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If we fail to obtain regulatory authorizations in other countries for existing products or products under development, we will not be able to commercialize these products in those countries.
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We may be subject to enforcement action if we engage in improper or off-label marketing or promotion of our commercial medical device products, including fines, penalties and injunctions.
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Because we do not require extensive training for users of our current products, although they are limited under the FDA’s marketing clearances to use by, and that images generated from the scanner be interpreted by, trained healthcare practitioners, there exists a potential for misuse of these products, misinterpretation of images by untrained professionals or misuse of these products by untrained professionals, which could ultimately harm our reputation and business.
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We are subject to complex and evolving U.S. and foreign laws and regulations regarding privacy, data protection, artificial intelligence, and other matters. Many of these laws and regulations are subject to change and uncertain interpretation, and could result in claims or monetary penalties, changes to our business practices, increased cost of operations, or declines in customer growth or engagement, or otherwise harm our business.
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Security breaches, loss of data and other disruptions could compromise sensitive information related to our business or prevent us from accessing critical information and expose us to liability, which could adversely affect our business and our reputation.
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If we are unable to obtain and maintain and enforce sufficient intellectual property protection for our products and technology, or if the scope of the intellectual property protection obtained is not sufficiently broad, our competitors could develop and commercialize products similar or identical to ours, and our ability to successfully commercialize our products may be impaired.
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In the future, we may rely on licenses from third parties, and if we lose such licenses, then we may be subjected to future litigation.
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We face the risk of product liability claims and may be subject to damages, fines, penalties and injunctions, among other things.
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If we experience material weaknesses in our internal control over financial reporting or otherwise fail to maintain an effective system of internal controls in the future, we may not be able to report our financial condition or results of operations accurately or in a timely manner and we may be unable to maintain compliance with applicable stock exchange listing requirements, which may adversely affect investor confidence in us and, as a result, materially and adversely affect our business and the value of our Class A common stock.
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Future sales of substantial amounts of our Class A common stock, or the possibility that such sales could occur, could adversely affect the market price of our Class A common stock.
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Because we are a “controlled company” within the meaning of the Nasdaq listing rules, our stockholders may not have certain corporate governance protections that are available to stockholders of companies that are not controlled companies.
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The dual class structure of our common stock has the effect of concentrating voting power with Jonathan M. Rothberg, Ph.D., the Founder of Legacy Hyperfine and Liminal and a member of our board of directors, which limits an investor’s ability to influence the outcome of important transactions, including a change in control.
These and other material risks we face are described more fully in Item 1A, Risk Factors, which investors should carefully review prior to making an investment decision with respect to the Company or its securities.
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PART I
All brand names or trademarks appearing in this report are the property of their respective holders. Use or display by us of other parties’ trademarks, trade dress, or products in this report is not intended to, and does not, imply a relationship with, or endorsements or sponsorship of, us by the trademark or trade dress owners. Unless the context requires otherwise, references in this report to the “Company,” “we,” “us,” and “our” refer to Hyperfine, Inc. and its wholly-owned subsidiaries, including Hyperfine Operations, Inc., (“Legacy Hyperfine”) and Liminal Sciences, Inc., (“Liminal”), as the case may be.
Item 1. BUSINESS
Overview
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 significantly 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 patient-friendly experience, 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 and/or when they are not readily available. The portable design of our Swoop® system make it safely and readily accessible anywhere in a hospital, clinic, physician’s office, or patient care site and it does not require any special facilities accommodations. The easy to use, iPad-based interface makes its operation easy to learn and it does not require 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”).
The demand for MR imaging has been increasing due to the aging population and the rising prevalence of neurological, neurodegenerative, and cardiovascular conditions, and also the trends towards decentralized healthcare in mature, as well as low- and middle-income countries. Healthcare professionals and insurers recognize MR imaging as an effective, non-invasive diagnostic tool for evaluation and ongoing monitoring of patients at risk of or with neurological conditions. The Swoop® system is the next-generation brain imaging scanner 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.
Despite their advantages, many healthcare institutions worldwide lack the facilities, specialized technicians, 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 that is capable of providing imaging at multiple sites of care, such as intensive care units (“ICUs”), emergency departments, procedural rooms, clinics or physicians’ offices, and can inform the timely detection, diagnosis, monitoring, and treatment of acute and chronic neurological conditions inside and outside the hospital. We designed the Swoop® system to address the limitations of conventional MRI technologies and make brain MR imaging accessible nearly anywhere in a timely manner, closer to the patient, across professional healthcare settings. We believe the adoption of the Swoop® system by healthcare professionals has potential clinical and economic benefits throughout healthcare communities in both high and low resource settings.
The Swoop® system is AI-powered and integrates deep learning, Optive AITM, a form of AI in the reconstruction pipeline of the sequences. We offer T1, T2, diffusion-weighted imaging (“DWI”), and fluid-attenuated inversion recovery (“FLAIR”) sequences, in both fast and high resolution modes. Scanning time varies based on protocols but on average a full brain scan takes around 25 minutes. 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. Our Optive AITM models are designed to improve ULF image quality, while reducing the impact of scan artifacts. The Optive AITM models are 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 installed base continues to expand globally. The learnings from this market experience have served to improve our hardware, software, AI, and denoising algorithms resulting in the image quality and performance improvements of our product over the eleven 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, we have established a strong proprietary position in ULF MRI and as of February 15, 2026, we possess a portfolio of 197 issued patents worldwide and an additional 160 U.S. and foreign patents applications pending.
Our Swoop® system received initial 510(k) clearance for brain imaging from FDA in 2020. In July 2024, we received 510(k) clearance from FDA of the ninth-generation AI-powered Swoop® system software. The ninth-generation software significantly
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reduces scan times across multiple MR sequences without sacrificing image quality. In May 2025, we received 510(k) clearance from the FDA for our tenth-generation AI-powered software, Optive AITM software. The tenth-generation software enhances each stage of image processing from noise cancellation and image acquisition to reconstruction and post processing, and produces brain images with greater clarity, uniformity and sharper anatomical detail.
Obtaining 510(k) clearance from the FDA in late May 2025 for our new next-generation Swoop® scanner powered by Optive AITM software was a very important milestone for us. The next-generation Swoop® system incorporates learnings from five years of real-world experience, features new hardware and is powered by Optive AITM software. The next-generation Swoop® system incorporates innovations specifically engineered to deliver the highest signal-to-noise ratio, which, when paired with the Optive AITM software, achieve exceptional image quality at low-field MRI, including improved resolution and uniformity, as well as faster acquisition times.
In December 2025, we received FDA clearance for the eleventh-generation AI-powered software. The eleventh-generation software includes a new multi-direction DWI sequence in our Optive AITM software, and this software enhancement expands the Swoop® system’s clinical capabilities by improving image quality and diagnostic confidence for stroke detection, including clearer visualization of smaller lesions and more reliable differentiation of infarcts. The multi-direction DWI sequence uses multi-direction signal acquisition, similar to techniques used in high-field MRI, and is designed to reduce artifacts that may obscure stroke pathology, while the existing single-direction DWI sequence remains available for extremely time-sensitive imaging where rapid acquisition is critical to meeting stroke treatment protocols.
Outside of the United States, the first-generation 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 Mark”)), Canada, Australia, New Zealand and India. In October 2024 and February 2025, we received CE Mark and UKCA Mark approval for the ninth-generation of software, respectively. In August 2025, we received both CE Mark and UKCA Mark approvals for our Optive AITM software. In December 2025, we received regulatory approval in India from the Central Drugs Standard Control Organization (“CDSCO”), authorizing commercialization of the first-generation Swoop® system throughout India.
Our initial commercial focus has been in the U.S. market and with customers that use the Swoop® system inside the hospital setting primarily in critical care for pediatric and adult applications. The ability to place and use the Swoop® system in any professional care setting can significantly simplify the care navigation for these patients. Our technology is designed to address structural limitations of conventional MRI, including high cost, complex infrastructure requirements, limited availability, and workflow inefficiencies, by enabling point‐of‐care brain imaging across a broad range of clinical settings. The compact and versatile Swoop® system is designed for use in any professional healthcare setting.
In 2025, in connection with the introduction of our next-generation Swoop® scanner and Optive AITM software, we expanded our commercial focus beyond critical care in the hospitals. Our commercial focus has evolved in that we target customers across multiple healthcare settings in our pipeline, including:
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U.S. hospitals, with a focus on critical care units, emergency departments, and hospital‐based clinics;
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U.S. office‐based neurology practices; and
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International healthcare providers through distributor relationships.
To support a broad set of clinical use cases, we have partnered with leading institutions to collect clinical evidence. The generation of clinical evidence remains a core strategic priority. A peer-reviewed study demonstrated the economic and operational benefits of portable MRI, including reduced time to diagnosis and improved care efficiency. Ongoing and planned studies assess the Swoop® system’s role in emergency department imaging, post-operative imaging, office-based neurology applications, stroke workflows, neurodegenerative screening and monitoring and for patients on extracorporeal membrane oxygenation (ECMO). Additionally, a contrast study is being performed evaluating the feasibility and visualization benefits of gadolinium-enhanced imaging with ULF portable MRI using the Swoop® system in patients with suspected brain lesions. The contrast study is intended to support a future FDA 510(k) submission to expand the Swoop® system’s indicated use to include contrast agents, potentially enabling improved lesion characterization and broader clinical adoption. These studies and data are intended to support commercial adoption, routine utilization, and long-term market adoption and expansion.
We have built our direct commercial infrastructure in the United States and have third-party distributors responsible for commercialization efforts in Canada and select markets in Europe, Asia, Oceania, and the Middle East. 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.
Our wholly-owned subsidiary, Liminal was founded in 2018. In December 2022, we suspended our Liminal program to develop a device to non-invasively measure key vital signs in the brain.
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We were founded in 2014 by Dr. Jonathan Rothberg, a serial entrepreneur who received the Presidential Medal of Technology and Innovation in 2016 for inventing a novel next-generation DNA sequencing method and has founded more than ten healthcare and technology companies, including 454 Life Sciences, Ion Torrent, CuraGen, Butterfly Network, and Quantum-Si. We have raised equity from investments and partnership milestones from leading institutional investors, including GV (formerly Google Ventures), and grants, including the Bill & Melinda Gates Foundation (the “BMGF”).
Our Core Competitive Strengths
We believe that our competitive strengths include the following:
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The image quality generated from our latest generation Swoop® system powered by Optive AITM software provides high quality ULF image with functionality and usability applicable for multiple use cases and sites of care. We launched our first-generation of portable brain MRI system in 2020. Since then, we have been driven by continuous innovation to upgrade and iterate portable AI-powered MRI images ready for mainstream adoption and scale. In mid-2025, we launched our next-generation Swoop® scanner and the Optive AITM software, delivering a step-change in portable MRI image resolution, uniformity and scanner usability. The new scanner and software were commercially rolled out across the hospital and neurology office settings in our pipeline and accelerated Swoop® system adoption by providing sharper images and faster scans for both new and existing Swoop® system customers.
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We have a strong foundation built from over a decade of development, clinical, and early commercialization experience. We believe our early experiences provide a strong foundation and advantage. We have approximately 200 issued patents, over 250,000 images, the first FDA-cleared AI-powered portable brain MRI system clearance, over a dozen subsequent FDA clearances, and numerous published papers to support broad clinical utility. Across multiple brain conditions, we are leveraging this foundation with the launch of our next-generation Swoop® system to execute upon our commercial expansion plans.
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There is a large and growing MRI market, and we have the potential to augment conventional MRI capacity to bring benefit to patients, clinicians and providers around the world. We believe our solution addresses a vast unmet need across the global market by adding a portable, accessible and affordable brain MR system to increase the existing capacity of conventional high-field MRI scanners as imaging rates continue to grow with the aging population and the incidence and prevalence of patients with acute neurological and chronic neurodegenerative conditions. Efficient and readily available MRI scanners deployed in different sites of care become increasingly valuable in multiple healthcare settings across high, middle and low resources countries globally. Our solution is designed to complement conventional MRI and seamlessly integrates into the hospital workflow, by processing orders from the Hospital Information Systems (“HIS”) and allowing users to manage images into their picture archiving and communication system (“PACS”), or directly onto our cloud PACS, which then makes images easily available for diagnostic purposes. To support information security, we have obtained several certifications, including HITRUST CSF® v9.4 Risk-based, 2-year, SOC2 Type 1 and SOC2 Type 2.
We estimate in the United States alone that our total addressable market for Swoop® system device placements is larger than $16 billion. We intend to make MRI available to a broader set of patients in both developed and emerging markets, as well as improve the utilization of MRI scanners through decreased wait times and more efficient patient flow.
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Our innovative technology can potentially improve the quality of care for patients worldwide. We believe our portable, affordable, brain MRI scanner can broaden access to quality care, leading to better brain health. In many cases, other imaging modalities, such as CT scanners, are used due to the lack of availability of MRI scanners or their lower cost profile, even though CT provides lower soft tissue contrast for evaluating abnormalities in the brain. Our portable Swoop® system is significantly more affordable than conventional MRI and CT scanners, helping to make the Swoop® system accessible for hospitals and care centers that are not financially able to acquire a conventional MRI or CT scanner. Compared to CT, MRI has a greater range of soft tissue contrast, depicts anatomy in greater detail, and is more sensitive and specific for abnormalities within the brain itself.
The Swoop® system does not emit ionizing radiation and therefore reduces the risk of cancer that comes with CT imaging. The absence of ionizing radiation can benefit patients with conditions that require frequent follow-up with multiple scans per year, such as pediatric hydrocephalus. In certain circumstances, such as in the management of patients with delirium or altered mental status, familiarity or keeping the surrounding environment as similar as possible can be critical, which we believe makes portable devices like our Swoop® system particularly valuable since patients do not need to move to distant radiology suites for conventional MRI scans. Studies show that 37% of patients report anxiety-related reactions in an isolated room for imaging. With our Swoop® system, we can offer a quieter, calmer and more comfortable experience with the option of a family member or other caregiver being present by the patient’s side during the scanning process.
Our portable Swoop® system also helps avoid the risk of patient injury during transport through the ability to bring the system to the patient. By performing scans for urgent and critically ill patients at the bedside, we can help prevent the adverse incidents that occur with approximately 26–79% of critically ill patients during transport. The Swoop® system can eliminate the labor-intensive and high-risk process of transporting patients on ventilators or connected to other life-sustaining devices, which can be especially valuable in the staff shortage environment that many healthcare institutions continue to experience.
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Our proprietary, disruptive, and revolutionary product is designed with healthcare professionals in mind. We have commercially launched our Swoop® system, a portable AI-powered brain MRI device capable of producing diagnostic quality images at a lower magnetic field strength than conventional MRI scanners. Using ULF magnetic force significantly reduces projectile safety concerns and, therefore, should reduce the length of pre-safety checks typically conducted by healthcare professionals. We designed our product with the physician workflow in mind, reducing the average emergency department time to scan from 27.7 hours required for the conventional MRI process to a median time-to-scan of 2.5 hours with our Swoop® system. Typically, with a reduction in total workflow time, physicians can reduce the time to diagnoses for timely treatment, potentially resulting in improved health outcomes for the patient.
Conventional MRI scanners require specially trained technicians fully dedicated to operating those systems and increase the time and cost related to nurses and porters transporting patients to the MRI unit. Our Swoop® system is designed to simplify the image acquisition process. We have designed our system to be user-friendly and require minimal training to be operated, including a simple user interface accessed through a Hyperfine provided tablet. The Swoop® system’s portability and accessibility at the
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bedside can further allow more time for healthcare professionals to focus on other important activities related to patient care, diagnosis, and treatment.
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Our first-in-its-class product can provide an attractive return on investment for various care settings. We created the Swoop® system not to replace conventional MRI devices but to complement them and enable additional brain MR exams for patients and in settings not traditionally serviced by conventional MRI scanners, such as critical care units, emergency departments, clinics and physicians’ offices. By facilitating imaging in a timely manner by bringing the Swoop® system to the patient, patients can potentially be treated earlier and discharged sooner, potentially leading to increased hospital savings consistent with the growing shift to value-based care.
In a published peer-reviewed study, the Swoop® system delivers measurable hospital cost savings and operational efficiency by enabling bedside MRI in the ICU and emergency department, eliminating the need for patient transport to fixed MRI suites. In a 12 month retrospective analysis, use of the Swoop® system avoided an average of $590 per patient in MR-compatible supplies and reduced MRI wait times by approximately 18 hours, which supports accelerated diagnoses and patient progression through high-cost care settings. By shortening time-to-imaging, we believe the Swoop® system directly addresses two major hospital cost drivers—ICU length of stay and emergency department boarding—while also reducing staff time and transport-related resource use. These workflow efficiencies may translate into tens to hundreds of thousands of dollars in annual cost savings, depending on utilization, which we believe supports a significantly faster ROI compared with traditional MRI, and other capital medical equipment in hospitals. In addition, shifting inpatient imaging to the bedside frees capacity on high-field MRI scanners and improve overall imaging suite economics. Collectively, these benefits demonstrate that the Swoop® system improves imaging access, lowers per-patient costs, and enhances hospital throughput without compromising patient safety, making it a compelling economic adjunct to conventional MRI in multiple care environments.
As healthcare costs continue to rise, we believe our Swoop® system has the potential to allow for significant potential cost reductions that can benefit the entire imaging ecosystem. Our Swoop® system has reduced hardware costs, using modern computational power and deep learning advances. The cost benefits of our Swoop® system are not limited to a customer’s initial purchase of the system. Our customers can benefit by not having to spend on additional cooling, power, and high maintenance expenses typically required throughout the lifetime of conventional MRI scanners. Unlike conventional MRI scanners, the use of the Swoop® system also does not require a specialized radio frequency (RF) room to safely house the MRI scanner, which can result in a lower total cost of installing an MRI and allow flexibility in the use of space for other essential patient care activities.
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Our Swoop® system is strategically positioned to be integrated into the emergency departments, critical care units and hospitals workflows. We are focusing on market expansion and are targeting over 9,600 potential sites of care in the United States alone, including 4,000 critical care units and 5,600 emergency departments. Our portable Swoop® system enables clinicians to take neurological images of critically ill patients in ICUs and of patients presenting to emergency departments with less transfers and shorter wait times with high-quality images produced at a lower magnetic field strength than standard MRI scanners.
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Our Swoop® system has launched in the office setting following the publication of the Intersocietal Accreditation Commission (“IAC”) accreditation standards and completion of the office market pilot. The MRI standards issued by the IAC in November 2024 enabled accredited neurology offices to secure CMS reimbursement for MRI scans using the Swoop® system. The standards do not require MRI technologists to operate the Swoop® system in the office setting. This expands our ability to offer the portable Swoop® system into new sites of care outside the hospital, representing nearly 2,400 potential locations in the United States alone. From late 2024 through mid-2025, we completed an office market pilot which validated the deployment of the portable Swoop® system in outpatient neurology offices, demonstrating that practices could successfully install and operate the system, complete IAC accreditation, integrate with teleradiology and PACS, and obtain CMS and private-payer reimbursement. In mid-2025, we launched into the neurology office market, to drive in-office MRI as a scalable clinical and commercial solution. By bringing advanced MR brain imaging directly to these professional healthcare settings, we allow for significantly enhanced patient access and convenience by enabling MR brain imaging as part of the routine clinic visits.
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Our Optive AITM software is CE Mark and UKCA Mark approved. Since receiving CE Mark and UKCA Mark approvals of our Optive AITM software in August 2025 and subsequent commercial rollout, we believe we are positioned for broader international commercial expansion of the first-generation Swoop® system, bringing cutting-edge brain imaging technology to new global markets.
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Our validated platform and business model allows for potential widespread adoption. Over 250 conference presentations and peer reviewed journal articles, perspectives, case studies, and editorials on the Swoop® system have discussed the potential clinical benefits of portable, ULF MRI for patients with stroke, hydrocephalus, hematoma, multiple sclerosis, headaches, and tumor resection. We generate sales revenue by selling the Swoop® system primarily through one business model, which is ownership accompanied by an annual software, service and support agreement. In this model, the Swoop® system is typically sold with a software, service and support agreement that begins after one year of warranty and is sold initially in either 36- or 60-
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month terms. In certain cases, the Swoop® system is sold without an accompanying service and support agreement. As more healthcare professionals adopt our technology, we anticipate improvements in gross margin due to increased volume, increased average selling prices resulting from annual pricing increases, and the recurring service and support agreements.
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We have a strong, experienced and lean executive leadership team with deep expertise in health technology. We have a world-class management team, including our executive officers and other senior management, with decades of cumulative experience in healthcare and consumer end-markets. Our team is comprised of leaders with deep leadership experience in health technology research and development, manufacturing, and commercialization.
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We have assembled and developed core capabilities, know-how and intellectual property to pursue broader set of ULF opportunities. We have accumulated extensive experience in delivering usable, affordable and safe ULF MRI with diagnostic quality imaging in the brain. Many of the same capabilities, technologies and know-how apply to potential use cases outside of the brain. While we are initially focused on the brain opportunity, we see potential expansion opportunities to develop ULF technology with high clinical and economic impact across multiple anatomies. To accelerate adoption and collaboration in ULF portable brain MRI, we launched PULSE (Portable Ultra-Low-Field Scientific Exchange) in late 2025, a subscription-based platform for users of the Swoop® system. PULSE provides access to proprietary research sequences powered by Optive AITM software, community-developed sequences, and raw imaging data, enabling clinical research, workflow evaluation, and exploration of new imaging applications. The platform is designed to support ongoing innovation and may facilitate expansion of the Swoop® system beyond its current clinical imaging use.
Our Strategies
Our strategies include the following:
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Execute upon our diversified commercial growth strategy. Our current focus is AI-powered portable brain MRI with the Swoop® system and the advancement of our brain MR technology and its proprietary AI-powered software for multiple clinical applications in different sites of care. Our initial commercial focus had been in our beachhead markets inside the hospital for critical care, adult and pediatric patients. We have expanded beyond critical care inside the hospital and now are now focused on multiple sites within the hospital opportunity, neurology office opportunity, and international opportunity.
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The U.S. hospital opportunity centers on deploying the Swoop® system where conventional MRI access is constrained by logistics, staffing, and throughput limitations. The Swoop® system delivers compelling clinical utility across adult and pediatric patients while enabling bedside imaging without patient transport, improving care efficiency and safety. From an economic standpoint, the Swoop® system offers a strong value proposition: scans qualify for existing reimbursement (CPT 70551) in the outpatient setting, published health economic evidence demonstrates meaningful cost savings, and hospitals can achieve breakeven significantly faster than traditional capital equipment. This use of the Swoop® system supports both revenue generation and cost reduction through improved throughput and avoided transport-related expenses. The Swoop® system can be deployed across multiple units within the same institution (such as Adult & Pediatric ICUs, emergency departments, and hospital-based clinics) and there are potential multi-system placements within individual hospitals and larger multi-system placement opportunities across health systems through standardization of care protocols.
The U.S. neurology office opportunity centers on neurology practices that order high volumes of brain MRIs but largely lack on‐site imaging, creating potential delays in clinical decision making, patient loss, and reduced patient satisfaction. In the office setting, the Swoop® system will allow physicians to obtain diagnostic-quality MR brain images within their offices, providing patients with timely and convenient MRI access. The Swoop® system enables in‐office brain imaging with minimal infrastructure, existing reimbursement eligibility (CPT 70551) after site accreditation, allowing practices to capture incremental revenue while improving patient access and experience. With strong clinical evidence and demonstrated economics, neurology offices represent new growth opportunity incremental to the U.S. hospital business.
The international strategy leverages strong clinical portability and hospital‐based demand to expand the Swoop® system adoption outside the United States, supported by a growing distributor network and global reference sites. We believe recent regulatory clearance of the Optive AITM software positions the Swoop® system for broader European commercial expansion, and regulatory clearance in India positions the international business for scalable growth across hospitals, including resource‐constrained and remote settings, over the next several years.
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Focus on supporting customers through implementation programs. We believe the Swoop® system can represent a valuable tool in the screening and monitoring of patients. The Swoop® system is designed to make the user experience as easy as possible through our easy-to-use interface accessed through a Hyperfine-provided tablet. In addition, we have a field team dedicated to support programs, who can train staff and help integrate the Swoop® system into hospital and clinic workflows.
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Demonstrate our commitment to continuous technical innovation and leadership across the care continuum. Our advanced technology has been developed by an internal team of engineers and AI scientists dedicated to continuous innovation. Our pace of AI-powered software iterations allows further improvements of image quality, consistency, and image sequences for the clinical uses of our technology. As the Swoop® system becomes integrated into ICUs and other care workflows and care sites across medical practices, we are dedicated to gaining more insights into our product’s usability and clinical applications. We plan to
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continue developing our technology to expand into new imaging applications to enable us to reach the broader care continuum through diagnosis and treatment.
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Expand clinical validation data and publications. There are numerous conference presentations and peer reviewed journal articles, perspectives, case studies, and editorials on the Swoop® system discussing the clinical benefits of our Swoop® system. Supporting the hospital business are several studies including SAFE-MRI ECMO (Assessing the Safety and Feasibility of bedside portable low-field brain Magnetic Resonance Imaging in patients with ECMO) which was published in the September 2024 Issue of Circulation and HOPE PMR (Portable MRI for Children with Neurological Injury—A Pilot Study using Hydrocephalus as an Index Condition). We have also completed a market adoption study ACTION PMR (ACuTe Ischemic strOke detectioN), which was published in the November 2025 Issue of Stroke: Vascular and Interventional Neurology (SVIN) in which the study results demonstrated the Swoop® system’s ability to identify small strokes rapidly and reliably, reinforcing its clinical value for acute care and emergency settings. Additionally, clinical studies supporting the hospital business include the PRIME study (Portable Rapid Imaging for Medical Emergencies), a clinical study evaluating the Swoop® system for triage and decision-making in emergency departments, and PRISM PMR (PRe- and post-operatIve Study of iMaging with Portable MR), a clinical study evaluating the use of the Swoop® system in the neurosurgical operating room.
Supporting the office business, we ran NEURO PMR (Neurological Evaluation in the Office with Portable MRI) which is multi-center, real-world study evaluating the clinical utility and patient experience of the Swoop® system versus standard-of-care high-field MRI in outpatient neurology clinics. Initial results were presented at the 2026 American Society of Neuroimaging and study results demonstrated 92% concordance with conventional MRI in blinded review and 98% concordance in paired clinical review, while patients were four times more likely to prefer the portable Swoop® system. Furthermore, we have started a utility study CARE PMR (Capturing ARIA Risk Equitably with Portable MR) for the use of the Swoop® system for the monitoring of Alzheimer’s patients for Amyloid related Imaging Abnormalities (“ARIA”).
In January 2026, we initiated Contrast PMR, a prospective, multi‐center clinical study designed to evaluate the feasibility and visualization benefits of gadolinium-enhanced lesions at ULF using the Swoop® system in patients with suspected brain lesions. The study is intended to support a future FDA 510(k) submission to expand the Swoop® system’s intended use to include contrast agents, potentially enabling improved lesion visualization and broader clinical adoption across neurology and inpatient settings.
These studies highlighted the potential of the Swoop® system to expand access to critical diagnostic imaging for acute ischemic stroke and other neurological conditions, providing actionable insights where conventional high-field MRI may not be feasible.
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Expand sales in international markets. We are executing on our international expansion plans by entering into agreements with experienced and accomplished distributors. We have distribution partners covering several countries across Europe, Asia Pacific, and the Middle East, as well as in Canada. With the Swoop® system’s transformative, affordable, and accessible platform, we aim to serve more clinicians and patients needing brain imaging across the globe. The first-generation Swoop® system has received marketing authorization for brain imaging in several countries, including the European Union (CE Mark), the United Kingdom (UKCA Mark), Canada, Australia, New Zealand and India. In December 2025, we received regulatory approval in India from the CDSCO, authorizing commercialization of the Swoop® system throughout India.
Industry and Market
MRI is a non-ionizing radiation risk imaging modality widely used by healthcare professionals across various clinical settings for the medical diagnosis of patients, staging of disease, and continued assessment following treatment. MRI is noninvasive, sometimes eliminates the need for surgical intervention or invasive procedures when used correctly, and offers superior soft tissue contrast resolution compared to other imaging modalities like CT. It is a more sensitive and potentially objective measure of brain tissue and injury. MRI is used to examine central nervous system, musculoskeletal, and other diseases. The prevalence and incidence rates of these diseases continue to increase across the globe. According to a United Nations report, up to one billion people, nearly one in six of the world’s population, suffer from neurological disorders, including Alzheimer’s and Parkinson’s disease, stroke, multiple sclerosis, epilepsy, migraine, brain injuries, and neuro infections, with some 6.8 million dying of these disorders each year.
The aging population and rising prevalence of stroke, neurodegenerative, cardiovascular, and neurological conditions have augmented the demand for MRI. Healthcare professionals and insurers recognize imaging as a cost-effective and non-invasive diagnostic for prevention, early detection and ongoing monitoring. We estimate in the United States alone that our total addressable market for Swoop® system device placements is more than $16 billion. Given the significant patient populations needing diagnostic imaging, we have positioned ourselves in an underpenetrated market with substantial room for growth. While the current imaging market is mainly limited to high-resource countries, we believe our system can help make MRI imaging more accessible in mature and low resource settings globally, leading to an increase in both MRI penetration rates and the size of the overall market opportunity.
Market needs
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Despite MRI’s advantages to diagnose and monitor patients through treatment, access to MRI scanners can be difficult. Numerous challenges are associated with the use of conventional MRI devices:
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High cost: The average cost of new conventional MRI scanners is $1.2 million and could cost as high as $3 million, significantly more than our Swoop® system. Conventional MRI is not readily available in low resource settings. There is wide disparity in the MRI units per inhabitant ratio across the globe, making equity in access to MRI a challenge for healthcare systems in developed and low- and middle-income countries. The Swoop® system has the potential to address equity disparities as a portable and affordable brain imaging system that offers versatility for deployment.
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Complex site requirements and upgrades: Due to the use of strong (1.5−3.0T (Tesla)) magnetic fields in conventional MRI scanners, there are various requirements and restrictions on imaging facilities size, location, and ongoing maintenance, including the need to build a specialized radio frequency room to house the MRI scanner safely.
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Scheduling delays: A high level of coordination is required between the MRI facility and patients scheduled for a conventional MRI scan. Coordination is further complicated with patients who are unstable in critical care and require multiple medical procedures in a timely manner. Conventional MRI devices are not available in the same clinic settings where clinical monitoring and follow up for neurological conditions takes place, requiring additional appointments for patients and potentially delaying assessments.
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Risk of adverse events during transportation: Patients in the ICU are often connected to life-sustaining devices that complicate the transportation to a conventional MRI scanner. According to Glavis et al., the conventional MRI workflow for imaging an ICU patient can take as long as 11.7 hours at their hospital, with other hospitals anecdotally reporting up to 24 hours. Intrahospital transport of patients is associated with cardiovascular and respiratory risks that may limit timely and safe neuroimaging for critically ill patients. Even under the supervision of a well-trained team, adverse events may still occur in 26–79% of critically ill patients during transport. Martin et al. reported that ventilator asynchrony was the most frequent adverse event and put patients at a higher risk for pneumothorax, atelectasis, and ventilator-associated pneumonia. Difficulties occur with hardware, challenges with lifts to move the patient, issues with infusion lines, and a lack of battery life for equipment needed to support the patient. In addition to patient impact, there are expenses associated with each adverse event. According to a study by Mello et al., the average hospital-borne cost of an adverse event is $6,255 (adjusted for inflation).
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Consumption of valuable personnel resources: One of the challenging aspects of transporting an ICU patient is coordinating a specialized team to manage the patient as they move from the ICU to the MRI. Such a team typically includes two to six staff members. With hospitals often being short-staffed, taking staff away from the ICU to assist in imaging a patient could put other patients at risk. Additionally, each patient transport for imaging complicates the ICU workload, creating time-intensive patient care interruptions that require specialized nurses to remove and reattach life-sustaining equipment.
Due to these challenges, the adoption of conventional MRI scanners has been limited across medical settings in the United States and globally, especially in rural locations where many individuals only have access to small clinics. Conventional MRI scanners also include additional costs of establishing an MRI suite, patient support areas, machine installation and servicing, including costly or inaccessible cryogens for cooling, software upgrading, and maintenance that burden hospitals and clinics with limited ongoing funding.
There are significant benefits to diagnosing a disease at multiple sites of care in its early stages, which can reduce the time to treatment and improve the quality of life for those patients. We have taken advantage of technological advances in electronics, computing and AI to develop an MRI device that is not only portable but also uses an ULF 64mT (0.064T) permanent magnet, which is much lower than the 1.5T or higher field strength of conventional MRI scanners, and does not require cryogenic cooling. Our advanced technology allows healthcare professionals to conduct an MRI scan at the patient’s bedside in the hospital or any clinical setting to begin early diagnosis, intervention, and ongoing treatment.
In the neurology office setting, there is a structural imaging gap: neurologists order a high volume of brain MRIs each year, yet the vast majority of private practices lack on-site MRI capability, forcing reliance on external imaging centers and creating delays, friction, and lost control over the patient experience. This disconnect slows clinical decision-making, increases patient drop-off, and limits physicians’ ability to monitor disease progression timely and efficiently. Traditional conventional MRI systems are poorly suited for office settings due to high capital costs, extensive siting requirements, specialized staffing needs, and long payback periods. These barriers make conventional MRI economically and operationally challenging for most neurology practices, particularly small and mid-sized offices. As a result, office‐based neurologists have an unmet need for an imaging solution that is affordable, easy to deploy, and compatible with existing workflows—one that allows them to bring MRI into the practice. Addressing this need enables faster diagnoses, improved patient satisfaction, safer longitudinal monitoring (including repeat imaging without radiation), and the ability to capture imaging revenue under existing reimbursement pathways.
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Globally, according to a 2008 report from the World Health Organization, 90% of the world does not have access to MRI technology, primarily due to socioeconomic factors. Many low-resource countries recognize the benefit of investing in their healthcare infrastructure, and it is expected to cause a spur in growth for the global MRI market. For example, India and China are two of the fastest-growing markets building its healthcare infrastructure in rural areas. The ability of these countries to build the facilities needed to house these large systems and train highly specialized personnel to operate conventional MRI scanners presents a challenge.
Products and Services
Our Swoop® AI- Powered Portable MR Imaging® System
We designed our Swoop® system to address an unmet need in accessible, affordable, portable medical imaging through a unique combination of hardware and AI-powered software services. Our hardware is powered using modern computational power and deep learning advances. Our software is designed to address the traditional ease-of-use and integration challenges often presented by specialized medical technologies. Our system operates from a Wi-Fi-capable tablet and integrates with PACS to enable fast and confident clinical decision-making.
Features
Portable Brain Neuroimaging—FDA-Cleared for MRI of the Brain and Head in Patients of All Ages
Portable brain imaging has only been possible using CT. CT can visualize bones, blood vessels with contrast agents, and hemorrhage well, but is not as sensitive as MRI at imaging the brain’s anatomy. Additionally, CT delivers a significant amount of ionizing radiation. Exposing patients to radiation increases the risk of developing cancer, which limits CT’s use for critically ill patients and makes it particularly hazardous for pediatric patients.
The gold standard for neuroimaging is MRI, which can provide excellent high-resolution images of the soft tissues of the brain without being obscured by the skull. MRI can provide critical insight into brain trauma and disease but historically has not been portable and not easily available at most sites of care. Because of their size, weight, and safety issues, conventional MRI scanners were only available in radiology suites in hospitals, major medical centers, and in outpatient imaging providers, meaning that patients typically must be transported to the MRI scanner.
We have developed a new category of medical imaging, AI-powered portable brain MRI, that is smaller, lighter weight, and lower cost than conventional MRI scanners yet maintains the soft tissue visualization capabilities critical for brain imaging. Since launching our FDA-cleared portable Swoop® system in 2020, brain imaging is now available for patients of all ages at practically any site of patient care in the United States.
Ultra-Low-Field System
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To engineer this new category of portable MRI, we made several significant design changes with respect to conventional MRI, particularly the magnetic field strength. Over the past 40 years, the goal for improving conventional MRI scanners has been to increase the magnetic field strength. In 2017, the FDA cleared the first 7T MRI, after 20 years of development. It was noted that the added field strength allows for better visualization of smaller structures and subtle pathologies that may improve disease diagnosis. We have taken a different approach by developing our Swoop® system to have an ultra-low-field magnet of 0.064T, which enables MRI to be small, portable and safe in multiple sites of care because, unlike conventional MRI scanners, the field strength of the magnet in our system does not require a specialized room to house or use the MRI scanner safely. This field strength and form factor comes from a unique optimization of the magnet size, weight, field uniformity, and patented design of the permanent magnet structure.
There are additional benefits to operating an MRI system with an ultra-low-field magnet. It reduces the risk of ferromagnetic objects becoming projectile and injuring patients or operators, a typical concern with conventional MRI scanners. Furthermore, the radiofrequency pulses used in conventional MRI are responsible for 55% of the FDA-reported adverse events from MRI, causing skin and internal burns in some patients. Operating at 0.064T means using lower energy radiofrequency pulses and significantly reducing associated safety risks.
Motion Correction
Portable MRI at the point of care can provide MRI insights to more patients than previously possible. All MRI scans regularly suffer from quality problems due to patient motion, with approximately 30% of all scans from inpatient or emergency department exams having moderate or severe image quality issues. We have developed software that compensates for subtle motion to improve image quality in the most challenging, and often most in need, patients. We believe that our technology can produce diagnostic scans without requiring the operator to make expert adjustments to the scanning procedure due to typical patient movements.
Noise-Cancellation Technology
Designing an ultra-low-field magnet is not sufficient to enable portable MRI. Portable MRI must also address the electromagnetic interference surrounding us. Electromagnetic interference makes conventional MRI outside of a shielded room unsafe and impossible. Conventional MRI scanners are permanently installed in a special room where the walls, floor, and ceiling are encased in copper or aluminum to provide an environment for conventional MRI machines to operate, in which all man-made and natural electromagnetic interference is prevented from entering. Installation of these shielded rooms typically costs more than $100,000.
We have developed proprietary, patented AI-powered noise-cancellation technology to enable portable MRI. Our technology measures the external electromagnetic interference and subtracts that from the interference that swamps the MRI signals.
Delivery of Multiple Sequences with Tissue Contrasts
MRI can provide images with different soft tissue contrasts through various sequences that can highlight a range of pathologies. These contrasts are standard in conventional MRI and allow for the differentiation of various tissue types aiding in establishing the diagnosis. Our Swoop® system generates images with contrast weightings with which physicians are most familiar, and which are most clinically useful for the target use cases: T1, T2, FLAIR, and DWI with apparent diffusion coefficient maps.
Image Quality
We deliver diagnostic-quality images to healthcare professionals. The images from our Swoop® system are higher in contrast resolution than other portable medical brain imaging systems, such as portable CT scanners. Our portable Swoop® system also delivers images that are diagnostic and clinically relevant in many use cases when high field MRI is not available. Our MRI signal is produced at 0.064T compared to 1.5T or higher produced by conventional, fixed MRI scanners. We believe that the Swoop® system provides the potential to improve the quality of care for patients who have limited or no access to conventional MRI.
Controlled by an Easy-to-Use Wireless Tablet
As we seek to reach new markets and users with our Swoop® system, we have sought to make the operation of the device as intuitive and easy to use as possible. We believe it is important to consider usability when significantly changing how a medical device is used, specifically in MRI, where conventionally, the operator is required to have several years of training. We believe this is particularly important when used in hospital environments, including with unstable patients in the critical care and emergency situations such as stroke, where speed is essential.
The interfaces to the Swoop® system are simple, intuitive buttons, joystick controls to drive the system, and a familiar tablet controller for image acquisition and viewing. The user interface provided on the tablet offers a playlist of protocols based on the use case that can be started, stopped, and rearranged as needed. In addition to being easy to use and the consequential acceleration of
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hospital workflows that can result, our system provides standardized images across all placement sites due to our uniform manufacturing specifications and a consistent set of sequences that individual operators do not customize. Conventional MRI scanners are operated by highly-trained technologists and can have variations in image resolution and contrast weighting across sites due to institutional policies and radiologist preferences. We believe the standardization of images across scanners and sites will significantly benefit the ability of radiologists and other healthcare professionals to read our images efficiently and ultimately build a data repository of images that can serve as training sets to further improve our image quality and the Swoop® system user experience.
Integration with Picture Archiving and Communication System and Secure Image Upload to the Cloud
Similar to other medical devices in hospitals, we designed our Swoop® system to seamlessly integrate with the hospital informational technology (“IT”) infrastructure, such that scans can be ordered easily and sent to PACS to be read by a radiologist. For applications where access to such infrastructure is unavailable, we also offer a secure cloud based PACS where healthcare professionals, including teleradiology service providers, can view images from anywhere in the world. We believe the combination of portable MRI, where scans can be obtained outside the conventional MRI suite, and teleradiology can significantly improve patient care and increase access.
Design
Location Flexibility
Despite the weight of our Swoop® system being 1,400 pounds, its powered drive system means operators can move the system around the hospital with minimal effort. The Swoop® system can be moved from bed-to-bed and easily positioned in tight spaces because it turns on the spot with a zero-turn radius.
Open Layout Designed to Improve the Patient Experience and Potentially Reduce Patient Anxiety
For an MRI scan in a traditional setting, a patient arrives at the radiology department of a hospital and typically enters through a door covered with radiation warnings and other hazard symbols. The patient then proceeds to a waiting room where they undergo a lengthy safety questionnaire and are asked to remove all jewelry and clothes and put on a hospital gown. Wait times vary from a half hour to several hours before the patient enters the console room and is led through a large metal door into the RF screen room by themselves. Typical conventional MRI scanners are long tubes where the patient is positioned on a motorized bed, and RF coils are attached around the patient who has been instructed to lay still. The MRI technician uses the motorized bed to push the patient into the long tube of the large superconducting magnet, leaves the room, closes the metal door to the scan room, and tells the patient over an intercom that the scan is about to start. The patient experiences an extremely loud environment throughout the scanning experience. The conventional MRI procedure is often a daunting experience for the patient that can cause significant anxiety, especially for pediatric patients who are separated from their families during this time.
Unlike conventional MRI, our Swoop® system is entirely contained in a system that is less than 59 inches tall and 34 inches wide and is designed to scan patients in their beds. Parents, family, or caregivers can be close to the patient as they are scanned, with just their head in the transparent head RF coil. The system is quiet enough to allow constant verbal contact with the patient, which can create a considerably less distressing experience for the patient compared to that of a conventional MRI scanner.
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Powered Using a Standard Wall Outlet
Transportable throughout any hospital environment, our Swoop® system plugs into a standard wall outlet (100-230 VAC, 50/60 Hz, 15A) and uses less than 900W of electricity. This is achieved with low-power electronics, including efficient power supplies and power amplifiers, coupled with a zero-power consumption permanent magnet. Our Swoop® system does not require many of the components of conventional MRI, including the liquid helium used in conventional MRI superconducting magnets or the associated safety and supporting infrastructure, the chilled water-cooling systems for the power electronics and gradient coils, and the room air conditioning needed to extract the heat generated in the separate electronics machine room, or the special 480 V, 3-phase, 200A power supply.
Services
Our Swoop® system service and support program includes support and technical assistance with hardware and software issues. A combination of remote and onsite support in collaboration with onsite technical staff can better solve software issues. In addition, it also includes our Hyperfine Image Viewer, a cloud PACS that users can use to upload images for storage purposes. The service and support program also grants access to our future software upgrades. Recent upgrades include our FDA-cleared image quality improvements that enhances the quality of images in the presence of subtle motion and other potential future upgrades designed to improve the patient workflow and diagnosis.
Our People
Legacy Hyperfine was founded in 2014 by Dr. Jonathan Rothberg. Our mission is to provide accessible and affordable imaging through MRI to revolutionize healthcare for people around the world.
As of February 15, 2026, we had 102 employees, all of whom were full-time employees and of whom 24 work in sales, marketing, and commercial support, 56 work in research, development, clinical, technical assistance, supply chain, operations and logistics and 22 work in general and administrative capacities. As of February 15, 2026, 99 of our employees were located in the United States and, internationally, three were located in the United Kingdom and Europe. None of our employees are represented by a labor union or are subject to a collective bargaining agreement.
Dr. Rothberg and our business have been recognized for leadership. Legacy Hyperfine was founded in 2014 by Dr. Jonathan Rothberg, a serial entrepreneur that received the Presidential Medal of Technology and Innovation in 2016 for inventing a novel next-generation DNA sequencing method and has founded more than 10 healthcare and technology companies, including 454 Life Sciences, Ion Torrent, CuraGen, Butterfly Network and Quantum-Si.
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Information About Our Executive Officers and Directors
The following persons were our executive officers and directors as of February 15, 2026:
Name Position
Executive Officers
Maria Sainz President, Chief Executive Officer and Director
Thomas Teisseyre, Ph.D. Chief Operating Officer
Directors
John Dahldorf Chief Financial Officer, Q’Apel Medical, Inc
Ruth Fattori Independent Consultant
Governance Practices, Sustainability, and Human Capital
Our board of directors is committed to robust corporate governance practices, risk oversight, stockholder rights, corporate sustainability, ethics and compliance in order to protect the long-term interests of our company, stockholders and the patients we serve. Our board of directors adopted corporate governance principles applicable to us, including responsible oversight and management of the Company, effective controls and processes, compliance with SEC and Nasdaq Stock Market rules and regulations, maintaining an engaged board of directors and a board structure that recognizes the importance of compliance, appropriate compensation practices, and succession planning, among other matters.
We are committed to delivering products and solutions that build a healthier and more sustainable world for this and future generations. We recognize the importance of taking measures to reduce our environmental footprint. The Swoop® system is a low-footprint MR-based device that can be deployed in a variety of settings including low- and middle-income countries. The Swoop® system is powered from a standard electrical outlet and does not require any special construction at site of care like conventional MRI requires.
We believe that our people are the reason for our success and we have organized ourselves to maximize productivity and performance. Critical to achieving our strategic goals is our ability to build and retain an exceptional team in which each member plays a unique and important role. We recognize that maintaining an engaged and high performing workforce and a connection with the communities we serve are critical to our success. The comradery and community are at the core of who we are as a company and are integral components of our human capital management strategy. We are inspired by each other and the possibilities of what we can achieve together. We understand that in order to drive innovation, we must continuously improve our human capital management strategies and find ways to foster engagement and growth within our organization. To this end, below are some of our initiatives:
Professional Development Programs and Opportunities: Our greatest asset is our employees, and we aspire to provide them with opportunities so they can continue to grow and excel in their functions and our company. Professional growth of our employees leads to engagement, development and allows us to leverage opportunities so we can hire and promote key talent from within. Through development planning, we strive for employees at all levels to focus on strengthening the skills required in their current role and potentially their next role. We are focused on building a culture of continuous coaching, feedback and open communication between managers and their direct reports throughout the entire year. We provide managers and employees with training on how to conduct effective forward-looking performance conversations and to set effective goals that are realistic, measurable, attainable, relevant and timebound.
Compensation, Equity and Benefits: We have designed a broad-based compensation program that aims to attract, retain and motivate our employees to deliver sustainable long-term value. We seek to deliver performance-driven, market competitive reward opportunities commensurate with company and individual performance. Many of our employees receive equity grants and cash bonuses in addition to base salaries and our benefits package. We believe that providing employees with an ownership interest in our company further strengthens the level of employee engagement. Furthermore, equity awards help align the interests of our employees with the long-term interests of our stockholders. We also offer employees a health insurance package.
We maintain and will continue to improve our corporate governance practices and strengthen our sustainability efforts and human capital management strategies.
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Marketing, Sales and Pricing
Marketing
Our marketing efforts are focused on accelerating awareness of our products and capabilities in order to create a strong reputation with clinicians and healthcare administrators. Our go-to-market approach features a targeted sales organization complemented by an array of promotional activities including digital marketing, lead generation, multi-channel campaigns, clinical marketing, media coverage, tradeshow exhibition, advertising, and live product demonstration. We principally target ICUs, emergency departments, neurology offices, and comprehensive and primary stroke accredited facilities.
We recognize the role of education in accelerating clinical adoption of our products across the patient care pathway, including healthcare professionals who currently may not themselves be primary users of MRI technology. To support adoption of our product and in addition to our simplified product interface, we have built a team of clinically trained support specialists to guide and coach clinicians and their staff on the unique features of our device and on the specific clinical application of our technologies.
Sales and Pricing
The Swoop® system is commercially available in the United States, Canada, United Kingdom, certain European and Middle Eastern markets, Australia, New Zealand and India. We have built our direct commercial infrastructure in the United States and sell our products in other countries through distributors.
We are primarily commercializing our device through one business model, which is ownership accompanied by an annual software, service and support agreement. In this model, the Swoop® system is typically sold with a software, service and support agreement that begins after a one-year warranty and is sold initially in either 36- or 60-month terms. In certain cases, the Swoop® system is sold without an accompanying service and support agreement. We offer our customers payment term options that include, among others, either an upfront payment for the Swoop® system and annual payment for service and support or an annual payment option for the term of their agreement. The annual payment option contains a portion of interest for the Swoop® system over the term.
To help ensure our customers receive the highest level of customer service, we plan to continue to sell directly to customers and provide ongoing customer support. However, as we expand internationally subject to regulatory authorization in those countries, we will continue to leverage distributors to sell our product depending on the commercial strategy for each country assessed on a country-by-country basis. Through our business model, we aim to provide portable MRI systems that are more affordable than conventional MRI systems and achieve our vision of increasing access to MRI systems at different sites of care worldwide.
Suppliers and Manufacturing
Our Swoop® system is built using both custom-made and off-the-shelf components supplied by outside manufacturers and vendors located in the United States, Europe and Asia. One key custom-made component in our Swoop® system is the magnet, which is manufactured by a single source supplier in Europe. The majority of the other components for the Swoop® system are off-the-shelf or made using standard processes.
We purchase some of our components and materials used in manufacturing, including magnets, field programmable gate arrays (“FPGAs”), central processing units (“CPUs”) and molded plastics, from single sources. Although we believe that alternative sources of these components and materials would be available, it would take time to identify and validate replacement components, which could negatively affect our ability to supply the Swoop® system on a timely basis. We cannot give assurances that any alternative supplier would be able to recreate the manufacturing processes currently in use. To mitigate this risk, we typically carry a significant inventory of critical components. We are also working with our Swoop® system device manufacturer, Benchmark, to add an additional magnet supplier to the manufacturing process to mitigate the risk to supply of our magnets by the current use of a single supplier.
All of our Swoop® system devices are manufactured, tested, shipped and supported by Benchmark from its facilities in Nashua, NH. We believe that this manufacturing strategy is efficient and conserves capital. However, in the event it becomes necessary to utilize a different contract manufacturer for our Swoop® system products, we would experience additional costs, delays and difficulties in doing so, and our business could be harmed.
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Key Agreements
Manufacture and Supply Agreement with Benchmark Electronics, Inc.
In October 2018, Legacy Hyperfine entered into a Manufacture and Supply Agreement with Benchmark (the “MSA”). Under the MSA, Benchmark agreed to manufacture our products pursuant to binding purchase orders. Each month, we have agreed to provide Benchmark with a binding purchase order for a period specified by the MSA, as well as a non-binding forecast for each month within such period. If we do not provide the monthly purchase order and forecast update, then the first forecast month of the then-current forecast becomes binding so that a rolling binding commitment to purchase product for the specified period is maintained. The parties have agreed to meet periodically regarding any minimum order quantities of components under the MSA. We also have certain inventory related obligations, including the obligation to purchase excess and obsolete components from Benchmark. Excess components are determined based upon the amount of component inventory that exceeds the build plan for the specified period discussed above. We would be required to purchase such excess inventory and be credited back against future purchases of finished products as the inventory of components is reduced to the amount needed to meet the rolling build plan. Obsolete materials are immediately invoiced once identified.
Under the terms of the MSA, we granted Benchmark a non-exclusive, non-transferable, revocable, fully-paid, royalty-free license, without the right to sublicense, to use our technology solely to manufacture our products. The MSA provides that we will own any right, title and interest in any improvements or modifications to our technology made in the course of performance of Benchmark’s obligations under the MSA. We and Benchmark also agreed to indemnify each other against certain third-party claims.
Following the MSA’s initial three-year term, the MSA renews automatically for additional two-year terms unless either party gives 180 days’ prior written notice before the end of the then-current term to the other party electing not to renew the agreement. The MSA or any purchase order under the MSA may be terminated by either party for convenience upon 90 days’ prior written notice to the other party. The MSA may also be terminated by either party by written notice upon the occurrence of (i) a breach by the other party under the agreement which is not cured within 30 days after written notice by the terminating party, (ii) the other party becomes insolvent, dissolves, liquidates or ceases to conduct business or (iii) the occurrence of payment-related breaches. Benchmark may also terminate the agreement upon the filing of any petition against us under bankruptcy or similar laws, where such petition is not vacated within 10 days via court order.
Competition
Several large companies, such as General Electric, Siemens, Philips, Hologic, Fuji, Toshiba, Canon and Hitachi currently dominate the medical imaging market. We expect that the existing market participants will remain key players in the future.
As a general matter, we view competition on two levels:
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Computed tomography (“CT”), particularly non-contrast computed tomography, both portable and/or at the point of care setting. CT systems, while providing valuable information about hemorrhage and fractures, provide less soft tissue differentiation to inform clinical decisions when compared to MRI. As such, the Swoop® system is well positioned to augment critical care and emergency departments with existing CT capabilities; and
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Portable ULF brain MRI systems with similar attributes are currently in development. Neuro42 announced receipt of FDA clearance of its portable MRI system in February 2024 with future plans to commercialize. In addition, there are several companies currently in the process of developing this technology, including, for example, DeepSpin and Multiwave.
We view high-field MRI more as a complementary rather than a competitive technology. Particularly in the United States, we see substantial interest among our customers for the implementation of Swoop® system to augment traditional, high-field MRI workflows and increase throughput of high-field scanners.
U.S. Reimbursement, Coverage, Coding, and Payment
In the United States, healthcare providers that purchase medical equipment such as the Swoop® system generally rely on government and private third-party payors for reimbursement for the healthcare treatment and services they provide. Examples of these types of payors include Medicare, Medicaid, private health insurance plans, and health maintenance organizations, which reimburse all or a portion of the cost of treatment, as well as related healthcare services. Reimbursement involves three components: coverage, coding and payment.
There are currently no National Coverage Determinations in place under Medicare for diagnoses provided on a Swoop® system. Medicare coverage criteria for diagnoses performed on a Swoop® system is outlined in Local Coverage Determinations or, in the absence of a formal policy, diagnoses is covered as long as it is considered reasonable and necessary. Commercial payor policies vary
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with respect to coverage for diagnoses including many of the indications covered by Medicare, though coverage criteria may differ. The codes that are used to report diagnoses delivery for the hospital outpatient department are Current Procedural Terminology (“CPT”) codes 70551, MRI of the brain, including brain stem, without contrast material. Payment rates under the Medicare fee-for-service methodology are established based on cost data submitted by hospitals. CMS pays separately for ancillary procedures. Payment for diagnoses with Swoop® system are also available in the freestanding center setting.
The new accreditation standards issued by the IAC, a leading CMS approved accrediting body, in November 2024 include ULF MRI technology and allow for accredited neurology offices to secure CMS reimbursement for MRI scans using the Swoop® system.
The federal government reviews and adjusts rates annually, and from time to time considers various Medicare and other healthcare reform proposals that could significantly affect both private and public reimbursement for healthcare services, including diagnostic examination, in hospitals and free‐standing clinics.
Intellectual Property
Protection of our intellectual property is a strategic priority for our business. We rely on a combination of patents, trademarks, trade secrets and other intellectual property rights protections and contractual restrictions to protect our proprietary technologies.
The patents owned by us are generally directed to the architecture of MRI systems and related technology. We have developed a portfolio of issued patents and pending patent applications directed to commercial products and technologies for potential development. We believe that our intellectual property is a core strength of our business, and our strategy includes the continued development of our patent portfolio.
Our Swoop® System and Related Technology
As of February 15, 2026, we held a portfolio of 197 U.S. and foreign patents, and 160 U.S. and foreign patent applications. These issued patents and patent applications cover various aspects of our research and development efforts, as well as commercial aspects of our Swoop® system. Our patent estate covers various components and techniques incorporated into, and generally directed to our Swoop® system and its development, including: magnet design and manufacturing, electronics and circuitry, mechanical aspects, safety features, noise compensation, imaging, analysis software, and various other aspects of MRI systems. These pending and issued patents have expected expiration dates ranging between 2035 and 2043. We cannot be certain that any patents will be issued from any of our pending patent applications, nor can we be certain that any of our existing patents or any patents that may be granted to us in the future will provide us with protection.
License Agreements
We have entered into licenses in the ordinary course of business relating to our technologies or other intellectual property rights or assets.
Government Regulation
Diagnostic and therapeutic medical devices like those we develop and distribute are subject to regulation by numerous regulatory bodies, including the FDA and comparable international regulatory agencies. These agencies require developers of medical devices to comply with applicable laws and regulations governing the development, testing, manufacturing, packaging, labeling, marketing and distribution of medical devices. Devices are generally subject to varying levels of regulatory control, the most comprehensive of which requires that a clinical evaluation program be conducted before a device can be approved for marketing and commercial distribution. In addition, healthcare regulatory bodies in the United States and around the world impose a range of requirements related to paying for medical devices and the procedures in which they are used, including laws intended to prevent fraud, waste, and abuse of healthcare dollars.
U.S. Laws and Regulations
In the United States, medical devices are subject to extensive regulation at the federal level by the FDA under the Federal Food, Drug, and Cosmetic Act (“FDCA”) and its implementing regulations. The laws and regulations govern, among other things, medical device design and development, nonclinical and clinical testing, pre-market clearance, authorization or approval, establishment registration and product listing, product manufacturing, product packaging and labeling, product storage, advertising and promotion, product distribution, recalls and field actions, servicing and post-market clinical surveillance. A number of U.S. states also impose licensing and compliance regimes on companies that manufacture or distribute prescription devices into or within the state.
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Some of our products are also subject to the Radiation Control provisions, administered by the FDA, which imposes performance standards and record keeping, reporting, product testing and product labeling requirements for electronic products that emit radiation, such as magnetic resonance imaging systems.
In addition, the commercialization and use of our devices in the United States is subject to regulation by the U.S. Department of Health and Human Services (“HHS”) and state agencies responsible for reimbursement and regulation of payment for healthcare items and services. Federal laws and regulations apply primarily in connection with government payer programs such as the Medicare and Medicaid programs, but state laws apply more broadly, encompassing healthcare items and services covered by private payers. At the state and federal level, the government’s interest is in regulating the quality and cost of healthcare and protecting the independent clinical judgment of licensed healthcare providers.
The Federal Trade Commission (“FTC”) also oversees the advertising and promotion of our products pursuant to broad authority to police deceptive advertising for goods or services within the United States. Under the Federal Trade Commission Act, the FTC is empowered, among other things, to (a) prevent unfair methods of competition and unfair or deceptive acts or practices in or affecting commerce; (b) seek monetary redress and other relief for conduct injurious to consumers; and (c) gather and compile information and conduct investigations relating to the organization, business, practices, and management of entities engaged in commerce. In the context of performance claims for products such as our goods and services, compliance with the FTC Act includes ensuring that there is scientific data to substantiate the claims being made, that the advertising is neither false nor misleading, and that any user or expert testimonials or endorsements we or our agents disseminate related to the goods or services comply with applicable disclosure rules and other regulatory requirements. In addition, with respect to our commercial products and any future products that are marketed as clinical products, FDA’s regulations applicable to medical device products prohibit them from being promoted for uses not within the scope of a given product’s authorized intended use(s), among other promotional and labeling rules applicable to products subject to the FDCA.
Further, medical device systems that include wireless radio frequency transmitters and/or receivers are subject to equipment authorization requirements in the United States. The Federal Communications Commission (“FCC”) requires advance clearance of all radio frequency devices before they can be sold or marketed in the United States. These clearances ensure that the proposed products comply with FCC radio frequency emission and power level standards and will not cause interference.
FDA Regulation of Medical Devices
Medical devices must undergo pre-market review by and receive clearance, authorization, or approval from the FDA prior to commercialization, unless the device is of a type exempted from such review by statute, regulation, or an FDA exercise of enforcement discretion. The FDA classifies medical devices into three classes based on risk. Regulatory control increases from Class I (lowest risk) to Class III (highest risk). The FDA generally must clear or approve the commercial sale of most new medical devices that fall within product categories designated as Class II and III. Commercial sales of most Class II and III medical devices within the United States must be preceded either by pre-market notification and FDA clearance pursuant to Section 510(k) of the FDCA (Class II) or by the granting of a pre-market approval (“PMA”) (Class III), after a pre-market application is submitted. Both 510(k) notifications and PMA applications must be submitted to FDA with significant user fees, although reduced fees for small businesses are available. Class I devices are generally exempt from pre-market review and notification, as are some moderate-risk Class II devices. Manufacturers of all classes of devices must comply with FDA’s quality management system regulation, establishment registration, medical device listing, labeling requirements, and medical device reporting (“MDR”) regulations, which are collectively referred to as medical device general controls. Class II devices may also be subject to special controls such as performance standards, post-market surveillance, FDA guidelines, or particularized labeling. Some Class I and Class II devices may be exempted by regulation from the requirement of compliance with substantially all of the quality management system.
510(k) Clearance Pathway
A 510(k) pre-market notification must contain information sufficient to demonstrate that the new device is substantially equivalent to a predictive device. A predicate device is a legally marketed device that is not subject to a PMA, meaning, (i) a device that was legally marketed prior to May 28, 1976 (“preamendments device”) and for which a PMA is not required, (ii) a device that has been reclassified from Class III to Class II or I, or (iii) a device that was found substantially equivalent through the 510(k) process. To obtain 510(k) clearance for a non-exempt Class II device, the FDA must determine that the device is substantially equivalent to such a predicate device based on the information submitted by the product developer in the pre-market notification. The FDA’s 510(k) clearance process generally takes from three to 12 months from the date the application is submitted, but it may take significantly longer if FDA has significant questions or needs more information about the new device or its manufacturing or quality controls.
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As part of the 510(k) notification process for Class II devices that have an existing classification regulation available for purposes of the regulatory filing, the FDA typically requires the following:
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Development of comprehensive product description and indications for use.
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Completion of extensive nonclinical tests and/or animal studies, performed in accordance with the FDA’s good laboratory practice (“GLP”) regulations, as well as testing to demonstrate that the device meets applicable performance standards or other testing requirements established by FDA through regulations or device-specific guidance.
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Comprehensive review of one or more predicate devices and development of data supporting the new product’s substantial equivalence to such predicate devices.
Assuming successful completion of all required testing, a detailed 510(k) notification is submitted to the FDA requesting clearance to market the product. This premarket notification includes all relevant data from pertinent nonclinical studies and clinical trials (if applicable), together with detailed information relating to the product’s proposed labeling, and other relevant documentation. The FDA evaluates all 510(k) submissions prior to filing for substantive review based on specific acceptance criteria and may issue a refuse-to-accept notification if the submission is deficient with respect to any of the established criteria. If after substantive review the FDA determines that the applicant’s device is substantially equivalent to the identified predicate device(s), the agency will issue a 510(k) clearance letter that authorizes commercial marketing of the device for one or more specific indications for use. If the FDA determines that the applicant’s device is not substantially equivalent to the predicate device(s), the agency will issue a not-substantially-equivalent letter stating that the new device may not be commercially distributed.
After a new medical device receives 510(k) clearance from the FDA, any modification that could significantly affect its safety or effectiveness, or that would constitute a major change in its intended use, requires a new 510(k) clearance or could require the submission of a PMA application. The FDA requires each manufacturer to make the determination of whether a device modification requires a new 510(k) notification or PMA application in the first instance, but the FDA may review any such decision. If the FDA disagrees with a manufacturer’s decision not to seek a new 510(k) clearance or PMA for a particular change, the FDA may retroactively require the manufacturer to submit a 510(k) pre-market notification or a PMA application. The FDA may also require the manufacturer to cease U.S. marketing and/or recall any distributed units of the modified device until 510(k) clearance or a PMA for the modification is obtained.
De Novo Classification
If a previously unclassified new medical device does not qualify for the 510(k) pre-market notification process because no predicate device to which it is substantially equivalent can be identified, the device is automatically classified into Class III. However, if such a device would be considered low or moderate risk (in other words, it does not rise to the level of requiring a PMA), it may be eligible for the De Novo classification process. The De Novo classification process allows a device developer to request that the novel medical device be reclassified as either a Class I or Class II device, rather than having it regulated as a high-risk Class III device subject to the PMA requirements. If the manufacturer seeks reclassification into Class II, the classification request must include a draft proposal for special controls that are necessary to provide a reasonable assurance of the safety and effectiveness of the medical device.
Under the FDCA, the FDA is required to classify a device within 120 days following receipt of the De Novo classification request from an applicant; however, the FDA attempts to issue a decision on the majority of De Novo requests within 150 days of receipt. De Novo classification requests are subject to user fees, unless a specific exemption applies.
As with the 510(k) pre-market notification process described above, any modification to a device authorized through the De Novo process that could significantly affect the safety or effectiveness of such device, or that would constitute a major change in its intended use, requires a new 510(k) clearance or could require the submission of a PMA application.
As an alternative to the De Novo classification process, a company could also file a reclassification petition seeking to change the automatic Class III designation of a novel post-amendment device under Section 513(f)(3) of the FDCA. FDA can also initiate reclassification of an existing device type on its own initiative. In December 2018, FDA issued a final rule to clarify the administrative process through which the FDA reclassifies a medical device. To reclassify a device under Section 513(e) of the FDCA, the FDA must first publish a proposed reclassification order that includes a summary of the valid scientific evidence that supports the reclassification; convene a device classification panel meeting; and consider comments to the public docket before it then publishes a final reclassification order in the Federal Register.
Pre-market Approval Pathway
Our point-of-care MRI systems have been classified and are regulated as Class II devices, although future products that we develop may be classified as Class III devices. Products classified by FDA as Class III generally require marketing approval via the PMA process. A PMA application must be supported by valid scientific evidence, which typically requires extensive data, including
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technical, nonclinical, clinical, manufacturing and labeling data, to demonstrate to the FDA’s satisfaction the safety and efficacy of the device for its intended use(s). A PMA application also must include a complete description of the device and its components, a detailed description of the methods, facilities and controls used to manufacture the device, and proposed labeling. After a PMA application is submitted and found to be sufficiently complete, it is considered “filed” and the FDA begins an in-depth review of the submitted information. During this substantive review period, the FDA may request additional information or clarification of information already provided. Also, during the review period, an advisory panel of experts from outside the FDA may be convened to review and evaluate the application and provide recommendations to the FDA. In addition, the FDA generally will conduct a pre-approval inspection of the manufacturing facility to evaluate compliance with the applicable quality management system regulations, which requires manufacturers to implement and follow design, testing, control, documentation and other quality assurance procedures.
FDA review of a PMA application is required to be completed within 180 days of the application’s filing date although the process generally takes between one and three years and may take significantly longer. The FDA can delay, limit or deny approval of a PMA application for many reasons, including:
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the product may not be safe or effective for its intended use(s) to the FDA’s satisfaction;
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the data from the applicant’s nonclinical studies and clinical trials may be insufficient to support approval;
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the manufacturing process or facilities that the applicant uses may not meet applicable requirements; and
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changes in FDA approval policies or adoption of new regulations may require additional data to demonstrate the safety or effectiveness of the device.
If FDA evaluations of the PMA application and the applicable manufacturing facilities are favorable, the FDA will either issue an approval letter, which authorizes commercial marketing of the device for specific indications for use, or an approvable letter, which usually contains a number of conditions which must be met in order to secure final approval of the PMA application. When and if the conditions of the approvable letter have been fulfilled to the satisfaction of the FDA, the agency will issue a PMA approval letter authorizing commercial marketing of a device, subject to the conditions of approval and the limitations established in the approval letter.
If the FDA’s evaluation of the PMA application or the applicable manufacturing facilities is not favorable, the FDA will deny approval of the PMA or issue a not approvable letter. The FDA may also determine that additional clinical trials are necessary, in which case the PMA approval may be delayed for several months or years while the trials are conducted, and data is submitted in an amendment to the PMA. The PMA process can be expensive, uncertain and lengthy. PMA approval may also be granted with post-approval requirements such as the need for additional clinical trials or patient follow-up for an indefinite period of time.
New PMA applications or PMA supplements may be required for modifications to the manufacturing process, labeling, device specifications, materials or design of a device that is approved through the PMA process. PMA supplements often require submission of the same type of information as an initial PMA application, except that the supplement is limited to information needed to support any changes from the device covered by the approved PMA application and may or may not require as extensive clinical data or the convening of an advisory panel.
Predetermined Change Control Plans for Medical Devices
As part of the Consolidated Appropriations Act for 2023, Congress amended the FDCA to give FDA the authority to authorize certain potential, future changes to a medical device in a predetermined change control plan (“PCCP”) as part of a PMA application or 510(k) premarket notification for a medical device, including a device that incorporates artificial intelligence or machine learning technology. A PCCP must describe the specific proposed modifications and provide sufficient information to demonstrate that the device will remain safe and effective for its intended use, and in the case of a 510(k) cleared device that the device will remain substantially equivalent to the predicate device, if the applicant implements the proposed modifications to the device as described in the PCCP. If FDA authorizes a PCCP for a device, any modification to the device within the authorized scope of the PCCP will not require the submission and authorization of a new PMA application, PMA supplement, or new 510(k) premarket notification. However, modifications to a previously authorized PCCP will generally require submission of a PMA supplement or new 510(k) premarket notification, depending on the original authorization pathway for the device, with the modified PCCP.
Clinical Investigations Using Devices in Development
Clinical trials are almost always required to support a PMA application and are sometimes required for a De Novo classification request or 510(k) pre-market notification. In order to conduct a clinical investigation involving human subjects for the purpose of demonstrating the safety and effectiveness of a medical device, an investigator acting on behalf of the company must, among other things, apply for and obtain institutional review board (“IRB”) approval of the proposed investigation. In addition, if the clinical trial involves a “significant risk” (as defined by the FDA) to human health, the company sponsoring the trial (referred to as the “sponsor”)
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must also submit and obtain FDA approval of an investigational device exemption (“IDE”) application. An IDE application must be supported by appropriate data, such as animal and laboratory testing results, showing that it is safe to test the device in humans and that the testing protocol is scientifically sound. The IDE application must be approved in advance by the FDA for a specified number of trial participants, unless the product is deemed a non-significant risk device and eligible for abbreviated IDE requirements. Generally, clinical trials for a significant risk device may begin once the IDE application is approved by the FDA and the trial protocol and informed consent are approved by a duly-appointed IRB for each site. FDA’s IDE regulations govern investigational device labeling, prohibit promotion, and specify an array of good clinical practice (“GCP”) requirements, which include, among other things, recordkeeping, reporting and monitoring responsibilities of trial sponsors and study investigators. Clinical trials must further comply with the FDA’s regulations for IRB approval and for informed consent and other human subject protections, all of which are considered part of GCP requirements. Required records and reports are subject to inspection by the FDA. The results of clinical testing may be unfavorable or, even if the intended safety and efficacy success criteria are achieved, may not be considered sufficient for the FDA to grant approval or clearance of a product.
Information about certain clinical trials, including details of the protocol and eventually results, also must be submitted within specific timeframes to the National Institutes of Health (“NIH”), for public dissemination on the ClinicalTrials.gov data registry. Information related to the product, patient population, phase of investigation, trial sites and other aspects of the clinical trial is made public as part of the registration process. Sponsors are obligated to disclose the results of their clinical trials after completion. Disclosure of results can be delayed in some cases for up to two years after the date of completion of the trial. Failure to timely register a covered clinical trial or to submit results as provided for in the law can give rise to civil monetary penalties and also prevent the non-compliant party from receiving future grant funds from the federal government. The NIH Final Rule on ClinicalTrials.gov registration and reporting requirements became effective in 2017, and both NIH and FDA have brought enforcement actions against non-compliant sponsors.
The commencement or completion of any of our clinical trials may be delayed or halted, or be inadequate to support approval of a PMA application (or FDA’s grant of a De Novo classification request or clearance of a 510(k) notification, as applicable), for numerous reasons, including, but not limited to, the following:
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the FDA, the IRB(s), or other regulatory authorities do not approve a clinical trial protocol or a clinical trial, or place a clinical trial on hold;
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participants do not enroll in clinical trials at the expected rate;
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participants do not comply with trial protocols;
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participant follow-up is not at the expected rate;
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patients experience adverse side effects;
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participants die during a clinical trial, even though their death may not be related to the investigational products;
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IRBs and third-party clinical investigators may delay or reject the sponsor’s trial protocol;
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third-party clinical investigators decline to participate in a trial or do not perform a trial on the sponsor’s anticipated schedule or consistent with the clinical trial protocol, GCPs or other FDA requirements;
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the sponsor or third-party organizations do not perform data collection, monitoring and analysis in a timely or accurate manner or consistent with the clinical trial protocol or investigational or statistical plans;
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third-party clinical investigators have significant financial interests related to the sponsor or the trial that the FDA deems to make the trial results unreliable, or the sponsor or investigators fail to disclose such interests;
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unfavorable regulatory inspections of the sponsor’s clinical trial sites or manufacturing facilities, which may, among other things, require the sponsor to undertake corrective action or suspend or terminate the sponsor’s clinical trials;
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changes in governmental regulations or administrative actions applicable to the sponsor’s trial protocols;
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the interim or final results of the clinical trial are inconclusive or unfavorable as to safety or effectiveness; and
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the FDA concludes that the results from the sponsor’s trial and/or trial design are inadequate to demonstrate safety and effectiveness of the product.
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In the Consolidated Appropriations Act for 2023, Congress amended the FDCA to require the sponsor of any pivotal clinical trial to support marketing authorization of a medical device to develop a diversity action plan for such trial, and if submission of an IDE application is required, to submit such diversity action plan to the FDA. The action plan must include the sponsor’s diversity goals for enrollment, as well as a rationale for the goals and a description of how the sponsor will meet them. The FDA may grant a waiver for some or all of the requirements for a diversity action plan. If the FDA objects to a sponsor’s diversity action plan and requires the sponsor to amend the plan or take other actions, it may delay trial initiation.
Ongoing Post-Market Regulatory Requirements and FDA Enforcement
Our Swoop® system received initial 510(k) clearance for brain imaging from FDA in 2020. In July 2024, we received 510(k) clearance from the FDA of the ninth-generation AI-powered Swoop® system software. In May 2025, we received 510(k) clearance from the FDA for our tenth-generation AI-powered software, Optive AITM software, in late May 2025, we received 510(k) clearance for our next-generation Swoop® scanner powered by Optive AITM software, and in December 2025 we received 510(k) clearance for our eleventh-generation AI-powered software. In October 2024 and February 2025, we received CE Mark and UKCA Mark approval for the ninth generation of software, respectively. In August 2025, we received both CE Mark and UKCA Mark approvals for our Optive AITM software. In December 2025, we received regulatory approval in India from the CDSCO, authorizing commercialization of the first-generation Swoop® system throughout India. Outside of the United States, the first-generation Swoop® system has received marketing authorization for brain imaging in several countries, including the European Union (CE Mark), the United Kingdom (UKCA Mark), Canada, Australia, New Zealand and India.
In the United States, after a medical device is authorized for marketing and placed in commercial distribution (or, for 510(k)-exempt products, placed into commerce without first obtaining FDA clearance or approval), numerous regulatory requirements apply. These general controls that must be met for all device classes include:
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establishment registration and device listing;
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quality system management regulations;
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labeling regulations, which govern the mandatory elements of the device labels and packaging (including Unique Device Identifier markings for certain categories of products);
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FDA’s prohibitions against the promotion of products for uncleared, unapproved or “off-label” uses and other requirements related to promotional activities;
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the MDR regulations, which require that manufacturers report to the FDA if a device may have caused or contributed to a death or serious injury or malfunctioned in a way that would likely cause or contribute to a death or serious injury if the malfunction were to recur;
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voluntary and mandatory device recalls to address problems when a device is defective and/or could be a risk to health;
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correction and removal reporting regulations, which require that manufacturers report to the FDA field corrections and product recalls or removals if undertaken to reduce a risk to health posed by the device or to remedy a violation of the FDCA that may present a risk to health; and
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post-market surveillance regulations, which apply to certain Class II or III devices when necessary to protect the public health or to provide additional safety and effectiveness data for the device.
FDA’s MDR requirements also extend to healthcare facilities that use medical devices in providing care to patients, or “device user facilities,” which include hospitals, ambulatory surgical facilities, nursing homes, outpatient diagnostic facilities, or outpatient treatment facilities, but not physician’s offices. A device user facility must report any device-related death to both the FDA and the device manufacturer, or any device-related serious injury to the manufacturer (or, if the manufacturer is unknown, to the FDA) within 10 days of the event. Device user facilities are not required to report device malfunctions that would likely cause or contribute to death or serious injury if the malfunction were to recur but may voluntarily report such malfunctions through MedWatch, the FDA’s Safety Information and Adverse Event Reporting Program.
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To ensure compliance with regulatory requirements, medical device manufacturers are subject to market surveillance and periodic, pre-scheduled and unannounced inspections by the FDA and certain state authorities. Failure to comply with applicable regulatory requirements can result in enforcement action by the FDA, which may lead to any of the following sanctions:
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Warning Letters or Untitled Letters that require corrective action;
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fines and civil penalties;
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unanticipated expenditures;
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delays in approving/clearing or refusal to approve/clear any of our future products;
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FDA refusal to issue certificates to foreign governments needed to export our products for sale in other countries;
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suspension or withdrawal of FDA approval or clearance (as may be applicable);
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product recall or seizure;
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partial suspension or total shutdown of production;
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operating restrictions;
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injunctions or consent decrees; and
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civil or criminal prosecution.
We and any of our contract manufacturers, and some suppliers of components or device accessories, are required to manufacture medical device products in compliance with current good manufacturing practice requirements set forth in the quality management system rules, unless explicitly exempted by regulation. The FDA’s quality management system regulations require manufacturers to implement, maintain and comply with written procedures for the design, manufacture, packaging, labeling, storage, installation and servicing of marketed devices, and includes extensive requirements with respect to quality management and organization, device design, buildings, equipment, purchase and handling of components or services, production and process controls, packaging and labeling controls, device evaluation, distribution, installation, complaint handling, servicing, and record keeping. Prior to February 2, 2026, such rules were known as the Quality System Regulation (“QSR”). However, on February 2, 2024, the FDA issued a new final rule called the Quality Management System Regulation (“QMSR”) to harmonize the FDA’s medical device quality management system regulations with the International Organization for Standardization standard for device quality management systems (ISO 13485:2016). The effective date for the QMSR final rule was February 2, 2026.
The FDA evaluates compliance with the quality management system requirements through periodic pre-scheduled or unannounced inspections that may include registered manufacturing facilities of our manufacturer. Following such inspections, the FDA may issue reports known as Forms FDA 483 or Notices of Inspectional Observations, which list instances where the FDA investigator believes the manufacturer has failed to comply with applicable regulations and/or procedures. If the observations are sufficiently serious or the manufacturer fails to respond appropriately, the FDA may issue Warning Letters, which are notices of intended enforcement actions against the manufacturer. For less serious violations that may not rise to the level of regulatory significance, the agency may issue Untitled Letters. The FDA may take more significant administrative or legal action if a manufacturer continues to be in substantial noncompliance with applicable regulations.
For example, if the FDA believes we or any of our contract manufacturers or regulated suppliers are not in compliance with these requirements and patients are being subjected to serious risks, it can shut down manufacturing operations, require recalls of our medical device products, refuse to approve new marketing applications, initiate legal proceedings to detain or seize products, enjoin future violations, or assess civil and criminal penalties against us or our officers or other employees. Any such action by the FDA would have a material adverse effect on our business. We may be unable to comply with all applicable FDA regulations.
U.S. Fraud and Abuse Laws and Other Compliance Requirements
Successfully commercializing a medical device or technology depends not on only FDA authorization, but also on broad health insurance or third-party payor coverage. Government and private payors institute coverage criteria to ensure the appropriate utilization of products and services and to control costs. Limited third-party payor coverage for a technology or procedure may limit adoption and commercial viability, while broader coverage supports optimal market uptake. Favorable coverage decisions by government payors like Medicare or Medicaid are critical because private payors typically follow the government’s lead regarding reimbursement. However, manufacturers whose technology is reimbursed by government payors are subject to various U.S. federal and state laws
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pertaining to healthcare fraud and abuse. These laws can be implicated by inappropriate sales and marketing arrangements with healthcare providers. Many commonly accepted commercial practices are illegal in the healthcare industry and violations of these laws are punishable by criminal and civil sanctions, including, in some instances, exclusion from participation in U.S. federal and state healthcare programs, including Medicare and Medicaid.
Anti-kickback Laws. The federal Anti-Kickback Statute prohibits persons from knowingly and willfully soliciting, receiving, offering or providing remuneration directly or indirectly to induce either the referral of an individual, or the furnishing, recommending, or arranging of a good or service, for which payment may be made under a government healthcare program such as Medicare and Medicaid. The definition of “remuneration” has been broadly interpreted to include anything of value, including such items as gifts, discounts, the furnishing of supplies or equipment, credit arrangements, waiver of payments, and providing anything at less than its fair market value. The Office of the Inspector General for the U.S. Department of Health and Human Services, has issued regulations, commonly known as safe harbors, which set forth certain provisions that, if satisfied in their entirety, will assure healthcare providers and other parties that they will not be prosecuted under the federal Anti-Kickback Statute. The failure of a transaction or arrangement to fit precisely within one or more safe harbors does not necessarily mean that it is illegal or that prosecution will be pursued. However, conduct and business arrangements that do not fully satisfy each applicable safe harbor element may result in increased scrutiny by government enforcement authorities or invite litigation by private citizens under federal whistleblower laws. The Anti-Kickback law is broadly interpreted and aggressively enforced with the result that beneficial commercial arrangements can be criminalized in the healthcare industry because of the Anti-Kickback law.
The penalties for violating the federal Anti-Kickback Statute include imprisonment for up to 10 years, fines of up to $100,000 per violation and possible exclusion from government healthcare programs such as Medicare and Medicaid. Many states have adopted prohibitions similar to the federal Anti-Kickback Statute, some of which apply to the referral of patients for healthcare services reimbursed by any source, not only by the government programs such as Medicare and Medicaid.
Federal False Claims Act. The federal False Claims Act prohibits knowingly presenting, or causing to be presented, a false or fraudulent claim for payment or approval by a federal healthcare program, knowingly making or using, or causing to be made or used, a false statement or record to obtain payment from the federal government, or avoiding, decreasing or concealing an obligation to pay money to the federal government. When an entity is determined to have violated the False Claims Act, it must pay three times the actual damages sustained by the government, plus mandatory per-claim civil penalties and attorneys’ fees. Violation of the False Claims Act also can result in exclusion from government healthcare programs. Suits filed under the False Claims Act, known as “qui tam” actions, can be brought by any individual on behalf of the government and such individuals (known as “relators” or, more commonly, as “whistleblowers”) may share in any amounts paid by the entity to the government in fines or settlement. In addition, certain states have enacted laws modeled after the federal False Claims Act. Qui tam actions have increased significantly in recent years, causing greater numbers of healthcare companies to have to defend false claim actions, even before the validity of the claim is established and even if the government decides not to intervene in the lawsuit. Healthcare companies may decide to agree to large settlements with the government and/or whistleblowers to avoid the cost and negative publicity associated with litigation. In addition, the Patient Protection and Affordable Care Act of 2010 amended federal law to provide that a violation of the federal Anti-Kickback Statute constitutes a false or fraudulent claim for purposes of the federal civil False Claims Act. Criminal prosecution is possible for knowingly making or presenting a false or fictitious or fraudulent claim to the federal government.
Various states have enacted false claims laws analogous to the False Claims Act. Some of these state laws apply where a claim is submitted to any commercial payor, and not merely a government healthcare program, and some authorize private citizens to bring suit on the state’s behalf.
Federal Physician Self-Referral Law. The Federal Physician Self-Referral Law, also referred to as the Stark Law, prohibits a physician (or an immediate family member of a physician) who has a financial relationship with an entity from referring patients to that entity for certain designated health services, including durable medical equipment and supplies, payable by Medicare, unless an exception applies. The Stark Law also prohibits such an entity from presenting or causing to be presented a claim to the Medicare program for such designated health services provided pursuant to a prohibited referral, and provides that certain collections related to any such claims must be refunded in a timely manner. Exceptions to the Stark Law include, among other things, exceptions for certain financial relationships, including both ownership and compensation arrangements. The Stark Law is a strict liability statute: to the extent that the statute is implicated and an exception does not apply, the statute is violated. In addition to the Stark Law, many states have implemented similar physician self-referral prohibitions that may extend to Medicaid, third-party payors, and self-pay patients. Violations of the Stark Law must be reported and unauthorized claims must be refunded to Medicare in order to avoid potential liability under the federal False Claims Act for avoiding a known obligation to return identified overpayments. Violations of the Stark Law can also form the basis for exclusion from participation in federal and state healthcare programs.
Civil Monetary Penalties Law. The Civil Monetary Penalties Law (“CMPL”) authorizes the imposition of substantial civil money penalties against an entity that engages in certain prohibited activities including but not limited to violations of the Stark Law or Anti-Kickback Statute, knowing submission of a false or fraudulent claim, employment of an excluded individual, and the provision or
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offer of anything of value to a Medicare or Medicaid beneficiary that the transferring party knows or should know is likely to influence beneficiary selection of a particular provider for which payment may be made in whole or part by a government healthcare program, unless an exception applies. Sanctions for violations of the CMPL include exclusion from participation in government healthcare programs, substantial fines, and payment of up to three times the amount billed, depending upon the nature of the offense.
State Analogs of Federal Fraud and Abuse Laws. Many U.S. states have their own laws intended to protect against fraud and abuse in the healthcare industry and more broadly. In some cases, these laws prohibit or regulate additional conduct beyond what federal law affects. Penalties for violating these laws can range from substantial fines to criminal sanctions.
HIPAA. The Health Insurance Portability and Accountability Act of 1996 and implementing regulations (“HIPAA”), created two new federal crimes: healthcare fraud and false statements relating to healthcare matters. The healthcare fraud statute prohibits knowingly and willfully executing a scheme to defraud any healthcare benefit program, including private payors. A violation of this statute is a felony and may result in fines, imprisonment or exclusion from government healthcare programs. The false statements statute prohibits knowingly and willfully falsifying, concealing or covering up a material fact or making any materially false, fictitious or fraudulent statement in connection with the delivery of or payment for healthcare benefits, items or services.
FCPA and Other Anti-Bribery and Anti-Corruption Laws. The U.S. Foreign Corrupt Practices Act (“FCPA”) prohibits U.S. corporations and their representatives from offering, promising, authorizing or making payments to any foreign government official, government staff member, political party or political candidate in an attempt to obtain or retain business abroad. The scope of the FCPA would include interactions with certain healthcare professionals or organizations in many countries. Our present and future business has been and will continue to be subject to various other U.S. and foreign laws, rules and/or regulations.
Physician Payments Sunshine Act. Manufacturers of U.S. FDA-regulated devices reimbursable by government healthcare programs are subject to the Physician Payments Sunshine Act, which requires manufacturers to track and annually report certain payments and other transfers of value made to U.S.-licensed physicians, certain advanced non-physician healthcare practitioners, or U.S. teaching hospitals. As a manufacturer of U.S. FDA-regulated devices reimbursable by government healthcare programs, we are subject to this law. We are also required to report certain ownership interests held by physicians and their immediate family members. The law authorizes significant monetary penalties for violations, depending on the circumstances, and payments reported also have the potential to draw scrutiny on payments to and relationships with physicians, which may have implications under the Anti-Kickback Statute, Stark Law and other healthcare laws.
Similar to the federal law, certain states also have adopted marketing and/or transparency laws relevant to device manufacturers, some of which are broader in scope. Some state laws require medical device companies to comply with the relevant industry’s voluntary compliance guidelines and the relevant compliance guidance promulgated by the federal government in addition to requiring device manufacturers to report information related to payments to physicians and other healthcare providers or marketing expenditures. The need to build and maintain a robust compliance program with different compliance and/or reporting requirements increases the possibility that a healthcare company may violate one or more of the requirements, resulting in fines and penalties.
U.S. and European Data Security and Data Privacy Laws
HIPAA’s administrative simplification provisions established comprehensive federal standards for the privacy and security of health information. In 2009, Congress enacted Subtitle D of the Health Information Technology for Economic and Clinical Health Act, or HITECH, provisions of the American Recovery and Reinvestment Act of 2009, which expanded and strengthened HIPAA, created new targets for enforcement, imposed new penalties for noncompliance and established new breach notification requirements. HIPAA applies to health plans, healthcare clearing houses, and healthcare providers that conduct certain healthcare transactions electronically, which are referred to collectively as “Covered Entities”, as well as individuals or entities that perform services for Covered Entities involving the use, or disclosure of, individually identifiable health information or protected health information (“PHI”) under HIPAA. Such service providers are called “Business Associates.” Under HIPAA, as amended by the HITECH Act, HHS has issued regulations to protect the privacy and security of PHI used or disclosed by Covered Entities and Business Associates. HIPAA also regulates and standardizes the codes, formats and identifiers used in certain healthcare transactions and standardization of identifiers for health plans and providers, for example insurance billing. We are a Business Associate of our Covered Entity Customers in connection with the use of data and images to train AI algorithms as well as the provision of product maintenance and support services. Accordingly, we execute and must comply with HIPAA Business Associate Agreements and with HIPAA regulations applicable to Business Associates. Any non-compliance with HIPAA and HITECH could result in penalties and could adversely impact our business.
The HIPAA security standards require the adoption of administrative, physical, and technical safeguards and the adoption of written security policies and procedures to maintain the security of protected health information.
The HIPAA privacy regulations address the privacy of PHI by limiting the use and release of such information. They also set forth certain rights that an individual has with respect to his or her PHI maintained by a Covered Entity, including the right to access or
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amend certain records containing PHI, request an accounting of disclosures of PHI or to request restrictions on the use or disclosure of PHI. Proposed modifications to the privacy regulations were published in January 2021 with a public comment period that ended in May 2021. The content of the final rules has not yet been issued but may result in changes to HIPAA that could impact us and our business. The HIPAA breach notification regulations impose certain reporting requirements on Covered Entities and their Business Associates in the event of a breach of PHI.
Significant civil and criminal fines and other penalties may be imposed for violating HIPAA directly, and in connection with acts or omissions of any agents, including a downstream Business Associate. Civil penalties are adjusted for inflation on an annual basis and can exceed one million dollars per year for failure to comply with a HIPAA requirement. A single breach incident can violate multiple requirements. Additionally, a person who knowingly obtains or discloses PHI in violation of HIPAA may face criminal penalties (including fines and imprisonment), which increase if the wrongful conduct involves false pretenses or the intent to sell, transfer or use PHI for commercial advantage, personal gain or malicious harm. Covered Entities are also subject to enforcement by state Attorneys General who were given authority to enforce HIPAA.
Although HIPAA does not create a private right of action allowing individuals to file suit against us in civil court for violations of HIPAA, its standards have been used as the basis for duty of care cases in state civil suits such as those for negligence or recklessness in the misuse or breach of PHI.
Even when HIPAA does not apply, according to the FTC, failing to take appropriate steps to keep consumers’ personal information secure could constitute unfair acts or practices in or affecting commerce in violation of Section 5(a) of the Federal Trade Commission Act. The FTC expects a company’s data security measures to be reasonable and appropriate in light of the sensitivity and volume of consumer information it holds, the size and complexity of its business, and the cost of available tools to improve security and reduce vulnerabilities. Individually identifiable health information is considered sensitive data that merits stronger safeguards. The FTC and states' Attorneys General have also brought enforcement actions and prosecuted some data breach cases as unfair and/or deceptive acts or practices under the FTC Act and comparable state laws.
The HIPAA privacy and security regulations establish a uniform federal "floor" and do not preempt state laws that are more stringent or provide individuals with greater rights with respect to the privacy or security of, and access to, their records containing PHI. These laws overlap with HIPAA and may differ from each other in significant ways and may not have the same effect, thus complicating compliance efforts. Failure to comply with these laws, where applicable, can result in the imposition of significant civil and/or criminal penalties and private litigation. The State of California, for example, has implemented comprehensive laws and regulations concerning health information and other personally identifiable information. The California Confidentiality of Medical Information Act (CMIA) imposes restrictive requirements regulating the use and disclosure of health information and other personally identifiable information. Separately, the California Consumer Privacy Act of 2018 (the CCPA) went into effect January 1, 2020. The CCPA, among other things, creates new data privacy obligations for covered businesses and provides new privacy rights to California residents, including the right to opt out of certain disclosures of their information. It also creates individual privacy rights for California consumers and increases the privacy and security obligations of entities handling certain personal information. The CCPA provides for civil penalties for violations, as well as a private right of action for data breaches, which may result in increased privacy and information security enforcement in California. Although the law includes limited exceptions, including for PHI maintained by a Covered Entity or Business Associate under HIPAA and medical information maintained by healthcare providers under the CMIA, it may still regulate or impact our processing of personal information depending on the context. Further, the California Privacy Rights Act (CPRA) went into effect January 1, 2023, amending the CCPA. The CPRA imposes additional data protection obligations on covered businesses, including additional consumer rights processes, limitations on data uses, new audit requirements for higher risk data, and opt outs for certain uses of sensitive data, and the CPRA expands the application of the CCPA to personal information of our California-based employees. It also created a new regulatory entity, the California Privacy Protection Agency, which is authorized to issue substantive regulations under the CPRA and in which may spearhead increased privacy and information security oversight and enforcement in California. Many other states have enacted their own omnibus consumer privacy laws similar to the CCPA or have continued to deliberate and introduce similar legislation, all of which increases the complexity of compliance and the risk of failures to comply.
In dealing with health information for the development of our technology or for commercial purposes, we are directly or indirectly affected by HIPAA and other federal and state-imposed health information privacy and security laws, including consumer protection laws and regulations, because these laws govern the collection, dissemination, use, access to, confidentiality and security of patient health information and regulate the ability of our customers and research collaborators to share health information with us. For example, Washington state recently enacted the “My Health My Data” Act which regulates a broad category called “consumer health data,” defined as “personal information that is linked or reasonably linkable to a consumer and that identifies a consumer’s past, present, or future physical or mental health.” Notably, the “My Health My Data” Act contains a private right of action, which is expected to increase litigation. In addition, Congress and some states are considering new laws and regulations that further protect the privacy and security of medical records or medical information. We must also identify and comply with all applicable state laws for the protection of personal information with respect to employee information or other personal information that we collect.
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With the recent increase in publicity regarding data breaches resulting in improper dissemination of consumer information, all fifty states have passed laws regulating the actions that a business must take if it experiences a data breach, as defined by state law, including prompt disclosure within a specified amount of time to affected individuals. In addition to data breach notification laws, some states have enacted statutes and rules requiring businesses to reasonably protect certain types of personal information they hold or to otherwise comply with certain specified data security requirements for personal information. Congress has also been considering similar federal legislation relating to data privacy and data protection.
In the European Union, increasingly stringent data protection and privacy rules have and will continue to have substantial impact on the use of personal and patient data across the healthcare industry. The EU General Data Protection Regulation, (“GDPR”), which took effect in May 2018, applies across the European Union and broader European Economic Area (“EEA”) and includes, among other things, a requirement for prompt notice of data breaches to data subjects and supervisory authorities in certain circumstances and significant fines for non-compliance. The GDPR establishes fines and penalties that reach up to 20 million euros, or up to 4% of total global turnover of the preceding fiscal year, whichever is higher. The GDPR sets out a number of requirements that must be complied with when handling the personal data of such EEA-based data subjects including: providing expanded disclosures about how their personal data will be used; higher standards for organizations to demonstrate that they have obtained valid consent or have another legal basis in place to justify their data processing activities; the obligation to appoint data protection officers in certain circumstances; rights for individuals to be “forgotten” and rights to data portability; rights to submit data access requests; the principal of accountability and demonstrating compliance through policies, procedures, training and audits; and a mandatory data breach regime. In particular, medical or health data, genetic data and biometric data where the latter is used to uniquely identify an individual are all classified as “special category” data under the GDPR and are afforded greater protection and require additional compliance measures. Noncompliance could result in the imposition of fines, penalties, data lockup or orders to stop noncompliant activities. We may be subject to the GDPR if we undertake operations in the EEA, offer products or services to individuals in the EEA or monitor the behavior of individuals within the EEA. Our research activities in the EEA currently implicate the GDPR and if we undertake commercial operations in the EEA, offer products or services to individuals in the EEA, or monitor the behavior of individuals within the EEA, we will have additional compliance obligations.