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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
SCHEDULE 14A INFORMATION

Proxy Statement Pursuant to Section 14(a) of
the

Securities Exchange Act of 1934

(Amendment No.)

Filed by the Registrant  ☑                            Filed by a Party other than the Registrant  ☐

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Filed by a Party other than the Registrant
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Preliminary Proxy Statement
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☐Confidential, for Use of the Commission Only (as permitted by Rule14a-6(e)(2))
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Definitive Proxy Statement
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Definitive Additional Materials
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Soliciting Material Pursuant to §240.14a-12under §240.14a-12

Helius Medical Technologies, Inc.

(Name of Registrant as Specified In Its Charter)

(Name of Person(s) Filing Proxy Statement if Other Than the Registrant)

Payment of Filing Fee (Check the appropriate box)

HELIUS MEDICAL TECHNOLOGIES, INC.
(Name of Registrant as Specified In Its Charter)
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Aggregate number of securities to which transaction applies:

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HELIUS MEDICAL TECHNOLOGIES, INC.

642 Newtown Yardley Road, Suite 100

Newtown, Pennsylvania 18940

NOTICETABLE OF ANNUAL MEETING OF STOCKHOLDERSCONTENTS


November 30, 2020
To Be Held On June 10, 2020

Dear Stockholder:

You are cordially invited to attend the Annual Meetingour Stockholders:

A special meeting of Stockholders ofHELIUS MEDICAL TECHNOLOGIES, INC., a Delaware corporation (the “Company”). The meetingstockholders will be held on Wednesday, June 10,Monday, December 28, 2020, at 10:00 a.m. local time. Eastern Time to conduct the following items of business:
Proposal 1 – To approve an amendment to our Certificate of Incorporation to effect a reverse split of our outstanding Class A common stock at a ratio in the range of 1-for-5 to 1-for-35 to be determined at the discretion of our Board of Directors, whereby each outstanding 5 to 35 shares would be combined, converted and changed into 1 share of our Class A common stock, to enable the Company to comply with the Nasdaq Stock Market’s continued listing requirements; and
Proposal 2 – To authorize one or more adjournments of the special meeting to solicit additional proxies in the event there are insufficient votes to approve Proposal 1 described above.
Our Board of Directors unanimously recommends that you vote FOR Proposals 1 and 2.
Due to concerns regarding theCOVID-19 outbreak and to assist in protecting the health and well-being of our shareholdersstockholders and employees, this year’s Annual Meetingthe special meeting of stockholders will be helda completely virtual meeting conducted via the internet. Shareholderslive webcast. You will be able to listen,attend the special meeting online, vote electronically and asksubmit your questions regardless of location viaduring the Internet at http://www.viewproxy.com/heliusmedical/2020/vmspecial meeting by using the event passcode provided after registering for the virtual meeting at http://www.viewproxy.com/heliusmedical/2020.visiting www.virtualshareholdermeeting.com/HSDT2020SM. You will not be able to attend the Annual Meetingspecial meeting in person. The Annual Meeting is being held
Even if you are planning on attending the special meeting online, please promptly submit your proxy vote via the Internet, by telephone, or by completing, dating, signing and returning the enclosed proxy card or voting instruction card, so your shares will be represented at the special meeting. Instructions on voting your shares are on the proxy materials you received for the special meeting. Even if you plan to attend the special meeting online, it is strongly recommended you vote before the special meeting date to ensure that your shares will be represented if you are unable to virtually attend.
Details regarding admission to the virtual special meeting and the business to be conducted at the special meeting are more fully described in the accompanying Notice of Special Meeting of Stockholders and proxy statement.
Only holders of our Class A common stock at the close of business on November 19, 2020, the record date, are entitled to receive this notice and to attend and vote at the special meeting and any adjournment or postponement thereof.
Your vote is important. Whether or not you plan to attend the special meeting online, please submit your proxy vote as soon as possible so that your shares can be voted at our special meeting in accordance with your instructions. If you attend the meeting, you may revoke your proxy in accordance with the procedures set forth in the proxy statement and vote in person.
Thank you for your continued support of Helius Medical Technologies.
Sincerely,

Dane C. Andreeff
Interim President and Chief Executive Officer

TABLE OF CONTENTS


HELIUS MEDICAL TECHNOLOGIES, INC.
642 Newtown Yardley Road, Suite 100
Newtown, Pennsylvania 18940
NOTICE OF SPECIAL MEETING OF STOCKHOLDERS TO BE HELD ON DECEMBER 28, 2020
Notice is hereby given that a special meeting of stockholders of Helius Medical Technologies, Inc. (the “Company” or “Helius”) will be held on Monday, December 28, 2020, at 10:00 a.m. Eastern Time, as a virtual meeting at www.virtualshareholdermeeting.com/HSDT2020SM. At the special meeting of stockholders or any adjournment or postponement thereof (the “Special Meeting”), you will be asked to consider and vote upon the following purposes:

1.    To elect the Board’s seven nominees for director.

2.    To ratify the selection by the Audit Committee of the Board of Directors of BDO USA, LLP as the independent registered public accounting firm of the Company for its fiscal year ending December 31, 2020.

3.proposals:

Proposal 1 – To approve an amendment to the Company’s Articlesour Certificate of Incorporation to effect at the option of the Board of Directors, a reverse stock split of the Company’sour outstanding Class A common stock at a ratio ranging fromfive-for-one (5:1)in the range of 1-for-5 totwenty-five-for-one (25:1), inclusive, with the effectiveness the amendment or the abandonment of the amendment, 1-for-35 to be determined byat the discretion of our Board of Directors, priorwhereby each outstanding 5 to 35 shares would be combined, converted and changed into 1 share of our Class A common stock, to enable the Company to comply with the Nasdaq Stock Market’s continued listing requirements; and
Proposal 2 – To authorize one or more adjournments of the special meeting to solicit additional proxies in the event there are insufficient votes to approve Proposal 1 described above.
Through the website above, you will be able to attend the Special Meeting online and vote electronically and submit your questions during the Special Meeting. Your attention is directed to the date of our 2021 Annual Meeting of Stockholders.

4.    To conduct any other business properly brought beforeenclosed proxy statement which is set forth on the meeting.

Thesefollowing pages, where details regarding how to attend the meeting online and the foregoing items of business are more fully described in the Proxy Statement accompanying this Notice.

described. The record date for the Annual Meeting is April 24, 2020. Only stockholdersBoard of record atDirectors has fixed the close of business on thatNovember 19, 2020 as the record date mayfor the determination of stockholders entitled to notice of, and to vote at, the meetingSpecial Meeting.

OUR BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS THAT YOU VOTE “FOR” EACH OF THE PROPOSALS.
Your vote is extremely important, regardless of the number of shares of Class A common stock you own. Whether or not you plan to attend the Special Meeting, you are respectfully requested by the Board of Directors to promptly submit your proxy by telephone or over the Internet in accordance with the instructions on the enclosed proxy card or voting instruction card or sign, date and return the enclosed proxy card or voting instruction card. If you received this notice and the accompanying proxy statement in the mail, a return envelope is enclosed for your convenience. This will not prevent you from voting at the Special Meeting since you may revoke your proxy at any adjournment thereof.

time prior to the Special Meeting or vote electronically at the Special Meeting, but submitting your proxy will help to ensure the presence of a quorum at the Special Meeting and avoid added proxy solicitation costs.

By Order of the Board of Directors,



Joyce LaViscount
Secretary
Newtown, Pennsylvania
November 30, 2020
Important Notice Regarding the Availability of Proxy Materials for the Stockholders’
Helius Medical Technologies, Inc. Special Meeting of Stockholders to Bebe Held on
Monday, December 28, 2020:
The proxy statement is available at www.proxyvote.com and on the Investor Relations portion of
our website at https://heliusmedical.com/index.php/investor-relations/sec-filings.

TABLE OF CONTENTS

TABLE OF CONTENTS
Questions and Answers About the Special Meeting
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1
Proposal 1 – Reverse Stock Split Proposal
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Proposal 2 – Adjournment Proposal
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Security Ownership of Certain Beneficial Owners and Management
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Additional Matters
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Other Matters
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Householding
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Requirements for Submission of Stockholder Proposals and Nominations for 2021 Annual Meeting
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Solicitation by Board, Expenses
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Important Notice Regarding the Availability of Proxy Materials for the Stockholder Meeting to be Held on December 28, 2020
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Appendix A
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June 10,TABLE OF CONTENTS

HELIUS MEDICAL TECHNOLOGIES, INC.
PROXY STATEMENT
SPECIAL MEETING OF STOCKHOLDERS
DECEMBER 28, 2020
QUESTIONS AND ANSWERS ABOUT THE SPECIAL MEETING
Who is soliciting my vote?
The Board of Directors (the “Board”) of Helius Medical Technologies, Inc. (the “Company”, “we” or “us”) is soliciting your proxy, as a holder of our Class A common stock (the “Common Stock”), for use at the special meeting of stockholders to be held on Monday, December 28, 2020, at 10:00 a.m. local timeEastern Time, virtually at via Internet at http://www.viewproxy.com/heliusmedical/2020.

www.virtualshareholdermeeting.com/HSDT2020SM and any adjournment or postponement of such meeting (the “Special Meeting”). We have retained The Proxy Advisory Group, LLC to assist in the solicitation of proxies.

The notice of Special Meeting, proxy statement and annual reportform of proxy card are expected to be first mailed to stockholders

are available at www.investorvote.com.

of record on or about November 30, 2020.

By Order

What is the purpose of the BoardSpecial Meeting?
At the Special Meeting, you will be voting on:
Proposal 1 – To approve an amendment to our Certificate of Directors

Joyce LaViscount

Secretary

Newtown, Pennsylvania

May     , 2020

You are cordially invitedIncorporation to attendeffect a reverse split of our outstanding Common Stock at a ratio in the meeting via live webcast by visiting http://www.viewproxy.com/heliusmedical/2020/vm. Whether or not you expectrange of 1-for-5 to attend the meeting, please complete, date, sign and return the proxy mailed1-for-35 to you, or vote over the telephone or the internet as instructed in these materials, as promptly as possible in order to ensure your representationbe determined at the meeting. A return envelope has beendiscretion of our Board, whereby each outstanding 5 to 35 shares would be combined, converted and changed into 1 share of our Common Stock, to enable the Company to comply with the Nasdaq Stock Market’s continued listing requirements; and

Proposal 2 – To authorize one or more adjournments of the Special Meeting to solicit additional proxies in the event there are insufficient votes to approve Proposal 1 described above.
The Board recommends a vote FOR Proposals 1 and 2.
Except as noted herein, share numbers are provided for your convenience. Evenas of the record date and on a pre-reverse stock split basis.
Who is entitled to vote?
You may vote if you have voted by proxy, you may still vote in person if you attendowned shares of our Common Stock at the meeting via Internet. Please note, however, that if yourclose of business on November 19, 2020, the record date, provided such shares are held directly in your name as the stockholder of record or are held for you as the beneficial owner through a broker, bank or other nominee. Each share of Common Stock is entitled to one vote on each matter properly brought before the meeting. As of November 19, 2020, we had [•] shares of Common Stock outstanding and entitled to vote.
What is the difference between a stockholder of record and a beneficial owner?
Stockholders of Record. If your shares of Common Stock are registered directly in your name with our transfer agent, Computershare Investor Services Inc., you are considered the stockholder of record with respect to those shares, and these proxy materials are being sent directly to you by us. As the stockholder of record, you have the right to grant your voting proxy directly to us through the enclosed proxy card or to vote electronically at the Special Meeting.
Beneficial Owners. Many of our stockholders hold their shares of Common Stock through a broker, bank or other nominee andrather than directly in their own names. If your shares are held in a stock brokerage account or by a bank or other nominee, you wishare considered the beneficial owner with respect to vote at the meeting, you must obtain a proxy issued in your name from that record holder.

QUESTIONS AND ANSWERS ABOUT THESE PROXY MATERIALS AND VOTING

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PROPOSAL 1 ELECTION OF DIRECTORS

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INFORMATION REGARDING THE BOARD OF DIRECTORS AND CORPORATE GOVERNANCE

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INDEPENDENCE OF THE BOARD OF DIRECTORS

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BOARD LEADERSHIP STRUCTURE

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ROLE OF THE BOARD IN RISK OVERSIGHT

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MEETINGS OF THE BOARD OF DIRECTORS

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INFORMATION REGARDING COMMITTEES OF THE BOARD OF DIRECTORS

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STOCKHOLDER COMMUNICATIONS WITH THE BOARD OF DIRECTORS

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CODE OF BUSINESS CONDUCT AND ETHICS

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PROPOSAL 2 RATIFICATION OF SELECTION OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

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CHANGE IN INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

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PRINCIPAL ACCOUNTANT FEES AND SERVICES

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PRE-APPROVAL POLICIES AND PROCEDURES

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PROPOSAL 3 APPROVAL OF REVERSE STOCK SPLIT OF OUR COMMON STOCK

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EXECUTIVE OFFICERS

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SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT

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DELINQUENT SECTION 16(A) REPORT

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EXECUTIVE COMPENSATION

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SUMMARY COMPENSATION TABLE

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OUTSTANDING EQUITY AWARDS AT DECEMBER 31, 2019

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NON-EMPLOYEE DIRECTOR COMPENSATION

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SECURITIES AUTHORIZED FOR ISSUANCE UNDER EQUITY COMPENSATION PLANS

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TRANSACTIONS WITH RELATED PERSONS

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HOUSEHOLDING OF PROXY MATERIALS

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OTHER MATTERS

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APPENDIX A CERTIFICATE OF AMENDMENT OF CERTIFICATE OF INCORPORATION OF HELIUS MEDICAL TECHNOLOGIES, INC.

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HELIUS MEDICAL TECHNOLOGIES, INC.

642 Newtown Yardley Road, Suite 100

Newtown, Pennsylvania 18940

PROXY STATEMENT

FOR THE 2020 ANNUAL MEETING OF STOCKHOLDERS

June 10, 2020

QUESTIONS AND ANSWERS ABOUT THESE PROXY MATERIALS AND VOTING

Why am I receiving these materials?

We have sent youthose shares, and these proxy materials because the Board of Directors of Helius Medical Technologies, Inc. (sometimes referred to as the “Company” or “Helius”) is soliciting your proxy to vote at the 2020 Annual Meeting of Stockholders, including at any adjournments or postponements of the meeting. You are invited to attend the annual meeting via Internet to vote on the proposals described in this proxy statement. However, you do not need to attend the meeting to vote your shares. Instead, you may simply complete, sign and return the enclosed proxy card, or follow the instructions below to submit your proxy over the telephone or through the internet.

We intend to mail these proxy materials on or about May     , 2020 to all stockholders of record entitled to vote at the annual meeting.

How do I attend the Annual Meeting?

The meeting will be held on June 10, 2020 at 10:00 a.m. local time. In order to participate in the 2020 Annual Meeting live via the Internet, you must register at www.viewproxy.com/heliusmedical/2020 by 11:59 p.m. Eastern Time by June 8, 2020.

On the day of the Annual Meeting, if you have properly registered, you may enter the Annual Meeting by logging in using the event password you received via email in your registration confirmation at http://www.viewproxy.com/heliusmedical/2020/vm.

If you encounter any difficulties accessing the Annual Meeting live audio webcast during the meeting time, please email virtualmeeting@viewproxy.com or call 1-866-612-8937.

Even if you plan to attend the live webcast of the Annual Meeting, we encourage you to vote in advance by Internet, telephone or mail so that your vote will be counted even if you later decide not to attend the virtual Annual Meeting.

Who can vote at the Annual Meeting?

Only stockholders of record at the close of business on April 24, 2020 will be entitled to vote at the Annual Meeting. On this record date, there were 38,041,666 shares of Class A common stock, which we refer to as our common stock, outstanding and entitled to vote.

Stockholders of Record: Shares Registered in Your Name

If, on April 24, 2020, your shares were registered directly in your name with the Company’s transfer agent, Computershare Trust Company of Canada, then you are(including a stockholder of record. As a stockholder of record, you must register using the virtual control number included on your Notice of Internet Availability of Proxy Materials or your proxy card (if you received a printed copy of the proxy materials) in order to vote in person via Internet at the Annual Meeting, or you may vote by proxy. Whether or not you plan to attend the meeting, we urge you to vote by proxy over the telephone or on the internet as instructed below or to complete, sign, date and return a proxy card to ensure your vote is counted.

Beneficial Owner: Shares Registered in the Name of a Broker or Bank

If, on April 24, 2020, your shares were held, not in your name, but rather in an account at a brokerage firm, bank, dealer or other similar organization, then you are the beneficial owner of shares held in “street name” and these proxy materialsvoting instruction card) are being forwarded to you by that organization. The organization holding your accountbroker, bank or nominee who is considered to be the stockholder of record for purposes of voting atwith respect to those shares. As the Annual Meeting. As a beneficial owner, you have the right to direct your broker, bank or other agent regardingnominee on how to vote the shares in your account. Youand are also invited to attend the AnnualSpecial Meeting. However, sinceYour broker, bank or nominee has enclosed a voting instruction card for you to use in directing the broker, bank or nominee on how to vote your shares.

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TABLE OF CONTENTS

Can I vote my shares without attending the Special Meeting?
Stockholders of Record. You may vote by internet, by phone or by completing, signing and returning the enclosed proxy card in the postage-paid envelope provided. To vote by internet or phone, you will need to use a control number provided to you in the materials with this proxy statement and follow the additional steps when prompted. The steps have been designed to authenticate your identity, allow you to give voting instructions, and confirm that those instructions have been recorded properly.
Beneficial Owners. If you are not the stockholder of record,a beneficial owner, you may notmust vote your shares in person at the meeting unless you request and obtain a valid proxy frommanner prescribed by your broker, bank or other agent. If you are unablenominee. You will receive a voting instruction card (not a proxy card) to obtain a legal proxyuse in directing the broker, bank or other nominee how to vote your shares. You may also have the option to vote your shares via the internet or phone.
May I attend the Special Meeting and vote my shares virtually?
The Special Meeting will be held entirely online. To participate in the Special Meeting, you will stillneed the 16-digit control number included in your Notice or on the instructions that accompanied your proxy materials. We encourage you to access the meeting prior to the start time. If your shares are held in street name and you did not receive a 16-digit control number, you may gain access to and vote at the Special Meeting by logging into your bank or brokerage firm’s website and selecting the stockholder communications mailbox to access the meeting. The control number will automatically populate. Instructions should also be able to attendprovided on the Annualvoting instruction form provided by your bank, broker or other nominee. If you lose your 16-digit control number, you may join the Special Meeting (butas a “Guest,” but you will not be able to vote, your shares) so longask questions or access the list of stockholders as you demonstrate proof of stock ownership. Instructions on how to connect and participate via the Internet, including how to demonstrate proof of stock ownership, are posted at http://www.viewproxy.com/heliusmedical/2020.

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What am I voting on?

There are three matters scheduled for a vote:

Election of seven directors (Proposal 1); and

Ratification of the selectionrecord date.

Can I change my vote?
Stockholders of Record. You may change your vote at any time before your proxy is exercised by the Audit Committeesending a written notice of the Board of Directors of BDO USA, LLP as independent registered public accounting firm of the Company for its fiscal year ending December 31, 2020 (Proposal 2); and

Approval of an amendmentrevocation or a later-dated proxy to our Articles of Incorporation to effect a reverse stock split of our common stock at a ratio ranging fromfive-for-one (5:1) totwenty-five-for-one (25:1), inclusive (“Reverse Stock Split”), with the effectiveness of the amendment or the abandonment of the amendment, to be determined by the Board of Directors prior to the date of our 2021 Annual Meeting of Shareholders (Proposal 3).

What if another matter is properly brought before the meeting?

The Board of Directors knows of no other matters that will be presented for consideration at the Annual Meeting. If any other matters are properly brought before the meeting, it is the intention of the persons named in the accompanying proxy to vote on those matters in accordance with their best judgment.

How do I vote?

For Proposal 1, you may either vote “For” all the nominees to the Board of Directors or you may “Withhold” your vote for any nominee you specify. For each of the other matters to be voted on, you may vote “For” or “Against” or abstain from voting.

The procedures for voting are fairly simple:

Stockholder of Record: Shares Registered in Your Name

If you are a stockholder of record, you may vote in person at the Annual Meeting via Internet, vote by proxy using the enclosed proxy card or vote by proxy over the telephone, or vote by proxy through the internet. Whether or not you plan to attend the meeting, we urge you to vote by proxy to ensure your vote is counted. You may still attend the meeting and vote in person even if you have already voted by proxy.

To vote in person, register for the Annual Meeting as described above and you will be able to vote when you log in.

To vote using the proxy card, simply complete, sign and date the enclosed proxy card and return it promptly in the envelope provided. If you return your signed proxy card to us before the Annual Meeting, we will vote your shares as you direct.

To vote over the telephone, dial toll-free1-866-732-8683 using a touch-tone phone and follow the recorded instructions. You will be asked to provide the company number and control number from the enclosed proxy card. Your telephone voteSecretary, which must be received prior to commencement of the Special Meeting; by 10:00 a.m.submitting a later-dated proxy via internet or phone; or by voting online at the Special Meeting. Internet voting facilities for stockholders of record will be available 24 hours a day beginning immediately and will close at 11:59 p.m., Eastern timeTime, on June 8, 2020December 27, 2020. Your virtual attendance at the Special Meeting will not cause your previously granted proxy to be counted.

To vote throughrevoked unless you file the internet, go to http://www.investorvote.com to complete an electronic proxy card. You will be asked to provide the company number and control number from the enclosed proxy card. Your internet vote must be received by 10:00 a.m. Eastern time on June 8, 2020proper documentation for it to be counted.

so revoked.

Beneficial Owner: Shares Registered in the Name of Broker or Bank

Owners.If you arehold your shares through a beneficial owner of shares registered in the name of your broker, bank or other agent,nominee, you should have received a voting instruction form with these proxy materials from that organization rather than from Helius. Simply complete and mailcontact such person prior to the voting instruction form to ensure that your vote is counted. Alternatively, you may vote by telephone or over the internet as instructed by your broker or bank. To vote in person at the Annual Meeting via Internet, you must obtain a valid proxy from your broker, bank or other agent. Follow the instructions from your broker or bank included with these proxy materials, or contact your broker or bank to request a proxy form.

Internet proxy voting is provided to allow you to vote your shares online, with procedures designed to ensure the authenticity and correctness of your proxy vote instructions. However, please be aware that you must bear any costs associated with your internet access,time such as usage charges from internet access providers and telephone companies.

How many votes do I have?

On each matter to be voted upon, you have one vote for each share of common stock you own as of April 24, 2020.

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If I am a stockholder of record and I do not vote, or if I return a proxy card or otherwise vote without giving specific voting instructions what happens?

If you are a stockholder of record and do not vote by completing your proxy card, by telephone, through the internet or in person at the Annual Meeting via Internet, your shares will not be voted.

If you return a signed and dated proxy card or otherwise vote without marking voting selections, your shares will be voted, as applicable, “For” the election of all seven nominees for director, “For” the ratification of selection by the Audit Committee of the Board of Directors of BDO USA, LLP as independent registered public accounting firm of the Company for its fiscal year ending December 31, 2020, and “For” the approval of an amendment to our Articles of Incorporation to effect the Reverse Stock Split. If any other matter is properly presented at the meeting, your proxyholder (one of the individuals named on your proxy card) will vote your shares using his or her best judgment.

If I am a beneficial owner of shares held in street name and I do not provide my broker or bank with voting instructions, what happens?

If you are a beneficial owner of shares held in street name and you do not instruct your broker, bank or other agent how to vote your shares, your broker, bank or other agent may still be able to vote your shares in its discretion. In this regard, under the rules of the New York Stock Exchange (“NYSE”), brokers, banks and other securities intermediaries that are subject to NYSE rules may use their discretion to vote your “uninstructed” shares with respect to matters considered to be “routine” under NYSE rules, but not with respect to“non-routine”exercised. matters. In this regard, Proposals 1 and 3 are considered to be“non-routine” under NYSE rules meaning that your broker may not vote your shares on these proposals in the absence of your voting instructions. However, Proposal 2 is considered to be a “routine” matter under NYSE rules meaning that if you do not return voting instructions to your broker by its deadline, your shares may be voted by your broker in its discretion on Proposal 2.

If you are a beneficial owner of shares held in street name, in order to ensure your shares are voted in the way you would prefer, you must provide voting instructions to your broker, bank or other agent by the deadline provided in the materials you receive from your broker, bank or other agent.

Who is paying for this proxy solicitation?

We will pay for the entire cost of soliciting proxies. In addition to these proxy materials, our directors and employees may also solicit proxies in person, by telephone, or by other means of communication. Directors and employees will not be paid any additional compensation for soliciting proxies. We may also reimburse brokerage firms, banks and other agents for the cost of forwarding proxy materials to beneficial owners.

What does it mean if I receive more than one set of proxy materials?

card or voting instruction card?

If you receive more than one setproxy card or voting instruction card, it means that you have multiple accounts with brokers, banks or other nominees and/or our transfer agent. Please sign and deliver, or otherwise vote, each proxy card and voting instruction card that you receive. We recommend that you contact your nominee and/or our transfer agent, as appropriate, to consolidate as many accounts as possible under the same name and address. Our transfer agent is Computershare Investor Services Inc., 100 University Ave., 8th Fl., North Tower Toronto, ON M5J 2Y1 Canada; telephone: 1-800-564-6253.
What if I do not vote for some of the items listed on my proxy materials,or voting instruction card?
Stockholders of Record. If you indicate a choice with respect to any matter to be acted upon on your proxy card, the shares maywill be registeredvoted in more than one name or in different accounts. Please follow theaccordance with your instructions. Shares represented by proxy cards that are signed and returned, but do not contain voting instructions on the proxy cardswith respect to certain matters, will be voted in the proxy materials to ensure that all of your shares are voted.

Can I change my vote after submitting my proxy?

Stockholder of Record: Shares Registeredmanner recommended by the Board on those matters and as the proxyholders may determine in Your Name

Yes. You can revoke your proxy attheir discretion for any time before the finalother matters properly presented for a vote at the meeting.Special Meeting.

Beneficial Owners. If you are the record holder of your shares, you may revoke your proxy in any one of the following ways:

You may submit another properly completed proxy card withindicate a later date.

You may grant a subsequent proxy by telephone or through the internet.

You may send a timely written notice that you are revoking your proxy to our Corporate Secretary at 642 Newtown Yardley Road, Suite 100, Newtown, Pennsylvania 18940.

You may attend the Annual Meeting and vote in person through the Internet. Simply attending the meeting will not, by itself, revoke your proxy.

Your most current proxy card or telephone or internet proxy is the one that is counted.

Beneficial Owner: Shares Registered in the Name of Broker or Bank

If your shares are held by your broker or bank as a nominee or agent, you should follow the instructions provided by your broker or bank.

When are stockholder proposals and director nominations due for next year’s Annual Meeting?

To be considered for inclusion in next year’s proxy materials, your proposal must be submitted in writing by January 4, 2021, to our Corporate Secretary at Helius Medical Technologies, Inc., 642 Newtown Yardley Road, Suite 100, Newtown, Pennsylvania 18940. If you wish to nominate an individual

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for election at, or bring business other than through a stockholder proposal before the 2021 Annual Meeting of Stockholders, you must deliver your notice to our Corporate Secretary at the address above between February 13, 2021 and March 14, 2021. Your notice to the Corporate Secretary must set forth information specified in our Amended and Restated Bylaws, including your name and address and the class and number of shares of our stock that you beneficially own.

If you propose to bring business before an Annual Meeting of stockholders other than a director nomination, your notice must also include, as to each matter proposed, the following: (1) a brief description of the business desired to be brought before such Annual Meeting and the reasons for conducting that business at the Annual Meeting and (2) any material interest you have in that business. If you propose to nominate an individual for election as a director, your notice must also include, as to each person you propose to nominate for election as a director, the following: (1) the name, age, business address and residence address of the person, (2) the principal occupation or employment of the person, (3) the class and number of shares of our stock that are owned of record and beneficially owned by the person, (4) the date or dates on which the shares were acquired and the investment intent of the acquisition; (5) a statement whether such nominee, if elected, intends to tender, promptly following such person’s failure to receive the required vote for election orre-election at the next meeting at which such person would face election orre-election, an irrevocable resignation effective upon acceptance of such resignation by the Board of Directors and (6) any other information concerning the person as would be required to be disclosed in a proxy statement soliciting proxies for the election of that person as a director in an election contest (even if an election contest is not involved), or that is otherwise required to be disclosed pursuant to Section 14 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), and the rules and regulations promulgated under the Exchange Act, including the person’s written consent to being named as a nominee and to serving as a director if elected. We may require any proposed nominee to furnish other information as we may reasonably require to determine the eligibility of the proposed nominee to serve as an independent director or that could be material to a reasonable stockholder’s understanding of the independence, or lack of independence, of the proposed nominee.

For more information, and for more detailed requirements, please refer to our Amended and Restated Bylaws, filed as Exhibit 3.3 to our Quarterly Report on Form10-Q, filed with the Securities and Exchange Commission (the “SEC”) on August 9, 2018.

How are votes counted?

Votes will be counted by the inspector of election appointed for the meeting, who will separately count, for the proposal to elect directors, votes “For,” “Withhold” and brokernon-votes, and,choice with respect to the other proposalsany matter to be acted upon on your voting instruction card, the shares will be voted in accordance with your instructions. If you do not indicate a choice or return the voting instruction card, the broker, bank or other nominee will determine if it has the discretionary authority to vote on votes “For”each matter. Under applicable regulations, a broker, bank or nominee has the discretion to vote on routine matters, including Proposal 1 and “Against,” abstentions and,Proposal 2. It is nonetheless very important for you to vote your shares for each proposal.

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TABLE OF CONTENTS

How many shares must be present to hold the meeting?
In order for us to conduct the Special Meeting, holders of a majority of the voting power of our outstanding shares of stock entitled to vote as of November 19, 2020 must be present by remote communication or by proxy at the Special Meeting. This is called a quorum. Abstentions (as well as broker non-votes, if applicable, brokerany) will be considered present for purposes of determining a quorum. If a quorum is not reached, the Special Meeting will be adjourned until a later time.
What vote is required to approve each item of business?
Proposal 1 – Approval of Reverse Stock Split.non-votes. The affirmative vote of holders of a majority of the outstanding shares of Common Stock entitled to vote at the Special Meeting is required for the approval of the reverse stock split. Abstentions and brokernon-votes, will be counted towards the vote total for Proposals 1 and 3 and if any, will have the same effect as “Against” votes.

What are “brokernon-votes”?

As discussed above, when a beneficial owner of shares held in “street name” does not give instructions tovotes against the broker or nominee holding the shares as to how to vote on matters deemed by the NYSE to be“non-routine,”matter. the broker or nominee cannot vote the shares. These unvoted shares are counted as “brokernon-votes.”

How many votes are needed to approve each proposal?

For the election of directors, the seven nominees receiving the most “For” votes from the holders of shares present in person or represented by proxy and entitled to vote on the election of directors will be elected. Only votes “For” will affect the outcome.

We have adopted a majority voting standard for the election of directors in uncontested elections. Any nominee for director in an uncontested election who receives a greater number of votes “Withheld” from his or her election than votes “For” such election shall promptly tender his or her resignation to the Board of Directors following certification of the stockholder vote. The Board of Directors will determine whether to accept or reject the director’s resignation, and will publicly disclose its decision within 90 days from the date of the certification of the election results.

To be approved,

Proposal 2 the ratification– Approval of the selection of BDO USA, LLP as the Company’s independent registered public accounting firm for the fiscal year ending December 31, 2020, must receive “For” votes from the holders of a majority of shares present in person or represented by proxy and entitled to vote on the matter. If you “Abstain” from voting, it will have the same effect as an “Against” vote. BrokerAdjournment.non-votes will have the same effect as a vote “Against” Proposal 2.

To be approved, Proposal 3 (an amendment to our Articles of Incorporation to effect a Reverse Stock Split) must receive “For” votes from the holders of a majority of shares present in person or represented by proxy and entitled to vote on the matter. If you mark your proxy to “Abstain” from voting, it will have the same effect as an “Against” vote. Brokernon-votes will have the same effect as a vote “Against” Proposal 3.

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What is the quorum requirement?

A quorum of stockholders is necessary to hold a valid meeting. A quorum will be present if stockholders holding at least a majority of the outstanding shares entitled to vote are present at the meeting in person or represented by proxy. On the record date, there were 38,041,666 shares outstanding and entitled to vote. Thus, the holders of 19, 020,833 shares must be present in person or represented by proxy at the meeting to have a quorum.

Your shares will be counted towards the quorum only if you submit a valid proxy (or one is submitted on your behalf by your broker, bank or other nominee) or if you vote in person at the meeting. Abstentions and brokernon-votes will be counted towards the quorum requirement. If there is no quorum, the holders of a majority of shares present at the meeting in person or represented by proxy may adjourn the meeting to another date.

How can I find out the results of the voting at the Annual Meeting?

Preliminary voting results will be announced at the Annual Meeting. In addition, final voting results will be published in a current report on Form8-K that we expect to file within four business days after the Annual Meeting. If final voting results are not available to us in time to file a Form8-K within four business days after the meeting, we intend to file a Form8-K to publish preliminary results and, within four business days after the final results are known to us, file an additional Form8-K to publish the final results.

What proxy materials are available on the internet?

The proxy statement and Form10-K are available at www.investorvote.com.

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Proposal 1

Election of Directors

Our Board currently consists of seven directors, six of whom are being nominated for reelection at this Annual Meeting. On February 16, 2020, one director, Thomas Griffin, notified the Board of his intent not to run for reelection at our 2020 Annual Meeting of Stockholders. Mr. Griffin’s decision not to run for reelection is not due to any disagreement with us on any matter relating to our operations, policies or practices. Each director to be elected and qualified will hold office until the next annual meeting of stockholders and until his successor is elected, or, if sooner, until the director’s death, resignation or removal. Six of the nominees listed below are currently directors of the Company who were previously elected by the stockholders. One of the nominees listed below is being nominated for the first time. It is the Company’s policy to invite its nominees for directors to attend the Annual Meeting. One of the directors attended the 2019 Annual Meeting of Stockholders. Proxies cannot be voted for a greater number of persons than the number of nominees named in this proposal.

Directors are elected by a plurality of the votes of the holders of shares present in person or represented by proxy and entitled to vote on the election of directors. Accordingly, the seven nominees receiving the highest number of affirmative votes will be elected.

We have adopted a majority voting standard for the election of directors in uncontested elections. Any nominee for director in an uncontested election who receives a greater number of votes “Withheld” from his or her election than votes “For” such election shall promptly tender his or her resignation to the Board of Directors following certification of the stockholder vote. The Board will determine whether to accept or reject the director’s resignation, and will publicly disclose its decision within 90 days from the date of the certification of the election results.

Nominees

The following is a brief biography of each nominee for director and a discussion of the specific experience, qualifications, attributes or skills of each nominee that led the Board to recommend that person as a nominee for director, as of the date of this proxy statement.

The Company seeks to assemble a board that, as a whole, possesses the appropriate balance of professional and industry knowledge, financial expertise and high-level management experience necessary to oversee and direct the Company’s business. To that end, the Board has identified and evaluated nominees in the broader context of the Board’s overall composition, with the goal of recruiting members who complement and strengthen the skills of other members and who also exhibit integrity, collegiality, sound business judgment and other qualities that the Nominating and Corporate Governance Committee views as critical to effective functioning of the Board. The brief biographies below include information, as of the date of this proxy statement, regarding the specific and particular experience, qualifications, attributes or skills of each director or nominee that led the Board to believe that that nominee should continue to serve on the Board. However, each of the members of the Board may have a variety of reasons why he believes a particular person would be an appropriate nominee for the Board, and these views may differ from the views of other members.

Name

  Age  

Principal Occupation/

Position Held With the Company

Philippe Deschamps

57Chief Executive Officer and Chairman of the Board

Dane C. Andreeff

54General Partner, Maple Leaf Partners, LP

Huaizheng Peng

57General Manager, China Medical System Holdings

Edward M. Straw

81Managing Director, Osprey Venture Partners

Mitchell E. Tyler

67Clinical Director, Advanced NeuroRehabilitation LLC

Blane Walter

49Partner, Talisman Capital Partners

Jeffrey Mathiesen

59Advisor to the CEO, Teewinot Life Sciences Corporation

Philippe Deschamps

Mr. Deschamps has served as our Chief Executive Officer, President and a Director since June 2014. Previously, Mr. Deschamps served as the president of Helius Medical, Inc (formerly known as NeuroHabilitation Corporation), our wholly-owned subsidiary, from October 2013 to June 2014. From February 2012 to October 2013, Mr. Deschamps served as chief executive officer of MediMedia Health, a marketing services company, where, among other things, he developed recommendations for the sale of MediMedia Health to its private equity sponsor. Prior to that time, Mr. Deschamps served in various roles at GSW Worldwide, most recently as president and chief executive officer, and Bristol Myers Squibb, including as director of neuroscience marketing. Mr. Deschamps received a BSc. in chemistry from the University of Ottawa in Canada in 1985. Our Board of Directors believes Mr. Deschamps is qualified to serve as a director based upon his role as our principal executive officer and his 30 years of experience in the health sciences industry.

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Dane C. Andreeff

Mr. Andreeff has served as a member of our Board of Directors since August 2017. Mr. Andreeff is the general partner and portfolio manager at Maple Leaf Partners, LP, a position he has held since 1996. Mr. Andreeff also serves as a member of the board of directors of TraceSecurity, LLC, HDL Therapeutics, Inc. and Myocardial Solutions, Ltd. Mr. Andreeff received his Bachelor’s degree in Economics from the University of Texas at Arlington in 1989 and his Master’s degree in Economics from the University of Texas at Arlington in 1991. Our Board believes that Mr. Andreeff’s extensive experience in the investment industry and capital markets will make him a valuable member of the Board.

Huaizheng Peng, Ph.D

Dr. Peng has served as a member of our Board of Directors since December 2015. Dr. Peng is the general manager of China Medical System Holdings, a position he has held since October 2013. Previously, Dr. Peng was a partner at Northland Bancorp, a private equity firm, from January 2010 to November 2012, and head of global life sciences and director of corporate finance of Seymour Pierce, from February 2006 to January 2010. Dr. Peng currently serves as a director of Faron Pharmaceuticals, Navamedica ASA and Destiny Pharma plc. Dr. Peng received a Bachelor’s degree and a Master’s degree in medicine from Hunan Medical College, China, and a Ph.D. in molecular pathology from University College London Medical School. Our Board of Directors believes that Dr. Peng is qualified to serve as a director based on his international medical and investment experience.

Edward M. Straw

Vice Admiral (Retired) Straw has served as a member of our Board of Directors since November 2014. He founded Osprey Venture Partners in 2011, a firm that mentors young entrepreneurs seeking investment capital and assists with business development and serves as the managing director. Previously he was president, global operations of The Estée Lauder Companies from 2000 to 2005, senior vice president global operations of the Compaq Computer Corporation from 1998 to 2000, and president of Ryder Integrated Logistics from 1996 to 1998. Prior to joining the private sector, he had a distinguished35-year career in the U.S. Navy and retired as a three-star admiral. During his military service, Vice Admiral (Retired) Straw was chief executive officer of the Defense Logistics Agency, the largest military logistics command supporting the American armed forces. He a member of the Defense Science Board, chairman of Odyssey Logistics and currently sits on the boards of The Boston Consulting Federal Group, Academy Securities and Lenitiv Scientific. He is a former board member of Eddie Bauer, MeadWestvaco, Ply Gem Industries and Panther Logistics. Vice Admiral (Retired) Straw received a B.S. from the United States Naval Academy, an MBA from The George Washington University, and is a graduate of the National War College. Our Board of Directors believes that Vice Admiral (Retired) Straw is qualified to serve as a director based on his extensive leadership experience in both the private sector and the U.S. military.

Mitchell E. Tyler

Mr. Tyler has served as a member of our Board of Directors since June 2014. Mr. Tyler is aco-inventor of the PoNS device and isco-owner and clinical director of Advanced NeuroRehabilitation LLC, a position he has held since 2009. Mr. Tyler retired in 2019 after 32 years at the University of Wisconsin as emeritus Senior Lecturer in Biomedical Engineering and Researcher in Rehabilitation Medicine. From 1998 through 2017 Mr. Tyler also served as the clinical director of the Tactile Communication and NeuroRehabilitation Laboratory. He received his M.S. in Bioengineering from University of California, Berkeley in 1985 and is currently working on his Ph.D. in Biomedical Engineering at the University of Wisconsin–Madison. Mr. Tyler is a registered professional engineer in Wisconsin. Our Board of Directors believes that Mr. Tyler is qualified to serve as a director based on his extensive knowledge of PoNS treatment and his research and development experience in the medical device industry.

Blane Walter

Mr. Walter has served as a member of our Board of Directors since December 2015. Mr. Walter is a partner at Talisman Capital Partners, a position he has held since 2011. In 1999, Mr. Walter founded inChord Commmunications, Inc., a global private healthcare communications company, which was acquired by inVentiv Health in 2005. Mr. Walter joined inVentiv Health as president of the Communications division in 2005 and was named Chief Executive Officer in 2008 and served in that capacity until leading the sale of the company to Thomas H. Lee Partners in 2010. Following the buyout, Mr. Walter served as vice chairman of inVentiv Group, a holding company which survived the buyout, from 2011 to August 2017. Mr. Walter received a B.S. in marketing and finance from Boston College in 1993. Our Board of Directors believes that Mr. Walter is qualified to serve as director based on his background in the healthcare and pharmaceutical industries.

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Jeffrey Mathiesen

Mr. Mathiesen is seeking election as a member of our Board of Directors for the first time and has served as Director and Audit Committee Chair of Sun BioPharma, Inc. (OTCMKTS: SNBP), a publicly traded biopharmaceutical company developing therapies for pancreatic diseases, since 2015, NeuroOne Medical Technologies Corporation (OTCQB: NMTC), a publicly traded medical technology company providing neuromodulation continuous EEG monitoring and treatment solutions for patients suffering from epilepsy and other nerve related disorders, since 2017, and eNeura, Inc., a privately held medical technology company providing therapy for both acute treatment and prevention of migraine, since 2018. Mr. Mathiesen served as Advisor to the CEO of Teewinot Life Sciences Corporation, a privately held global leader in the biosynthetic development and production of cannabinoids and their derivatives for consumer and pharmaceutical products, from October 2019 to December 2019, and served as Chief Financial Officer from March 2019 to October 2019. Mr. Mathiesen previously served as Chief Financial Officer of Gemphire Therapeutics Inc., which was acquired by NeuroBo Pharmaceuticals, Inc. (NASDAQ: NRBO) in January 2020, a publicly-held clinical-stage biopharmaceutical company developing therapies for patients with cardiometabolic disorders, from 2015 to 2018, and as Chief Financial Officer of Sunshine Heart, Inc. (NASDAQ: CHFS), a publicly-held early-stage medical device company, from 2011 to 2015. Mr. Mathiesen received a B.S. in Accounting from the University of South Dakota and is a Certified Public Accountant. Our Board believes that Mr. Mathiesen is qualified to serve as director based on his background in a broad range of responsibilities in financial and operational roles, including manufacturing, quality and procurement, in addition to traditional CFO roles in organizations with operations in North America, Europe, Southeast Asia and Australia.

The Board of Directors Recommends

A Vote in Favor of Each Named Nominee.

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INFORMATION REGARDING THE BOARD OF DIRECTORS AND CORPORATE GOVERNANCE

Independence of The Board of Directors

The Board reviews its composition annually, including the determination of the independence of our directors. Our Board consults with the Company’s counsel to ensure that the Board’s determinations are consistent with relevant securities and other laws and regulations regarding the definition of “independent,” including those set forth in pertinent listing standards of the Toronto Stock Exchange (the “TSX”) and The Nasdaq Stock Market (“Nasdaq”), as in effect from time to time.

Consistent with these considerations, after review of all relevant identified transactions or relationships between each director, or any of his or her family members, and the Company, its senior management and its independent auditors, the Board has affirmatively determined that all of the directors nominated for election at the Annual Meeting, other than Messrs. Deschamps and Tyler, are independent under the standards set forth in applicable TSX and Nasdaq listing standards. In making those independence determinations, the Board took into account certain relationships and transactions that occurred in the ordinary course of business between the Company and entities with which some of its directors are or have been affiliated. The Board considered all relationships and transactions that occurred during any12-month period within the last three fiscal years. The Board determined that the relationships would not interfere with their exercise of independent judgment in carrying out their responsibilities as directors.

Board Leadership Structure

The Company’s Board of Directors is currently chaired by the President and Chief Executive Officer of the Company, Mr. Deschamps.

The Board does not have a formal policy with respect to the separation of the offices of Chief Executive Officer and chairman of the Board. It is the Board’s view that rather than having a formal policy, the Board, upon consideration of all relevant factors and circumstances, will determine, as and when appropriate, whether it is in the best interests of the Company and its stockholders for such offices to be separate or combined. Our Board believes that our compensation system, our division of risk oversight responsibilities, and our Board leadership structure comprise and support the most effective risk management approach.

The Company currently believes that combining the positions of Chief Executive Officer and chairman helps to ensure that the Board and management act with a common purpose and provide a single, clear chain of command to execute the Company’s strategic initiatives and business plans. In addition, the Company currently believes that a combined Chief Executive Officer/chairman is better positioned to act as a bridge between management and the Board, facilitating the regular flow of information. The Company also believes that it is advantageous to have a chairman with an extensive history with and knowledge of the Company (as is the case with Mr. Deschamps) as compared to a relatively less informed independent chairman.

However, as the Company transitions to a commercial-stage company, the Board believes that the Company may benefit from a restructuring of its leadership structure in the future. Specifically, the Board will consider designating a lead independent director or separating the roles of chairman and chief executive officer, which could create an environment that is more conducive to objective evaluation of management’s performance, increasing management accountability and improving the ability of the Board to monitor whether management’s actions are in the best interests of the Company and its stockholders.

Role of the Board in Risk Oversight

The Board plays an active role in overseeing management of our risks. The Board regularly reviews information regarding our credit, liquidity and operations, as well as the risks associated with each. The Audit Committee of the Board is responsible for overseeing the management of financial risks. The Compensation Committee also is responsible for overseeing the management of risks relating to our executive compensation policies and arrangements, and for managing risks relating to our director compensation policies and arrangements and reviewing the independence of the Board and other corporate governance matters.

Meetings of the Board of Directors

The Board of Directors met 18 times during the last fiscal year. Each Board member attended 75% or more of the aggregate number of meetings of the Board and of the committees on which he served, held during the portion of the last fiscal year for which he was a director or committee member.

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Information Regarding Committees of the Board of Directors

The Board has three committees: an Audit Committee, a Compensation Committee and a Nominating and Corporate Governance Committee. The following table provides membership and meeting information for fiscal 2019 for each of the Board committees:

Name

  Audit
Committee		  Compensation
Committee		  Nominating
and
Corporate
Governance
Committee

Dane C. Andreeff

    X*  X

Thomas E. Griffin

  X*  X  

Huaizheng Peng

      X

Edward M. Straw

  X    

Blane Walter

  X  X  X*

Total meetings in fiscal 2019

  4  4  1

*

Committee Chairperson

Below is a description of each committee of the Board of Directors. Each of the committees has authority to engage legal counsel or other experts or consultants, as it deems appropriate to carry out its responsibilities.

Audit Committee

The Audit Committee of the Board of Directors was established by the Board in accordance with Section 3(a)(58)(A) of the Exchange Act, to oversee the Company’s corporate accounting and financial reporting processes and audits of its financial statements. For this purpose, the Audit Committee performs several functions. The Audit Committee evaluates the performance of and assesses the qualifications of the independent auditors; determines and approves the engagement of the independent auditors; determines whether to retain or terminate the existing independent auditors or to appoint and engage new independent auditors; reviews and approves the retention of the independent auditors to perform any proposed permissiblenon-audit services; monitors the rotation of partners of the independent auditors on the Company’s audit engagement team as required by law; reviews and approves or rejects transactions between the Company and any related persons; confers with management and the independent auditors regarding the scope, adequacy and effectiveness of internal control over financial reporting; establishes procedures, as required under applicable law, for the receipt, retention and treatment of complaints received by the Company regarding accounting, internal controls or auditing matters and the confidential and anonymous submission by employees of concerns regarding questionable accounting or auditing matters; and meets to review the Company’s annual audited financial statements and quarterly financial statements with management and the independent auditor, including a review of the Company’s disclosures under “Management’s Discussion and Analysis of Financial Condition and Results of Operations.”

The Audit Committee is composed of three directors: Messrs. Griffin and Walter and Vice Admiral (Retired) Straw, with Mr. Griffin serving as chair, and will be composed of Messrs. Mathiesen and Walter and Vice Admiral (Retired) Straw, with Mr. Mathiesen serving as chair as of June 9, 2020. The Audit Committee met four times during the last fiscal year. The Board has adopted a written Audit Committee charter that is available to stockholders on the Company’s website at www.heliusmedical.com.

The Board of Directors reviews the Nasdaq and TSX listing standards definition of independence for Audit Committee members on an annual basis and has determined that all members of the Company’s Audit Committee are independent.

The Board of Directors has also determined that Messrs. Griffin and Mathiesen each qualifies as an “audit committee financial expert,” as defined in applicable SEC rules. The Board made a qualitative assessment of each of Messrs. Griffin and Mathiesen’s level of knowledge and experience based on a number of factors, including his formal education and experience as a chief financial officer for public reporting companies.

Report of the Audit Committee of the Board of Directors

The Audit Committee has reviewed and discussed the audited financial statements for fiscal year ended December 31, 2019 with management of the Company. The Audit Committee has discussed with the independent registered public accounting firm the matters required to be discussed by Auditing Standard No. 1301,Communications with Audit Committees, as adopted by the Public Company Accounting Oversight Board (“PCAOB”). The Audit Committee has also received the written disclosures and the letter from the independent registered public accounting firm required by applicable requirements of the PCAOB regarding the independent accountants’ communications with the Audit Committee concerning independence and has discussed with the independent registered public accounting firm, the accounting firm’s independence. Based on the foregoing, the Audit Committee has recommended to the Board of Directors that the audited financial statements be included in the Company’s Annual Report on Form10-K for the fiscal year ended December 31, 2019.

Thomas E. Griffin

Edward M. Straw

Blane Walter

The material in this report is not “soliciting material,” is not deemed “filed” with the Commission and is not to be incorporated by reference in any filing of the Company under the Securities Act of 1933, as amended, or the Exchange Act, whether made before or after the date hereof and irrespective of any general incorporation language in any such filing.

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Compensation Committee

The Compensation Committee was established in March 2018. The Compensation Committee is composed of three directors: Messrs. Andreeff, Griffin and Walter, with Mr. Andreeff serving as chair. All members of the Company’s Compensation Committee are independent (as independence is currently defined in Rule 5605(d)(2) of Nasdaq listing standards and TSX independence rules). The Board has adopted a written Compensation Committee charter that is available to stockholders on the Company’s website at www.heliusmedical.com.

The Compensation Committee of the Board of Directors acts on behalf of the Board to review, recommend for adoption and oversee the Company’s compensation strategy, policies, plans and programs, including establishing corporate and individual performance objectives relevant to the compensation of the Company’s executive officers and other senior management and evaluation of performance in light of these stated objectives; reviewing and recommending to the Board for approval the compensation and other terms of employment or service, including severance andchange-in-control arrangements, of the Company’s Chief Executive Officer, the other executive officers and the directors; and administering the Company’s equity compensation plans, pension and profit-sharing plans, deferred compensation plans and other similar plans and programs.

Compensation Determination: Processes and Procedures

The Compensation Committee will meet at least annually and with greater frequency if necessary and appropriate. The agenda for each meeting will be developed by the Chair of the Compensation Committee, in consultation with legal counsel or other advisers or consultants it deems necessary and appropriate. The Compensation Committee will meet regularly in executive session. However, from time to time, various members of management and other employees as well as outside advisors or consultants may be invited by the Compensation Committee to make presentations, to provide financial or other background information or advice or to otherwise participate in Compensation Committee meetings. The Chief Executive Officer may not participate in, or be present during, any deliberations or determinations of the Compensation Committee regarding his compensation or individual performance objectives. The charter of the Compensation Committee grants the Compensation Committee full access to all books, records, facilities and personnel of the Company. In addition, under the charter, the Compensation Committee has the authority to obtain, at the expense of the Company, advice and assistance from compensation consultants and internal and external legal, accounting or other advisors and other external resources that the Compensation Committee considers necessary or appropriate in the performance of its duties. The Compensation Committee has direct responsibility for the oversight of the work of any consultants or advisers engaged for the purpose of advising the Committee. In particular, the Compensation Committee has the sole authority to retain, in its sole discretion, compensation consultants to assist in its evaluation of executive and director compensation, including the authority to approve the consultant’s reasonable fees and other retention terms. Under the charter, the Compensation Committee may select, or receive advice from, a compensation consultant, legal counsel or other adviser to the Compensation Committee, other thanin-house legal counsel and certain other types of advisers, only after taking into consideration six factors, prescribed by the SEC and Nasdaq, that bear upon the adviser’s independence; however, there is no requirement that any adviser be independent.

Prior to the establishment of a formal compensation committee in March 2018, thenon-employee directors of the Board performed the duties of a compensation committee and met at least four times per year, regularly in executive session, to discuss compensation. Thenon-employee directors invited management and other employees, outside advisors and/or consultants to join its meetings as appropriate to provide advice and background information. The Chief Executive Officer did not participate in, and was not present during, any deliberations or determinations of thenon-employee directors regarding his compensation or individual performance objectives.

During the past fiscal year, the Company engaged Compensia Inc. (“Compensia”) as its compensation consultant. As part of its engagement, Compensia was invited to the meetings of the Compensation Committee and was requested to develop a comparative group of companies and to perform analyses of competitive performance and compensation levels for that group. Compensia ultimately developed recommendations that were presented to the Compensation Committee for its consideration. Following an active dialogue with Compensia, the Compensation Committee approved the recommendations.

In fiscal 2019, the Board delegated authority to Mr. Deschamps to grant, without any further action required by the Compensation Committee, equity awards to employees and consultants who are not officers of the Company. The purpose of this delegation of authority is to enhance the flexibility of option administration within the Company and to facilitate the timely grant of options tonon-management employees, particularly new employees, within specified limits approved by the Board. Typically, as part of its oversight function, the Compensation Committee will review on a quarterly basis the list of grants made by Mr. Deschamps.

Historically, thenon-employee directors and, since its establishment in 2018, the Compensation Committee, have made most of the significant adjustments to annual compensation, determined bonus and equity awards and established new performance objectives at one or more meetings held during the first quarter of the year. Generally, the process comprises two related elements: the determination of compensation levels and the establishment of performance objectives for the current year. For executives other than the Chief Executive Officer, the Compensation Committee solicits and considers evaluations and recommendations submitted to the Committee by the Chief Executive Officer. In the case of the Chief Executive Officer, the evaluation of his performance is conducted by the Compensation Committee, which determines any adjustments to his compensation as

11

well as awards to be granted. The Chief Executive Officer may not be present during these discussions. For all executives and directors as part of its deliberations, the Compensation Committee may review and consider, as appropriate, materials such as financial reports and projections, operational data, tax and accounting information, tally sheets that set forth the total compensation that may become payable to executives in various hypothetical scenarios, executive and director stock ownership information, company stock performance data, analyses of historical executive compensation levels and current Company-wide compensation levels and recommendations of the Company’s compensation consultant, including analyses of executive and director compensation paid at other companies identified by the consultant.

Nominating and Corporate Governance Committee

The Nominating and Corporate Governance Committee was established in March 2018. The Nominating and Corporate Governance Committee is composed of three directors: Messrs. Andreeff, Peng and Walter, with Mr. Walter serving as chair. All members of the Nominating and Corporate Governance Committee are independent (as independence is currently defined in Rule 5605(a)(2) of the Nasdaq listing standards and in the TSX Company Manual). The Board has adopted a written Nominating and Corporate Governance Committee charter that is available to stockholders on the Company’s website at www.heliusmedical.com.

The Nominating and Corporate Governance Committee of the Board of Directors is responsible for identifying, reviewing and evaluating candidates to serve as directors of the Company (consistent with criteria approved by the Board), reviewing and evaluating incumbent directors, selecting or recommending to the Board for selection candidates for election to the Board of Directors, making recommendations to the Board regarding the membership of the committees of the Board, assessing the performance of management and the Board, and developing a set of corporate governance principles for the Company. Prior to the establishment of a formal nominating and governance committee in March 2018, the Board performed such duties as it did not believe a formal committee was necessary or cost efficient for a company of our size.

Generally, director nominees are identified and suggested by our directors or management using their business networks. The Nominating and Corporate Governance Committee also intends to consider director nominees put forward by stockholders. Our Amended and Restated Bylaws contain provisions that address the process by which a stockholder may nominate an individual to stand for election to the Board at the annual meeting. Stockholders may recommend individuals to our Board for consideration as potential director candidates by submitting the names of the recommended individuals, together with appropriate biographical information and background materials, to the Board at Helius Medical Technologies, Inc., 642 Newtown Yardley Road, Suite 100, Newtown, Pennsylvania 18940, Attention: Chairman of the Board. Such nomination must satisfy the notice, information and consent requirements set forth in our Amended and Restated Bylaws and must be received by us prior to the date set forth under “When are stockholder proposals and director nominations due for next year’s Annual Meeting?” included herein. The Board does not intend to alter the manner in which it evaluates candidates, including the minimum criteria set forth above, based on whether or not the candidate was recommended by a stockholder.

The Nominating and Corporate Governance Committee does not have any specific minimum qualifications that director nominees must have in order to be considered to serve on the Board. However, the Nominating and Corporate Governance Committee does take into consideration areas of expertise that director nominees may be able to offer, including professional experience, knowledge, abilities and industry knowledge or expertise. The Nominating and Corporate Governance Committee also considers their potential contribution to the overall composition and diversity of the Board.

The Nominating and Corporate Governance Committee will conduct the appropriate and necessary inquiries (as determined by the Committee) with respect to the backgrounds and qualifications of any potential nominees, without regard to whether a potential nominee has been recommended by our stockholders, and, upon consideration of all relevant factors and circumstances, approves the slate of director nominees to be nominated for election at our annual meeting of stockholders.

The Nominating and Corporate Governance Committee considers potential nominees without regard to gender, race, color, creed, religion, national origin, age, sexual orientation or disability. While the Nominating and Corporate Governance Committee has not adopted a formal policy with respect to diversity, it is committed to promoting Board diversity and intends to emphasize gender diversity. In general, the Company seeks a Board that includes a diversity of perspectives and includes individuals that possess backgrounds, skills, expertise and attributes that allow them to function collaboratively and effectively together in their oversight of the Company.

Stockholder Communications With the Board of Directors

The Board welcomes communications from our stockholders and other interested parties. Stockholders and other interested parties may send communications to the Board, to any particular director or the independent directors as a group, to the following address: Helius Medical Technologies, Inc., 642 Newtown Yardley Road, Suite 100, Newtown, Pennsylvania 18940, Attention: Irina Ishak. Stockholders or interested parties should indicate clearly the director or directors to whom the communication is being sent so that each communication may be forwarded directly to the appropriate director(s).

12

Code of Business Conduct and Ethics

The Company has adopted a Code of Business Conduct and Ethics that applies to all officers, directors and employees. The Code of Business Conduct and Ethics is available on the Company’s website at www.heliusmedical.com. If the Company makes any substantive amendments to the Code of Business Conduct and Ethics or grants any waiver from a provision of the Code to any executive officer or director, the Company will promptly disclose the nature of the amendment or waiver on its website.

13

Proposal 2

Ratification of Selection of Independent Registered Public Accounting Firm

The Audit Committee of the Board of Directors has selected BDO USA, LLP as the Company’s independent registered public accounting firm for the fiscal year ending December 31, 2020 and has further directed that management submit the selection of its independent registered public accounting firm for ratification by the stockholders at the Annual Meeting. BDO USA, LLP has audited the Company’s financial statements since January 4, 2017. Representatives of BDO USA, LLP are expected to be present at the Annual Meeting via Internet. They will have an opportunity to make a statement if they so desire and will be available to respond to appropriate questions.

Neither the Company’s Amended and Restated Bylaws nor other governing documents or law require stockholder ratification of the selection of BDO USA, LLP as the Company’s independent registered public accounting firm. However, the Audit Committee of the Board is submitting the selection of BDO USA, LLP to the stockholders for ratification as a matter of good corporate practice. If the stockholders fail to ratify the selection, the Audit Committee of the Board will reconsider whether or not to retain BDO USA, LLP. Even if the selection is ratified, the Audit Committee of the Board in its discretion may direct the appointment of different independent auditors at any time during the year if they determine that such a change would be in the best interests of the Company and its stockholders.

The affirmative vote of the holders of a majority of the voting power of the shares present in personby remote communication or represented by proxy at the AnnualSpecial Meeting will beand entitled to vote is required to ratify the selection of BDO USA, LLP.

Change in Independent Registered Public Accounting Firm

On January 4, 2017, the Audit Committeefor any adjournment of the Special Meeting to solicit additional proxies in the event there are insufficient votes to approve Proposal 1. Broker non-votes, if any, will have no effect on the outcome of this proposal. Abstentions will have the same effect as a vote against the matter.

Other Matters. The Board does not propose to conduct any business at the Special Meeting, nor is it aware of Directors approvedany other matter to be presented for action at the appointmentmeeting, other than as stated above.
Who will count the votes and where can I find the voting results?
Broadridge Investor Communication Solutions, Inc. (“Broadridge”) will tabulate the voting results and American Election Services will act as inspector of BDO USA, LLP aselection. We intend to announce the Company’s independent registered public accounting firmpreliminary voting results at the Special Meeting and, in accordance with the rules of the Securities and Exchange Commission (the “SEC”), we intend to auditpublish the Company’s financial statementsfinal results in a current report on Form 8-K within four business days of the Special Meeting.
Who can help answer my other questions?
If you have more questions about the proposals or voting, you should contact The Proxy Advisory Group, LLC, who is assisting us with the proxy solicitation.
The Solicitation Agent for the fiscal year ending December 31, 2016, in place of BDO Canada LLP.

Special Meeting is:

The report of BDO Canada LLP on the consolidated financial statements of the Company for the two years ended March 31, 2016, dated June 27, 2016 and included in our Annual Report on FormProxy Advisory Group, LLC
10-K18 East 41st Street, 20th Floor filed with the SEC on June 28, 2016, states that the Company’s recurring losses from operations and its accumulated deficit raise substantial doubt about the Company’s ability to continue as a going concern. Other than the foregoing, BDO Canada LLP’s report on the financial statements for the past two years contained no adverse opinion or disclaimer of opinion and was not qualified as to audit scope or accounting principles.

During the fiscal years ended March 31, 2016 and 2015 and through the date of BDO Canada LLP’s dismissal on January 4, 2017, there were no disagreements between the Company and BDO Canada LLP on any matter of accounting principles or practices, financial statement disclosure or auditing scope or procedure which, if not resolved to the satisfaction of BDO Canada LLP, would have caused BDO Canada LLP to make reference to the subject matter of the disagreements in connection with its reports for such fiscal years; and there were no reportable events as defined in Item 304(a)(1)(v) of Regulation

S-KNew York, NY 10017 except for the material weakness in (i) the Company’s internal control over financial reporting disclosed in its Annual Report on Form10-K/A for the fiscal year ended March 31, 2015, filed with the SEC on January 11, 2016, related to the design of controls with respect to the calculation of the fair value of the Company’s share based compensation, and (ii) the Company’s Annual Report on Form10-K for the fiscal year ended March 31, 2016, filed with the SEC on June 28, 2016, related to the Company’s accounting staff having insufficient technical accounting knowledge relating to accounting for income taxes and complex matters related to accounting principles generally accepted in the United States. The Company has authorized BDO Canada LLP to respond fully and without limitation to all requests of BDO USA, LLP concerning all matters related to the periods audited by BDO Canada LLP, including with respect to the subject matter of these reportable events. BDO Canada LLP’s letter to the SEC stating its agreement with the statements in this paragraph was filed as an exhibit to the Company’s Current Report on Form8-K dated January 10, 2017.

During the nine months ended December 31, 2016 and the fiscal year ended March 31, 2016, and any subsequent interim period before the Company’s engagement of BDO USA, LLP, the Company did not consult with BDO USA, LLP regarding the application of accounting principles to a specified transaction, or the type of audit opinion that might be rendered on the Company’s financial statements.

14


Tel: (212) 616-2181
3

Principal Accountant Fees and Services

TABLE OF CONTENTS

The following table represents aggregate fees billed to the Company for the fiscal years ended December 31, 2019 and December 31, 2018 by BDO USA, LLP, the Company’s principal accountant (amounts in thousands).

   Fiscal Year
Ended
December 31,
2019		   Fiscal Year
Ended
December 31,
2018		 

Audit Fees(1)

  $307   $442 

Tax Fees(2)

   32    32 
  

 

 

   

 

 

 

Total Fees

  $339   $474 

(1)

Audit fees included amounts billed for professional services rendered in connection with the audit of our consolidated financial statements and review of our interim consolidated financial statements included in quarterly reports and services that are normally provided by our principal accountant in connection with statutory and regulatory filings as well as professional services rendered in connection with the Company’s public offerings, including reviewing registration statements and prospectuses and preparing comfort letters.

(2)

Tax fees included amounts billed for professional services for tax compliance, tax advice and tax planning. These services included assistance regarding federal, state and tax compliance.

All fees described above werepre-approved by the Audit Committee.

Pre-Approval Policies and Procedures

Our Audit Committee has adopted policies and procedures for thepre-approval of audit services and permittednon-audit and tax services rendered by our independent registered public accounting firm. The policy generallypre-approves specified services in the defined categories of audit services, audit-related services and tax services up to specified amounts.Pre-approval may also be given as part of the Audit Committee’s approval of the scope of the engagement of the independent auditor or on an individual, explicit,case-by-case basis before the independent auditor is engaged to provide each service. The Audit Committee mustpre-approve all services provided by the independent registered public accounting firm.

The Audit Committee has determined that the rendering of services other than audit services by BDO USA, LLP is compatible with maintaining the principal accountant’s independence.

PROPOSAL NO. 1

APPROVAL OF A PROPOSED AMENDMENT TO OUR CERTIFICATE OF INCORPORATION
TO EFFECT A REVERSE SPLIT OF OUR OUTSTANDING COMMON STOCK
TO ENABLE THE COMPANY TO COMPLY WITH THE NASDAQ STOCK MARKET’S
CONTINUED LISTING REQUIREMENTS
General
The Board of Directors Recommends

A Vote In Favor of Proposal 2.

15

Proposal 3

Approval ofhas unanimously approved an Amendmentamendment to the Company’s Certificate of Incorporation and

Grant of Discretionary Authority to the Board of Directors to

Effect a Reverse Split of the Company’s Outstanding Common Stock

The Board has adopted a resolution approving and recommending to the Company’s stockholders for their approval a proposal to amend our certificate of incorporation to effect a reverse split of our outstanding shares of common stock within a range of one share of common stock for every five shares of common stock to one share of common stock for every twenty-five shares of common stock, with the exact reverse split ratio to be decided and publicly announced by the BoardCompany’s Common Stock any time prior to the effective timefirst anniversary of its approval by the stockholders at a ratio in the range of 1-for-5 to 1-for-35, to be determined at the discretion of the amendmentBoard, whereby each outstanding 5 to our certificate of incorporation. If the stockholders approve this Proposal 3, the Board will have the authority to decide, at any time prior the date35 shares would be combined, converted and changed into 1 share of the 2021 Annual Meeting, whether to implement the reverse stock split and the precise ratio of the reverse stock split within a range ofone-for-five shares of our common stock toone-for-twenty-five shares of our common stock. If the Board decides to implement the reverse stock split, the reverse stock split will become effective upon the filing of an amendment to our certificate of incorporation with the Secretary of State of the State of Delaware.

The Board reserves the right, even after stockholder approval, to abandon or postpone the filing of the amendment to effect the reverse stock split if the Board determines that it is not in the best interests of the Company and the stockholders. If the amendment effecting the reverse stock split holders is not implemented by the Board prior to the date of the 2021 Annual Meeting, the proposal will be deemed abandoned, without any further effect. In that case, the Board may again seek stockholder approval at a future date for a reverse stock split if it deems a reverse stock split to be advisable at that time.

TheCompany’s Common Stock. A form of the certificate of amendment to accomplishthe Certificate of Incorporation for the reverse stock split (the “Reverse Stock Split Certificate of Amendment”) is attached to this Proxy Statementhereto as Appendix A.A. The following discussion is qualified in its entirety by the full text of the certificateReverse Stock Split Certificate of amendment,Amendment, which is incorporated herein by reference.

Reasons for

The Board has recommended that the proposed Reverse Stock Split

The primary reason for the reverse stock split is to allow us to attempt to increase the bid price Certificate of our common stock by reducing the number of outstanding shares of our common stock. The Board plansAmendment to effect the reverse stock split be presented to the extent necessary in connection with listing our common stock onCompany’s stockholders for approval. If the Reverse Stock Split Certificate of Amendment is approved by a national securities exchange. To list on a national securities exchange, we must comply withmajority of the applicable continued listing requirements for such national securities exchange, which requirements include, among others, a minimum bid price, which we currently do not meet. The Board believes that the reverse stock split could be an effective means of regaining compliance with the minimum bid price requirement for continued listing of our common stock on The Nasdaq Capital Market.

In addition, among the factors considered byCompany’s stockholders, the Board in reaching its decisionwill have discretion to recommend the reverse stock split, the Board considered the potential effects of having stock that trades at a low price. For example, certain brokerage firms have internal practices and policies that discourage individual brokers from dealing in stocks that are tradeddetermine, as it deems to be in theover-the-counter market because they are not held to the same stringent standards. Further, since the brokerage commissions on stock with a low trading price generally represent a higher percentage best interest of the stock price than commissions on higher priced stock, investors in stocks with a low trading price pay transaction costs (commissions, markups, or markdowns) at a higher percentage of their total share value, which may limitCompany’s stockholders, the willingness of individual investorsspecific ratio to be used within the range described above and institutions to purchase our common stock. The Board believes that certain institutional investors, such as mutual funds or pension plans, have policies or procedures that discourage or prohibit acquisitions of shares priced at less than $5.00 per share, making our shares less attractive. The SEC has also adopted rules governing “penny stock” that impose additional burdens on broker-dealers trading in stock priced at or below $5.00 per share, unless listed on certain securities exchanges.

Further, the Board believes that a higher stock price, which may be achieved through a reverse stock split, could help generate investor interest in the Company and help attract, retain, and motivate employees. The Board also believes that some potential employees may be less likely to work for the Company if we have a low stock price or are no longer listed on The Nasdaq Capital Market, regardless of size of our overall market capitalization. Each of these factors could weaken the market for our common stock.

There will be no change in our authorized shares as a result of the amendment to our certificate of incorporation and therefore, upon effectivenesstiming of the reverse stock split, the number of shares of our common stock that are authorized and unissued will increase relativewhich must occur any time prior to the number of issued and outstanding shares. We currently have no plans, proposals, arrangements or understandings to issue anyfirst anniversary of its authorized but unissued sharesapproval by the stockholders. The Board believes that stockholder approval of our common stock. However, itthe range of reverse stock split ratios (as opposed to approval of a single reverse stock split ratio) provides the Board with maximum flexibility to achieve the purpose of a reverse stock split, as discussed below, and therefore is possible that some of these additional authorized shares could be used in the future for various other purposes without furtherbest interests of the Company and its stockholders.

The Board may, in its discretion, determine not to effect the reverse stock split if it determines, subsequent to obtaining stockholder approval, except asthat such action is not in the best interests of the Company. By voting in favor of the reverse stock split, you are expressly authorizing the Board to determine not to proceed with, and abandon, the reverse stock split if it should so decide.
In addition to the approval may be required in particular cases by our certificate of incorporation, applicable law orstockholders, the rulesreverse stock split requires the approval of anythe Toronto Stock Exchange (the “TSX”). The Company will apply to the TSX for conditional approval of the reverse stock exchange or other system onsplit, which our securities may then be listed.

Nasdaq Requirementsapproval is subject to the Company fulfilling standard listing conditions.

Reasons for Continued Listing

Our common stockthe Reverse Stock Split

The Company’s Common Stock is quoted on the Nasdaq Capital Market under the symbol “HSDT” and on the Toronto Stock Exchange under the symbol ��HSM.”
For the Common Stock to continue trading on the Nasdaq Capital Market, the Company must comply with various listing standards, including that our Common Stock maintain a minimum bid price of $1.00 per share, as set forth in Nasdaq Listing Rule 5550(a)(2) (the “Minimum Bid Price Requirement”). The closing price of the Company’s Common Stock on the Nasdaq Capital Market on November 16, 2020 was $0.3882 per share and, over the prior 52 weeks, the closing price of the Company’s Common Stock has ranged from $0.249 to $1.49 per share.
As previously disclosed, on March 23, 2020, the Company received a letter (the “Notice”) from the Listing Qualifications Staff of The Nasdaq Stock Market (“Nasdaq”) indicating that, based on the closing bid price of the Company’s Common Stock for the 30 consecutive business days preceding the Notice, the Company no longer meets the Minimum Bid Price Requirement. The Notice has no effect on the listing of the Common Stock at this time, and the Common Stock continues to trade on the Nasdaq Capital Market under the symbol “HSDT.” One of the requirements for continued listing on The Nasdaq Capital Market pursuant to Nasdaq Listing Rule 5550(a)(2) is maintenance of a minimum closing bid price of $1.00.

On April 23, 2020, the closing market price per share of our common stock was $0.32, as reported by The Nasdaq Capital Market. On March 23, 2020, we received a written notification from The Nasdaq Stock Market LLC (“Nasdaq”) notifying us that we had failed to comply with the minimum bid

16

price requirement because the bid price for our common stock over a period of 30 consecutive business days prior to such date had closed below the minimum $1.00 per share requirement. In accordance with Nasdaq Listing Rule 5810(c)(3)(A), we had an initialthe Company was provided a period of 180 calendar days orin which to regain compliance. On April 17, 2020, Nasdaq notified the Company (the “Second Notice”) that the 180-day period to regain compliance with the Minimum Bid Price Requirement has been extended due to the global market impact caused by COVID-19. More specifically, Nasdaq has stated that compliance periods were suspended from April 16, 2020 until September 21,June 30, 2020. On July 1, 2020, companies received the balance of any pending compliance period to regain compliance with the Minimum Bid Price Requirement. As a result of this extension, the Company was given until December 3, 2020 to regain compliance with the minimum bid price requirement of $1.00 per share, which period was extended on April 17, 2020 until December 3, 2020. Minimum Bid Price Requirement.

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In the event that we do not regain compliance within this initial period,by December 3, 2020, we may be eligible to seekobtain an additional compliance period of 180 calendar days ifso long as we meetsatisfy the continued listing requirement for market value of publicly held shares and all other continuedcriteria for initial listing standards for theon The Nasdaq Capital Market, withbut for the exceptionMinimum Bid Price Requirement and market value of the bid pricepublicly held shares requirement, and provide written notice to Nasdaq of our intent to cure the deficiency during thisthe second compliance period by effectingvia the implementation of a reverse stock split if necessary. ToWe plan to timely submit our request to Nasdaq for the additional 180-day extension, if necessary. If we do not regain compliance with the minimum closing bid price per shareMinimum Bid Price Requirement by the end of our common stock must be at least $1.00 for a minimum of ten consecutive business days. If we fail to regainthe applicable compliance byperiod (either December 3, 2020 Nasdaq will provide written notificationor June 1, 2021 in the event a second compliance period is requested and granted), our Common Stock would be subject to delisting from Nasdaq. In that our securities will be delisted. At that time, we may appeal Nasdaq’s determinationcase, however, the Company would have the right to request a Hearings Panel. If we appeal, thehearing before a Nasdaq Hearings Panel will request ato address its plan to regain compliance. Hearings Panels have generally viewedremedy the deficiency, which request would stay any delisting action by the Listing Qualifications staff pending the ultimate outcome of the hearing process.
At the Company’s annual meeting of stockholders held on June 10, 2020 (the “Annual Meeting”), the Board similarly proposed an amendment to the Company’s Certificate of Incorporation to effect a reverse stock split. There were insufficient votes to pass such proposal at the Annual Meeting.
The Board is asking the stockholders to grant it the authority, at its discretion, to effect a reverse stock split, aswhich the only definitive planBoard believes is an effective way to resolve aincrease the minimum bid price deficiency. There can be no assuranceof our Common Stock proportionately by reducing the number of outstanding shares of Common Stock and put us in a position to regain compliance with Nasdaq Listing Rule 5550(a)(2). The Board further believes that such an appeal would be successful.

In the event thatincreased market price of our commonCommon Stock expected as a result of implementing the reverse stock were to be delisted from The Nasdaq Capital Market, our common stock would likely trade in theover-the-counter market. If our common stock were to trade on theover-the-counter market, selling our common stock could be more difficult because smaller quantities of shares would likely be boughtsplit may improve marketability and sold, and transactions could be delayed. In addition, in the event our common stock is delisted, broker-dealers have certain regulatory burdens imposed upon them, which may discourage broker-dealers from effecting transactions in our common stock, further limiting the liquidity of our common stock.Common Stock and may encourage trading.

In evaluating whether or not to recommend that stockholders authorize the reverse stock split, in addition to the considerations described above, the Board took into account various negative factors associated with a reverse stock split. These factors couldinclude: the negative perception of reverse stock splits held by some investors, analysts, and other stock market participants; the fact that the stock price of some companies that have effected reverse stock splits has subsequently declined, with a corresponding decline in market capitalization; the adverse effect on liquidity that might be caused by a reduced number of shares outstanding; and the costs associated with implementing a reverse stock split. Conversely, we believe the current low market price of our Common Stock impairs its acceptability to important segments of the institutional investor community and the investing public. Many investors look upon low-priced stock as unduly speculative in nature and, as a matter of policy, avoid investment in such stocks. We believe that the low market price of our Common Stock has reduced the effective marketability of our shares because of the reluctance of many brokerage firms to recommend low-priced stock to their clients. Further, a variety of brokerage house policies and practices tend to discourage individual brokers within those firms from dealing in low-priced stocks. Some of those policies and practices pertain to the payment of brokers’ commissions and to time-consuming procedures that function to make the handling of low-priced stocks unattractive to brokers from an economic standpoint. In addition, the structure of trading commissions also tends to have an adverse impact upon holders of low-priced stock because the brokerage commission on a sale of low-priced stock generally represents a higher percentage of the sales price than the commission on a relatively higher-priced issue.
The Board believes that maintaining the listing of the Company’s Common Stock on Nasdaq is in the best interests of the Company and its stockholders. The Board believes that the delisting of the Company’s Common Stock from Nasdaq would impair our ability to raise additional funds and result in lower prices and larger spreads in the bid and ask prices for our common stock.

Such delisting from The Nasdaq Capital Market and continued or further decline in our stock price could also impair our ability to raise additional necessary capital through equity or debt financing.

In light of the factors mentioned above, our Board unanimously approved the proposed amendment to our Certificate of Incorporation to effect the reverse stock split as a potential means of increasing and maintaining the price of our common stock to above $1.00 per share in compliance with Nasdaq requirements.

Company’s Common Stock, among other things. See “Certain Risk Factors Associated with the Reverse Stock Split or Nasdaq Delisting” below for more information.

Determination of the Reverse Stock Split Ratio
Our Board only intends to implement the reverse stock split to the extent it believes necessary to maintain the Company’s listing on Nasdaq. In determining the ratio to be used, the Board will consider various factors, including but not limited to:
the potential impact and anticipated benefits to the Company and its stockholders;
market conditions and existing and expected market price of the Company’s Common Stock at such time;
existing and expected marketability of the Common Stock;
the number of shares that will be outstanding after the reverse stock split;
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the stockholders’ equity at such time; and
the trading volume of the Company’s Common Stock at such time.
Impact of the Reverse Stock Split, if Implemented
The primary purposeCompany’s Certificate of Incorporation, as previously corrected (the “Certificate of Incorporation”), currently authorizes the issuance of 150,000,000 shares of Class A Common Stock, par value $0.001 per share. On October 31, 2020, the Company had: 51,922,480 shares of Common Stock issued and outstanding, 4,550,945 shares of Common Stock issuable upon the exercise of outstanding options, 12,613,035 shares of Common Stock issuable upon the exercise of outstanding warrants, 16,755 shares of Common stock issuable upon settlement of restricted stock units and 2,755,955 shares of Common Stock reserved for future issuance under the Company’s 2018 Omnibus Incentive Plan.
As a matter of Delaware law, the implementation of a reverse stock split does not require a reduction in the total number of authorized shares. If the Company’s stockholders adopt and approve the Reverse Stock Split Certificate of Amendment and the reverse stock split is implemented by the Company, the authorized number of shares of the Company’s Common Stock would not be reduced by the reverse stock split ratio determined by the Board.
If approved and effected, the reverse stock split will automatically apply to all shares of the Company’s Common Stock, and each stockholder will own a reduced number of shares of the Company’s Common Stock. However, except for adjustments that may result from the treatment of fractional shares, as described below, or as a result of adjustments to the conversion prices of certain convertible securities, as described below, the reverse stock split will not affect any stockholder’s percentage ownership or proportionate voting power.
Based on the Company’s capitalization as of October 31, 2020, the principal effect of the reverse stock split (at a ratio between 1-for-5 and 1-for-35), not taking into account the treatment of fractional shares described under “—Procedure for Effecting the Reverse Stock Split—Treatment of Fractional Shares” below, would be that:
the number of shares of the Company’s Common Stock issued and outstanding would be reduced from 51,922,480 shares to between approximately 1,483,499 shares and 10,384,496 shares;
the number of shares of the Company’s Common Stock issuable upon the exercise of outstanding stock options would be reduced from 4,550,945 to between approximately 130,027 shares and 910,189 shares (and the respective exercise prices of the options would increase by a factor equal to the inverse of the split ratio);
the number of shares of the Company’s Common Stock issuable upon the exercise of outstanding warrants would be reduced from 12,613,035 to between approximately 360,372 shares and 2,522,607 shares (and the respective exercise prices of the warrants would increase by a factor equal to the inverse of the split ratio);
the number of shares of the Company’s Common Stock issuable upon the settlement of outstanding restricted stock units would be reduced from 16,755 to between approximately 478 shares and 3,351 shares;
the aggregate number of shares of the Company’s Common Stock reserved for issuance, in connection with future awards under the Company’s 2018 Omnibus Incentive Plan would be reduced from 2,755,955 to between approximately 78,741 shares and 551,191 shares;
the number of shares of the Company’s authorized Common Stock would remain unchanged at 150,000,000 shares;
the 10,000,000 shares of the Company’s authorized preferred stock would remain unchanged; and
the number of shares of the Company’s Common Stock that are authorized, but unissued and unreserved, would increase from 78,140,830 to between approximately 135,628,166 shares and 147,946,883 shares; and the par value of the Company’s Common Stock and preferred stock would remain unchanged at $0.001 per share, and, as a result, the stated capital attributable to Common Stock on the Company’s balance sheet would be reduced proportionately based on the reverse stock split ratio, the additional paid-in capital account would be credited with the amount by which the stated capital is reduced, and the per-share net income or loss and net book value of the Company’s Common Stock would be restated because there would be fewer shares of Common Stock outstanding.
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The following table contains approximate information relating to our Common Stock immediately following the reverse stock split under certain possible exchange ratios, based on share information as of October 31, 2020. All share numbers are rounded down to the nearest whole share but otherwise do not reflect the potential effect of rounding down for fractional shares that may result from the reverse stock split.
 
​​
Pre-Reverse
Split
​​
1-for-5
​​
1-for-10
​​
1-for-20
​​
1-for-30
​​
1-for-35
Number of authorized shares of Common Stock
​​
150,000,000
​​
150,000,000
​​
150,000,000
​​
150,000,000
​​
150,000,000
​​
150,000,000
Number of outstanding shares of Common Stock
​​
51,922,480
​​
10,384,496
​​
5,192,248
​​
2,596,124
​​
1,730,749
​​
1,483,499
Number of shares of Common Stock issuable upon exercise of outstanding stock options
​​
4,550,945
​​
910,189
​​
455,094
​​
227,547
​​
151,698
​​
130,027
Number of shares of Common Stock issuable upon exercise of outstanding warrants
​​
12,613,035
​​
2,522,607
​​
1,261,303
​​
630,651
​​
420,434
​​
360,372
Number of shares of Common Stock issuable upon settlement of outstanding restricted stock units
​​
16,755
​​
3,351
​​
1,675
​​
837
​​
558
​​
478
Number of shares of Common Stock reserved for issuance in connection with future awards under the Company’s 2018 Omnibus Incentive Plan
​​
2,755,955
​​
551,191
​​
275,595
​​
137,797
​​
91,865
​​
78,741
Number of shares of Common Stock authorized, but unissued and unreserved
​​
78,140,830
​​
135,628,166
​​
142,814,085
​​
146,407,044
​​
147,604,696
​​
147,946,883
See also “Certain Risk Factors Associated with the Reverse Stock Split or Nasdaq Delisting” and “—Procedure for Effecting the Reverse Stock Split—Treatment of Fractional Shares” below for additional information regarding the potential impact of the reverse stock split.
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Anti-Takeover and Dilutive Effects
The number of authorized shares of our Common Stock and preferred stock will not be reduced as a result of the reverse stock split. The Common Stock and preferred stock that is authorized but unissued provide the Board with flexibility to effect, among other transactions, public or private financings, acquisitions, stock dividends, stock splits and the granting of equity incentive awards. However, these authorized but unissued shares may also be used by the Board, consistent with and subject to its fiduciary duties, to deter future attempts to gain control of us or make such actions more expensive and less desirable. Following stock spit, our Board would continue to have the authority to issue additional shares from time to time without further action by the stockholders except as may be required by applicable law or regulations. The Reverse Stock Split Certificate of Amendment is not being recommended in response to any specific effort of which we are aware to obtain control of us, nor does our Board have any present intent to use the authorized but unissued Common Stock or preferred stock to impede a takeover attempt.
The Company expects to require additional financing to fund its ongoing activities. Other than the foregoing, and except for the Company’s obligation to issue Common Stock upon the exercise of outstanding options and warrants, we have no specific plan, commitment, arrangement, understanding or agreement, either oral or written, regarding the issuance of Common Stock subsequent to the reverse stock split at this time.
Certain Risk Factors Associated with the Reverse Stock Split or Nasdaq Delisting
A reverse stock split may negatively impact the market for our Common Stock.
Factors such as our financial results, market conditions and the market perception of our business may adversely affect the market price of our Common Stock. As a result, there can be no assurance that the total market capitalization of our Common Stock after the proposed reverse stock split iswill be equal to combineor greater than the issued and outstanding sharestotal market capitalization before the proposed reverse stock split or that the per share market price of our common stock into a smaller number of shares so that the shares of our common stock will trade above the minimum bid price required to list our common stock on a national securities exchange. However, we cannot assure you thatCommon Stock following the reverse stock split if implemented, will have the desired effect of raising the price of our common stock over the long term. The history of similar stock split combinations for companies in like circumstances is varied. There is no assurance that:

the market price per post-split share of our common stock would either exceed the required minimum bid price to list on a national securities exchange;

the trading price per share of our common stock after the reverse stock split would riseincrease in proportion to the reduction in the number ofpre-split shares of our common stockCommon Stock outstanding before the reverse stock split;

the reductionsplit. A decline in the shares outstanding and in the public floatmarket price of our Common Stock after the reverse stock split will not negatively impactmay result in a greater percentage decline than would occur in the absence of a reverse stock split, and the liquidity or trading activity forof our stock;

Common Stock could be adversely affected following such a reverse stock split.

In addition, the reverse stock split would result in a per share price that wouldmay increase the levelnumber of investment by institutional investors or increase analyst and broker interest in our company; or

stockholders who own odd lots (less than 100 shares). Any stockholder who owns fewer than 500 to 3,500 shares of Common Stock, depending on the final ratio, prior to the reverse stock split will resultown fewer than 100 shares of Common Stock following the reverse stock split. Stockholders who hold odd lots typically experience an increase in decreased transaction costs for our stockholders.

In addition, there can be no assurance that our commonthe cost of selling their shares and may have greater difficulty in effecting sales. Furthermore, some stockholders may cease being stockholders of the Company following the reverse stock split. Any stockholder who owns fewer than 5 to 35 shares of Common Stock, depending on the final ratio, prior to the reverse stock split will be listed on a national securities exchange even ifown less than one share of Common Stock following the reverse stock split and therefore such stockholder will receive cash equal to the market price per post-splitvalue of such fractional share of our common stock remains in excessand cease being a stockholder of the required minimum bid price.

Company, as further described below under “—Procedure for Effecting the Reverse Stock Split—Treatment of Fractional Shares”.

The market price of our common stockCommon Stock will also be based on our performance and other factors, including those factors listed under the heading “Risk Factors” and elsewhere in our annual reportAnnual Report on Form10-K for the year ended December 31, 2019, Quarterly Report on Form 10-Q for the quarter ended September 30, 2020 and other reports that we file with the SEC. IfSEC and the Canadian securities regulators. There can also be no assurance that the minimum bid price per share of our Common Stock will remain in excess of $1.00 following the reverse stock split is consummatedfor a sustained period of time, if at all.
Nasdaq may delist the Company’s Common Stock, which could seriously harm the liquidity of the Common Stock and the tradingCompany’s ability to raise capital.
On March 23, 2020, the Company received the Notice from Nasdaq staff indicating that, based upon the closing bid price of our common stock declines, the percentage decline asCommon Stock for the last 30 consecutive business days, the Company no longer meets the Minimum Bid Price Requirement. In accordance with Nasdaq Listing Rule 5810(c)(3)(A), the Company was provided a period of 180 calendar days, or until September 21, 2020, in which to regain compliance. On April 17, 2020, the Company received the Second Notice that Nasdaq has tolled the compliance period for bid price requirements through June 30, 2020, and accordingly, the Company has until December 3, 2020 to regain compliance. If the Company is unable to regain compliance with the Minimum Bid Price Requirement or other listing requirements, the Company could to lose eligibility for continued listing on the Nasdaq Capital Market or any comparable trading market. At the Annual
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Meeting, the Board similarly proposed an absolute number and asamendment to the Company’s Certificate of Incorporation to effect a percentage of our overall market capitalization may be greater than would occur in the absence of the reverse stock split. Furthermore,There were insufficient votes to pass such proposal at the liquidityAnnual Meeting.
If we cease to be eligible to trade on Nasdaq:
We may have to pursue trading in the United States on a less recognized or accepted market, such as the OTC Bulletin Board or the “pink sheets”;
Shares of our common stockCommon Stock could be adversely affected byless liquid and marketable, thereby reducing the reducedability of stockholders to purchase or sell our shares as quickly and as inexpensively as they have done historically;
Our Common Stock may be deemed a “penny stock,” and transactions in our Common Stock would be more difficult and cumbersome;
We may be unable to access capital on favorable terms or at all, as companies trading on alternative markets may be viewed as less attractive investments with higher associated risks, such that existing or prospective institutional investors may be less interested in, or prohibited from, investing in our Common Stock; and
The market price of the Common Stock may further decline.
A reverse stock split would increase the Company’s authorized but unissued shares of Common Stock, which could negatively impact a potential investor if they purchased shares of Common Stock.
Because the number of authorized shares that would be outstanding after the reverse stock split.

Principal Effects of the ReverseCompany’s Common Stock Split

After the effective date ofwill not be reduced proportionately, the reverse stock split each stockholder would own a reduced number of shares of common stock. However, the reverse stock split would affect all stockholders uniformly and would not affect any stockholder’s percentage ownership interest in Helius (except to the extent that the reverse stock split would result in some of our stockholders owning a fractional share as described below). Proportionate voting rights and other rights and preferences of the holders of common stock would not be affected by the reverse stock split (except to the extent that the reverse stock split would result in some of our stockholders owning a fractional share as described below). For example, a holder of 2% of the voting power of the outstanding shares of common stock immediately prior to the reverse stock split would continue to hold approximately 2% of the voting power of the

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outstanding shares of common stock immediately after the reverse stock split. The number of stockholders of record also would not be affected by the reverse stock split (except to the extent that the reverse stock split would result in some of our stockholders owning only a fractional share as described below).

The following table contains approximate information relating to our common stock if (i) the reverse stock split is implemented at a ratio ofone-for-five, (ii) the reverse stock is implemented at a ratio ofone-for-fifteen and (iii) the reverse stock split is implemented at a ratio ofone-for-twenty-five based on share information as of close of business on April 23, 2020:

   Shares Issued and
Outstanding(1)		   Shares Authorized and
Reserved for Issuance(1)		  Shares Authorized
and Unreserved for
Issuance(1)		   Total
Authorized		 

As of April 23, 2020

   38,041,666    16,864,509(2)   95,093,825    150,000,000 

5-for-1 Reverse Split

   7,608,333    3,372,902(3)   19,018,765    30,000,000 

15-for-1 Reverse Split

   2,536,111    1,124,301(4)   6,339,588    10,000,000 

25-for-1 Reverse Split

   1,521,667    674,580(5)   3,803,753    6,000,000 

(1)

These estimates do not reflect the potential effect of rounding down for fractional shares that may result from the reverse stock split.

(2)

Includes (i) 9,300,749 shares issuable upon the exercise of outstanding warrants at a weighted average exercise price of $3.54, as of April 23, 2020; (ii) 3,807,417 shares issuable upon the exercise of outstanding options under our equity incentive plans at a weighted average exercise price of $6.15, as of April 23, 2020; (iii) 3,645,038 shares reserved for future issuance under the 2018 Omnibus Incentive Plan; and (iv) 111,305 shares issuable for restricted stock units at a weighted average exercise price of $0.63.

(3)

Includes (i) 1,860,150 shares issuable upon the exercise of outstanding warrants at a weighted average exercise price of $$17.68, as of April 23, 2020; (ii) 761,483 shares issuable upon the exercise of outstanding options under our equity incentive plans at a weighted average exercise price of $30.75, as of April 23, 2020; (iii) 729,008 shares reserved for future issuance under the 2018 Omnibus Incentive Plan: and (iv) 22,261 shares issuable for restricted stock units at a weighted average exercise price of $3.15.

(4)

Includes (i) 620,050 shares issuable upon the exercise of outstanding warrants at a weighted average exercise price of $53.03, as of April 23, 2020; (ii) 253,828 shares issuable upon the exercise of outstanding options under our equity incentive plans at a weighted average exercise price of $92.25, as of April 23, 2020; (iii) 243,003 shares reserved for future issuance under the 2018 Omnibus Incentive Plan. and (iv) 7,420 shares issuable for restricted stock units at a weighted average exercise price of $9.45.

(5)

Includes (i) 372,030 shares issuable upon the exercise of outstanding warrants at a weighted average exercise price of $88.39, as of April 23, 2020; (ii) 152,297 shares issuable upon the exercise of outstanding options under our equity incentive plans at a weighted average exercise price of $153.75, as of April 23, 2020; (iii) 145,802 shares reserved for future issuance under the 2018 Omnibus Incentive Plan; and (iv) 4,452 shares issuable for restricted stock units at a weighted average exercise price of $15.75.

The reverse stock split would reduce the number of shares of common stock available for issuance under our 2018 Omnibus Incentive Plan. With respect to outstanding stock options to purchase shares of our common stock, the reverse stock split would effect a reduction in the number of shares subject to such outstanding stock options proportional to the exchange ratio of the reverse stock split (rounded down to the nearest whole share) and would effect a proportionate increase in the exercise price of such outstanding stock options (rounded up to the nearest whole cent). Unless required by the terms of the equity incentive compensation plan pursuant to which a stock equity award was issued, no cash payment would be made to holders of equity awards in respect of such rounding. Under the terms of our outstanding warrants, the reverse stock split would also result in a proportionate increase in the exercise price of the warrants, as well as a proportionate decrease in the number of shares issuable to the holders thereof upon exercise of the warrants.

If the proposed reverse stock split is implemented, it maywill increase the number of our stockholders who own “odd lots” of less than 100 shares of common stock. Brokerage commission and other costs of transactions in odd lots are generally higher than the costs of transactions of more than 100 shares of common stock.

Because the total number of shares of authorized common stock is not being reduced in an amount proportionate to the reverse stock split, theBoard’s ability of the Board to issue authorized and unissued shares without further stockholder action will be significantly increased. However, we currently have no plans, arrangements or understandings, written or oral, to issue these additional authorized shares.action. The issuance in the future of such additional authorized shares of Common Stock or securities convertible into Common Stock may have thea dilutive effect of diluting theon earnings per share and book value per share, as well asrelative voting power and may cause a decline in the stock ownership and voting rights,trading price of the currently outstandingCommon Stock. The Company could use the shares of our common stock. The effective increasethat are available for future issuance in the number of authorized but unissued shares of our common stock may be construed as having an anti-takeover effect by permitting the issuance of sharesdilutive equity financing transactions, or to purchasers who might oppose a hostile takeover bidattempt or oppose any efforts to amenddelay or repeal certain provisionsprevent changes in control or changes in or removal of our certificate of incorporation or bylaws.

Effective Date

If our stockholders approve this Proposal No. 3, the Board of Directors could decide at any time on or prior to the datemanagement, including transactions that are favored by a majority of the 2021 Annual Meetingstockholders or in which the stockholders might otherwise receive a premium for their shares over then-current market prices or benefit in some other manner.

The Company expects to require additional financing to fund its ongoing activities. Other than the foregoing, and except for the Company’s obligation to issue Common Stock upon the exercise of Stockholdersoutstanding options and warrants, the Company has no specific plan, commitment, arrangement, understanding or agreement, either oral or written, regarding the issuance of Common Stock subsequent to effect the reverse stock split based on a determination thatat this time.
Procedure for Effecting the reverse stock split is then advisableReverse Stock Split
When and in the best interests of the Company and our stockholders. Such determination would primarily be based upon consideration of whether such reverse split would be advisable to help us meet the applicable continued listing requirements to list our common stock on a national securities exchange. In determining the actual timing of the filing of the certificate of amendment and selecting an appropriate ratio within the range of specified reverse stock split ratios,if the Board of Directors would examine the historical and projected price performance of our common stock, the expected bid price and trading volume of our common stock over the short- and long-term following the effectiveness of the reverse stock split and the potential devaluation of our market

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capitalization as a result of the reverse stock split. Even with stockholder approval of this Proposal No. 3, and without the need for further action by our stockholders, the Board of Directors may delay the implementation of the reverse stock split up until the 2021 Annual Meeting of Stockholders and may abandondecides to implement the reverse stock split at any time prior tobefore the filingfirst anniversary of its approval by the certificate of amendment. If the reverse stock split is not effected on or prior to the date of the 2021 Annual Meeting of stockholders, the authority granted toCompany will promptly file the BoardReverse Stock Split Certificate of Directors to effect the reverse stock split would expire and be without any further effect.

If our stockholders approve this Proposal No. 3 and the Board of Directors determines that it is advisable and in the best interests of the Company and our stockholders to proceed with the reverse stock split, the certificate of amendment would be filed with the Secretary of State of the State of Delaware. The reverse stock split would become effective upon the filing of the certificate of amendmentAmendment with the Secretary of State of the State of Delaware and upon the effective date the outstanding sharesto amend its existing Certificate of our common stock would be combined and converted into a lesser number of shares of common stock calculated in accordance with the exchange ratio set by the Board of Directors, within the specified range of potential exchange ratios, and without further action on the part of the Company and our stockholders. For instance, if a stockholder presently holds 100 shares of our common stock, the stockholder would hold 20 shares of our common stock following aIncorporation. The reverse stock split affectedwill become effective upon filing the Reverse Stock Split Certificate of Amendment with the Secretary of State of the State of Delaware or at a ratio offive-for-one.

Treatment of Fractional Shares

No scrip or fractional shares would be issuedlater date and time set forth therein, if any, which effective time is referred to as a result ofthe “reverse stock split effective date”. Beginning on the reverse stock split a stockholder would otherwise become entitled to a fractional share. Instead, we would pay to the stockholder, in cash, the value of any fractional share arising from the reverse stock split. The cash payment would be based on the closing sale price per share of our common stock as reported on The Nasdaq Capital Market on the last trading day preceding the effective date, each certificate representing pre-reverse stock split shares will be deemed for all corporate purposes to evidence ownership of post-reverse stock split shares. The text of the Reverse Stock Split Certificate of Amendment is set forth in Appendix A to this proxy statement. The text of the Reverse Stock Split Certificate of Amendment is subject to modification to include such changes as may be required by the office of the Secretary of State of the State of Delaware and as the Board deems necessary and advisable to effect the reverse stock split, multiplied byincluding the number of shares ofpre-split common stock held by the stockholder that would otherwise have been exchangedapplicable ratio for such fractional share. No transaction costs would be assessed to stockholders for the cash payment. Stockholders would not be entitled to receive interest for their fractional shares.

If you do not hold sufficient shares ofpre-split common stock to receive at least one post-split share of common stock and you want to hold our common stock after the reverse stock split, you may do so by taking either of the following actions far enough in advance so that it is completed before the reverse stock split is effected:

split.

purchase a sufficient number of shares of our common stock so that you would hold at least that number of shares of common stock in your account prior to the implementation of the reverse stock split that would entitle you to receive at least one share of common stock on a post-split basis; or

if applicable, consolidate your accounts so that you hold at least that number of shares of our common stock in one account prior to the reverse stock split that would entitle you to at least one share of our common stock on a post-split basis. Common stock held in registered form (that is, shares held by you in your own name on our company’s share register maintained by our transfer agent) and common stock held in “street name” (that is, shares held by you through a bank, broker or other nominee) for the same investor would be considered held in separate accounts and would not be aggregated when implementing the reverse stock split. Also, shares of common stock held in registered form but in separate accounts by the same investor would not be aggregated when implementing the reverse stock split.

After the reverse stock split then-current stockholders would have no further interest in our company with respect to their fractional shares. A person otherwise entitled to a fractional share would not have any voting, dividend or other rights in respect of his or her fractional share except to receive the cash payment as described above. Such cash payments would reduce the number of post-split stockholders to the extent that there are stockholders holding fewer than that number ofpre-split shares within theone-for-five toone-for-twenty-five range of exchange ratios described above. Reducing the number of post-split stockholders, however, is not the purpose of this proposal.

Stockholders should be aware that, under the escheat laws of the various jurisdictions where stockholders reside, where we are domiciled and where the funds for fractional shares would be deposited, sums due to stockholders in payment for fractional shares that are not timely claimed after the effective date, may be requiredour Common Stock will have a new CUSIP number, which is a number used to identify securities, and stock certificates with the old CUSIP number will need to be paid to the designated agentexchanged for each such jurisdiction. Thereafter, stockholders otherwise entitled to receive such funds may have to seek to obtain them directly from the state to which they were paid.

Effect onNon-Registered Stockholders

Non-registered stockholders holding our common stock through a bank, broker or other nominee should note that such banks, brokers or other nominees may have different procedures for processing the consolidation than those that would be put in place by us for registered stockholders, and their procedures may result, for example, in differences in the precise cash amounts being paid by such nominees in lieu of a fractional share. If you hold your shares with such a bank, broker or other nominee and if you have questions in this regard, you are encouraged to contact your nominee.

Book-Entry Shares and Payment for Fractional Shares

The combination of and reduction in the number of our outstanding shares of common stock as a result of the reverse stock split would occur automatically on the effective date without any action on the part of our stockholders. Our registered stockholders may hold some or all of their shares electronically in book-entry form. These stockholders will not have stock certificates evidencing their ownershipwith the new CUSIP number using the procedures described below.

Exchange of common stock. They are, however, provided with a statement reflecting the number of shares of common stock registered in their accounts.

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Stock Certificates

Stockholders who hold registered shares of our common stock in book-entry form do not need to take any action to receive post-reverse stock split shares of our common stock in registered book-entry form or the cash payment in lieu of any fractional interest, if applicable. These stockholders will have theirpre-reverse stock split shares exchanged automatically and a Credit Advice will be mailed to them upon exchange indicating the number of post-reverse stock split shares owned by such stockholders. A check will also be mailed to such stockholders’ registered address asAs soon as practicable after the effective date of the reverse stock split. By signing and cashing this check, suchsplit, stockholders holding certificated shares will represent and warrantbe notified that they owned the shares of our common stock for which they received the cash payment.

Exchange of Stock Certificates and Payment for Fractional Shares

The combination of and reduction in the number of our outstanding shares of common stock as a result of the reverse stock split would occur automatically onhas been effected. Computershare Investor Services Inc., the effective date without any action on the part of our stockholders and without regard to the date that stock certificates representingpre-split shares of common stock are physically surrendered for new stock certificates representing post-split shares of common stock. As soon as practicable after the effective date, transmittal forms will be mailed to each holder of record of certificates for shares of our common stock to be used in forwarding such certificates for surrender in exchange for any cash payment due for fractional shares and, if so elected by the holder, certificates representing the number of shares of our post-split common stock such stockholder is entitled to receive as a result of the reverse stock split. OurCompany’s transfer agent, will act as exchange agent for purposes of implementing the payment in lieu of fractional shares and exchange of stock certificates. The transmittal formsHolders of pre-split shares in certificated form will be accompanied by instructions specifying other details ofasked to surrender to the exchange. Upon receipt of the transmittal form, each stockholder should surrender theexchange agent certificates representing

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pre-split shares in exchange for certificates representing post-split shares of our common stock prior to the reverse stock split in accordance with the applicable instructions. Each stockholder who surrenders certificatesprocedures to be set forth in a letter of transmittal that will receive any cash payment due for fractional shares and, upon payment ofbe delivered to the applicable fee, new certificates representing the whole number of shares of our common stock that he or she holds as a result of the reverse stock split.stockholders. No new certificates and no payments in lieu of fractional shares will be issued to a stockholder until the stockholder has surrendered to the exchange agent his, her or its outstanding stock certificate(s) together with the properly completed and executed transmittal form to the exchange agent.

letter of transmittal.

STOCKHOLDERS SHOULD NOT DESTROY ANYPRE-SPLIT STOCK CERTIFICATES AND SHOULD

NOT SUBMIT ANYTHEIR STOCK CERTIFICATES UNTIL THEY RECEIVE A TRANSMITTAL FORM FROM THE EXCHANGE AGENT.

STOCKHOLDERS ARE REQUESTEDENCOURAGED TO DO SO.

Accounting Consequences

The par value perPROMPTLY SURRENDER CERTIFICATES TO THE EXCHANGE AGENT FOLLOWING RECEIPT OF TRANSMITTAL FORMS IN ORDER TO AVOID HAVING SHARES POSSIBLY BECOMING SUBJECT TO ESCHEAT LAWS.

Stockholders whose shares are held by their stockbroker do not need to submit old share certificates for exchange. Their accounts will automatically reflect the new quantity of our commonshares based on the selected reverse stock would remain unchanged at $0.0001 per sharesplit ratio. Beginning on the reverse stock split effective date, each certificate representing pre-split shares will be deemed for all corporate purposes to evidence ownership of post-split shares.
Treatment of Fractional Shares
To avoid the existence of fractional shares of Common Stock after the reverse stock split. As a result, on the effective date of the reverse stock split, the amount on our balance sheet attributable to our common stockfractional shares that would be reduced proportionally, based on the exchange ratio of the reverse stock split, from its present amount, and the additionalpaid-in capital account would be credited with the amount by which the common stock is reduced. The per share common stock net loss and net book value would be increased because there would be fewer shares of our common stock outstanding. We do not anticipate that any other accounting consequences would arisecreated as a result of the reverse stock split.

Impactsplit will be rounded down to the next whole share and the stockholder will receive cash equal to the market value of Potential Reversethe fractional share, determined by multiplying such fraction by the closing sales price of the Company’s Common Stock Split Upon Other Data Contained in this Proxy Statement

Unless expressly stated otherwise,as reported on Nasdaq on the data contained in this proxy statement does not reflectlast trading day before the impact of any reverse stock split that may be effected pursuanteffective date (as adjusted to give effect to the termsreverse stock split). The ownership of this Proposal No. 3.

a fractional share will not give the holder any voting, dividend or other right except to receive the cash payment therefor. If a stockholder is entitled to a cash payment in lieu of any fractional share, a check will be mailed to the stockholder’s registered address as soon as practicable after the reverse stock split effective date. By signing and cashing the check, stockholders will warrant that they owned the shares of Common Stock for which they received such cash payment.

No Appraisal Rights

Under the Delaware General Corporation Law, our stockholders do not have a right to dissent and are not entitled to dissenters’appraisal rights with respect to the proposed amendment to our certificateReverse Stock Split Certificate of incorporationAmendment to effect the reverse stock split, and we will not independently provide our stockholders with any such right.

No Going Private Transaction

Notwithstanding the change in the number of outstanding shares following the reverse stock split, the Board does not intend for this transaction to be the first step in a series of plans or proposals of a “going private transaction” within the meaning of Rule13e-3 of the Exchange Act.

Interests of Certain Persons in the Proposal

Certain of our officers and directors have an interest in Proposal No. 3 as a result of their ownership of shares of our common stock, as set forth in the section entitled “Security Ownership of Certain Beneficial Owners and Management” above. However, we do not believe that our officers or directors have interests in Proposal No. 3 that are different from or greater than those of any other of our stockholders.

Certain U.S.rights.

Material Federal Income Tax Consequences of the Reverse Stock Split

The following discussion is a general summary of materialcertain U.S. federal income tax consequences to the Company’s stockholders of the reverse stock split, that may be relevant to U.S. Holders (as defined below) of our common stock, butif effected, does not purport to be a complete analysisdiscussion of all potential tax effects. The effects of otherthe possible U.S. federal income tax laws, suchconsequences and is included for general information only. It not intended as estatetax advice to any person and giftis not a comprehensive description of the tax laws, and any applicable state, local ornon-U.S. tax laws are not discussed. Thisconsequences that may be relevant to each stockholder’s own particular circumstances. The discussion is based on currently existing provisions of the Internal Revenue Code of 1986, as amended (the “Code”“Code”), its legislative history, existingapplicable Treasury Regulations promulgated thereunder, judicial authority and proposed federal income tax regulations, judicial decisions, and publishedcurrent administrative rulings and administrative pronouncements of the U.S. Internal Revenue Service (the “IRS”),

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in each casepractices as in effect as ofon the date hereof. These authorities may change or be subjectof this proxy statement. Changes to differing interpretations. Any such change or differing interpretation may be applied retroactively in a manner thatthe laws could adversely affect a holder of our common stock. We havealter the tax consequences described below, possibly with retroactive effect. The Company has not sought and will not seek an opinion of counsel or any rulingsa ruling from the IRSInternal Revenue Service regarding the matters discussed below. There can be no assurance the IRS or a court will not take a contrary position to that discussed below regarding theU.S. federal income tax consequences of the reverse stock split.

This discussion addresses the U.S. federal income tax consequences only to a stockholder that is limited(i) a citizen or individual resident of the United States, (ii) a corporation organized in or under the laws of the United States or any state thereof or the District of Columbia or otherwise subject to holders thatU.S. federal income taxation on a net income basis in respect of our Common Stock, (iii) a trust if (1) a U.S. court is able to exercise primary supervision over administration of such trust and one or more U.S. persons have the authority to control all substantial decisions of the trust or (2) it has a valid election in place to be treated as a U.S. person, or (iv) an estate whose income is subject to U.S. federal income taxation regardless of its source. This discussion addresses only those stockholders who hold our commontheir pre-reverse stock split shares as “capital assets” within the meaning of Section 1221 ofas defined in the Code (generally, property held for investment). This discussion, and will hold the shares received in the reverse stock split as capital assets. Further, it does not address all U.S. federalany state, local, foreign or other income tax consequences, nor does it address the tax consequences to stockholders that may be applicable to holders in light of their particular circumstances or to holdersare subject to special treatment under U.S. federal income tax law, including,rules, such as, without limitation:

persons thatlimitation, stockholders who are not U.S. Holders (as defined below);

persons subject to the alternative minimum tax;

tax,
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banks, insurance companies, regulated investment companies, personal holding companies, stockholders who are not “United States persons” as defined in Section 7701(a)(30) of the Code, U.S. Holders (as defined below)persons whose functional currency is not the U.S. dollar;

persons holding our common stock as part of a hedge, straddledollar, broker-dealers, tax-exempt entities, or other risk reduction strategy or as part of a conversion transaction or other integrated investment;

banks, insurance companies, and other financial institutions;

real estate investment trusts or regulated investment companies;

brokers, dealers or traders in securities;

corporations that accumulate earnings to avoid U.S. federal income tax;

S corporations, partnerships or other entities or arrangements treated as partnerships for U.S. federal income tax purposes (and(or investors therein);

tax-exempt organizations. If an entity or governmental organizations;

persons deemed to sell our common stock under the constructive sale provisions of the Code;

persons whose shares constitute “qualified small business stock” for purposes of Section 1202 of the Code;

persons who hold or receive our common stock pursuant to the exercise of any employee stock option or otherwisearrangement treated as compensation; and

tax-qualified retirement plans.

THIS DISCUSSION IS PROVIDED FOR GENERAL INFORMATION ONLY AND DOES NOT CONSTITUTE LEGAL ADVICE TO ANY HOLDER. WE STRONGLY URGE A HOLDER OF OUR COMMON STOCK TO CONSULT ITS OWN TAX ADVISORS CONCERNING THE U.S. FEDERAL INCOME TAX CONSEQUENCES RELATING TO THE REVERSE STOCK SPLIT IN LIGHT OF ITS PARTICULAR CIRCUMSTANCES AND ANY CONSEQUENCES ARISING UNDER STATE, LOCAL, OR FOREIGN INCOME OR OTHER TAX LAW.

For purposes of this discussion, a “U.S. Holder” is a beneficial owner of shares of our common stock thatpartnership for U.S. federal income tax purposes is or is treated as: (1) an individual who is a citizen or residentholds pre-reverse stock split shares of the United States; (2) a corporation (or other entity taxable as a corporation) created or organized underCompany’s stock, the laws of the United States, any state thereof, or the District of Columbia; (3) an estate the income of which is subject to U.S. federal income tax regardless of its source; or (4) a trust that (a) is subject to the primary supervisiontreatment of a U.S. courtpartner of the partnership will depend on the status of the partner and the control of one of more “United States persons” (within the meaning of Section 7701(a)(30)activities of the Code), or (b) has a valid electionpartnership and upon certain determinations made at the partnership level. Partners in effect under applicable Treasury Regulationspartnerships holding our Common Stock are urged to be treated as a United States person.

Tax Consequences ofconsult their own tax advisors about the Reverse Stock Split

The reverse stock split is expected to constitute a “recapitalization” for U.S. federal income tax purposes pursuant to Section 368(a)(1)(E)consequences of the Code. As a result, areverse stock split.

Stockholders are advised to consult their own tax advisers regarding the U.S. Holder generally should not recognizefederal income tax consequences of the reverse stock split in light of their personal circumstances and the consequences under state, local and foreign tax laws, and also as to any estate or gift tax considerations.
Exchange Pursuant to Reverse Stock Split
No gain or loss will be recognized by a stockholder upon such stockholder’s exchange of pre-reverse stock split shares for post-reverse stock split shares pursuant to the reverse stock split, except with respect to the extent of cash, if any, received in lieu of fractional shares, further described in “—Cash in Lieu of Fractional Shares” below. The aggregate tax basis of the post-reverse stock split shares received in the reverse stock split, including any fractional share deemed to have been received, will be equal to the aggregate tax basis of the pre-reverse stock split shares exchanged therefor, and the holding period of the post-reverse stock split shares will include the holding period of the pre-reverse stock split shares.
Cash in Lieu of Fractional Shares
A stockholder who receives cash in lieu of a fractional post-reverse stock split share should generally be treated as having received such fractional share pursuant to the reverse stock split and then as having exchanged such fractional share for cash in a redemption of such fractional share. The amount of any gain or loss should be equal to the difference between the ratable portion of the tax basis of the pre-reverse stock split shares exchanged in the reverse stock split that is allocated to such fractional share and the cash received in lieu thereof. In general, any such gain or loss will constitute a long-term capital gain or loss if the stockholder’s holding period for such pre-reverse stock split shares exceeds one year at the time of the reverse stock split. Deductibility of capital losses by holders is subject to limitations. Depending on a stockholder’s individual facts and circumstances, it is possible that cash received in lieu of a fractional share of our common stock,could be treated as discussed below. A U.S. Holder’s aggregate adjusted tax basis in the shares of our common stock received pursuant to the reverse stock split should equal the aggregate adjusted tax basisa distribution under Section 301 of the shares of our common stock surrendered and such U.S. Holder’s holding period in the shares of our common stock received should include the holding period in the shares of our common stock surrendered. Treasury Regulations provide detailed rules for allocating the tax basis and holding period of the shares of our common stock surrendered to the shares of our common stock received in a recapitalization pursuant to the reverse stock split. U.S. Holders of shares of our common stock acquired on different dates and at different pricesCode, so stockholders should consult their own tax advisors regardingas to that possibility and the allocation of theresulting tax basis and holding period of such shares.

In general, a U.S. Holderconsequences to them in that receives cash in lieu of a fractional share of our common stock pursuant to the reverse stock splitevent.

The Company will not recognize any gain or loss based upon the difference between the amount of cash received and the U.S. Holder’s adjusted tax basis in the shares of our common stock surrendered that is allocated to such fractional share as set forth above, as if such fractional shares were distributed as parta result of the reverse stock split and then redeemed, subject to the provisions and limitations of Section 302 of the Code (including, without limitation, certain attribution rules that could result in the cash payment being treated as a dividend). The gain or loss will constitute a capital gain or loss and will constitute long-term capital gain or loss if the U.S. Holder’s holding period is greater than one year as of the effective time of the reverse stock split.

21

Information Reporting and Backup Withholding

Information reporting and backup withholding (at a rate of 24%) may apply to holders who receive cash in lieu of a fractional share of our common stock pursuant to the reverse stock split. Backup withholding generally will not apply to (1) a U.S. Holder that furnishes a correct taxpayer identification number and certifies that such holder is not subject to backup withholding on IRS FormW-9 or (2) any holder that otherwise establishes an exemption from backup withholding. Backup withholding is not an additional tax. Any amounts withheld under the backup withholding rules may be refunded or allowed as a credit against the U.S. Holder’s federal income tax liability, if any, provided the required information is timely furnished to the IRS. U.S. Holders should consult their tax advisors regarding their qualification for an exemption from backup withholding and the procedures for obtaining such an exemption.

Vote Required

The affirmative vote of holders of a majority of the outstanding shares of common stock outstanding andCommon Stock entitled to vote at the meeting will beSpecial Meeting is required for the approval of the Reverse Stock Split Certificate of Amendment to approve this proposal No. 3.effect a reverse stock split. Abstentions and brokernon-votes, with respect to this proposal will be counted for purposes of establishing a quorum and, if a quorum is present,any, will have the same practical effect as a votevotes against this proposal.

the matter.

The Board recommends that you vote FOR Proposal 1.
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TABLE OF CONTENTS

PROPOSAL NO. 2

ADJOURNMENT OF SPECIAL MEETING
The Board has approved the submission to the stockholders of Directors Recommends

a Voteproposal to approve one or more adjournments of the Special Meeting in Favorthe event that there is not a sufficient number of votes at the Special Meeting to approve Proposal 3

22

EXECUTIVE OFFICERS

Our executive officers, and their respective ages,1. In order to permit proxies that have been timely received to be voted for such adjournments, we are as follows:

Name

Age

Position

Philippe Deschamps

57President, Chief Executive Officer and Director

Joyce LaViscount

58Chief Financial Officer and Chief Operating Officer

Jonathan Sackier

62Chief Medical Officer

The biography of Mr. Deschamps is set forth in “Proposal 1: Election of Directors” above.

Joyce LaViscount

Ms. LaViscount has served as our Chief Financial Officer and Chief Operating Officer since October 2015, and she previously servedsubmitting this proposal as a memberseparate matter for your consideration. If it is necessary to adjourn the Special Meeting, the adjournment is for a period of our Boardless than 30 days and the record date remains unchanged, no notice of Directors from March 2015the time and place of the reconvened meeting will be given to December 2015. Prior to joining Helius, Ms. LaViscount served as chief operating officer and chief financial officer of MM Health Solutions, formerly MediMedia Health, from July 2012 to August 2015. Ms. LaViscount concurrently served as the chief financial officer of MediMedia Pharmaceutical Solutions from January 2014 to February 2015. Previously, Ms. LaViscount served as executive director/group controller North America of Aptalis Pharmaceuticals from February 2011 to July 2012. Ms. LaViscount is a Certified Public Accountant. She received a B.A. in business with a concentration in accounting from Franklin and Marshall College in 1984.

Jonathan Sackier

Dr. Sackier has served as our Chief Medical Officer since December 2014. He has also served as a Visiting Professor of Surgerystockholders, other than an announcement made at the Nuffield Department of Surgical Sciences at Oxford University since 2014. From 2005 to 2014, Dr. Sackier was a Visiting Professor of Surgery at the University of Virginia and prior toSpecial Meeting.

The Board recommends that served as a Clinical Professor at the George Washington University. Dr. Sackier has served as a director of Kypha, Inc. since July 2014, Clinvue LLC since July 2010, Brandon Medical since May 2013 and SoundPipe Therapeutics since September 2013. He previously served as a director of HemoShear Therapeutics, LLC from 2008 to 2015. He is a trustee of First Star and previously chaired the Larry King Cardiac Foundation Board of Governors. A keen pilot, Jonathan advises the Aircraft Owners & Pilots Association on medical issues germane to pilots and authors the “Fly Well” column in the association’sPilot magazine.you vote FOR Proposal 2.
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23

SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT

The following table sets forth certain information regarding the ownership of the Company’s common stockCommon Stock as of April 23,October 31, 2020 by: (i) each director and nominee for director; (ii) each of theour named executive officers named in the Summary Compensation Table;officers; (iii) all executive officers and directors of the Company as a group; and (iv) all those known by the Company to be beneficial owners of more than five percent of its common stock.

our Common Stock.

We have determined beneficial ownership in accordance with the rules of the SEC. These rules generally attribute beneficial ownership of securities to persons who possess sole or shared voting power or investment power with respect to those securities. In addition, these rules require that we include shares of common stockCommon Stock issuable pursuant to the vesting of warrants and the exercise of stock options that are either immediately exercisable or exercisable within 60 days of April 23,October 31, 2020. These shares are deemed to be outstanding and beneficially owned by the person holding those warrants or options for the purpose of computing the percentage ownership of that person, but they are not treated as outstanding for the purpose of computing the percentage ownership of any other person. This table is based on information supplied by officers, directors and principal stockholders and Schedule 13D, and Schedule 13G and Section 16 filings, if any, with the SEC. Unless otherwise indicated, the persons or entities identified in this table have sole voting and investment power with respect to all shares shown as beneficially owned by them, subject to applicable community property laws.

Except as otherwise noted below, the address for persons listed in the table is c/o Helius Medical Technology, Inc., 642 Newtown Yardley Road, Suite 100, Newtown, Pennsylvania 18940.

   Beneficial Ownership 
Beneficial Owner  Number of Shares
of Common Stock		   Percent of
Total		 

A&B (HK) Company Limited(2)

   2,699,828    10.4 

Sabby Volatility Warrant Master Fund, Ltd.(3)

   2,857,143    7.5 

Montel Williams Enterprises. Inc.(4)

   874,487    5.3 

Armistice Capital, LLC(5)

   1,910,062    5.0 

Philippe Deschamps(6)

   1,444,145    5.4 

Joyce LaViscount(7)

   398,365    1.5 

Jonathan Sackier (8)

   1,068,068    2.8 

Thomas E. Griffin(9)

   49,841*    * 

Huaizheng Peng(10)

   45,088*    * 

Edward M. Straw(11)

   62,703*    * 

Mitchell E. Tyler(12)

   928,751    3.6 

Blane Walter(13)

   214,225*    * 

Dane C. Andreeff(14)

   743,137    2.9 

All executive officers and directors as a group (10 persons) (15)

   3,778,359    9.9 

* Less than one percent.

 
​​
Beneficial Ownership(1)
Beneficial Owner
​​
Number of Shares
of Common Stock
​​
Percent of
Total
Columbus Capital Management LLC(2)
​​
5,628,228
​​
9.9
A&B (HK) Company Limited(3)
​​
2,699,828
​​
5.2
Sabby Volatility Warrant Master Fund, Ltd.(4)
​​
2,887,143
​​
5.3
Philippe Deschamps(5)
​​
1,352,182
​​
2.6
Joyce LaViscount(6)
​​
710,919
​​
1.4
Jonathan Sackier(7)
​​
1,110,070
​​
2.1
Edward M. Straw(8)
​​
116,827
​​
*
Mitchell E. Tyler(9)
​​
879,731
​​
1.7
Blane Walter(10)
​​
270,659
​​
*
Dane C. Andreeff(11)
​​
3,336,943
​​
6.3
Jeffrey S. Mathiesen(12)
​​
30,609
​​
*
All current executive officers and directors as a group (7 persons)(13)
​​
5,147,932
​​
9.6
*
Less than one percent.
(1)

This table is based upon information supplied by officers, directors and principal stockholders. Unless otherwise indicated in the footnotes to this table and subject to community property laws where applicable, the Company believes that each of the stockholders named in this table has sole voting and investment power with respect to the shares indicated as beneficially owned. Applicable percentages are based on 38,041,66651,922,480 shares outstanding on April 23,October 31, 2020, adjusted as required by rules promulgated by the SEC.

(2)
(2)Includes 5,128,228 shares of Common Stock, and 500,000 shares of Common Stock issuable upon the exercise of warrants. Columbus Capital Management, LLC, which serves as the general partner and investment manager to each of Columbus Capital QP Partners, L.P., Columbus Capital Partners, L.P., and Columbus Capital Offshore QP Fund, LTD. (collectively "the Funds"), and Mr. Matthew D. Ockner, as Managing Member of Columbus Capital Management, LLC, with the power to exercise investment and voting discretion, may be deemed to be the beneficial owner of all shares of Common Stock held by the Funds. The business address of Matthew D. Ockner is 1 Embarcadero Center, Suite 1130, San Francisco, CA 94111. The percentage in this table reflects that the reporting persons may not exercise the warrants to the extent such exercise would cause the reporting persons to beneficially own a number of shares of common stock that would exceed 9.99% of our then outstanding common stock following such exercise.
(3)

Includes 2,495,747 shares of common stock,Common Stock, and 204,081 shares of common stockCommon Stock issuable upon the exercise of warrants. Dr. Lam Kong is the sole officer and director of each A&B (HK) Company Limited (“A&B”) and A&B Brother Limited (“A&B BVI”). The business address of A&B BVI is Trident Chambers, P.O. Box 146, Road Town, Tortola, British Virgin Islands. The business address of Dr. Lam Kong is Unit 2106, 21/F, Island Place Tower, 510 King’s Road, North Point, Hong Kong.

(4)
(3)

Based solely on a Schedule 13G filed March 18, 2020,Incudes 2,857,143 shares issuable upon the exercise of warrants. Sabby Volatility Warrant Master Fund, Ltd. (“Sabby”) disclosed direct ownership of 2,857,143 shares, and, Sabby Management, LLC (“Sabby, Sabby Management”) and Hal Mintz disclosed beneficialhave shared voting and indirect ownership of 2,857,143investment power with respect to these shares. Sabby Management, LLC serves as the investment manager of Sabby; Mr. Mintz is manager of Sabby Management, LLC. The address for Sabby is c/o Ogier Fiduciary Services (Cayman) Limited, 89 Nexus Way, Camana Bay, Grand CaymanKY1-9007, Cayman Islands. The address for Sabby Management, LLC and Mr. Mintz is 10 Mountainview Road, Suite 205, Upper Saddle River, New Jersey 07458.

(4)

Based solely on a Schedule 13G/A filed February 12, 2020, Montel Williams Enterprises, Inc. (“MWE”) disclosed direct ownership of 874,487 shares. By virtue of his control of MWE as its sole stockholder and sole director, Montel Williams is deemed to beneficially own such 874,487 shares. The address for the reporting person is 1395 Brickell Avenue, Suite 800, Miami, FL33131.

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24

(5)

Based solely on a Schedule 13G filed March 30, 2020, Armistice Capital, LLC (“Armistice”), Armistice Capital Master Fund Ltd. (“Master Fund”) and Steven Boyd disclosed shared voting and dispositive power over 1,910,062 shares. The address for Armistice is 510 Madison Avenue, 7th Floor, New York, New York 10022. The address for Master Fund is c/o dms Corporate Services Ltd., 20 Genesis Close, P.O. Box 314, Grand CaymanKY1-1104, Cayman Islands. The address for Mr. Boyd is c/o Armistice Capital, LLC, 510 Madison Avenue, 7th Floor, New York, New York 10022.

(6)

Includes 677,888783,234 shares of common stock, 735,729Common Stock, 543,438 shares of common stockCommon Stock issuable upon the exercise of stock options, and 30,52825,510 shares of common stockCommon Stock issuable upon the exercise of warrants.

Mr. Deschamps stepped down from his roles as President and Chief Executive Officer and director effective August 23, 2020 upon mutual agreement with the Board. The information presented is based on the former officer’s last filed Form 4 and company records.
(7)(6)

Includes 25,860148,742 shares of common stock, 351,667Common Stock, 527,292 shares of common stockCommon Stock issuable upon the exercise of stock options, and 20,83834,885 shares of common stockCommon Stock issuable upon the exercise of warrants.

(8)(7)

Includes 703,402703,403 shares of common stockCommon Stock and 364,666396,667 shares of common stockCommon Stock issuable upon the exercise of stock options.

(9)(8)

Includes 3,3462,500 shares of common stock, 43,149Common Stock and 114,327 shares of common stockCommon Stock issuable upon the exercise of stock options and 3,346 shares of common stock issuable upon the exercise of warrants.

options.
(10)(9)

RepresentsIncludes 829,545 shares of common stockCommon Stock and 50,186 shares of Common Stock issuable upon the exercise of stock options.

(11)(10)

Includes 2,500 shares of common stock and 60,203 shares of common stock issuable upon the exercise of stock options.

(12)

Includes 829,545 shares of common stock and 99,206 shares of common stock issuable upon the exercise of stock options.

(13)

Includes 84,530 shares of common stock, 53,165Common Stock, 109,599 shares of common stockCommon Stock issuable upon the exercise of stock options and 76,530 shares of common stockCommon Stock issuable upon the exercise of warrants.

(14)(11)

Includes 302,6731,420,525 shares of common stock and 85,070347,296 shares of common stock issuable upon the exercise of warrants held by Maple Leaf Partners, L.P. (“MLP”), 66,283300,953 shares of common stock and 19,31773,621 shares of common stock issuable upon the exercise of warrants held by Maple Leaf Partners I, L.P. (“MLP I”), 161,154815,842 shares of common stock and 48,663202,570 shares of common stock issuable upon the exercise of warrants held by Maple Leaf Discovery I, L.P. (“MLD I”), 12,42658,945 shares .ofof common stock and 4,56718,681 shares of common stock issuable upon the exercise of warrants held by Maple Leaf Offshore, Ltd. (“MLO”), 20,000 shares on common stock held directly by Mr. Andreeff and 22,98478,510 shares of common stock issuable upon the exercise of stock options held directly by Mr. Andreeff. Mr. Andreeff is the managing member of Maple Leaf Capital I, LLC, the general partner of MLP, MLP I and MLD I, and as such may be deemed to beneficially own the securities held by MLP, MLP I and MLD I. Mr. Andreeff is also the president of the managing member of Andreeff Equity Advisors, LLC, the investment manager of MLO and as such may be deemed to beneficially own the securities held by MLO.

(15)(12)

Includes 2,889,608Consists of 30,609 shares of commonCommon Stock issuable upon the exercise of stock 1,667,960options.

(13)
Includes 3,468,410 shares of common stockCommon Stock, 1,002,469 shares of Common Stock issuable upon the exercise of stock options, and 288,859677,053 shares of common stockCommon Stock issuable upon the exercise of warrants.

14
Delinquent Section 16(A) Report

TABLE OF CONTENTS

Section 16(a)

ADDITIONAL MATTERS
Other Matters
The Company is unaware of the Exchange Act requires the Company’s directors and executive officers, and persons who own moreany business, other than ten percent of a registered class of the Company’s equity securities, to file with the SEC initial reports of ownership and reports of changes in ownership of common stock and other equity securities of the Company. Officers, directors and greater than ten percent stockholders are required by SEC regulation to furnish the Company with copies of all Section 16(a) forms they file.

To the Company’s knowledge, based solely on a review of the copies of such reports furnished to the Company and written representations that no other reports were required, during the fiscal year ended December 31, 2019, all Section 16(a) filing requirements applicable to its officers, directors and greater than ten percent beneficial owners were complied with; except two reports covering separate transactions were filed late for Ms. LaViscount and Mr. Tyler.

25

EXECUTIVE COMPENSATION

We are currently an emerging growth company. As an emerging growth company, we are subject to the scaled reporting rules applicable to emerging growth companies. The following section describes, under the scaled reporting rules applicable to emerging growth companies, the compensation we paid to our Named Executive Officers for 2018 and 2019.

Summary Compensation Table

The following table sets forth information regarding compensation earned during the last two completed fiscal years by our chief executive officer and our two next most highly compensated executive officers during 2019 who were serving as executive officers as of December 31, 2019. We refer to these persons as our “Named Executive Officers” elsewheredescribed in this proxy statement.

Name and Principal Position

  Year   Salary ($)   Option
Awards ($) (1)		  Securities
in Lieu of
Cash ($) (2)		   Non-Equity
Incentive Plan
Compensation ($)		   All Other
Compensation ($)(3)		   Total ($) 

Philippe Deschamps

   2019    484,356    739,776   7,997    235,664    12,373    480,166 

Chief Executive Officer(4)

   2018    424,320    721,318(5)   0        99,840    13,458    1,258,936 

Joyce LaViscount

   2019    376,464    642,705   5,491    138,432    8,371    1,171,463 

Chief Financial Officer and Chief Operating Officer

   2018    342,720    607,425(5)   0        67,200    8,234    25,579 

Jonathan Sackier

   2019    336,553    462,360   0        153,544    0        958,026 

Chief Medical Officer

   2018    318,240    607,425(5)   0        62,400    0        988,065 

(1)

The amounts reflect the full grant date fair value for awards granted during the indicated year. The grant date fair value was computed in accordance with ASC Topic 718, Compensation—Stock Compensation. Unlike the calculations contained in our financial statements, this calculation does not give effect to any estimate of forfeitures related to service-based vesting, but assumes that the executive will perform the requisite service for the award to vest in full. The assumptions we used in valuing options are described in Note 4 to our audited financial statements included in our Annual Report on Form10-K for the fiscal year ended December 31, 2019.

(2)

The amounts reflect the amount of cash salary forgone based on elections made to reduce cash salaries commencing December 13, 2019.

(3)

Represents matching contributions to the Company’s 401(k) savings plan.

(4)

Mr. Deschamps is also a member of our Board of Directors, but did not receive any additional compensation in his capacity as a director.

(5)

The grant date fair value was denominated in Canadian dollars and translated into U.S. dollars from Canadian dollars based on the closing exchange rate from the Bank of Canada of USD$1.00 = CAD$1.2876 on May 15, 2018, based on an option exercise price of CAD$14.15.

Narrative Disclosure to Summary Compensation Table

The Company has retained Compensia as its compensation consultant. Compensia also advisedstatement, that may be considered at the Compensation Committee onSpecial Meeting. If any other matters should properly come before the Company’s compensation strategy and in developing and implementing an executive compensation program to execute that strategy. AtSpecial Meeting, it is the requestintention of the Compensation Committee, Compensia provided competitive market data for similarly sized medical device companies for the purposes of determining our executive compensation. Compensia ultimately developed recommendations that were presented to the Compensation Committee for its consideration. During the fiscal year ended December 31, 2019, our Compensation Committee recommended, and the Board approved the base salaries and target discretionary bonuses described below based on Compensia’s recommendations.

Prior to the establishment of a formal compensation committee in March 2018, ournon-employee directors historically determined executive compensation, including our Chief Executive Officer’s compensation, and reviewed such compensation annually. The Compensation Committee now performs all duties relating to executive compensation and makes recommendations on such matters to the Board for final approval. The Compensation Committee intends to review compensation annually for all executive officers, including our Named Executive Officers. In setting annual base salaries and bonuses and granting equity incentive awards, the Compensation Committee considers compensation for comparable positionspersons named in the market, individual performance as comparedaccompanying form of proxy to our expectations and objectives, our desire to motivate our employees to achieve short- and long-term results that are invote the best interests of our stockholders, and a long-term commitment to the Company.

26

Annual Base Salary

We have entered into employment agreements with each of our Named Executive Officers that establish annual base salaries, which are reviewed periodicallyproxies held by our Compensation Committee, and recommended to the Board for final approval, in order to compensate our Named Executive Officers for the satisfactory performance of duties to the Company. Annual base salaries are intended to provide a fixed component of compensation to our Named Executive Officers, reflecting their skill sets, experience, roles and responsibilities. Base salaries for our Named Executive Officers have generally been set at levels deemed necessary to attract and retain individuals with superior talent.

Annual Bonus

For the fiscal year ended December 31, 2019, our Named Executive Officers were entitled to annual bonuses calculated as a target percentage of their annual base salary based upon the Chief Executive Officer’s assessment of their performance and our attainment of targeted goals as set by the Board of Directors in their sole discretion, and communicated to each officer. The target bonus for the Chief Executive Officer was based on the Compensation Committee’s assessment of his performance. The amounts of such bonuses were recommended by the Compensation Committee to the Board, and formally approved by the Board in March 2020 based on each executive’s and our performance in the fiscal year ended December 31, 2019.

Equity-Based Awards

Our equity-based incentive awards which are mainly comprised of stock options are designed to align our interests with those of our employees and consultants, including our Named Executive Officers. Ournon-employee directors have historically been responsible for approving equity grants. As described above, our Compensation Committee now has responsibility for recommending to the Board, for final approval, equity-based incentive awards to our Named Executive Officers. Vesting of equity awards is generally tied to continuous service with us and serves as an additional retention measure. Our executives generally are awarded an initial new hire grant upon commencement of employment. Additional grants may occur periodically in order to specifically incentivize executives with respect to achieving certain corporate goals or to reward executives for exceptional performance.

In May 2018, our Compensation Committee recommended, and our Board approved, the grant of an option to purchase 95,000 shares of common stock to Mr. Deschamps, an option to purchase 80,000 shares of common stock to Ms. LaViscount and an option to purchase 80,000 shares of common stock to Dr. Sackier pursuant to the 2016 Omnibus Incentive Plan (the “2016 Plan”) and a stock option agreement. Each of these stock options has an exercise price equal to the fair market value of a share of common stock as of the grant date, as determinedthem in accordance with our 2016 Plan, and vests in equal monthly installments overtheir best judgment.

To assure the48-month period following the grant date.

In May 2018, the Company’s Board of Directors authorized and approved the adoption presence of the 2018 Omnibus Incentive Plan (the “2018 Plan”), under which an aggregate of 5,356,114 shares may be issued. Pursuantnecessary quorum and to vote on the matters to come before the Special Meeting, please promptly indicate your choices via the internet or phone, or by mail, according to the termsprocedures described on the proxy card. The submission of a proxy via the 2018 Plan, the Company is authorized to grant stock options, as well as awards of stock appreciation rights, restricted stock, unrestricted shares, restricted stock units (“RSUs”), stock equivalent unitsinternet, or by mail does not prevent you from attending and performance-based cash awards. These awards may be granted to directors, officers, employees and eligible consultants. Vesting and the term of an option is determinedvoting at the discretion of the Board of Directors. Subsequent to the adoption of the 2018 Plan, the Company ceased granting awards under the 2016 Plan.

In March 2019, our Compensation Committee recommended, and our Board approved, the grant of an option to purchase 160,000 shares of common stock to Mr. Deschamps, an option to purchase 100,000 shares of common stock to Ms. LaViscount and an option to purchase 100,000 shares of common stock to Dr. Sackier pursuant to the 2018 Plan. Each of these stock options has an exercise price equal to the fair market value of a share of common stock as of the grant date, as determined in accordance with our 2018 Plan, and vests in equal monthly installments over the48-month period following the grant date.

In September 2019, our Compensation Committee recommended, and our Board approved, the grant of an option to purchase 100,000 shares of common stock to Ms. LaViscount pursuant to the 2018 Plan. Each of these stock options has an exercise price equal to the fair market value of a share of common stock as of the grant date, as determined in accordance with our 2018 Plan. 25% of the shares subject to the grant vest on September 23, 2020, and the remaining shares vest in equal monthly installments over the remaining 36 months.

In December 2019, we entered into an arrangement, as approved our Board, with each of Mr. Deschamps and Ms. LaViscount whereby Mr. Deschamps and Ms. LaViscount elected to receive shares of common stock in lieu of a portion of each of their respective cash salary compensation. Mr. Deschamps and Ms. LaViscount elected to reduce their base cash salaries by 19% and 17%, respectively, in exchange for fully vested restricted stock grants pursuant to the 2018 Plan. The value of the shares is equal in value to the amount of cash salary forgone, with the actual number of shares issuable on each payroll date calculated based on the closing trading price of our common stock as of such payroll date. Mr. Deschamps’ and Ms. LaViscount’s elections to receive restricted stock awards in lieu of cash salary compensation were effective beginning with the December 15, 2019 payroll date and will remain in place and be effective for all future payroll dates that occur thereafter until the officer delivers written notice to us of his or her decision to termination the election. As of December 31, 2019, Mr. Deschamps received 13,211 restricted stock awards and Ms. LaViscount received 9,069 restricted stock awards.

27

Special Meeting.

In March 2020, our Compensation Committee recommended, and our Board approved, the grant of an option to purchase 50,000 shares of common stock to Dr. Sackier pursuant to the 2018 Plan. Each of these stock options has an exercise price equal to the fair market value of a share of common stock as of the grant date, as determined in accordance with our 2018 Plan, and vests in equal annual installments over the four-year period following the grant date.

Retirement Benefits and Other Compensation

Our Named Executive Officers do not participate in, or otherwise receive any benefits under, any pension or deferred compensation plan sponsored by us. During 2019, we matched contributions made by our employees, including our Named Executive Officers, to the Company’s 401(k) savings plan. In 2020, we suspended the safe harbor match and moved to a discretionary, profit-sharing match. Our Named Executive Officers were eligible to participate in our employee benefits, including health insurance benefits, on the same basis as our other employees. We generally do not provide perquisites or personal benefits except in limited circumstances.

Employment Agreements and Payments Upon Termination or Change in Control

Philippe Deschamps

On June 13, 2014, we entered into an employment agreement with Philippe Deschamps to serve as our President and Chief Executive Officer. We amended the employment agreement on September 1, 2014. Pursuant to the employment agreement, Mr. Deschamps initially received a base salary at an annualized rate of $250,000, which was subsequently increased to $400,000 following the Company’s achievement of certain financing thresholds. On April 17, 2017, the Board approved an increase of his base salary to $416,000. In addition to Mr. Deschamps’ base salary, he had the opportunity to receive a target annual bonus of 30% of the base salary, conditional upon, and subject to upward or downward adjustment based upon, achievements and individual goals to be established in good faith by the Board of Directors and Mr. Deschamps. On April 26, 2018, the Compensation Committee recommended to the Board, and the Board approved a 3% increase to Mr. Deschamps’ base salary to $428,480. On March 5, 2019, the Compensation Committee recommended to the Board and the Board approved, a 17% increase to Mr. Deschamps’ base salary to $501,000 effective March 31, 2019 and a target annual bonus of 55% of such salary.

If Mr. Deschamps is terminated without cause or if Mr. Deschamps resigns for good reason (each as defined in Mr. Deschamps’ employment agreement), Mr. Deschamps is entitled to an aggregate amount equal to the sum of his base salary and the earned portion of his annual bonus paid for the year preceding the year of his termination of which such amount is to be paid in equal monthly installments during the twelve month period following such termination of employment.

Joyce LaViscount

On October 19, 2015, we entered into an employment agreement with Joyce LaViscount to serve as our Chief Financial Officer and Chief Operating Officer. Pursuant to the employment agreement, Ms. LaViscount received a base salary at an annualized rate of $300,000 for her employment term, which isat-will. On April 17, 2017, the Board approved an increase of her base salary to $336,000. In addition to Ms. LaViscount’s base salary, she had the opportunity to receive a target annual bonus of 25% of the base salary, conditional upon, and subject to upward or downward adjustment based upon achievements and individual goals to be established in good faith by our Chief Executive Officer and Ms. LaViscount. On April 26, 2018, the Compensation Committee recommended to the Board, and the Board approved, a 3% increase to Ms. LaViscount’s base salary to $346,080. On March 5, 2019, the Compensation Committee recommended to the Board, and the Board approved, a 12% increase to Ms. LaViscount’s base salary to $387,000, effective March 31, 2019, and a target annual bonus of 40% of such salary.

If Ms. LaViscount is terminated without cause or if she resigns for good reason (each as defined in Ms. LaViscount’s employment agreement), Ms. LaViscount is entitled to an aggregate amount equal to the sum of her base salary and the earned portion of her annual bonus paid for the year of her termination, of which such amount is to be paid in equal monthly installments during the twelve month period following such termination of employment.

Jonathan Sackier

On December 1, 2014, we entered into an employment agreement with Jonathan Sackier to serve as our Chief Medical Officer. Pursuant to the employment agreement, Dr. Sackier received a base salary at an annualized rate of $300,000 for his employment terms, which isat-will. In addition to Dr. Sackier’s base salary, he shall have the opportunity to receive a target annual bonus of 25% of the base salary, conditional upon, and subject to upward or downward adjustment based upon, achievements and individual goals to be established in good faith by our Chief Executive Officer and Dr. Sackier. On April 17, 2017, our Board of Directors approved a 4% increase in Dr. Sackier’s base salary to $312,000. On April 26, 2018, the Compensation Committee recommended to the Board, and the Board approved a 3% increase to Dr. Sackier’s base salary to $324,480. On March 5, 2019, the Compensation Committee recommended to the Board and the Board approved, a 12% increase to Dr. Sackier’s base salary to $360,000 effective March 31, 2019 and a target annual bonus of 40% of such salary. On December 1, 2019, Dr. Sackier agreed to take a temporary salary reduction to $200,000.

28

If Mr. Sackier is terminated without cause or if he resigns for good reason (each as defined in Mr. Sackier’s employment agreement), Mr. Sackier is entitled to an aggregate amount equal to the sum of his base salary and the earned portion of his annual bonus paid for the year of his termination, of which such amount is to be paid in equal monthly installments during the twelve month period following such termination of employment.

Outstanding Equity Awards at December 31, 2019

The following tables set forth certain information about equity awards granted to our Named Executive Officers that remain outstanding as of December 31, 2019:

Stock Options

Name

  Number of
Securities
Underlying
Unexercised
Options
(#)
Exercisable		   Number of
Securities
Underlying
Unexercised
Options
(#)
Unexercisable		  Option
Exercise
Price
($)		   Option
Expiration
Date		 

Philippe Deschamps

   300,000    0(1)   5.35    7/13/2026 
   100,000    100,000 (2)   8.13    4/17/2027 
   37,604    57,396 (3)   10.99    5/15/2028 
   0    160,000 (4)   6.76    3/28/2029 

Joyce LaViscount

   20,000    0(5)   12.52    3/16/2025 
   150,000    0(6)   3.20    10/21/2025 
   120,000    0(1)   5.35    7/13/2026 
   80,000    80,000 (2)   8.13    4/17/2027 
   31,667    48,333 (3)   10.99    5/15/2028 
   0    100,000 (4)   6.76    3/28/2029 
   0    150,000 (7)   1.73    9/23/2029 

Jonathan Sackier

   80,000    0(8)   12.72    12/8/2024 
   120,000    0(1)   5.35    7/13/2026 
   80,000    80,000 (2)   8.13    4/17/2027 
   31,667    48,333 (3)   10.99    5/15/2028 
   0    100,000 (4)   6.76    3/28/2029 

(1)

This option was granted on July 13, 2016. All of the shares subject to the option have vested.

(2)

This option was granted on April 17, 2017. The shares vest in equal monthly installments over 48 months from the date of grant.

(3)

This option was granted on May 15, 2018. The shares vest in equal monthly installments over 48 months from the date of grant.

(4)

This option was granted on March 28, 2019. The shares vest in equal annual installments over 4 years from the date of grant.

(5)

This option was granted on March 16, 2015. All of the shares subject to the option have vested.

(6)

This option was granted on October 21, 2015. All of the shares subject to the option have vested.

(7)

This option was granted on September 23, 2019. 25% of the shares subject to the grant vest on September 23, 2020, and the remaining shares vest in equal monthly installments over the remaining 36 months.

(8)

This option was granted on December 8, 2014. All of the shares subject to the option have vested.

Restricted Stock Awards

Name

  Number of
Securities
Underlying
Unexercised
RSAs
(#)
Exercisable (1)		   Number of
Securities
Underlying
Unexercised
RSAs
(#)
Unexercisable (2)		   RSA
Expiration
Date		 

Philippe Deschamps

   9,089    0    12/13/2029 
   100,000    0    12/31/2029 

Joyce LaViscount

   4,122    0    12/13/2029 
   2,830    0    12/31/2029 

(1)

The value of the shares to be issued will be equal to the amount of cash salary forgone, with the actual number of shares issuable on each payroll date are calculated based on the closing trading price of the Company’s common stock as of such payroll date.

(2)

The restricted stock awards fully vest on grant date.

29

Householding

Non-Employee Director Compensation

During the fiscal year ended December 31, 2019, we did not pay any cash fees to ournon-employee directors for service on our Board. We adopted anon-employee director compensation policy, effective as of the date of the Annual Meeting, pursuant to which the Chairs of the Audit Committee, Compensation Committee and Governance and Nominating Committee will receive an annual retainer of $10,000, $5,000 and $2,500, respectively. We also reimbursenon-employee directors for reasonable expenses incurred in connection with attending Board and committee meetings.

The following table shows for the fiscal year ended December 31, 2019 certain information with respect to the compensation of allnon-employee directors of the Company:

Name

  Option
Awards
($)		   All Other
Compensation
($)		  Total
($)		 

Thomas E. Griffin (1)

   83,521    —     83,521 

Huaizheng Peng (2)

   68,639    —     68,639 

Mitchell E. Tyler (3)

   65,138    26,451 (4)   91,589 

Edward M. Straw (5)

   71,703    —     71,703 

Blane Walter (6)

   83,959    —     83,959 

Dane C. Andreeff(7)

   79,144    —     79,144 

(1)

Mr. Griffin held 73,891 shares of common stock underlying option grants at December 31, 2019.

(2)

Dr. Peng held 73,025 shares of common stock underlying option grants at December 31, 2019.

(3)

Mr. Tyler held 44,233 shares of common stock underlying option grants at December 31, 2019.

(4)

This amount represents cash consulting fees paid to Mr. Tyler, in connection with consulting services for the development of the PoNS device.

(5)

Vice Admiral (Retired) Straw held 88,718 shares of common stock underlying option grants at December 31, 2019.

(6)

Mr. Walter held 83,990 shares of common stock underlying option grants at December 31, 2019.

(7)

Mr. Andreeff held 52,901 shares of common stock underlying option grants at December 31, 2019.

In May 2018, our Compensation Committee recommended, and our Board approved, the grant of an option to purchase 15,000 shares of common stock to each of Messrs. Andreeff and Griffin, and an option to purchase 12,500 shares of common stock to each of Messrs. Tyler and Walter, Dr. Peng and Vice Admiral (Retired) Straw, in each case pursuant to the 2016 Plan and a stock option agreement. Each of these stock options has an exercise price equal to the fair market value of a share of common stock as of the grant date, as determined in accordance with the 2016 Plan, and vests in equal monthly installments over the12-month period following the grant date.

In March 2019, our Compensation Committee recommended, and our Board approved, the grant of an option to purchase 18,990 shares of common stock to Mr. Walter, an option to purchase 18,891 shares of common stock to Mr. Griffin, an option to purchase 17,901 shares of common stock to Mr. Andreeff, an option to purchase 16,218 shares of common stock to Vice Admiral (Retired) Straw, an option to purchase 15,525 shares of common stock to Dr. Peng and an option to purchase 14,733 shares of common stock to Mr. Tyler, in each case pursuant to the 2018 Plan and a stock option agreement. Each of these stock options has an exercise price equal to the fair market value of a share of common stock as of the grant date, as determined in accordance with the 2018 Plan, and vests in equal monthly installments over the12-month period following the grant date.

30

SECURITIES AUTHORIZED FOR ISSUANCE UNDER EQUITY COMPENSATION PLANS

The following table shows information regarding our equity compensation plans as of December 31, 2019.

Name

  Number of
Securities to be
Issued upon
Exercise of
Outstanding
Options,
Warrants and
Rights(a)		  Weighted-
Average
Exercise Price
of Outstanding
Options,
Warrants and
Rights(b)		  Number of Securities
Remaining Available
for Future Issuance
Under Equity
Compensation Plans
(Excluding Securities
Reflected in
Column)(a)(c)		 

Equity compensation plans approved by security holders

   3,494,989    (1 )  $6.76(2)   4,068,711(3) 

Equity compensation plans not approved by security holders

   —    $—   — 

Total

   3,494,989    $6.76   4,068,711 

(1)

Consists of 3,467,292 shares issuable upon exercise of outstanding options and 27,697 shares issuable upon settlement of RSUs under the 2018 Plan, the 2016 Plan and the Helius Medical Technologies, Inc. June 2014 Stock Incentive Plan.

(2)

Does not take into account RSUs, which have no exercise price.

(3)

Consists of shares available under the 2018 Plan.

31

TRANSACTIONS WITH RELATED PERSONS

Related-Person Transactions Policy and Procedures

The Board has adopted a written Related-Person Transactions Policy that sets forth the Company’s policies and procedures regarding the identification, review, consideration and approval or ratification of “related-persons transactions.” For purposes of the Company’s policy only, a “related-person transaction” is a transaction, arrangement or relationship (or any series of similar transactions, arrangements or relationships) in which the Company and any “related person” are participants involving an amount that exceeds or will exceed $120,000 or, during such time as the Company qualifies as a “smaller reporting company,” the lesser of (1) $120,000 or (2) 1% of the average of our total assets for the last two completed fiscal years. Transactions involving compensation for services provided to the Company as an employee, director, consultant or similar capacity by a related person are not covered by this policy. A related person is any executive officer, director, nominee to become director, or more than 5% stockholder of the Company, including any of their immediate family members, and any entity owned or controlled by such persons.

Under the policy, where a transaction has been identified as a related-person transaction, management must present information regarding the proposed related-person transaction to the Audit Committee (or, where Audit Committee approval would be inappropriate, to another independent body of the Board) for consideration and approval or ratification. The presentation must include a description of, among other things, the material facts, the interests, direct and indirect, of the related persons, the benefits to the Company of the transaction and whether any alternative transactions were available. To identify related-person transactions in advance, the Company relies on information supplied by its executive officers, directors and certain significant stockholders. In considering related-person transactions, the Committee takes into account the relevant available facts and circumstances including, but not limited to (a) the risks, costs and benefits to the Company, (b) the impact on a director’s independence in the event the related person is a director, immediate family member of a director or an entity with which a director is affiliated, (c) the terms of the transaction, (d) the availability of other sources for comparable services or products and (e) the terms available to or from, as the case may be, unrelated third parties or to or from employees generally. In the event a director has an interest in the proposed transaction, the director must recuse himself or herself from the deliberations and approval. The policy requires that, in determining whether to approve, ratify or reject a related-person transaction, the Committee consider, in light of known circumstances, whether the transaction is in, or is not inconsistent with, the best interests of the Company and its stockholders, as the Committee determines in the good faith exercise of its discretion.

Certain Related-Person Transactions

The following includes a summary of transactions since January 1, 2017 to which we have been a party, in which the amount involved in the transaction exceeded $120,000, and in which any of our directors, executive officers or, to our knowledge, beneficial owners of more than 5% of our voting securities or any member of the immediate family of any of the foregoing persons had or will have a direct or indirect material interest. Other than described below, there have not been, nor are there currently any proposed, transactions or series of similar transactions to which we have been or will be a party other than compensation arrangements, which include equity and other compensation, termination, change in control and other arrangements, which are described under “Executive Compensation.”

Consulting Agreement with Montel Media, Inc.

In April 2016, we entered into a consulting agreement with Montel Media, Inc. (“Montel Media”), pursuant to which Montel Media provides consulting services for the promotion of our clinical trials and ongoing media and marketing strategies. Under the agreement, Montel Media receives $15,000 per month. This consulting agreement was terminated in February 2018. We paid Montel Media $0, $45,000 and $0.2 million for the years ended December 31, 2019, 2018 and 2017, respectively, pursuant to the consulting agreement.

Consulting Agreement with Clinvue LLC

Our Chief Medical Officer, Jonathan Sackier, was a founding member of Clinvue LLC, which provided regulatory advisory services for the Company. Clinvue ceased operations as of December 31, 2018. We paid Clinvue LLC approximately $0.1 million for consulting services in each of the years ended December 31, 2018 and 2017. We made no payments to Clinvue for the year ended December 31, 2019.

November 2019 Public Offering

In November 2019, we issued 4,815,010 shares of our Class A Common Stock in an underwritten public offering. Entities affiliated with Dane C. Andreeff, our director, purchased approximately $0.2 million, or 571,429, of the shares Class A Common Stock offered thereby. Each share of Class A Common Stock was purchased at a price of $0.35 per share.

Indemnification

The Company provides indemnification for its directors and officers so that they will be free from undue concern about personal liability in connection with their service to the Company. Under the Company’s Amended and Restated Bylaws, the Company is required to indemnify its directors and officers to the extent not prohibited under Delaware or other applicable law. The Company has also entered into indemnity agreements with certain

32

officers and directors. These agreements provide, among other things, that the Company will indemnify the officer or director, under the circumstances and to the extent provided for in the agreement, for expenses, damages, judgments, fines and settlements he or she may be required to pay in actions or proceedings which he or she is or may be made a party by reason of his or her position as a director, officer or other agent of the Company, and otherwise to the fullest extent permitted under Delaware law and the Company’s Amended and Restated Bylaws.

HOUSEHOLDING OF PROXY MATERIALS

The SEC has adopted rules that permit companies and intermediaries (e.g.,(such as brokers) to satisfy theimplement a delivery requirements for Annual Meeting materials with respect to two or moreprocedure called “householding.” Under this procedure, stockholders sharing an address who have been previously notified by their broker, bank or other agent and have consented to householding will receive only one copy of our proxy statement. This procedure reduces printing costs and postage fees, and helps protect the same address by delivering a single set of Annual Meeting materials addressed to those stockholders. This process, which is commonly referred toenvironment as “householding,” potentially means extra convenience for stockholders and cost savings for companies.

This year,well.

We expect that a number of brokers with account holders who are Helius Medical Technologies, Inc.our stockholders will be “householding” the Company’sour proxy materials. A single set of Annual Meetingproxy materials will be delivered to multiple stockholders sharing an address unless contrary instructions have been received from one or more of the affected stockholders. Once you have received notice from your broker that theyit will be “householding” communications to your address, “householding” will continue until you are notified otherwise or until you revoke your consent. If,Stockholders may revoke their consent at any time you no longer wishby contacting their broker.
Upon written or oral request, we will undertake to participate in “householding” and would preferpromptly deliver a separate copy of the proxy materials to any stockholder at a shared address to which a single copy of any of those documents was delivered. To receive a separate setcopy of Annual Meetingthe proxy materials, please notify your broker or Helius Medical Technologies, Inc. Direct your written request to Helius Medical Technologies, Inc., Attention:you may write our Secretary at 642 Newtown Yardley Road, Suite 100, Newtown, Pennsylvania 18940, (215) 431-3296. Any stockholders who share the same address and currently receive multiple copies of the proxy materials who wish to receive only one copy in the future can contact their bank, broker or contactother holder of record or our Secretary to request information about “householding”.
Requirements for Submission of Stockholder Proposals and Nominations for 2021 Annual Meeting
To be considered for inclusion in the proxy materials for our 2021 annual meeting of stockholders (pursuant to Rule 14a-8 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”)), your proposal must be submitted in writing by January 11, 2021, to our Corporate Secretary at (215)431-3296. Stockholders who currently receive multiple sets of Annual Meeting materials at their addresses and would like to request “householding” of their communications should contact their brokers.

33

OTHER MATTERS

The Board of Directors knows of no other matters that will be presented for consideration at the Annual Meeting. If any other matters are properly brought before the meeting, it is the intention of the persons named in the accompanying proxy to vote on such matters in accordance with their best judgment.

By Order of the Board of Directors,

Joyce LaViscount

Secretary

May     , 2020

A copy of the Company’s Annual Report to the Securities and Exchange Commission on Form10-K for the fiscal year ended December 31, 2019 is available without charge upon written request to: Corporate Secretary, Helius Medical Technology,Technologies, Inc., 642 Newtown Yardley Road, Suite 100, Newtown, Pennsylvania 18940. As the rules of the SEC make clear, simply submitting a proposal does not guarantee that it will be included.

Any stockholder director nomination or proposal of other business intended to be presented for consideration at the 2021 annual meeting, but not intended to be considered for inclusion in our proxy statement and form of proxy relating to such meeting (i.e. not pursuant to Rule 14a-8 of the Exchange Act), must be received by us at the address stated above between February 10, 2021 and March 12, 2021. However, if our 2021 annual meeting occurs more than 30 days before or more than 30 days after June 10, 2021, we must receive nominations or proposals (i) not later than the close of business on the later of the 90th day prior to the date of the 2021 annual meeting or the 10th day following the day on which public announcement is made of the date of the 2021 annual meeting, and (ii) not earlier than the 120th day prior to the 2021 annual meeting.
The above-mentioned proposals and notice to the Corporate Secretary must also be in compliance with our Amended and Restated Bylaws (including the information requirements therein) and the proxy solicitation rules of the SEC and Nasdaq. We reserve the right to reject, rule out of order or take other appropriate action with respect to any proposal that does not comply with the foregoing and other applicable requirements.
Solicitation by Board; Expenses
The Board is sending you this proxy statement in connection with the solicitation of proxies for use at the Special Meeting. We have engaged The Proxy Advisory Group, LLC to assist in the solicitation of proxies and provide related advice and informational support, for a services fee and the reimbursement of customary disbursements, which are
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not expected to exceed $25,000 in total. In addition, the Company’s directors, officers and regular employees may solicit proxies personally, telephonically, electronically or by other means of communication, but they will not receive any additional compensation for these services. The Company will pay the cost of preparing, assembling, and mailing the proxy materials. The Company has requested brokers, banks and other nominees to send the proxy materials to, and to obtain proxies from, the beneficial owners and the Company will reimburse such record holders for their reasonable expenses in doing so.
Important Notice Regarding the Availability of Proxy Materials for the Stockholder Meeting to be Held on December 28, 2020
The proxy statement and proxy card are available at www.proxyvote.com.
Your cooperation in giving this matter your immediate attention and in voting your proxies promptly is appreciated.
​​
By Order of the Board of Directors,
​
​​
Joyce LaViscount
​​
Secretary
​​
November 30, 2020
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34

APPENDIX A

CERTIFICATE OF AMENDMENT

OF


TO THE
CERTIFICATE OF INCORPORATION


OF


HELIUS MEDICAL TECHNOLOGIES, INC.

Pursuant to Section 242

Helius Medical Technologies, Inc. (the “Corporation”), a corporation organized and existing under and by virtue of the General Corporation Law of the State of Delaware Helius Medical Technologies, Inc., a corporation organized and existing under the laws of the State of Delaware (the “CorporationDGCL”), does hereby certify as follows:

1.

The name of the Corporation is Helius Medical Technologies, Inc. The Corporation was incorporated by the filing of its original Certificate of Incorporation with the Secretary of State of the State of Wyomingthat:

FIRST: The name of the Corporation is Helius Medical Technologies, Inc. and the date on March 13, 2014, which was amended by a certificate of conversion filed with the Secretary of State of the State of Delaware on July 18, 2018 (as so amended, the “Certificate of Incorporation”).

2.

The Certificate of Incorporation of the Corporation is hereby amended to effect a reverse stock split of the Corporation’s common stock by adding the following paragraph to Section A of Article IV:

“Effective upon the effective time of this Certificate of Amendment of the Certificate of Incorporation of the Corporation was originally filed with the Secretary of State of the State of Delaware (the “Split Effective Time”was July 18, 2018 (as previously corrected, the “Certificate of Incorporation”);

SECOND: The Board of Directors of the Corporation has duly adopted resolutions proposing and declaring advisable that the Certificate of Incorporation be amended as set forth herein and calling for the consideration and approval thereof at a meeting of the stockholders of the Corporation;
THIRD: The Certificate of Incorporation is hereby amended by deleting the Paragraph A of ARTICLE IV in its entirety and inserting the following in lieu thereof:
“The Company is authorized to issue two classes of stock to be designated, respectively, “Class A Common Stock” and “Preferred Stock.” The total number of shares which the Company is authorized to issue is one hundred sixty million (160,000,000) shares, of which one hundred fifty million (150,000,000) shares shall be Class A Common Stock (“Common Stock”), having a par value per share of $0.001, and ten million (10,000,000) shares shall be Preferred Stock, having a par value per share of $0.001. Upon the filing and effectiveness (the “Effective Time”) pursuant to the DGCL of this Certificate of Amendment to the Certificate of Incorporation, each [•] shares of the Corporation’s Common Stock issued and outstanding immediately prior to the Split Effective Time shall, automatically and without any action on the shares of Common Stock issued and held in the treasurypart of the Corporation immediately prior to the Split Effective Time are reclassifiedor respective holders thereof, be combined and converted into a smaller number of shares such that each five to twenty-five shares ofone (1) validly issued, Common Stock immediately prior to the Split Effective Time is reclassified into onefully paid and non-assessable share of Common Stock (the “Reverse Split”); provided, however, that the exact ratio withinCorporation shall issue no fractional shares as a result of the fiveactions set forth herein but shall instead pay to twenty-five rangethe holder of such fractional share a sum in cash equal to be determinedsuch fraction multiplied by the closing sales price of the Common Stock as reported on The Nasdaq Capital Market on the last trading day before the Effective Time (as adjusted to give effect to the Reverse Split).”
FOURTH: Pursuant to a resolution of the Board of Directors of the Corporation, priorthis Certificate of Amendment to the Split Effective TimeCertificate of Incorporation was submitted to the stockholders of the Corporation for their approval and publicly announced bywas duly adopted in accordance with the Corporation. Notwithstandingprovisions of Section 242 of the foregoing, no fractional sharesDGCL.
FIFTH: This Certificate of Common StockAmendment to the Certificate of Incorporation shall be issuedeffective as a result of the reclassification. In lieu of any fractional share to which the holder would otherwise be entitled, the Corporation shall pay the holder cash equal to the product of such fraction multiplied by the Common Stock’s fair market value as determined in good faith by the Board of Directors[•] p.m. Eastern time on and as of the Split Effective Time. Each stock certificate that, immediately prior todate of filing of this Certificate of Amendment with the Split Effective Time, represented sharesSecretary of Common Stock that were issued and outstanding immediately prior toState of the Split Effective Time shall, from and after the Split Effective Time, automatically and without the necessityState of presenting the same for exchange, represent that number of whole shares of Common Stock after the Split Effective Time into which the shares of Common Stock formerly represented by such certificate shall have been reclassified, provided, however, that each person of record holding a certificate that represented shares of Common Stock that were issued and outstanding immediately prior to the Split Effective Time shall receive, upon surrender of such certificate, a new certificate evidencing and representing the number of whole shares of Common Stock after the Split Effective Time into which the shares of Common Stock formerly represented by such certificate shall have been reclassified.”

3.

The Board of Directors of the Corporation has duly adopted a resolution pursuant to Section 242 of the General Corporation Law of the State of Delaware setting forth a proposed amendment to the Certificate of Incorporation of the Corporation and declaring said amendment to be advisable. The requisite stockholders of the Corporation have duly approved said proposed amendment in accordance with Section 242 of the General Corporation Law of the State of Delaware.

4.

This Certificate of Amendment and the amendment to the Certificate of Incorporation effected hereby shall be effective immediately upon filing.

[Signature Page Follows]

Delaware.

IN WITNESS WHEREOFIn Witness Whereof, the CorporationHelius Medical Technologies, Inc. has caused this Certificate of Amendment to be signedexecuted by its Chief Executive Officerduly authorized officer on this day of [        ],, 2020.

​​
Helius Medical Technologies, Inc.
HELIUS MEDICAL TECHNOLOGIES, INC.
​​
​
​​
By:
​​
By:
​

​
Name:
​​
Name:
​Philippe Deschamps
Title:​
Title:
Chief Executive Officer​​
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