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DEBT | 3 Months Ended
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Mar. 31, 2026
Debt Disclosure [Abstract] |
DEBT | 9. DEBT On March 18, 2026 (the “Closing Date”), the Company entered into a Loan and Security Agreement (the “Loan Agreement”) with Horizon Technology Finance Corporation (the “Lender”), as lender and collateral agent, providing for a senior secured term loan facility with an aggregate principal amount of up to $40,000. On the Closing Date, the Company borrowed $15,000. The remaining $25,000 may be borrowed prior to December 31, 2027, subject to the satisfaction of certain conditions set forth in the Loan Agreement. As of March 31, 2026, no additional amounts had been borrowed under the Loan Agreement. Borrowings under the Loan Agreement bear interest at a variable rate equal to the prime rate plus 4.25%, with the prime rate subject to a floor of 6.50%, resulting in a minimum interest rate of 10.75%. The effective interest rate was 15.94% as of March 31, 2026. Interes t is payable monthly in arrears. The term loan is payable on an interest-only basis for a period of 48 months from the Closing Date. Thereafter, principal and interest are payable in equal monthly installments through the maturity date of March 18, 2031. If certain performance milestones as specified in the Loan Agreement are satisfied, the Company may extend the interest-only period through the maturity date. The Company may prepay the term loan in full, subject to a repayment fee of 1%-3%. The Company paid a commitment fee of $400 in connection with the execution of the Loan Agreement, which was reflected as a debt discount and presented as a reduction of the carrying amount of the term loan. Upon repayment in full of the term loan, the Company is required to pay a final payment fee equal to 5.0% of the aggregate original principal amount borrowed. Interest expense related to the term loan includes stated interest, the amortization of debt issuance costs and debt discount, and the accretion of the final payment fee, each of which is recognized using the effective interest method over the contractual term of the loan. The obligations under the Loan Agreement are guaranteed by the Company's wholly owned subsidiaries, Hyperfine Operations, Inc. and Liminal Sciences, Inc., and are secured by substantially all of the Company's and the guarantors' assets, subject to customary exceptions, including that intellectual property is excluded from the collateral at closing and until the first funding of any additional loan tranche following the Closing Date. The Loan Agreement contains customary affirmative and negative covenants, including restrictions on indebtedness, liens, asset dispositions, investments and dividends. As of March 31, 2026, the Company was in compliance with all applicable covenants. In connection with the Loan Agreement, on the Closing Date the Company executed and delivered to the Lender (i) warrants to purchase up to an aggregate of 562,500 shares of the Company's Class A common stock at an exercise price of $1.20 per share (the “Initial Warrants”), which are immediately exercisable, and (ii) additional warrants to purchase up to an aggregate of 520,835 shares of Class A common stock at an exercise price of $1.20 per share (the “Additional Warrants”). The Additional Warrants will become exercisable only if and when the Company draws additional loan tranches under the Loan Agreement. All of these warrants expire seven years from the Closing Date. The Initial Warrants were evaluated and classified as equity. Proceeds received at closing under the Loan Agreement were allocated between the term loan and the Initial Warrants using the relative fair value method. Accordingly, the relative fair value of the Initial Warrants at issuance of $545 was recorded to additional paid-in capital, with a corresponding amount recorded as a debt discount that reduces the carrying amount of the term loan. The debt discount is amortized to interest expense over the term of the loan using the effective interest method. Iss uance costs incurred in connection with the Loan Agreement were allocated between the debt and equity components in proportion to the allocation of proceeds; the portion allocable to the equity-classified warrants of $50 was recorded as a reduction of additional paid-in capital. Upon issuance, the Initial Warrants were recorded at their relative fair value using the Black-Scholes option-pricing model and the following assumptions: no dividend yield, expected volatility of 87.5%, risk free rate of 4.05%, and expected term of 7 years, equal to the life of the warrant. The net carrying amount of the term loan was as follows:
|  | As of March 31, 2026 |
Principal |  | $ | 15,000 |
Add: accrued final payment fee |  |  | 6 |
Less: unamortized debt discount |  |  | (1,883 | )
Long-term debt, net |  | $ | 13,123 |
Current portion |  | $ | — |
Long-term portion |  | $ | 13,123 |

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- Definition The entire disclosure for information about short-term and long-term debt arrangements, which includes amounts of borrowings under each line of credit, note payable, commercial paper issue, bonds indenture, debenture issue, own-share lending arrangements and any other contractual agreement to repay funds, and about the underlying arrangements, rationale for a classification as long-term, including repayment terms, interest rates, collateral provided, restrictions on use of assets and activities, whether or not in compliance with debt covenants, and other matters important to users of the financial statements, such as the effects of refinancing and noncompliance with debt covenants. + References Reference 1: http://www.xbrl.org/2003/role/disclosureRef -Topic 815 -SubTopic 10 -Name Accounting Standards Codification -Section 50 -Paragraph 8A -Publisher FASB -URI https://asc.fasb.org/1943274/2147480434/815-10-50-8A Reference 2: http://www.xbrl.org/2003/role/disclosureRef 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