Document and Entity Information
Document and Entity Information - shares | 6 Months Ended | |
Jun. 30, 2022 | Aug. 09, 2022 | |
Document and Entity Information | ||
Document Type | 10-Q | |
Document Quarterly Report | true | |
Document Transition Report | false | |
Amendment Flag | false | |
Document Period End Date | Jun. 30, 2022 | |
Document Fiscal Year Focus | 2022 | |
Document Fiscal Period Focus | Q2 | |
Trading Symbol | HSDT | |
Entity Registrant Name | HELIUS MEDICAL TECHNOLOGIES, INC. | |
Entity Central Index Key | 0001610853 | |
Current Fiscal Year End Date | --12-31 | |
Entity Filer Category | Non-accelerated Filer | |
Entity Small Business | true | |
Entity Emerging Growth Company | false | |
Entity Common Stock, Shares Outstanding | 28,197,189 | |
Entity Current Reporting Status | Yes | |
Entity Shell Company | false | |
Entity File Number | 001-38445 | |
Entity Tax Identification Number | 36-4787690 | |
Entity Incorporation, State or Country Code | DE | |
Entity Address, Address Line One | 642 Newtown Yardley Road, Suite 100 | |
Entity Address, City or Town | Newtown | |
Entity Address, State or Province | PA | |
Entity Address, Postal Zip Code | 18940 | |
City Area Code | (215) | |
Local Phone Number | 944-6100 | |
Title of 12(b) Security | Class A Common Stock, $0.001 par value per share | |
Security Exchange Name | NASDAQ | |
Entity Interactive Data Current | Yes |
Unaudited Condensed Consolidate
Unaudited Condensed Consolidated Balance Sheets - USD ($) $ in Thousands | Jun. 30, 2022 | Dec. 31, 2021 |
Current assets | ||
Cash | $ 3,273 | $ 11,005 |
Accounts receivable, net | 9 | 66 |
Other receivables | 187 | 185 |
Inventory, net | 577 | 476 |
Prepaid expenses | 996 | 862 |
Other current assets | 22 | |
Total current assets | 5,064 | 12,594 |
Property and equipment, net | 365 | 409 |
Other assets | ||
Goodwill | 753 | 763 |
Intangible assets, net | 236 | 333 |
Operating lease right-of-use asset, net | 128 | 3 |
Total other assets | 1,117 | 1,099 |
TOTAL ASSETS | 6,546 | 14,102 |
Current liabilities | ||
Accounts payable | 1,043 | 1,069 |
Accrued liabilities | 654 | 1,433 |
Operating lease liability | 52 | 3 |
Deferred revenue | 28 | 148 |
Total current liabilities | 1,777 | 2,653 |
Non-current liabilities | ||
Operating lease liability | 83 | |
Deferred revenue | 184 | 193 |
TOTAL LIABILITIES | 2,044 | 2,846 |
Commitments and contingencies (Note 10) | ||
STOCKHOLDERS' EQUITY | ||
Preferred stock, $0.001 par value; 10,000,000 shares authorized; no shares issued and outstanding as of June 30, 2022 and December 31, 2021 | ||
Class A common stock, $0.001 par value; 150,000,000 shares authorized; 4,195,113 and 3,780,674 shares issued and outstanding as of June 30, 2022 and December 31, 2021, respectively | 4 | 4 |
Additional paid-in capital | 150,665 | 149,412 |
Accumulated deficit | (145,191) | (137,035) |
Accumulated other comprehensive loss | (976) | (1,125) |
TOTAL STOCKHOLDERS' EQUITY | 4,502 | 11,256 |
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY | $ 6,546 | $ 14,102 |
Unaudited Condensed Consolida_2
Unaudited Condensed Consolidated Balance Sheets (Parenthetical) - $ / shares | Jun. 30, 2022 | Dec. 31, 2021 |
Unaudited Condensed Consolidated Balance Sheets | ||
Preferred stock, Par Value | $ 0.001 | $ 0.001 |
Preferred Stock, Shares Authorized | 10,000,000 | 10,000,000 |
Preferred Stock, Shares Issued | 0 | 0 |
Preferred Stock, Shares Outstanding | 0 | 0 |
Common Stock, Par Value | $ 0.001 | $ 0.001 |
Common Stock, Shares Authorized | 150,000,000 | 150,000,000 |
Common Stock, Shares, Issued | 4,195,113 | 3,780,674 |
Common Stock, Shares, Outstanding | 4,195,113 | 3,780,674 |
Unaudited Condensed Consolida_3
Unaudited Condensed Consolidated Statements of Operations and Comprehensive Loss - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2022 | Jun. 30, 2021 | Jun. 30, 2022 | Jun. 30, 2021 | |
Revenue: | ||||
Product sales, net | $ 119 | $ 63 | $ 302 | $ 140 |
Revenue from Contract with Customer, Product and Service [Extensible Enumeration] | us-gaap:ProductMember | us-gaap:ProductMember | us-gaap:ProductMember | us-gaap:ProductMember |
Other revenue | $ 8 | $ 7 | $ 15 | |
Total operating revenue | $ 119 | 71 | 309 | 155 |
Cost of sales: | ||||
Cost of product sales | $ 88 | $ 67 | $ 212 | $ 83 |
Cost, Product and Service [Extensible Enumeration] | us-gaap:ProductMember | us-gaap:ProductMember | us-gaap:ProductMember | us-gaap:ProductMember |
Gross profit | $ 31 | $ 4 | $ 97 | $ 72 |
Operating expenses: | ||||
Research and development | 953 | 1,377 | 2,717 | 2,694 |
Selling, general and administrative | 2,461 | 4,744 | 5,280 | 6,939 |
Amortization expense | 47 | 49 | 94 | 106 |
Total operating expenses | 3,461 | 6,170 | 8,091 | 9,739 |
Operating loss | (3,430) | (6,166) | (7,994) | (9,667) |
Other income (expense): | ||||
Other income | 1 | |||
Foreign exchange (loss) gain | (380) | 185 | (163) | 324 |
Net other income (expense) | (380) | 185 | (162) | 324 |
Loss before provision for income taxes | (3,810) | (5,981) | (8,156) | (9,343) |
Provision for income taxes | ||||
Net loss | (3,810) | (5,981) | (8,156) | (9,343) |
Other comprehensive income (loss): | ||||
Foreign currency translation adjustments | 351 | (185) | 149 | (313) |
Comprehensive loss | $ (3,459) | $ (6,166) | $ (8,007) | $ (9,656) |
Net loss per share | ||||
Basic | $ (0.97) | $ (2.58) | $ (2.11) | $ (4.29) |
Diluted | $ (0.97) | $ (2.58) | $ (2.11) | $ (4.29) |
Weighted average shares outstanding | ||||
Basic | 3,928,704 | 2,317,389 | 3,858,676 | 2,179,878 |
Diluted | 3,928,704 | 2,317,389 | 3,858,676 | 2,179,878 |
Unaudited Condensed Consolida_4
Unaudited Condensed Consolidated Statements of Stockholders' Equity - USD ($) $ in Thousands | Class A Common Stock. | Additional Paid-In Capital | Accumulated Deficit | Accumulated Other Comprehensive Loss | Total |
Beginning Balance at Dec. 31, 2020 | $ 1 | $ 123,872 | $ (118,903) | $ (1,099) | $ 3,871 |
Beginning Balance, Shares at Dec. 31, 2020 | 1,484,362 | ||||
Issuance of common stock in February 2021 offering | $ 1 | 8,398 | 8,399 | ||
Issuance of common stock in February 2021 offering (in shares) | 744,936 | ||||
Issuance of warrants in February 2021 offering | 2,638 | 2,638 | |||
Share issuance costs | (1,361) | (1,361) | |||
Exercise of warrants | 1,318 | 1,318 | |||
Exercise of warrants (in shares) | 81,895 | ||||
Exercise of stock options | 2 | 2 | |||
Exercise of stock options (in shares) | 214 | ||||
Settlement of restricted stock units, Shares | 1,028 | ||||
Stock-based compensation | 3,156 | 3,156 | |||
Stock-based compensation (in shares) | 5,337 | ||||
Other comprehensive income | (313) | (313) | |||
Net loss | (9,343) | (9,343) | |||
Ending Balance at Jun. 30, 2021 | $ 2 | 138,023 | (128,246) | (1,412) | 8,367 |
Ending Balance, Shares at Jun. 30, 2021 | 2,317,772 | ||||
Beginning Balance at Mar. 31, 2021 | $ 2 | 135,388 | (122,265) | (1,227) | 11,898 |
Beginning Balance, Shares at Mar. 31, 2021 | 2,311,868 | ||||
Exercise of warrants | 4 | 4 | |||
Exercise of warrants (in shares) | 262 | ||||
Exercise of stock options | 2 | 2 | |||
Exercise of stock options (in shares) | 214 | ||||
Settlement of restricted stock units, Shares | 91 | ||||
Stock-based compensation | 2,629 | 2,629 | |||
Stock-based compensation (in shares) | 5,337 | ||||
Other comprehensive income | (185) | (185) | |||
Net loss | (5,981) | (5,981) | |||
Ending Balance at Jun. 30, 2021 | $ 2 | 138,023 | (128,246) | (1,412) | 8,367 |
Ending Balance, Shares at Jun. 30, 2021 | 2,317,772 | ||||
Beginning Balance at Dec. 31, 2021 | $ 4 | 149,412 | (137,035) | (1,125) | 11,256 |
Beginning Balance, Shares at Dec. 31, 2021 | 3,780,674 | ||||
Common stock issued under equity line of credit | 638 | 638 | |||
Common stock issued under equity line of credit (in shares) | 391,363 | ||||
Settlement of restricted stock units, Shares | 6,274 | ||||
Common stock issued for services | 34 | $ 34 | |||
Common stock issued for services (in shares) | 8,791 | 8,791 | |||
Stock-based compensation | 581 | $ 581 | |||
Stock-based compensation (in shares) | 8,011 | ||||
Other comprehensive income | 149 | 149 | |||
Net loss | (8,156) | (8,156) | |||
Ending Balance at Jun. 30, 2022 | $ 4 | 150,665 | (145,191) | (976) | 4,502 |
Ending Balance, Shares at Jun. 30, 2022 | 4,195,113 | ||||
Beginning Balance at Mar. 31, 2022 | $ 4 | 149,834 | (141,381) | (1,327) | 7,130 |
Beginning Balance, Shares at Mar. 31, 2022 | 3,794,797 | ||||
Common stock issued under equity line of credit | 638 | 638 | |||
Common stock issued under equity line of credit (in shares) | 391,363 | ||||
Settlement of restricted stock units, Shares | 4,690 | ||||
Common stock issued for services | 14 | $ 14 | |||
Common stock issued for services (in shares) | 4,263 | 4,263 | |||
Stock-based compensation | 179 | $ 179 | |||
Other comprehensive income | 351 | 351 | |||
Net loss | (3,810) | (3,810) | |||
Ending Balance at Jun. 30, 2022 | $ 4 | $ 150,665 | $ (145,191) | $ (976) | $ 4,502 |
Ending Balance, Shares at Jun. 30, 2022 | 4,195,113 |
Unaudited Condensed Consolida_5
Unaudited Condensed Consolidated Statements of Cash Flows - USD ($) $ in Thousands | 6 Months Ended | |
Jun. 30, 2022 | Jun. 30, 2021 | |
Cash flows from operating activities: | ||
Net loss | $ (8,156) | $ (9,343) |
Adjustments to reconcile net loss to net cash used in operating activities: | ||
Stock-based compensation expense | 581 | 3,156 |
Common stock issued for services | 34 | |
Provision For Doubtful Accounts | (11) | |
Provision for (reversal of) inventory reserve | (37) | |
Foreign exchange loss (gain) | 161 | (323) |
Depreciation expense | 50 | 56 |
Amortization expense | 94 | 106 |
Non-cash operating lease expense | 26 | 30 |
Changes in operating assets and liabilities: | ||
Accounts receivable | 57 | 34 |
Other receivables | (4) | (13) |
Inventory, net | (64) | (118) |
Prepaid expenses | (134) | (98) |
Other current assets | (22) | |
Operating lease liability | (19) | (31) |
Accounts payable | (7) | 229 |
Accrued liabilities | (779) | (366) |
Deferred revenue | (127) | 2 |
Net cash used in operating activities | (8,346) | (6,690) |
Cash flows from investing activities: | ||
Purchase of property and equipment | (12) | (19) |
Proceeds from sale of property and equipment | 6 | |
Internally developed software | (2) | |
Net cash used in investing activities | (6) | (21) |
Cash flows from financing activities: | ||
Proceeds from issuances of common stock | 644 | 11,037 |
Share issuance costs | (24) | (1,523) |
Proceeds from the exercise of warrants and stock options | 1,320 | |
Net cash provided by financing activities | 620 | 10,834 |
Effect of foreign exchange rate changes on cash | (29) | |
Net (decrease) increase in cash | (7,732) | 4,094 |
Cash at beginning of period | 11,005 | 3,331 |
Cash at end of period | 3,273 | $ 7,425 |
Supplemental cash flow information: | ||
Right-of-use assets obtained in exchange for new lease liabilities | $ 151 |
Organization, Consolidation and
Organization, Consolidation and Presentation of Financial Statements | 6 Months Ended |
Jun. 30, 2022 | |
Organization, Consolidation and Presentation of Financial Statements | |
Organization, Consolidation and Presentation of Financial Statements | 1. ORGANIZATION, CONSOLIDATION AND PRESENTATION OF FINANCIAL STATEMENTS Helius Medical Technologies, Inc. (together with its wholly owned subsidiaries the “Company”) is a neurotech company focused on neurological wellness. The Company’s purpose is to develop, license or acquire non-implanted technologies targeted at reducing symptoms of neurological disease or trauma. The Company’s product, known as the Portable Neuromodulation Stimulator (“PoNS®”) has been commercially available in Canada since March 2019. The Company began accepting prescriptions for its PoNS product in the U.S. in the first quarter of 2022, and the first commercial sales began in April 2022. PoNS is authorized for sale as a Class IIa medical device in Australia. The Company is working to establish a distribution partner for Australia but currently does not expect to have commercial sales of PoNS in Australia in 2022. The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with the rules and regulations of the Securities and Exchange Commission ("SEC") and should be read in conjunction with the Company’s audited consolidated financial statements for the year ended December 31, 2021, included in its Annual Report on Form 10-K that was filed with the Securities and Exchange Commission on March 14, 2022 (“2021 10-K”). Certain information and footnote disclosures normally included in financial statements prepared in accordance with generally accepted accounting principles in the United States of America ("GAAP") have been condensed or omitted. In the opinion of management, the information furnished in the consolidated condensed financial statements include all adjustments (consisting of only normal, recurring adjustments), considered necessary to present fairly the results of operations, financial position and cash flows of the Company. |
Risks and Uncertainties
Risks and Uncertainties | 6 Months Ended |
Jun. 30, 2022 | |
Risks and Uncertainties | |
Risks and Uncertainties | 2. RISKS AND UNCERTAINTIES Going Concern Uncertainty As of June 30, 2022, the Company had cash of $3.3 million. For the six months ended June 30, 2022, the Company had an operating loss of $8.0 million, and as of June 30, 2022, its accumulated deficit was $145.2 million. For the six months ended June 30, 2022, the Company had $0.3 million of net revenue from the commercial sale of products. The Company expects to continue to incur operating losses and net cash outflows until such time as it generates a level of revenue to support its cost structure. There is no assurance that the Company will achieve profitable operations, and, if achieved, whether it will be sustained on a continued basis. These factors indicate substantial doubt about the Company’s ability to continue as a going concern within one year after the date the financial statements are filed. The Company’s condensed consolidated financial statements have been prepared on the basis of continuity of operations, realization of assets and satisfaction of liabilities in the ordinary course of business; no adjustments have been made relating to the recoverability and classification of recorded asset amounts and classification of liabilities that might be necessary should the Company not continue as a going concern. The Company intends to fund ongoing activities by utilizing its current cash on hand, cash received from the sale of its PoNS device in the U.S. and Canada and by raising additional capital through equity or debt financings. As discussed in Note 11 to our unaudited condensed consolidated financial statements, on August 9, 2022, the Company closed on a public offering of its Class A common stock and warrants and received aggregate net proceeds of approximately $16.4 million. There can be no assurance that the Company will be successful in raising additional capital or that such capital, if available, will be on terms that are acceptable to the Company. If the Company is unable to raise sufficient additional capital, the Company may be compelled to reduce the scope of its operations and planned capital expenditures. COVID-19 and Worldwide Economic Conditions On March 11, 2020, the World Health Organization declared the outbreak of a novel coronavirus (“COVID-19”) as a global pandemic, which has spread throughout the U.S. and around the world. The Company’s business, results of operations and financial condition have been and may continue to be adversely impacted by the COVID-19 pandemic and global economic conditions. The outbreak and spread of COVID-19 has significantly increased economic uncertainty. Authorities implemented, and continue to implement, numerous measures to try to contain COVID-19, such as travel bans and restrictions, quarantines, shelter in place orders and business shutdowns. The COVID-19 pandemic initially led to the closure of PoNS Authorized clinic locations across Canada. While all clinics had re-opened, as of December 31, 2021, many were operating at reduced capacity well into the first half of 2022, and patients have been and may continue to be less willing to return to these clinics, impacting the Company’s commercial activities and customer engagement efforts. Moreover, the Company’s ability to conduct its ongoing clinical experience programs and clinical trials has been and may be impaired due to trial participants’ attendance being adversely affected by COVID-19. In addition, the COVID-19 pandemic has and may continue to cause delays in the Company’s suppliers’ ability to ship materials that the Company relies upon as well as manufacturing delays as the result of labor shortages. Two of the Company’s suppliers experienced significant labor shortages as a result of COVID-19 from the end of November 2021 through early January 2022 which reduced the available resources needed to build and test product resulting in production delays of the PoNS devices. During March 2022 and continuing into the second quarter of 2022, an increase in COVID-19 related cases in certain parts of China resulted in the re-imposition of widespread shutdowns and restrictions in China and additional supply chain disruptions. It is currently unclear how long this latest series of shutdowns will continue and the Company may experience future manufacturing delays, which could place constraints on the Company’s ability to produce or deliver its products and meet customer demand or increase its costs. Generally, worldwide economic conditions remain uncertain, particularly due to the COVID-19 pandemic. Access to capital markets is critical to our ability to operate. Declines and uncertainties in these markets in the past have severely restricted raising new capital and have affected companies’ ability to continue to expand or find existing development, manufacturing, regulatory and commercialization efforts. The Company requires significant capital for our current and expected operations. The general economic and capital market conditions both in the U.S. and worldwide, have been volatile in the past and at times have adversely affected the Company’s access to capital and increased the cost of capital. The capital and credit markets may not be available to support future capital raising activity on favorable terms. If economic conditions decline, the Company’s future cost of equity or debt capital and access to the capital markets could be adversely affected. Disruptions in business or governmental operations due to COVID-19 may delay the timing for the submission and approval of the Company’s marketing applications with regulatory agencies. Further, the economic impact of the COVID-19 pandemic could affect the Company’s ability to access the public markets and obtain necessary capital in order to properly capitalize and continue its operations. The extent to which the COVID-19 pandemic will continue to impact the Company’s business, including its U.S. commercial launch and sales in Canada, as well as the Company’s results of operations and its financial condition will depend on future developments, which are highly uncertain and cannot be predicted. The Company does not yet know the full extent of the impact of COVID-19 on its future business, operations or the global economy as a whole. Inflationary Environment The Company’s operating results could be materially impacted by changes in the overall macroeconomic environment and other economic factors that impact customer confidence and spending, including capital spending. Changes in economic conditions, supply chain constraints, logistics challenges, labor shortages, the conflict in Ukraine, and steps taken by governments and central banks, particularly in response to the COVID-19 pandemic as well as other stimulus and spending programs, have led to higher inflation, which is likely, in turn, to lead to an increase in costs and may cause changes in fiscal and monetary policy, including increased interest rates. As a result of inflation, we have experienced and may continue to experience, cost increases. Although the Company may take measures to mitigate the impact of this inflation, if these measures are not effective, the Company’s business, financial condition, results of operations, and liquidity could be materially adversely affected. |
Recent Accounting Pronouncement
Recent Accounting Pronouncements | 6 Months Ended |
Jun. 30, 2022 | |
Recent Accounting Pronouncements | |
Recent Accounting Pronouncements | 3. RECENT ACCOUNTING PRONOUNCEMENTS In June 2016, the FASB issued ASU 2016-13, Financial Instruments – Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments , which requires measurement and recognition of expected credit losses for financial assets held and requires enhanced disclosures regarding significant estimates and judgments used in estimating credit losses. In November 2019, the FASB issued ASU 2019-10, Financial Instruments – Credit Losses (Topic 326), Derivatives and Hedging (Topic 815) and Leases (Topic 842): Effective Dates , which amends the effective date of ASU 2016-13. Public business entities that meeting the definition of an SEC filer, excluding entities eligible to be a Smaller Reporting Company (“SRC”) as defined by the SEC, are required to adopt the standard for fiscal years beginning after December 15, 2019, including interim periods within those fiscal years. All other entities are required to adopt the standard for fiscal years beginning after December 15, 2022, including interim periods within those fiscal years. The Company meets the definition of an SRC and therefore the standard will not be effective until the beginning of 2023. The Company is evaluating the effect that ASU 2016-13 will have on its condensed consolidated financial statements. |
Revenue from Contracts with Cus
Revenue from Contracts with Customers | 6 Months Ended |
Jun. 30, 2022 | |
Revenue from Contracts with Customers | |
Revenue from Contracts with Customers | 4 Product sales are derived from the sale of PoNS devices to clinics in Canada and directly to the patient in the U.S. For both Canada and U.S. customers, the Company’s performance obligation is met, and revenue is recognized, upon delivery to the customer and the customer’s acceptance. During the three and six months ended June 30, 2022 and 2021, Canada product net sales were $56 thousand, $239 thousand, $63 thousand and $140 thousand, respectively. For both the three and six months ended June 30, 2022, U.S. product net sales were $63 thousand. As of June 30, 2022 and December 31, 2021, the Company had no contract assets or liabilities on its condensed consolidated balance sheets. |
Supplemental Balance Sheet Disc
Supplemental Balance Sheet Disclosures | 6 Months Ended |
Jun. 30, 2022 | |
Supplemental Balance Sheet Disclosures | |
Supplemental Balance Sheet Disclosures | 5. SUPPLEMENTAL BALANCE SHEET DISCLOSURES Components of selected captions in the condensed consolidated balance sheets consisted of the following (amounts in thousands): Accounts receivable, net Accounts receivable from product sales are net of allowance for doubtful accounts of $351 and $355 as of June 30, 2022 and December 31, 2021, respectively. Inventory, net As of As of June 30, 2022 December 31, 2021 Raw materials $ 225 $ 171 Work-in-process 349 528 Finished goods 60 32 Inventory, gross $ 634 $ 731 Inventory reserve (57) (255) Inventory, net $ 577 $ 476 During the six months ended June 30, 2022 existing reserves of $161 were charged against work-in-process inventory and inventory reserves were decreased by $37. Accrued expenses As of June 30, 2022 December 31, 2021 Employees benefits $ 462 $ 712 Professional services 24 174 Legal fees 44 23 Royalty fees 5 10 Franchise fees 20 193 Severance 37 258 Other 62 63 Total $ 654 $ 1,433 Deferred revenue License Revenue The Company recorded deferred license fee revenue in connection with a Clinical Research and Co-Promotion Agreement with Health Tech Connex Inc. (“HTC”) (the “Co-Promotion Agreement”), as more fully described in the 2021 10-K. Deferred revenue as of both June 30, 2022 and December 31, 2021 included approximately $200 of license fees not yet recognized under the Co-Promotion Agreement. License fee revenue recognized is included in Other Revenue in the Condensed Consolidated Statements of Operations and Comprehensive Loss. On January 31, 2022, the Company notified HTC of its material breaches under the Co-Promotion Agreement which HTC failed to cure under the terms of the Co-Promotion Agreement and as such it is the Company’s position that this exclusivity right is no longer in effect. The Company and HTC are currently discussing opportunities to work together moving forward. Product Sales Deferred revenue as of December 31, 2021 included approximately $100 for the fair value of the remaining 16 PoNS devices to be transferred that had been included as consideration in the Company’s acquisition of Heuro Canada, Inc. (“Heuro”). During the six months ended June 30, 2022, the remaining 16 PoNS devices were transferred and the remaining $100 of deferred revenue was recognized in Product Sales in the Condensed Consolidated Statements of Operations and Comprehensive Loss. There were no PoNS devices, included as consideration in the Heuro acquisition, transferred during the six-month period ended June 30, 2021. |
Leases
Leases | 6 Months Ended |
Jun. 30, 2022 | |
Leases | |
Leases | 6. LEASES The Company has two operating leases for office space with lease terms expiring in January 2024 and March 2025. The leases do not contain any options to extend. The following table presents information on the lease terms and discount rates: Weighted average remaining lease term 2.75 years Weighted average discount rate 4.4 % Maturities of operating lease liabilities at June 30, 2022 were as follows (amounts in thousands): 2022 (remaining) $ 27 2023 58 2024 46 2025 12 Total future lease payments 143 Less: interest (8) Present value of lease liabilities $ 135 |
Stockholders' Equity
Stockholders' Equity | 6 Months Ended |
Jun. 30, 2022 | |
Stockholders' Equity | |
Stockholders' Equity | 7. STOCKHOLDERS’ EQUITY During the three and six months ended June 30, 2022, the Company issued 391,363 shares of Class A common stock (“common stock”) at an average price of $1.65 per share to Lincoln Park Capital Fund, LLC (“Lincoln Park”) pursuant to a purchase agreement (the “LPC Purchase Agreement”) and registration rights agreement with Lincoln Park, as more fully described in the 2021 10-K. As of June 30, 2022, the Company does not intend to issue any additional shares under the LPC Purchase Agreement. During the three and six months ended June 30, 2022, the Company issued common stock for services of 4,263 shares and 8,791 shares, respectively, with a value at issuance of $14 thousand and $34 thousand, respectively. The Company has outstanding equity-classified warrants to purchase 593,924 shares of common stock at a weighted average exercise price of $16.32, with expiration dates ranging from March 2025 to February 2026. During the six months ended June 30, 2022, no warrants were exercised |
Stock-Based Compensation
Stock-Based Compensation | 6 Months Ended |
Jun. 30, 2022 | |
Stock-Based Compensation | |
Stock-Based Compensation | 8. STOCK-BASED COMPENSATION On May 23, 2022, the Company’s stockholders approved the Helius Medical Technologies, Inc. 2022 Equity Incentive Plan (“2022 Plan”), which had been adopted by the Company’s Board of Directors on February 16, 2022. The 2022 Plan provides for the grant of incentive stock options (“ISOs”), nonstatutory stock options (“NSOs”), stock appreciation rights, restricted stock awards, restricted stock unit awards, performance awards and other forms of awards to employees, directors and consultants, including employees and consultants of the Company’s affiliates. Vesting and the term of an option is determined at the discretion of the Company’s Board of Directors. Initially, a maximum of 1,121,272 shares of common stock may be issued. The automatic increase provision in the 2022 Plan provides for an annual increase to the maximum number of authorized shares on January 1 of each year beginning on January 1, 2023 through January 1, 2027, to an amount equal to (i) 20% of the fully diluted number of shares of common stock outstanding on December 31 of the fiscal year before the date of each automatic increase, or (ii) a lesser number of shares determined by the Board prior to the date of the increase. The maximum number of shares of common stock that may be issued on the exercise of ISOs under the 2022 Plan is 11,212,720 . Effective with the approval of the 2022 Plan, the Company ceased granting awards under the 2018 Omnibus Incentive Plan. However, outstanding stock options granted prior to the effective date of the 2022 Plan are still governed by the respective predecessor plan under which they were granted, which are described more fully in the 2021 10-K. As of June 30, 2022, the remaining shares available for grant were 95,672 shares under the 2022 Plan and 31,000 shares under the Helius Medical Technologies, Inc. 2021 Inducement Plan. During the six months ended June 30, 2022, the Company granted 443,170 stock options at a weighted average exercise price of $3.88 per share. The grant date fair values of these stock options were estimated using the Black-Scholes option pricing model using the following weighted average assumptions: Six Months Ended June 30, 2022 Risk-free interest rate 2.63 % Expected volatility 74.66 % Expected term (years) 5.62 Expected dividend yield 0.00 % Fair value per option $ 1.34 During the six months ended June 30, 2022, the Company’s non-employee directors received a grant of 24,196 restricted stock units at a weighted average grant date fair value of $1.40 per share. Share-based compensation expense for the six months ended June 30, 2022 includes a grant to an officer of the Company of 8,011 shares of unrestricted common stock valued at $34 thousand. As of June 30, 2022, there were an aggregate of 1,070,404 stock options outstanding with a weighted average exercise price of $19.82 per share and 20,281 unvested restricted stock units outstanding with a weighted average grant date fair value of $1.48 per share. Compensation expense related to all stock-based compensation, net of forfeitures, was as follows (amounts in thousands): Three Months Ended Six Months Ended June 30, June 30, 2022 2021 2022 2021 Research and development $ (49) $ 162 $ 104 $ 384 Cost of sales $ 4 $ 3 7 3 Selling, general and administrative 224 2,464 470 2,769 Total $ 179 $ 2,629 $ 581 $ 3,156 There were no tax benefits recognized related to stock-based compensation expense during these periods. As of June 30, 2022, the unrecognized compensation cost related to non-vested time-based stock options and restricted stock units was $2.6 million which will be recognized over a weighted-average remaining vesting period of approximately 2.5 years. As of June 30, 2022, the unrecognized compensation cost related to performance-based stock options was $1.2 million. Recognition of compensation expense for performance-based stock options will commence at the time it is determined to be probable that the performance conditions will be met. Compensation cost is not adjusted for estimated forfeitures, but instead is adjusted upon an actual forfeiture of an award. |
Basic and Diluted Loss per Shar
Basic and Diluted Loss per Share | 6 Months Ended |
Jun. 30, 2022 | |
Basic and Diluted Loss per Share | |
Basic and Diluted Loss per Share | 9. BASIC AND DILUTED LOSS PER SHARE Basic loss per share of common stock is computed by dividing net loss attributable to common stockholders by the weighted average number of shares of common stock outstanding for the period. Diluted loss per share is calculated by adjusting the weighted-average number of shares outstanding for the dilutive effect of common stock equivalents outstanding for the period, determined using the treasury-stock method. Diluted loss per share excludes, when applicable, the potential impact of stock options, unvested restricted stock units and common stock warrants because their effect would be anti-dilutive due to the net loss. The calculation of basic and diluted net loss per share attributable to common stock was as follows (amounts in thousands except share and per share data): Three Months Ended Six Months Ended June 30, June 30, 2022 2021 2022 2021 Numerator: Net loss attributable to common stock—basic and diluted $ (3,810) $ (5,981) $ (8,156) $ (9,343) Denominator: Weighted average basic and diluted shares outstanding 3,928,704 2,317,389 3,858,676 2,179,878 Loss per share attributable to common stock—basic and diluted $ (0.97) $ (2.58) $ (2.11) $ (4.29) Common stock equivalents outstanding of 1,684,609 for both the three and six months ended June 30, 2022 and 1,233,230 for both the three and six months ended June 30, 2021 were not included in the computation of diluted loss per share because the effect would have been anti-dilutive. |
Commitments and Contingencies
Commitments and Contingencies | 6 Months Ended |
Jun. 30, 2022 | |
Commitments and Contingencies | |
Commitments and Contingencies | 10. COMMITMENTS AND CONTINGENCIES The Company is obligated under a license agreement with Advanced NeuroRehabilitation, LLC (“ANR”) to pay a 4% royalty on net revenue from the sale of devices covered by the patent-pending technology. During the three months ended June 30, 2022 and 2021, the Company recorded royalty expense from the sale of devices of approximately $5 thousand and $3 thousand, respectively, in its condensed consolidated statement of operations and comprehensive loss. During the six months ended June 30, 2022 and 2021, the Company recorded royalty expense from the sale of devices of approximately $12 thousand and $6 thousand, respectively, in its condensed consolidated statement of operations and comprehensive loss. |
Subsequent Events
Subsequent Events | 6 Months Ended |
Jun. 30, 2022 | |
Subsequent Events | |
Subsequent Events | 11. SUBSEQUENT EVENTS On August 9, 2022, the Company closed on a registered public offering consisting of 18,560,000 shares of common stock, pre-funded warrants to purchase 5,440,000 shares of common stock and accompanying warrants to purchase an aggregate of 36,000,000 shares of common stock (“Public Warrants”) at a combined offering price of $0.75 per share and accompanying Public Warrants, or $0.749 per pre-funded warrant and accompanying Public Warrants. The pre-funded warrants had an exercise price of $0.001 per share and were all exercised on the closing date. Net proceeds from the public offering, after deducting placement agent fees and expenses and other offering costs, were approximately $16.4 million. The Public Warrants have an exercise price of $0.75 per share, are exercisable upon issuance and will expire five years following the date of issuance. In conjunction with this public offering, certain performance criteria were achieved for the outstanding performance-based stock options discussed in Note 8, resulting in the vesting of the performance-based stock options. For the three months ending September 30, 2022, the Company expects to recognize additional share-based compensation expense of $1.2 million associated with the vesting of the performance-based stock options. |
Supplemental Balance Sheet Di_2
Supplemental Balance Sheet Disclosures (Tables) | 6 Months Ended |
Jun. 30, 2022 | |
Supplemental Balance Sheet Disclosures | |
Schedule of Inventories | As of As of June 30, 2022 December 31, 2021 Raw materials $ 225 $ 171 Work-in-process 349 528 Finished goods 60 32 Inventory, gross $ 634 $ 731 Inventory reserve (57) (255) Inventory, net $ 577 $ 476 |
Schedule of Accrued Expenses | As of June 30, 2022 December 31, 2021 Employees benefits $ 462 $ 712 Professional services 24 174 Legal fees 44 23 Royalty fees 5 10 Franchise fees 20 193 Severance 37 258 Other 62 63 Total $ 654 $ 1,433 |
Leases (Tables)
Leases (Tables) | 6 Months Ended |
Jun. 30, 2022 | |
Leases | |
Schedule of lease information | Weighted average remaining lease term 2.75 years Weighted average discount rate 4.4 % Maturities of operating lease liabilities at June 30, 2022 were as follows (amounts in thousands): 2022 (remaining) $ 27 2023 58 2024 46 2025 12 Total future lease payments 143 Less: interest (8) Present value of lease liabilities $ 135 |
Stock-Based Compensation (Table
Stock-Based Compensation (Tables) | 6 Months Ended |
Jun. 30, 2022 | |
Stock-Based Compensation | |
Estimation Using Black-Scholes Option Pricing Model With Following Weighted Average Assumptions | Six Months Ended June 30, 2022 Risk-free interest rate 2.63 % Expected volatility 74.66 % Expected term (years) 5.62 Expected dividend yield 0.00 % Fair value per option $ 1.34 |
Summary of Stock-Based Compensation Expense is Classified in Condensed Consolidated Statements of Operations and Comprehensive Loss | Three Months Ended Six Months Ended June 30, June 30, 2022 2021 2022 2021 Research and development $ (49) $ 162 $ 104 $ 384 Cost of sales $ 4 $ 3 7 3 Selling, general and administrative 224 2,464 470 2,769 Total $ 179 $ 2,629 $ 581 $ 3,156 |
Basic and Diluted Loss per Sh_2
Basic and Diluted Loss per Share (Tables) | 6 Months Ended |
Jun. 30, 2022 | |
Basic and Diluted Loss per Share | |
Schedule of basic and diluted net loss per share | Three Months Ended Six Months Ended June 30, June 30, 2022 2021 2022 2021 Numerator: Net loss attributable to common stock—basic and diluted $ (3,810) $ (5,981) $ (8,156) $ (9,343) Denominator: Weighted average basic and diluted shares outstanding 3,928,704 2,317,389 3,858,676 2,179,878 Loss per share attributable to common stock—basic and diluted $ (0.97) $ (2.58) $ (2.11) $ (4.29) |
Risks and Uncertainties - Addit
Risks and Uncertainties - Additional Information (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||||
Aug. 09, 2022 | Jun. 30, 2022 | Jun. 30, 2021 | Jun. 30, 2022 | Jun. 30, 2021 | Dec. 31, 2021 | |
Risks and Uncertainties | ||||||
Cash | $ 3,273 | $ 3,273 | $ 11,005 | |||
Operating loss | 3,430 | $ 6,166 | 7,994 | $ 9,667 | ||
Accumulated deficit | 145,191 | 145,191 | $ 137,035 | |||
Revenue from the sale of products or services | $ 119 | $ 63 | $ 302 | $ 140 | ||
Subsequent Event | Public Offering | ||||||
Risks and Uncertainties | ||||||
Net proceeds from issuance of common stock | $ 16,400 |
Revenue from Contracts with C_2
Revenue from Contracts with Customers (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | |||
Jun. 30, 2022 | Jun. 30, 2021 | Jun. 30, 2022 | Jun. 30, 2021 | Dec. 31, 2021 | |
Revenue from Contracts with Customers | |||||
Product sales, net | $ 119 | $ 63 | $ 302 | $ 140 | |
Contract with customer, assets | 0 | 0 | $ 0 | ||
Contract with customer, liabilities | 0 | 0 | $ 0 | ||
CANADA | |||||
Revenue from Contracts with Customers | |||||
Product sales, net | 56 | $ 63 | 239 | $ 140 | |
UNITED STATES | |||||
Revenue from Contracts with Customers | |||||
Product sales, net | $ 63 | $ 63 |
Supplemental Balance Sheet Di_3
Supplemental Balance Sheet Disclosures - Accounts receivable, net (Details) - USD ($) $ in Thousands | Jun. 30, 2022 | Dec. 31, 2021 |
Supplemental Balance Sheet Disclosures | ||
Allowance for doubtful accounts | $ 351 | $ 355 |
Supplemental Balance Sheet Di_4
Supplemental Balance Sheet Disclosures - Inventory (Details) - USD ($) $ in Thousands | 6 Months Ended | |
Jun. 30, 2022 | Dec. 31, 2021 | |
Inventory | ||
Raw materials | $ 225 | $ 171 |
Work-in-process | 349 | 528 |
Finished goods | 60 | 32 |
Inventory | 634 | 731 |
Inventory reserve | (57) | (255) |
Total inventory, net of reserve | 577 | $ 476 |
Inventory markdowns to net realizable value | (37) | |
Inventory reserves charged against work-in-process inventory | $ 161 |
Supplemental Balance Sheet Di_5
Supplemental Balance Sheet Disclosures - Accrued Expenses (Details) - USD ($) $ in Thousands | Jun. 30, 2022 | Dec. 31, 2021 |
Accrued Expenses | ||
Employees benefits | $ 462 | $ 712 |
Professional services | 24 | 174 |
Legal fees | 44 | 23 |
Royalty fees | 5 | 10 |
Franchise fees | 20 | 193 |
Severance | 37 | 258 |
Other | 62 | 63 |
Total | $ 654 | $ 1,433 |
Supplemental Balance Sheet Di_6
Supplemental Balance Sheet Disclosures - Deferred Revenue (Details) $ in Thousands | 6 Months Ended | ||
Jun. 30, 2022 USD ($) | Jun. 30, 2021 item | Dec. 31, 2021 USD ($) | |
Deferred Revenue | |||
Amount of license fees not yet recognized under the Co-Promotion Agreement, included in deferred revenue | $ 200 | $ 200 | |
Amount of deferred revenue related to the fair value of the remaining poNS devices to be transferred that had been included as consideration in the Company's acquisition of Heuro | $ 100 | ||
Amount of deferred revenue recognized related to Product Sales | $ 100 | ||
Number Of Devices Resulted In Recognition Of Revenue | item | 0 |
Leases (Details)
Leases (Details) | Jun. 30, 2022 USD ($) lease |
Leases | |
Number of operating leases | lease | 2 |
Weighted average remaining lease term | 2 years 9 months |
Weighted average discount rate | 4.40% |
Maturity of Lease Liabilities | |
2022 (remaining) | $ 27,000 |
2023 | 58,000 |
2024 | 46,000 |
2025 | 12,000 |
Total future minimum lease payments | 143,000 |
Less: interest | (8,000) |
Present value of lease liabilities | $ 135,000 |
Stockholders' Equity - Addition
Stockholders' Equity - Additional Information (Details) $ / shares in Units, $ in Thousands | 3 Months Ended | 6 Months Ended |
Jun. 30, 2022 USD ($) $ / shares shares | Jun. 30, 2022 USD ($) $ / shares shares | |
Stockholders' Equity | ||
Common stock issued for services (in shares) | 4,263 | 8,791 |
Common stock issued for services | $ | $ 14 | $ 34 |
LPC Purchase Agreement | ||
Stockholders' Equity | ||
Common stock issued under purchase agreement (in shares) | 391,363 | 391,363 |
Price per share | $ / shares | $ 1.65 | $ 1.65 |
Common Stock Warrants | ||
Stockholders' Equity | ||
Outstanding warrants (in shares) | 593,924 | 593,924 |
Warrant exercisable price per share | $ / shares | $ 16.32 | $ 16.32 |
Number of warrants exercised | 0 | |
Number of warrants cancelled | 0 |
Stock-Based Compensation - Addi
Stock-Based Compensation - Additional Information (Details) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2022 | Jun. 30, 2021 | Jun. 30, 2022 | Jun. 30, 2021 | |
Stock-Based Compensation | ||||
Number of Stock Options, Granted | 443,170 | |||
Weighted Average Exercise Price, Granted | $ 3.88 | |||
Stock based compensation expense | $ 179 | $ 2,629 | $ 581 | $ 3,156 |
Outstanding stock options (in shares) | 1,070,404 | 1,070,404 | ||
Weighted average exercise price (in dollars per share) | $ 19.82 | $ 19.82 | ||
Restricted Stock Units | ||||
Stock-Based Compensation | ||||
Outstanding unvested RSU (in shares) | 20,281 | 20,281 | ||
Weighted average grant date fair value (in dollars per share) | $ 1.48 | $ 1.48 | ||
Restricted Stock Units | Directors | ||||
Stock-Based Compensation | ||||
Number of awards granted (in shares) | 24,196 | |||
Weighted average grant date fair value of awards granted (in dollars per share) | $ 1.40 | |||
Unrestricted Common Stock | Officer | ||||
Stock-Based Compensation | ||||
Number of awards granted (in shares) | 8,011 | |||
Stock based compensation expense | $ 34 | |||
2022 Plan | ||||
Stock-Based Compensation | ||||
Common stock shares authorized for issuance under plan | 1,121,272 | 1,121,272 | ||
Maximum number of shares of common stock that may be issued on the exercise of ISOs under the plan | 11,212,720 | 11,212,720 | ||
Common stock remaining available for grant | 95,672 | 95,672 | ||
2021 Inducement Plan | ||||
Stock-Based Compensation | ||||
Common stock remaining available for grant | 31,000 | 31,000 |
Stock-Based Compensation - Fair
Stock-Based Compensation - Fair Value Assumptions (Details) - Stock Options | 6 Months Ended |
Jun. 30, 2022 $ / shares | |
Stock-Based Compensation | |
Risk-free interest rate | 2.63% |
Expected volatility | 74.66% |
Expected term | 5 years 7 months 13 days |
Expected dividend yield | 0% |
Fair value per option | $ 1.34 |
Stock-Based Compensation - Stoc
Stock-Based Compensation - Stock-Based Compensation Expense (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2022 | Jun. 30, 2021 | Jun. 30, 2022 | Jun. 30, 2021 | |
Stock-Based Compensation | ||||
Share-based compensation expense | $ 179 | $ 2,629 | $ 581 | $ 3,156 |
Tax benefit related to stock-based compensation | 0 | 0 | 0 | 0 |
Non-Vested Time-Based Stock Options and Restricted Stock Units | ||||
Stock-Based Compensation | ||||
Unrecognized compensation cost related to unvested awards | 2,600 | $ 2,600 | ||
Weighted-average remaining vesting period | 2 years 6 months | |||
Performance-Based Stock Options | ||||
Stock-Based Compensation | ||||
Unrecognized compensation cost related to unvested awards | 1,200 | $ 1,200 | ||
Research And Development Expense. | ||||
Stock-Based Compensation | ||||
Share-based compensation expense | (49) | 162 | 104 | 384 |
Cost Of Sales. | ||||
Stock-Based Compensation | ||||
Share-based compensation expense | 4 | 3 | 7 | 3 |
Selling General And Administrative Expenses. | ||||
Stock-Based Compensation | ||||
Share-based compensation expense | $ 224 | $ 2,464 | $ 470 | $ 2,769 |
Basic and Diluted Loss per Sh_3
Basic and Diluted Loss per Share (Details) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2022 | Jun. 30, 2021 | Jun. 30, 2022 | Jun. 30, 2021 | |
Numerator: | ||||
Net loss | $ (3,810) | $ (5,981) | $ (8,156) | $ (9,343) |
Weighted average shares outstanding | ||||
Weighted average basic shares outstanding | 3,928,704 | 2,317,389 | 3,858,676 | 2,179,878 |
Weighted average diluted shares outstanding | 3,928,704 | 2,317,389 | 3,858,676 | 2,179,878 |
Loss per share attributable to common stock, basic | $ (0.97) | $ (2.58) | $ (2.11) | $ (4.29) |
Loss per share attributable to common stock, diluted | $ (0.97) | $ (2.58) | $ (2.11) | $ (4.29) |
Other disclosures | ||||
Common stock equivalents outstanding, excluded from computation of diluted loss per share | 1,684,609 | 1,233,230 | 1,684,609 | 1,233,230 |
Commitments and Contingencies -
Commitments and Contingencies - Additional Information (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | |||
Jan. 22, 2013 | Jun. 30, 2022 | Jun. 30, 2021 | Jun. 30, 2022 | Jun. 30, 2021 | |
Commitments and Contingencies | |||||
Common stock issued for services (in shares) | 4,263 | 8,791 | |||
License agreement with ANR | |||||
Commitments and Contingencies | |||||
Percentage of royalty on net revenue | 4% | ||||
Royalty expense | $ 5 | $ 3 | $ 12 | $ 6 |
Subsequent Events (Details)
Subsequent Events (Details) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | 6 Months Ended | ||||
Aug. 09, 2022 | Sep. 30, 2022 | Jun. 30, 2022 | Jun. 30, 2021 | Jun. 30, 2022 | Jun. 30, 2021 | |
Subsequent Events | ||||||
Stock based compensation expense | $ 179 | $ 2,629 | $ 581 | $ 3,156 | ||
Subsequent Event | Performance-Based Stock Options | Forecast | ||||||
Subsequent Events | ||||||
Stock based compensation expense | $ 1,200 | |||||
Subsequent Event | Public Offering | ||||||
Subsequent Events | ||||||
Shares issued | 18,560,000 | |||||
Combined offering price (in dollars per share) | $ 0.75 | |||||
Offering price per pre-funded warrant and accompanying Public Warrants (in dollars per share) | $ 0.749 | |||||
Net proceeds from issuance of common stock | $ 16,400 | |||||
Subsequent Event | Pre-Funded Warrants | Public Offering | ||||||
Subsequent Events | ||||||
Warrants to purchase number of common stock, shares | 5,440,000 | |||||
Exercise price (in dollars per share) | $ 0.001 | |||||
Subsequent Event | Public Warrants | Public Offering | ||||||
Subsequent Events | ||||||
Warrants to purchase number of common stock, shares | 36,000,000 | |||||
Exercise price (in dollars per share) | $ 0.75 | |||||
Warrants expiration period | 5 years |