Document and Entity Information
Document and Entity Information - shares | 6 Months Ended | |
Jun. 30, 2021 | Aug. 06, 2021 | |
Cover [Abstract] | ||
Document Type | 10-Q | |
Amendment Flag | false | |
Document Period End Date | Jun. 30, 2021 | |
Document Fiscal Year Focus | 2021 | |
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 | 2,317,772 | |
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, $0.001 par value per share | |
Security Exchange Name | NASDAQ | |
Entity Interactive Data Current | Yes | |
Document Quarterly Report | true | |
Document Transition Report | false |
Unaudited Condensed Consolidate
Unaudited Condensed Consolidated Balance Sheets - USD ($) $ in Thousands | Jun. 30, 2021 | Dec. 31, 2020 |
Current assets | ||
Cash | $ 7,425 | $ 3,331 |
Accounts receivable, net | 51 | 74 |
Other receivables | 169 | 156 |
Inventory, net | 507 | 389 |
Prepaid expenses | 833 | 735 |
Total current assets | 8,985 | 4,685 |
Property and equipment, net | 449 | 486 |
Other assets | ||
Goodwill | 783 | 759 |
Intangible assets, net | 438 | 527 |
Operating lease right-of-use asset, net | 62 | 90 |
Total other assets | 1,283 | 1,376 |
TOTAL ASSETS | 10,717 | 6,547 |
Current liabilities | ||
Accounts payable | 912 | 747 |
Accrued liabilities | 873 | 1,337 |
Operating lease liability | 62 | 59 |
Deferred revenue | 290 | 281 |
Total current liabilities | 2,137 | 2,424 |
Non-current liabilities | ||
Operating lease liability | 32 | |
Deferred revenue | 213 | 220 |
TOTAL LIABILITIES | 2,350 | 2,676 |
Commitments and contingencies (Note 6) | ||
STOCKHOLDERS’ EQUITY | ||
Preferred stock, $0.001 par value; 10,000,000 shares authorized; no shares issued and outstanding as of June 30, 2021 and December 31, 2020 | ||
Class A common stock, $0.001 par value; 150,000,000 shares authorized; 2,317,772 and 1,484,362 shares issued and outstanding as of June 30, 2021 and December 31, 2020, respectively | 2 | 1 |
Additional paid-in capital | 138,023 | 123,872 |
Accumulated other comprehensive loss | (1,412) | (1,099) |
Accumulated deficit | (128,246) | (118,903) |
TOTAL STOCKHOLDERS’ EQUITY | 8,367 | 3,871 |
TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY | $ 10,717 | $ 6,547 |
Unaudited Condensed Consolida_2
Unaudited Condensed Consolidated Balance Sheets (Parenthetical) - $ / shares | Jun. 30, 2021 | Dec. 31, 2020 |
Statement Of Financial Position [Abstract] | ||
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 | 2,317,772 | 1,484,362 |
Common Stock, Shares, Outstanding | 2,317,772 | 1,484,362 |
Unaudited Condensed Consolida_3
Unaudited Condensed Consolidated Statements of Operations and Comprehensive Loss - USD ($) | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2021 | Jun. 30, 2020 | Jun. 30, 2021 | Jun. 30, 2020 | |
Revenue: | ||||
Total operating revenue | $ 71,000 | $ 133,000 | $ 155,000 | $ 339,000 |
Cost of sales: | ||||
Cost of product sales | $ 67,000 | $ 64,000 | $ 83,000 | $ 165,000 |
Type of Cost, Good or Service [Extensible List] | Product Sales | Product Sales | Product Sales | Product Sales |
Gross profit | $ 4,000 | $ 69,000 | $ 72,000 | $ 174,000 |
Operating expenses: | ||||
Research and development | 1,377,000 | 1,308,000 | 2,694,000 | 2,428,000 |
Selling, general and administrative | 4,744,000 | 2,394,000 | 6,939,000 | 5,255,000 |
Amortization expense | 49,000 | 89,000 | 106,000 | 215,000 |
Total operating expenses | 6,170,000 | 3,791,000 | 9,739,000 | 7,898,000 |
Operating loss | (6,166,000) | (3,722,000) | (9,667,000) | (7,724,000) |
Other income (expense): | ||||
Other income | 56,000 | 63,000 | ||
Change in fair value of derivative financial instruments | (1,000) | 3,000 | ||
Foreign exchange gain (loss) | 185,000 | 306,000 | 324,000 | (460,000) |
Total other income (expense) | 185,000 | 361,000 | 324,000 | (394,000) |
Net loss | (5,981,000) | (3,361,000) | (9,343,000) | (8,118,000) |
Other comprehensive loss: | ||||
Foreign currency translation adjustments | (185,000) | (255,000) | (313,000) | 381,000 |
Comprehensive loss | $ (6,166,000) | $ (3,616,000) | $ (9,656,000) | $ (7,737,000) |
Net loss per share | ||||
Basic | $ (2.58) | $ (2.90) | $ (4.29) | $ (7.85) |
Diluted | $ (2.58) | $ (2.90) | $ (4.29) | $ (7.85) |
Weighted average shares outstanding | ||||
Basic | 2,317,389 | 1,160,661 | 2,179,878 | 1,033,692 |
Diluted | 2,317,389 | 1,160,661 | 2,179,878 | 1,033,692 |
Product Sales | ||||
Revenue: | ||||
Total operating revenue | $ 63,000 | $ 126,000 | $ 140,000 | $ 317,000 |
Fee Revenue | ||||
Revenue: | ||||
Total operating revenue | 0 | 0 | 0 | 9,000 |
License Revenue | ||||
Revenue: | ||||
Total operating revenue | $ 8,000 | $ 7,000 | $ 15,000 | $ 13,000 |
Unaudited Condensed Consolida_4
Unaudited Condensed Consolidated Statements of Stockholders' Equity - USD ($) $ in Thousands | Total | At-the-Market Program | March 2020 Offering | February 2021 Offering | Common Stock $0.001 par value | Common Stock $0.001 par valueAt-the-Market Program | Common Stock $0.001 par valueMarch 2020 Offering | Common Stock $0.001 par valueFebruary 2021 Offering | Additional Paid-In Capital | Additional Paid-In CapitalAt-the-Market Program | Additional Paid-In CapitalMarch 2020 Offering | Additional Paid-In CapitalFebruary 2021 Offering | Accumulated Other Comprehensive Loss | Accumulated Deficit |
Beginning Balance at Dec. 31, 2019 | $ 5,835 | $ 1 | $ 111,509 | $ (902) | $ (104,773) | |||||||||
Beginning Balance, Shares at Dec. 31, 2019 | 877,672 | |||||||||||||
Proceeds from the issuance of common stock | $ 5,043 | $ 1,348 | $ 5,043 | $ 1,348 | ||||||||||
Proceeds from the issuance of common stock, Shares | 232,526 | 178,776 | ||||||||||||
Warrant issued | $ 842 | $ 842 | ||||||||||||
Share issuance costs | (506) | (506) | ||||||||||||
Stock-based compensation | 1,571 | 1,571 | ||||||||||||
Foreign currency translation adjustments | 381 | 381 | ||||||||||||
Net loss | (8,118) | (8,118) | ||||||||||||
Ending Balance at Jun. 30, 2020 | 6,396 | $ 1 | 119,807 | (521) | (112,891) | |||||||||
Ending Balance, Shares at Jun. 30, 2020 | 1,288,974 | |||||||||||||
Beginning Balance at Mar. 31, 2020 | 5,209 | $ 1 | 115,004 | (266) | (109,530) | |||||||||
Beginning Balance, Shares at Mar. 31, 2020 | 1,086,902 | |||||||||||||
Proceeds from the issuance of common stock | $ 4,240 | $ 4,240 | ||||||||||||
Proceeds from the issuance of common stock, Shares | 202,072 | |||||||||||||
Share issuance costs | (166) | (166) | ||||||||||||
Stock-based compensation | 729 | 729 | ||||||||||||
Foreign currency translation adjustments | (255) | (255) | ||||||||||||
Net loss | (3,361) | (3,361) | ||||||||||||
Ending Balance at Jun. 30, 2020 | 6,396 | $ 1 | 119,807 | (521) | (112,891) | |||||||||
Ending Balance, Shares at Jun. 30, 2020 | 1,288,974 | |||||||||||||
Beginning Balance at Dec. 31, 2020 | 3,871 | $ 1 | 123,872 | (1,099) | (118,903) | |||||||||
Beginning Balance, Shares at Dec. 31, 2020 | 1,484,362 | |||||||||||||
Proceeds from the issuance of common stock | $ 8,399 | $ 1 | $ 8,398 | |||||||||||
Proceeds from the issuance of common stock, Shares | 744,936 | |||||||||||||
Warrant issued | $ 2,638 | $ 2,638 | ||||||||||||
Share issuance costs | (1,361) | (1,361) | ||||||||||||
Proceeds from the exercise of warrants | 1,318 | 1,318 | ||||||||||||
Proceeds from the exercise of warrants, Shares | 81,895 | |||||||||||||
Proceeds from the exercise of stock options | $ 2 | 2 | ||||||||||||
Proceeds from the exercise of stock options, Shares | 214 | 214 | ||||||||||||
Settlement of restricted stock units, Shares | 1,028 | |||||||||||||
Issuance of shares as part of compensation | $ 77 | 77 | ||||||||||||
Issuance of shares as part of compensation, Shares | 5,337 | |||||||||||||
Stock-based compensation | 3,079 | 3,079 | ||||||||||||
Foreign currency translation adjustments | (313) | (313) | ||||||||||||
Net loss | (9,343) | (9,343) | ||||||||||||
Ending Balance at Jun. 30, 2021 | 8,367 | $ 2 | 138,023 | (1,412) | (128,246) | |||||||||
Ending Balance, Shares at Jun. 30, 2021 | 2,317,772 | |||||||||||||
Beginning Balance at Mar. 31, 2021 | 11,898 | $ 2 | 135,388 | (1,227) | (122,265) | |||||||||
Beginning Balance, Shares at Mar. 31, 2021 | 2,311,868 | |||||||||||||
Proceeds from the exercise of warrants | 4 | 4 | ||||||||||||
Proceeds from the exercise of warrants, Shares | 262 | |||||||||||||
Proceeds from the exercise of stock options | 2 | 2 | ||||||||||||
Proceeds from the exercise of stock options, Shares | 214 | |||||||||||||
Settlement of restricted stock units, Shares | 91 | |||||||||||||
Issuance of shares as part of compensation | 77 | 77 | ||||||||||||
Issuance of shares as part of compensation, Shares | 5,337 | |||||||||||||
Stock-based compensation | 2,552 | 2,552 | ||||||||||||
Foreign currency translation adjustments | (185) | (185) | ||||||||||||
Net loss | (5,981) | (5,981) | ||||||||||||
Ending Balance at Jun. 30, 2021 | $ 8,367 | $ 2 | $ 138,023 | $ (1,412) | $ (128,246) | |||||||||
Ending Balance, Shares at Jun. 30, 2021 | 2,317,772 |
Unaudited Condensed Consolida_5
Unaudited Condensed Consolidated Statements of Cash Flows - USD ($) $ in Thousands | 6 Months Ended | |
Jun. 30, 2021 | Jun. 30, 2020 | |
Cash flows from operating activities: | ||
Net loss | $ (9,343) | $ (8,118) |
Adjustments to reconcile net loss to net cash used in operating activities: | ||
Change in fair value of derivative financial instruments | (3) | |
Stock-based compensation expense | 3,156 | 1,571 |
Unrealized foreign exchange (gain) loss | (323) | 433 |
Depreciation expense | 56 | 67 |
Amortization expense | 106 | 215 |
(Recovery of) provision for doubtful accounts | (11) | 153 |
Non-cash lease expense | 30 | 196 |
Intangible asset impairment | 181 | |
Loss from disposal of property and equipment | 110 | |
Gain on lease modification | (56) | |
Changes in operating assets and liabilities: | ||
Accounts receivable | 34 | 1 |
Other receivables | (13) | 226 |
Inventory | (118) | 28 |
Prepaid expenses | (98) | (105) |
Operating lease liability | (31) | (126) |
Accounts payable | 229 | (1,288) |
Accrued liabilities | (366) | (381) |
Deferred revenue | 2 | (83) |
Net cash used in operating activities | (6,690) | (6,979) |
Cash flows from investing activities: | ||
Purchase of property and equipment | (19) | (3) |
Proceeds from sale of property and equipment | 61 | |
Internally developed software | (2) | (7) |
Net cash (used in) provided by investing activities | (21) | 51 |
Cash flows from financing activities: | ||
Proceeds from the issuances of common stock and warrants | 11,037 | 7,233 |
Share issuance costs | (1,523) | (506) |
Proceeds from the exercise of warrants and stock options | 1,320 | |
Proceeds from Paycheck Protection Program Loan | 323 | |
Repayment of Paycheck Protection Program Loan | (323) | |
Net cash provided by financing activities | 10,834 | 6,727 |
Effect of foreign exchange rate changes on cash | (29) | 6 |
Net increase (decrease) in cash | 4,094 | (195) |
Cash at beginning of period | 3,331 | 5,459 |
Cash at end of period | $ 7,425 | 5,264 |
Supplemental schedule of non-cash financing activities | ||
Share issuance costs included in accounts payable and accrued liabilities | $ 54 |
Description of Business
Description of Business | 6 Months Ended |
Jun. 30, 2021 | |
Organization Consolidation And Presentation Of Financial Statements [Abstract] | |
Description of Business | 1. DESCRIPTION OF BUSINESS Helius Medical Technologies, Inc. (the “Company”), is a neurotech company focused on neurological wellness. The Company’s purpose is to develop, license or acquire unique and non-invasive technologies targeted at reducing symptoms of neurological disease or trauma. The Company’s first product, known as the Portable Neuromodulation Stimulator (“PoNS TM TM The Company was incorporated in British Columbia, Canada on March 13, 2014. On May 28, 2014, the Company was reincorporated from British Columbia to the State of Wyoming, and on July 20, 2018, it was reincorporated from the State of Wyoming to the State of Delaware. The Company is headquartered in Newtown, Pennsylvania. On December 21, 2018, the Company’s wholly owned subsidiary, NeuroHabilitation Corporation, changed its name to Helius Medical, Inc (“HMI”). On January 31, 2019, the Company formed another wholly owned subsidiary, Helius NeuroRehab, Inc., (“HNR”), a Delaware corporation. On October 10, 2019, the Company formed Helius Canada Acquisition Ltd. (“HCA”), a company incorporated under the federal laws of Canada and a wholly owned subsidiary of Helius Medical Technologies (Canada), Inc. (“HMC”), a company incorporated under the federal laws of Canada, which acquired Heuro Canada, Inc. (“Heuro”) from Health Tech Connex Inc. (“HTC”) on October 30, 2019. Reverse Stock Split Effective after the close of business on December 31, 2020, the Company completed a 1-for- 35 All share and per share amounts in this Quarterly Report have been reflected on a post-split basis. Going Concern Uncertainty As of June 30, 2021, the Company had cash of $7.4 million. For the six months ended June 30, 2021, the Company had an operating loss of $9.7 million, and as of June 30, 2021, its accumulated deficit was $128.2 million. For the six months ended June 30, 2021, the Company had $0.2 million of revenue from the commercial sale of products or services. 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 Canada and by raising additional capital through equity or debt financings. There can be no assurance that the Company will be successful in raising that 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. Risks and Uncertainties COVID-19 On March 11, 2020, the World Health Organization declared the outbreak of a novel coronavirus (“COVID-19”) as a global pandemic, which continues to spread throughout the United States 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 have re-opened, they are all currently operating at reduced capacity, and patients have been and may continue to be less willing to return to these clinics, impacting our commercial activities and our customer engagement efforts. In addition, the resurgence of COVID-19 cases across Canada in the fourth quarter of 2020 and first half of 2021 has led to further restrictions on clinic activities. However, the rate of vaccination has increased throughout all provinces during the end of the second quarter of 2021. Moreover, the Company’s ability to conduct its ongoing clini 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 , and disruptions in business or governmental operations due to COVID-19 may delay the timing for the submission and approval of the Company ’ s marketing applicati ons 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 . To the extent the COVID-19 pandemic impacts the Company’s ability to complete the necessary pre-commercialization activities, the Company’s commercial launch in the U.S. could be impeded or delayed. The extent to which the COVID-19 pandemic will continue to impact the Company’s business, results of operations and financial condition will depend on future developments, which are highly uncertain and cannot be predicted. The Company does not know yet the full extent of the impact of COVID-19 on its future business, operations or the global economy as a whole. |
Summary of Significant Accounti
Summary of Significant Accounting Policies | 6 Months Ended |
Jun. 30, 2021 | |
Accounting Policies [Abstract] | |
Summary of Significant Accounting Policies | 2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Basis of Presentation The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”). The condensed consolidated financial statements have also been prepared on a basis substantially consistent with, and should be read in conjunction with the Company’s audited consolidated financial statements for the year ended December 31, 2020, included in its Annual Report on Form 10-K that was filed with the Securities and Exchange Commission on March 10, 2021. 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. The Company’s reporting currency is the U.S. Dollar (“USD$”). Use of Estimates The preparation of the condensed consolidated financial statements in accordance with GAAP requires management to make estimates and assumptions that affect the amounts reported in the condensed consolidated financial statements and disclosure of contingent assets and liabilities. Significant estimates include the assumptions used in the fair value pricing model for stock-based compensation, derivative financial instruments and deferred income tax asset valuation allowance. Financial statements include estimates which, by their nature, are uncertain. Actual outcomes could differ from these estimates. Principles of Consolidation The accompanying unaudited condensed consolidated financial statements reflect the operations of Helius Medical Technologies, Inc. and its wholly owned subsidiaries. The usual condition for a controlling financial interest is ownership of a majority of the voting interests of an entity. However, a controlling financial interest may also exist through arrangements that do not involve controlling voting interests. As such, the Company applies the guidance of the Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) 810 – Consolidation , Concentrations of Credit Risk The Company is subject to credit risk with respect to its cash. Amounts invested in such instruments are limited by credit rating, maturity, industry group, investment type and issuer. The Company is not currently exposed to any significant concentrations of credit risk from these financial instruments. The Company seeks to maintain safety and preservation of principal and diversification of risk, liquidity of investments sufficient to meet cash flow requirements and a competitive after-tax rate of return. Receivables Accounts receivables are stated at their net realizable value. In determining the appropriate allowance for doubtful accounts, the Company considers a combination of factors, such as the aging of trade receivables, its customers’ financial strength, and payment history. Changes in these factors, among others, may lead to adjustments in the Company’s allowance for doubtful accounts. The calculation of the allowance required judgment by Company management. As of June 30, 2021, the Company’s accounts receivable of $51 thousand, is net of an allowance for doubtful accounts of $0.4 million and is the result of revenue from product sales. As of December 31, 2020, the Company’s accounts receivable of $0.1 million, is net of an allowance for doubtful accounts of $0.4 million and is the result of revenue from product sales. Other receivables as of June 30, 2021 and December 31, 2020 included refunds from research and development (“R&D”) tax credits of $1 thousand and $1 thousand, respectively, and Goods and Services Tax (“GST”) and Quebec Sales Tax (“QST”) refunds of $0.2 million and $0.1 million, respectively, related to the Company’s Canadian expenditures. As of December 31, 2020, there was also a receivable from rent deposits of $18 thousand. Inventory The Company’s inventory consists of raw materials, work in progress and finished goods of the PoNS device. Inventory is stated at the lower of cost (average cost method) or net realizable value. Adjustments to reduce the cost of inventory to its net realizable value are made if required. The Company calculates provisions for excess inventory based on inventory on hand compared to anticipated sales or usage. Management uses its judgment to forecast sales or usage and to determine what constitutes a reasonable period. There can be no assurance that the amount ultimately realized for inventories will not be materially different than that assumed in the calculation of the reserves. No inventory markdowns to net realizable value were recorded during the three and six months ended June 30, 2021, respectively. Inventory markdowns to net realizable value of $0 and $2 thousand were recorded during the three and six months ended June 30, 2020, respectively. As of June 30, 2021 and December 31, 2020, inventory consisted of the following (amounts in thousands): As of As of June 30, 2021 December 31, 2020 Raw materials $ 167 $ 160 Work-in-process 526 440 Finished goods 69 44 Inventory $ 762 $ 644 Inventory reserve (255 ) (255 ) Total inventory, net of reserve $ 507 $ 389 Property and Equipment Property and equipment are carried at cost, less accumulated depreciation. Depreciation is recognized using the straight-line method over the useful lives of the related asset or the term of the related lease. Expenditures for maintenance and repairs, which do not improve or extend the expected useful life of the assets, are expensed to operations while major repairs are capitalized. The estimated useful life of the Company’s leasehold improvements is over the shorter of its lease term or useful life of 5 years; the estimated useful life for the Company’s furniture and fixtures is 7 years. Equipment has an estimated useful life of 15 years, while computer software and hardware has an estimated useful life of 3 to 5 years. As of June 30, 2021 and December 31, 2020, property and equipment consisted of the following (amounts in thousands): As of As of June 30, 2021 December 31, 2020 Leasehold improvement $ 64 $ 64 Furniture and fixtures 93 93 Equipment 354 335 Computer software and hardware 197 197 Property and equipment 708 689 Less accumulated depreciation (259 ) (203 ) Property and equipment, net $ 449 $ 486 Depreciation expense was $28 thousand and $29 thousand for the three months ended June 30, 2021 and 2020, respectively. Depreciation expense was $56 thousand and $67 thousand for the six months ended June 30, 2021 and 2020, respectively. Goodwill and Other Intangible Assets Goodwill represents the excess of purchase price over the fair values underlying net assets acquired in an acquisition. All of the Company’s goodwill as of June 30, 2021 is the result of the Heuro acquisition completed in October 2019. Goodwill is not amortized, but rather will be tested annually for impairment or more frequently if events or changes in circumstances indicate that the carrying amount of the asset may not be recoverable. The Company will test goodwill for impairment annually in the fourth quarter of each year using data as of October 1 of that year. Goodwill is allocated to and evaluated for impairment at the Company’s one identified reporting unit. Goodwill is tested for impairment by either performing a qualitative evaluation or a quantitative test. The qualitative evaluation is an assessment of factors to determine whether it is more likely than not that a reporting unit’s fair value is less than its carrying amount. The Company may elect not to perform the qualitative assessment for its reporting unit and perform the quantitative impairment test. The quantitative goodwill impairment test requires the Company to compare the carrying value of the reporting unit’s net assets to the estimated fair value of the reporting unit. If the estimated fair value exceeds the carrying value, no further evaluation is required, and no impairment loss is recognized. If the carrying amount of a reporting unit, including goodwill, exceeds the estimated fair value, the excess of the carrying value over the estimated fair value is recorded as an impairment loss, the amount of which is not to exceed the total amount of goodwill allocated to the reporting unit. The ongoing effects of the COVID-19 pandemic was considered a triggering event for testing whether goodwill is impaired at June 30, 2021 . As a result of the Company’s quantitative assessment, the Company determine d that the estimated fair value of the reporting unit exceeded the carrying value of the reporting unit. Therefore, the Company concluded that goodwill was not impaired as of any of the aforementioned periods . The Company will continue to monitor the impacts of the COVID-19 pandemic in future periods. The following is a summary of the activity for the period ended June 30, 2021 for goodwill: Carrying amount at December 31, 2020 $ 759 Foreign currency translation 24 Carrying amount at June 30, 2021 $ 783 Definite-lived intangibles consist principally of acquired customer relationships, proprietary software and reacquired rights as well as internally developed software. All are amortized straight-line over their estimated useful lives. Amortization expense related to intangible assets was $49 thousand and $0.1 million during the three and six months ended June 30, 2021, respectively. Amortization expense related to intangible assets was $0.1 million and $0.2 million during the three and six months ended June 30, 2020. During the six months ended June 30, 2020, the Company incurred an intangible asset impairment loss of $0.2 million related to the customer relationships, all of which was incurred during the first quarter of 2020, which is included in selling, general and administrative expenses in the accompanying condensed consolidated statement of operations and comprehensive loss. During the six months ended June 30, 2021, the Company wrote-off $0.2 million of fully amortized customer relationships, all of which occurred during the first quarter of 2021. Intangible assets as of June 30, 2021 and December 31, 2020 consist of the following: As of June 30, 2021 As of December 31, 2020 Useful Life Gross Carrying Amount Accumulated Amortization Net Carrying Value Gross Carrying Amount Accumulated Amortization Net Carrying Value Customer relationships (1) 1.25 years $ — $ — $ — $ 237 $ (228 ) $ 9 Acquired proprietary software 5 years 155 (52 ) 103 150 (35 ) 115 Reacquired rights 3.87 years 519 (224 ) 295 503 (152 ) 351 Internally developed software 3 years 84 (44 ) 40 82 (30 ) 52 Total intangible assets $ 758 $ (320 ) $ 438 $ 972 $ (445 ) $ 527 (1) During the six months ended June 30, 2021, the Company wrote off $0.2 million of fully amortized customer relationships. Amortization expense is anticipated to be as follows in future years: For the Year Ending December 31, 2021 (remaining 6 months) $ 96 2022 189 2023 127 2024 26 $ 438 Leases The Company accounts for its leases under ASU No. 2016-02, Leases The Company does not record an operating lease right of use (“ROU”) asset and corresponding lease liability for leases with an initial term of twelve months or less and recognizes lease expense for these leases as incurred over the lease term. The Company had only one operating lease, which was for its headquarters office in Newtown, Pennsylvania upon the adoption date. As of June 30, 2021, the Company has not entered into any additional lease arrangements, but did modify the existing lease arrangement in the second quarter of 2020 and again in the first quarter of 2021. Foreign Currency The Company’s functional currency is the U.S. dollar. Monetary assets and liabilities denominated in foreign currencies are translated into U.S. dollars using exchange rates in effect at the balance sheet date. Opening balances related to non-monetary assets and liabilities are based on prior period translated amounts, and non-monetary assets acquired, and non-monetary liabilities incurred are translated at the approximate exchange rate prevailing at the date of the transaction. Revenue and expense transactions are translated at the approximate exchange rate in effect at the time of the transaction. Foreign exchange gains and losses are included in the condensed consolidated statement of operations and comprehensive loss as foreign exchange gain (loss). The functional currency of HMC and HCA, the Company’s Canadian subsidiaries, is the CAD$ and the functional currency of HMI and HNR is the USD$. Transactions in foreign currencies are recorded into the functional currency of the relevant subsidiary at the exchange rate in effect at the date of the transaction. Any monetary assets and liabilities arising from these transactions are translated into the functional currency at exchange rates in effect at the balance sheet date or on settlement. Revenues, expenses and cash flows are translated at the weighted-average rates of exchanges for the reporting period. The resulting currency translation adjustments are not included in the Company’s condensed consolidated statements of operations and comprehensive loss for the reporting period, but rather are accumulated and gains and losses are recorded in foreign exchange gain (loss), as a component of comprehensive loss, within the condensed consolidated statements of operations and comprehensive loss. Stock-Based Compensation The Company accounts for all stock-based payments and awards under the fair value-based method. The Company recognizes its stock-based compensation expense using the straight-line method. Compensation cost is not adjusted for estimated forfeitures, but instead is adjusted upon an actual forfeiture of a stock option. The Company accounts for the granting of stock options to employees and non-employees using the fair value method whereby all awards are measured at fair value on the date of the grant. The fair value of all employee-related stock options is expensed over the requisite service period with a corresponding increase to additional paid-in capital. Upon exercise of stock options, the consideration paid by the option holder, together with the amount previously recognized in additional paid-in capital is recorded as an increase to common stock, while the par value of the shares received is reclassified from additional paid in capital. Stock options granted to employees are accounted for as liabilities when they contain conditions or other features that are indexed to other than a market, performance or service condition. In accordance with ASU 2018-07, Improvements to Nonemployee Share-Based Payment Accounting The Company uses the Black-Scholes option pricing model to calculate the fair value of stock options. The use of the Black-Scholes option pricing model requires management to make assumptions with respect to the expected term of the option, the expected volatility of the common stock consistent with the expected term of the option, risk-free interest rates, the value of the common stock and expected dividend yield of the common stock. Changes in these assumptions can materially affect the fair value estimate. Awards of options that provide for an exercise price that is not denominated in: (a) the currency of a market in which a substantial portion of the Company's equity securities trades, (b) the currency in which the employee's pay is denominated, or (c) the Company's functional currency, are required to be classified as liabilities. Revenue Recognition In accordance with the FASB’s ASC 606, Revenue from Contracts with Customers (i) identify the contract(s) with a customer; (ii) identify the performance obligations in the contract; (iii) determine the transaction price; (iv) allocate the transaction price to the performance obligations in the contract; and (v) recognize revenue when (or as) the entity satisfies a performance obligation. The Company applies the five-step model to contracts when it determines that it is probable it will collect substantially all of the consideration it is entitled to in exchange for the goods or services it transfers to the customer. At contract inception, once the contract is determined to be within the scope of ASC 606, the Company assesses the goods or services promised within each contract and determines those that are performance obligations and assesses whether each promised good or service is distinct. The Company then recognizes as revenue the amount of the transaction price, after consideration of variability and constraints, if any, that is allocated to the respective performance obligation when the performance obligation is satisfied. Product Sales, net Product sales are derived from the sale of the PoNS device to clinics. According to the supply agreement with each of these clinics, the Company’s performance obligation was met when it delivered the PoNS device to the clinic’s facility and the clinic assumed title of the PoNS device upon acceptance. As such, revenue is recognized at a point in time. Shipping and handling costs associated with outbound freight before control of a product has been transferred to a customer is accounted for as a fulfillment cost and are included in cost of sales. For the three and six months ended June 30, 2020, the Company recorded $0.1 million and $0.3 million, respectively, in product sales. As of June 30, 2020, the control of 11 of the 55 PoNS devices included as consideration in the Heuro acquisition had been transferred resulting in revenue of $0.1 million being recognized which is included in the aforementioned $0.3 million in product sales for the six months ended June 30, 2020. For the three and six months ended June 30, 2021, the Company recorded $63 thousand and $0.1 million, respectively, in product sales. There were no PoNS devices, included as consideration in the Heuro acquisition, transferred during the six months ended June 30, 2021. As of June 30, 2021, there were 34 devices remaining to be transferred. The fair value of the remaining devices is recorded as deferred revenue of $0.3 million on the condensed consolidated balance sheet. The returns during the three and six months ended June 30, 2021 were the result of warranty returns for defective products. These returns were insignificant and any future replacements are expected to be insignificant. Fee Revenue During the three and six months ended June 30, 2020, the Company recognized $0 and $9 thousand, respectively, of fee revenue related to engaging new neuroplasticity clinics to provide the PoNS Treatment. These agreements were terminated in the second quarter of 2020. As a result, during the three and six months ended June 30, 2021, the Company did not recognize any fee revenue. License Revenue In connection with the Heuro acquisition, the Company entered into a Clinical Research and Co-Promotion Agreement with HTC (the “Co-Promotion Agreement”). The Co-Promotion Agreement had a fair value of CAD$360 thousand at the time of acquisition and a ten-year ten-year As of June 30, 2021 and December 31, 2020, the Company had no contract assets or liabilities on its condensed consolidated balance sheets related to the supply agreements with each clinic. Cost of Sales Cost of product sales includes the cost to manufacture the PoNS device, inventory markdowns to net realizable value, royalty expenses, freight charges, customs duties, wages and salaries of employees involved in the management of the supply chain and logistics of fulfilling the Company’s sales orders. Income Taxes The Company accounts for income taxes using the asset and liability method. The asset and liability method provide that deferred tax assets and liabilities are recognized for the expected future tax consequences of temporary differences between the financial reporting and tax bases of assets and liabilities, and for operating loss and tax credit carryforwards. Deferred tax assets and liabilities are measured using the currently enacted tax rates and laws that will be in effect when the differences are expected to reverse. The Company records a valuation allowance to reduce deferred tax assets to the amount that is believed more likely than not to be realized. The Company has adopted the provisions of ASC 740 Income Taxes On March 27, 2020, President Trump signed into law the Coronavirus Aid, Relief, and Economic Security Act (“CARES Act”). The CARES Act, among other things, includes provisions relating to refundable payroll tax credits, deferment of employer side social security payments, net operating loss carryback periods, alternative minimum tax credit refunds, modifications to the net interest deduction limitations, increased limitations on qualified charitable contributions, and technical corrections to tax depreciation methods for qualified improvement property. We continue to examine the impact that the CARES Act may have on our business. The CARES Act has not had a material impact on our accounting for income taxes. Research and Development Expenses Research and development (“R&D”) expenses consist primarily of personnel costs, including salaries, benefits and stock-based compensation, clinical studies performed by contract research organizations, development and manufacturing of clinical trial devices and devices for manufacturing testing and materials and supplies as well as regulatory costs related to post market surveillance, quality assurance complaint handling and adverse event reporting. R&D costs are charged to operations when they are incurred. Segment Information Operating segments are defined as components of an enterprise about which separate discrete information is available for evaluation by the chief operating decision maker, or decision-making group, in deciding how to allocate resources and in assessing performance. The Company operates and manages its business within one operating and reportable segment. Accordingly, the Company reports the accompanying condensed consolidated financial statements in the aggregate in one reportable segment. Derivative Financial Instruments The Company evaluates its financial instruments and other contracts to determine if those contracts or embedded components of those contracts qualify as derivatives to be separately accounted for in accordance with ASC 815, Derivatives and Hedging The classification of derivative financial instruments, including whether such instruments should be recorded as liabilities/assets or as equity, is reassessed at the end of each reporting period. Derivative financial instruments that become subject to reclassification are reclassified at the fair value of the instrument on the reclassification date. Derivative financial instruments will be classified in the condensed consolidated balance sheet as current if the right to exercise or settle the derivative financial instrument lies with the holder. The last of the warrants accounted for in accordance with ASC 815 expired in April 2021 Fair Value Measurements The Company accounts for financial instruments in accordance with ASC 820, Fair Value Measurements and Disclosures Level 1 – Unadjusted quoted prices in active markets that are accessible at the measurement date for identical, unrestricted assets or liabilities; Level 2 – Quoted prices in markets that are not active or financial instruments for which all significant inputs are observable, either directly or indirectly; and Level 3 – Prices or valuations that require inputs that are both significant to the fair value measurement and unobservable. The Company’s financial instruments recorded in its condensed consolidated balance sheets consist primarily of cash, accounts receivable, other current receivables, operating lease ROU asset, accounts payable, accrued liabilities, operating lease liability and derivative financial instruments. The book values of these instruments, with the exception of derivative financial instruments, non-current lease liability and operating lease ROU asset approximate their fair values due to the immediate or short-term nature of these instruments. The Company’s derivative financial instruments are classified as Level 3 within the fair value hierarchy. Unobservable inputs used in the valuation of these financial instruments include volatility of the underlying share price and the expected term. See Note 3 for the inputs used in the Black-Scholes option pricing model as of December 31, 2020 and the roll forward of the Company’s derivative financial instruments. The Company’s derivative financial instruments were comprised of warrants classified as liabilities. The fair value of the derivative financial instruments as of December 31, 2020 was zero. The warrants classified as liabilities expired in April 2021 There were no transfers between any levels for any of the periods presented. In addition to assets and liabilities that are recorded at fair value on a recurring basis, the Company's assets and liabilities are also subject to nonrecurring fair value measurements. Generally, assets are recorded at fair value on a nonrecurring basis as a result of impairment charges. Due to the COVID-19 pandemic and the related risks and uncertainties, the Company’s customer relationship intangible asset incurred an impairment loss during the six months ended June 30, 2020 of $0.2 million, all of which was incurred during the first quarter of 2020. The fair value of this intangible asset was determined based on Level 3 measurements within the fair value hierarchy. Inputs to these fair value measurements included estimates of the amount and timing of the asset’s net future discounted cash flows based on historical data, current trends and market conditions. As of June 30, 2021, the Company’s customer relationship intangible asset had been fully amortized and written off. Basic and Diluted Net Loss per Share Earnings or loss per share (“EPS”) is computed by dividing net income (loss) by the weighted average number of common shares outstanding during the period. Diluted EPS is computed by dividing net income (loss) by the weighted average of all potentially dilutive shares of common stock that were outstanding during the periods presented. The treasury stock method is used in calculating diluted EPS for potentially dilutive stock options and share purchase warrants, which assumes that any proceeds received from the exercise of in-the-money stock options and share purchase warrants, would be used to purchase common shares at the average market price for the period, unless including the effects of these potentially dilutive securities would be anti-dilutive. The basic and diluted loss per share for the periods noted below is as follows (amounts in thousands except shares and per share data): Three Months Ended Six Months Ended June 30, June 30, 2021 2020 2021 2020 Basic and Diluted Numerator: Net loss $ (5,981 ) $ (3,361 ) $ (9,343 ) $ (8,118 ) Denominator: Weighted average common shares outstanding 2,317,389 1,160,661 2,179,878 1,033,692 Basic and diluted net loss per share $ (2.58 ) $ (2.90 ) $ (4.29 ) $ (7.85 ) No incremental common stock equivalents, consisting of outstanding stock options, warrants and restricted stock units, were included in calculating diluted loss per share because such inclusion would be anti-dilutive due to the Company’s losses for the three and six months ended June 30, 2021 and 2020. Common stock equivalents excluded from the computation of diluted weighted average shares outstanding were 1,233,230 and 388,344 for the three months ended June 30, 2021 and 2020, respectively. Common stock equivalents excluded from the computation of diluted weighted average shares outstanding were 1,233,230 and 388,344 for the six months ended June 30, 2021 and 2020, respectively. 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 Financial Instruments – Credit Losses (Topic 326), Derivatives and Hedging (Topic 815) and Leases (Topic 842): Effective Dates In August 2020, FASB issued ASU 2020-06, Debt with Conversion and Other Options (Subtopic 470-20) and Derivatives and Hedging – Contracts in Entity’s Own Equity (Subtopic 815-40) 2020, including interim periods within those fiscal years. FASB has specified that an entity should adopt the guidance as of the beginning of its annual fiscal year. The guidance is to be applied using either a full retrospective or modified retrospective method. In applying the full retrospective method, the cumulative effect of the accounting change should be recognized as an adjustment to the opening balance of retained earnings in the first comparative period presented. In applying the modified retrospective method, the cumulative effect of the accounting change should be recognized as an adjustment to the opening balance of retained earnings at the date of adoption. The Company early adopted ASU 2020-06 effective January 1, 2021 under the modified retrospective approach. The adoption of this guidance did not have a material impact on the Company’s consolidated financial statements. |
Common Stock and Warrants
Common Stock and Warrants | 6 Months Ended |
Jun. 30, 2021 | |
Equity [Abstract] | |
Common Stock and Warrants | 3. COMMON STOCK AND WARRANTS The Company’s authorized capital stock pursuant to its Delaware charter consists of 150,000,000 authorized shares of Class A common stock, at a par value per share of $0.001 and 10,000,000 authorized shares of preferred stock at a par value per share of $0.001. Holders of common stock are entitled to vote at any meeting of the Company’s stockholders on the basis of one vote per share of common stock owned as of the record date of such meeting. Each share of common stock entitles the holder to receive dividends, if any, as declared by the Company’s Board of Directors. No dividends have been declared since inception of the Company through June 30, 2021. In the event of a liquidation, dissolution or winding-up of the Company, other distribution of assets of the Company among its stockholders for the purposes of winding-up its affairs or upon a reduction of capital, the stockholders shall, share equally, share for share, in the remaining assets and property of the Company. On April 13, 2018, the Company issued 61,197 shares of its common stock and warrants to purchase 61,197 shares of the Company’s common stock in an underwritten public offering at a price of $261.45 per share and accompanying warrant. On April 24, 2018, the Company closed on the sale of an additional 9,179 shares of its common stock and warrants to purchase 9,179 shares of the Company’s common stock pursuant to the exercise of the underwriters’ over-allotment option (collectively the “April 2018 Offering”). The Company received net proceeds of $16.3 million from the April 2018 Offering. The fair value of these warrants at issuance was approximately $7.4 million. Each warrant issued in connection with the April 2018 Offering entitled the holder to acquire one additional share of common stock at an exercise price of CAD$428.75 per share on or before April 10, 2021. Pursuant to the guidance of ASC 815 Derivatives and Hedging The following table summarizes the weighted average assumptions used in estimating the fair value of the warrants issued in the April 2018 Offering using the Black-Scholes option pricing model as of the date of the initial closing of the offering and the date of the closing of the over-allotment option. April 24, 2018 April 13, 2018 Stock price CAD$ 376.60 CAD$ 344.75 Exercise price CAD$ 428.75 CAD$ 428.75 Warrant term 3.00 years 3.00 years Expected volatility 64.49 % 64.20 % Risk-free interest rate 2.02 % 1.99 % Dividend rate 0.00 % 0.00 % On January 27, 2020, the Company filed a Form S-3 shelf registration under the Securities Act which was declared effective by the SEC on February 6, 2020 (the “2020 Shelf”). In conjunction with the 2020 Shelf, on January 27, 2020, the Company entered into an At The Market Offering Agreement (the “2020 ATM”) with H.C. Wainwright & Co., LLC (“Wainwright”) under which the Company may offer and sell, from time to time at its sole discretion, to or through Wainwright, acting as agent and/or principal, shares of its common stock having an aggregate offering price of up to $11.34 million, which, in March 2020, was subsequently reduced to $9.15 million, including the shares previously sold under the 2020 ATM . For the six months ended June 30, 2020, under the 2020 ATM, the Company sold and issued 2 shares of its common stock with an aggregated market value of $ million at an average price of $ per share and paid Wainwright a sales commission of approximately $ thousand related to those shares. The Company terminated the 2020 ATM effective November 25, 2020. On March 20, 2020, the Company, in a registered direct offering, issued an aggregate of 178,776 shares of its common stock at a price of $12.25 per share. Additionally, the Company issued unregistered warrants in a concurrent private placement to purchase up to 178,776 shares of its common stock at an exercise price of $16.10 per share. Gross proceeds from the offering (the “March 2020 Offering”) were approximately $2.2 million. The underwriting discounts and commissions and offering expenses of $0.3 million were recorded to share issuance costs. Each warrant issued in connection with the March 2020 Offering entitles the holder to acquire one additional share of common stock at an exercise price of $16.10 per share, which became exercisable on September 20, 2020 and will expire on March 20, 2025. Pursuant to the guidance of ASC 480 Distinguishing Liabilities from Equity Derivatives and Hedging connection with the March 2020 Offering should be classified as equity as partial cash settlement under certain circumstances and provisions related to market volatility did not preclude equity classification . The relative fair value of these warrants at issuance was approximately $ 0.8 million and was included in additional paid-in capital. As of June 30, 2021 , 81,633 warrants had been exercised, all during the first quarter of 2021, for gross proceeds of $ 1.3 million. The following table summarizes the weighted average assumptions used in estimating the fair value of the warrants granted in the March 2020 Offering using the Black-Scholes option pricing model as of the date of the closing of the offering on March 20, 2020. March 20, 2020 Stock price $ 12.25 Exercise price $ 16.10 Warrant term 5.50 years Expected volatility 82.41 % Risk-free interest rate 0.52 % Dividend rate 0.00 % On October 26, 2020, the Company issued units consisting of one share and a warrant to purchase 0.50 shares of common stock, with an aggregate issuance of 187,646 shares of common stock and warrants to purchase an aggregate of 93,817 shares of common stock at a purchase price of $18.20 per unit, resulting in gross proceeds of approximately $3.4 million, excluding the proceeds, if any, that the Company may receive in the future from the exercise of the warrants (the “October 2020 Offering”). The Company incurred $0.3 million in share issuance costs, including placement agent fees. The warrants have an initial exercise price of $15.82 per share and are exercisable for a period of three years from the date of issuance. The Company also issued warrants to the placement agent to purchase 961 shares of common stock, with an exercise price of $19.775 per share. An officer of the Company and affiliates of an officer and director of the Company participated in the October 2020 Offering on the same terms and conditions as all other purchasers, except that they paid $18.354 per unit and their warrants have an exercise price of $16.1665 per share. Pursuant to the securities purchase agreement for the October 2020 Offering, if the Company issues any shares of common stock or common stock equivalents for cash consideration, indebtedness or a combination thereof, with certain exceptions, within twelve months of the closing of the October 2020 Offering, each purchaser who subscribed for at least $250,000 has the right to participate in up to such purchaser’s pro rata portion of 30% of the such subsequent financing on the same terms, conditions and price provided for in the subsequent financing. Pursuant to the guidance of ASC 480 Distinguishing Liabilities from Equity Derivatives and Hedging The following table summarizes the weighted average assumptions used in estimating the fair value of the warrants granted in the October 2020 Offering using the Black-Scholes option pricing model as of the date of the closing of the offering on October 26, 2020. October 26, 2020 Stock price $ 15.92 Exercise price $ 15.92 Warrant term 3.00 years Expected volatility 80.91 % Risk-free interest rate 0.18 % Dividend rate 0.00 % On February 1, 2021, in an underwritten public offering (the “February 2021 Offering”), the Company issued 744,936 shares of common stock and warrants to purchase up to an aggregate of 372,468 shares of common stock at a purchase price of $14.82 per unit, consisting of one share and a warrant to purchase 0.50 shares of common stock. The warrants have an initial exercise price of $16.302 per share and are exercisable for a period of five years from the date of issuance. The Company also issued warrants to the underwriter to purchase 29,797 shares of common stock, with an exercise price of $18.525 per share. Net proceeds from the February 2021 Offering after underwriter’s discounts and commission and offering expenses paid by us were approximately $9.6 million. Affiliates of an officer and director participated in the February 2021 Offering on the same terms and conditions as all other purchasers. Pursuant to the guidance of ASC 480 Distinguishing Liabilities from Equity Derivatives and Hedging The following table summarizes the weighted average assumptions used in estimating the fair value of the warrants granted in the February 2021 Offering using the Black-Scholes option pricing model as of the date of the closing of the offering on February 1, 2021. February 1, 2021 Stock price $ 14.82 Exercise price $ 16.47 Warrant term 5.00 years Expected volatility 75.02 % Risk-free interest rate 0.42 % Dividend rate 0.00 % The following table summarizes warrants accounted for as liabilities and recorded as derivative financial instruments on the Company’s condensed consolidated balance sheets for the six months ended June 30, 2021 and 2020 (amounts in thousands): Six Months Ended June 30, 2021 2020 Fair value of warrants at beginning of period $ — $ 5 Exercise of warrants — — Foreign exchange losses — — Change in fair value of warrants during the period — (4 ) Fair value of warrants at end of period $ — $ 1 Prior to their expiration in April 2021, these warrants were classified as derivative financial instruments in the Company’s condensed consolidated balance sheet as of December 31, 2020 and were required to be re-measured at each reporting period, with the change in fair value recorded as a gain or loss in the change in fair value of derivative financial instruments, included in other income (expense) in the Company’s condensed consolidated statements of operations and comprehensive loss. The fair value of the warrants continued to be classified as a liability until they were exercised or expired. No warrants were included in the table for 2021 as all warrants classified as liabilities were underwater prior to expiring in April 2021. As of June 30, 2021, there are no warrants outstanding classified as derivative financial instruments. The fair value of all warrants classified as derivative financial instruments outstanding as of December 31, 2020 were estimated using the Black-Scholes option pricing model with the following weighted average assumptions: December 31, 2020 Stock price CAD$ 17.15 Exercise price CAD$ 428.75 Warrant term 0.27 years Expected volatility 64.48 % Risk-free interest rate 0.06 % Dividend rate 0.00 % The following is a summary of the Company’s warrant activity during the six months ended June 30, 2021: Number of Warrants Weighted Average Exercise Price CAD US CAD$ USD$ Outstanding as of December 31, 2020 68,351 273,554 $ 428.75 $ 16.04 Granted — 402,265 — 16.47 Cancelled/Expired (68,351 ) — 428.75 — Exercised — (81,895 ) — 16.10 Outstanding as of June 30, 2021 — 593,924 $ — $ 16.32 The Company’s warrants outstanding and exercisable as of June 30, 2021 were as follows: Number of Warrants Outstanding Exercise Price Expiration Date 97,143 USD$16.10 March 20, 2025 17,431 USD$16.1665 October 26, 2023 76,386 USD$15.82 October 26, 2023 961 USD$19.775 October 26, 2023 372,206 USD$16.302 February 1, 2026 29,797 USD$18.525 February 1, 2026 593,924 |
Stock-Based Payments
Stock-Based Payments | 6 Months Ended |
Jun. 30, 2021 | |
Disclosure Of Compensation Related Costs Sharebased Payments [Abstract] | |
Stock-Based Payments | 4. STOCK-BASED PAYMENTS On May 15, 2018, the Company’s Board of Directors authorized and approved the adoption of the 2018 Omnibus Incentive Plan, (as amended, the “2018 Plan”), which was effective upon approval by the stockholders of the Company on June 28, 2018 and under which an aggregate of 153,031 shares could be issued. This share reserve was the sum of 85,714 new shares, plus the 67,317 shares that remained available for issuance at the time of approval under the Company’s 2016 Omnibus Incentive Plan (the “2016 Plan”), the predecessor incentive plan at the time of the adoption of the 2018 Plan. On April 20, 2021, the Company’s Board of Directors authorized and approved an amendment, which was effective upon approval by the stockholders of the Company on May 25, 2021, authorizing an additional 565,000 shares to be issued under the 2018 Plan. Pursuant to the terms of 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 units 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 determined at the discretion of the Company’s Board of Directors. Subsequent to the adoption of the 2018 Plan, the Company ceased granting awards under the 2016 Plan, the predecessor incentive plan. However, outstanding stock options granted prior to the effective date of the 2018 Plan are still governed by the 2016 Plan or the Company’s 2014 Stock Incentive Plan, which preceded the 2016 Plan. As of June 30, 2021, there was an aggregate of 127,328 shares of common stock remaining available for grant under the Company’s 2018 Plan. For the six months ended June 30, 2021, the Company issued 532,068 stock options to employees and directors of which 5,500 were forfeited. The Company issued no stock options to consultants during the six months ended June 30, 2021. The following is a summary of the Company’s stock option activity during the six months ended June 30, 2021: Weighted Average Aggregate Remaining Weighted Intrinsic Number of Contractual Average Value Stock Options Life (in years) Exercise Price (in thousands) Outstanding as of December 31, 2020 113,558 7.75 $ 159.33 $ — Granted 532,068 15.00 — Forfeited/Cancelled (14,396 ) 105.15 — Exercised (214 ) 10.50 — Outstanding as of June 30, 2021 631,016 9.47 $ 38.92 $ — Exercisable as of June 30, 2021 252,920 8.97 $ 26.73 $ — Employee and Director Stock Options As of June 30, 2021, the unrecognized compensation cost related to non-vested time-based stock options outstanding for employees and directors, was $3.9 million which will be recognized over a weighted-average remaining vesting period of approximately 3.5 years. As of June 30, 2021, the unrecognized compensation cost related to performance-based stock options for employees 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 a stock option. The weighted average grant date fair value of employee and director stock options granted for the six months ended June 30, 2021 was $11.27 per option and 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, 2021 Stock price $ 15.10 Exercise price $ 15.00 Expected term 7.17 years Expected volatility 1.19 % Risk-free interest rate 85.99 % Dividend rate 0.00 % Consultant Stock Options As of June 30, 2021, the unrecognized compensation cost related to non-vested stock options outstanding for non-employees was $13 thousand which will be recognized over a weighted-average remaining vesting period of approximately 0.3 years. Compensation cost is not adjusted for estimated forfeitures, but instead is adjusted upon an actual forfeiture of a stock option. Restricted Stock Units Beginning in the fourth quarter of 2019, certain members of the Company’s executive management team elected to receive RSUs in lieu of cash compensation under the 2018 Plan that vest upon issuance. The fair value of the RSUs was based on the closing price of the Company’s common stock on the day of the grant. Subsequent to the March 31, 2021 pay period, no members of the Company’s executive management team continued to elect to receive RSUs in lieu of cash compensation. During the second quarter of 2021, the Company granted 2,668 RSUs to an officer of the Company under the 2018 Plan that were scheduled to vest on October 2, 2021. The fair value of the RSUs is based on the closing price of the Company’s common stock on the day of the grant. During the second quarter of 2021, the Company granted 5,622 RSUs to the Company’s Board of Directors pursuant to the Non-Employee Director Compensation Policy which will vest in twelve monthly installments on the last day of each month. The fair value of the RSUs is based on the closing price of the Company’s common stock on the day of the grant. The following is a summary of the Company’s RSU award activity for the six months ended June 30, 2021: Number of RSUs Weighted Average Grant Date Fair Value per Unit Outstanding as of December 31, 2020 168 $ 13.20 Granted 9,150 15.46 Settled (1,028 ) 14.50 Outstanding as of June 30, 2021 8,290 $ 15.53 Unrestricted Stock On April 1, 2021, the Company granted 5,337 shares of unrestricted Class A Common Stock to an officer of the Company under the 2018 Plan. Stock-Based Compensation Expense Stock-based compensation expense is classified in the Company’s condensed consolidated statements of operations and comprehensive loss as follows (amounts in thousands): Three Months Ended June 30, Six Months Ended June 30, 2021 2020 2021 2020 Research and development $ 162 $ 243 $ 384 $ 482 Cost of sales 3 (2 ) 3 (1 ) Selling, general and administrative 2,464 488 2,769 1,090 Total $ 2,629 $ 729 $ 3,156 $ 1,571 |
Accrued Expenses
Accrued Expenses | 6 Months Ended |
Jun. 30, 2021 | |
Payables And Accruals [Abstract] | |
Accrued Expenses | 5. ACCRUED EXPENSES Accrued expenses consisted of the following (amounts in thousands): As of June 30, 2021 December 31, 2020 Employees benefits $ 457 $ 496 Professional services 107 292 Legal fees 144 133 Royalty fees 3 12 Severance 139 347 Other 23 57 Total $ 873 $ 1,337 |
Commitments and Contingencies
Commitments and Contingencies | 6 Months Ended |
Jun. 30, 2021 | |
Commitments And Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | 6. COMMITMENTS AND CONTINGENCIES (a) On January 22, 2013, the Company entered into a license agreement with Advanced NeuroRehabilitation, LLC (“ANR”) for an exclusive right to ANR’s patent pending technology, claims and knowhow. In addition to the issuance of 91,628 shares of common stock to ANR, the Company agreed to pay a 4% royalty on net revenue on the sales of devices covered by the patent-pending technology and services related to the therapy or use of devices covered by the patent-pending technology. For the three and six months ended June 30, 2021, the Company recorded approximately $ 3 thousand and $ 6 thousand, respectively, in royalty expense s in its condensed consolidated statement of operations and comprehensive loss . For the three and six months ended June 30, 2020 , the Company recorded approximately $ 5 thousand and $ 10 thousand, respectively, in royalty expenses in its condensed consolidated statement of operations and comprehensive loss . ( b ) In March 2017, the Company entered into a lease for office space in Newtown, Pennsylvania. The initial term of the lease was from July 1, 2017 through December 31, 2022, with an option to extend until 2027. In July 2017, the Company amended the contract to commence the lease on July 17, 2017 through January 16, 2023, with an option to extend until January 2028 January 2018 January 2021 The following table summarizes the Company’s operating lease information including future minimum lease payments under a non-cancellable lease as of June 30, 2021 (amounts in thousands). For the Six Months Ended June 30, 2021 Operating lease cost $ 5 Operating lease - operating cash flows $ 31 Weighted average remaining lease term 1.00 years Weighted average discount rate 7.2 % Future minimum lease payments under non-cancellable lease as of June 30, 2021 were as follows: For the Period Ending December 31, 2021 (remaining six months) $ 32 2022 32 Total future minimum lease payments 64 Less imputed interest (2 ) Total liability $ 62 Reported as of June 30, 2021 Current operating lease liability 62 Non-current operating lease liability — Total $ 62 ( c ) On December 29, 2017, HMI (formerly known as NeuroHabilitation Corporation) entered into a Manufacturing and Supply Agreement (“MSA”) with Key Tronic Corporation (“Key Tronic”), for the manufacture and supply of the Company’s PoNS device based upon the Company’s product specifications as set forth in the MSA. Per the agreement, the Company shall provide to Key Tronic a rolling forecast for the procurement of parts and material and within normal lead times based on estimated delivery dates for the manufacture of the PoNS device. The term of the agreement is for three years and will automatically renew for additional consecutive terms of one year, unless cancelled by either party upon 180-day written notice to the other party prior to the end of the then current term. On June 1, 2020, HMI extended the existing manufacturing agreement with Key Tronic for a second three year term from December 29, 2020 until December 31, 2023. As of June 30, 2021, the Company did not have any outstanding commitments to Key Tronic to complete the Company’s forecasts for the procurement of materials necessary for the delivery of PoNS devices. |
Related Party Transactions
Related Party Transactions | 6 Months Ended |
Jun. 30, 2021 | |
Related Party Transactions [Abstract] | |
Related Party Transactions | 7. RELATED PARTY TRANSACTIONS During the three and six months ended June 30, 2020, the Company paid approximately $0 and $5 thousand, respectively, in consulting fees to a director of the Company. No consulting fees were paid to this director during the three and six months ended June 30, 2021. An officer of the Company and affiliates of an officer and director subscribed for units in the Company’s October 2020 Offering. Affiliates of an officer and director participated in the February 2021 Offering. |
Subsequent Events
Subsequent Events | 6 Months Ended |
Jun. 30, 2021 | |
Subsequent Events [Abstract] | |
Subsequent Events | 8. SUBSEQUENT EVENTS 2021 Inducement Plan On July 2, 2021, the Company adopted the Helius Medical Technologies, Inc. 2021 Inducement Plan (the “Inducement Plan”), pursuant to which the Company reserved 100,000 shares of its Class A common stock to be used exclusively for grants of awards to individuals who were not previously employees or directors of the Company, as an inducement material to the individuals’ entry into employment with the Company within the meaning of Rule 5635(c)(4) of the Nasdaq Listing Rules. The Inducement Plan was approved by the Company’s Board of Directors without stockholder approval pursuant to Rule 5635(c)(4) of the Nasdaq Listing Rules. The Inducement Plan permits the grant of non-statutory stock options, stock appreciation rights, restricted stock, restricted stock units, performance stock and cash awards, and other share‑based awards. Departure of Executive Officer On July 26, 2021, the Company reported that the employment of Joyce LaViscount, Chief Operating Officer of the Company ended on July 20, 2021. As of August 12, 2021, terms of the separation have not been finalized. |
Summary of Significant Accoun_2
Summary of Significant Accounting Policies (Policies) | 6 Months Ended |
Jun. 30, 2021 | |
Accounting Policies [Abstract] | |
Reverse Stock Split | Reverse Stock Split Effective after the close of business on December 31, 2020, the Company completed a 1-for- 35 All share and per share amounts in this Quarterly Report have been reflected on a post-split basis. |
Going Concern Uncertainty | Going Concern Uncertainty As of June 30, 2021, the Company had cash of $7.4 million. For the six months ended June 30, 2021, the Company had an operating loss of $9.7 million, and as of June 30, 2021, its accumulated deficit was $128.2 million. For the six months ended June 30, 2021, the Company had $0.2 million of revenue from the commercial sale of products or services. 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 Canada and by raising additional capital through equity or debt financings. There can be no assurance that the Company will be successful in raising that 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. |
Risks and Uncertainties | Risks and Uncertainties COVID-19 On March 11, 2020, the World Health Organization declared the outbreak of a novel coronavirus (“COVID-19”) as a global pandemic, which continues to spread throughout the United States 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 have re-opened, they are all currently operating at reduced capacity, and patients have been and may continue to be less willing to return to these clinics, impacting our commercial activities and our customer engagement efforts. In addition, the resurgence of COVID-19 cases across Canada in the fourth quarter of 2020 and first half of 2021 has led to further restrictions on clinic activities. However, the rate of vaccination has increased throughout all provinces during the end of the second quarter of 2021. Moreover, the Company’s ability to conduct its ongoing clini 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 , and disruptions in business or governmental operations due to COVID-19 may delay the timing for the submission and approval of the Company ’ s marketing applicati ons 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 . To the extent the COVID-19 pandemic impacts the Company’s ability to complete the necessary pre-commercialization activities, the Company’s commercial launch in the U.S. could be impeded or delayed. The extent to which the COVID-19 pandemic will continue to impact the Company’s business, results of operations and financial condition will depend on future developments, which are highly uncertain and cannot be predicted. The Company does not know yet the full extent of the impact of COVID-19 on its future business, operations or the global economy as a whole. |
Basis of Presentation | Basis of Presentation The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”). The condensed consolidated financial statements have also been prepared on a basis substantially consistent with, and should be read in conjunction with the Company’s audited consolidated financial statements for the year ended December 31, 2020, included in its Annual Report on Form 10-K that was filed with the Securities and Exchange Commission on March 10, 2021. 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. The Company’s reporting currency is the U.S. Dollar (“USD$”). |
Use of Estimates | Use of Estimates The preparation of the condensed consolidated financial statements in accordance with GAAP requires management to make estimates and assumptions that affect the amounts reported in the condensed consolidated financial statements and disclosure of contingent assets and liabilities. Significant estimates include the assumptions used in the fair value pricing model for stock-based compensation, derivative financial instruments and deferred income tax asset valuation allowance. Financial statements include estimates which, by their nature, are uncertain. Actual outcomes could differ from these estimates. |
Principles of Consolidation | Principles of Consolidation The accompanying unaudited condensed consolidated financial statements reflect the operations of Helius Medical Technologies, Inc. and its wholly owned subsidiaries. The usual condition for a controlling financial interest is ownership of a majority of the voting interests of an entity. However, a controlling financial interest may also exist through arrangements that do not involve controlling voting interests. As such, the Company applies the guidance of the Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) 810 – Consolidation , |
Concentrations of Credit Risk | Concentrations of Credit Risk The Company is subject to credit risk with respect to its cash. Amounts invested in such instruments are limited by credit rating, maturity, industry group, investment type and issuer. The Company is not currently exposed to any significant concentrations of credit risk from these financial instruments. The Company seeks to maintain safety and preservation of principal and diversification of risk, liquidity of investments sufficient to meet cash flow requirements and a competitive after-tax rate of return. |
Receivables | Receivables Accounts receivables are stated at their net realizable value. In determining the appropriate allowance for doubtful accounts, the Company considers a combination of factors, such as the aging of trade receivables, its customers’ financial strength, and payment history. Changes in these factors, among others, may lead to adjustments in the Company’s allowance for doubtful accounts. The calculation of the allowance required judgment by Company management. As of June 30, 2021, the Company’s accounts receivable of $51 thousand, is net of an allowance for doubtful accounts of $0.4 million and is the result of revenue from product sales. As of December 31, 2020, the Company’s accounts receivable of $0.1 million, is net of an allowance for doubtful accounts of $0.4 million and is the result of revenue from product sales. Other receivables as of June 30, 2021 and December 31, 2020 included refunds from research and development (“R&D”) tax credits of $1 thousand and $1 thousand, respectively, and Goods and Services Tax (“GST”) and Quebec Sales Tax (“QST”) refunds of $0.2 million and $0.1 million, respectively, related to the Company’s Canadian expenditures. As of December 31, 2020, there was also a receivable from rent deposits of $18 thousand. |
Inventory | Inventory The Company’s inventory consists of raw materials, work in progress and finished goods of the PoNS device. Inventory is stated at the lower of cost (average cost method) or net realizable value. Adjustments to reduce the cost of inventory to its net realizable value are made if required. The Company calculates provisions for excess inventory based on inventory on hand compared to anticipated sales or usage. Management uses its judgment to forecast sales or usage and to determine what constitutes a reasonable period. There can be no assurance that the amount ultimately realized for inventories will not be materially different than that assumed in the calculation of the reserves. No inventory markdowns to net realizable value were recorded during the three and six months ended June 30, 2021, respectively. Inventory markdowns to net realizable value of $0 and $2 thousand were recorded during the three and six months ended June 30, 2020, respectively. As of June 30, 2021 and December 31, 2020, inventory consisted of the following (amounts in thousands): As of As of June 30, 2021 December 31, 2020 Raw materials $ 167 $ 160 Work-in-process 526 440 Finished goods 69 44 Inventory $ 762 $ 644 Inventory reserve (255 ) (255 ) Total inventory, net of reserve $ 507 $ 389 |
Property and Equipment | Property and Equipment Property and equipment are carried at cost, less accumulated depreciation. Depreciation is recognized using the straight-line method over the useful lives of the related asset or the term of the related lease. Expenditures for maintenance and repairs, which do not improve or extend the expected useful life of the assets, are expensed to operations while major repairs are capitalized. The estimated useful life of the Company’s leasehold improvements is over the shorter of its lease term or useful life of 5 years; the estimated useful life for the Company’s furniture and fixtures is 7 years. Equipment has an estimated useful life of 15 years, while computer software and hardware has an estimated useful life of 3 to 5 years. As of June 30, 2021 and December 31, 2020, property and equipment consisted of the following (amounts in thousands): As of As of June 30, 2021 December 31, 2020 Leasehold improvement $ 64 $ 64 Furniture and fixtures 93 93 Equipment 354 335 Computer software and hardware 197 197 Property and equipment 708 689 Less accumulated depreciation (259 ) (203 ) Property and equipment, net $ 449 $ 486 Depreciation expense was $28 thousand and $29 thousand for the three months ended June 30, 2021 and 2020, respectively. Depreciation expense was $56 thousand and $67 thousand for the six months ended June 30, 2021 and 2020, respectively. |
Goodwill and Other Intangible Assets | Goodwill and Other Intangible Assets Goodwill represents the excess of purchase price over the fair values underlying net assets acquired in an acquisition. All of the Company’s goodwill as of June 30, 2021 is the result of the Heuro acquisition completed in October 2019. Goodwill is not amortized, but rather will be tested annually for impairment or more frequently if events or changes in circumstances indicate that the carrying amount of the asset may not be recoverable. The Company will test goodwill for impairment annually in the fourth quarter of each year using data as of October 1 of that year. Goodwill is allocated to and evaluated for impairment at the Company’s one identified reporting unit. Goodwill is tested for impairment by either performing a qualitative evaluation or a quantitative test. The qualitative evaluation is an assessment of factors to determine whether it is more likely than not that a reporting unit’s fair value is less than its carrying amount. The Company may elect not to perform the qualitative assessment for its reporting unit and perform the quantitative impairment test. The quantitative goodwill impairment test requires the Company to compare the carrying value of the reporting unit’s net assets to the estimated fair value of the reporting unit. If the estimated fair value exceeds the carrying value, no further evaluation is required, and no impairment loss is recognized. If the carrying amount of a reporting unit, including goodwill, exceeds the estimated fair value, the excess of the carrying value over the estimated fair value is recorded as an impairment loss, the amount of which is not to exceed the total amount of goodwill allocated to the reporting unit. The ongoing effects of the COVID-19 pandemic was considered a triggering event for testing whether goodwill is impaired at June 30, 2021 . As a result of the Company’s quantitative assessment, the Company determine d that the estimated fair value of the reporting unit exceeded the carrying value of the reporting unit. Therefore, the Company concluded that goodwill was not impaired as of any of the aforementioned periods . The Company will continue to monitor the impacts of the COVID-19 pandemic in future periods. The following is a summary of the activity for the period ended June 30, 2021 for goodwill: Carrying amount at December 31, 2020 $ 759 Foreign currency translation 24 Carrying amount at June 30, 2021 $ 783 Definite-lived intangibles consist principally of acquired customer relationships, proprietary software and reacquired rights as well as internally developed software. All are amortized straight-line over their estimated useful lives. Amortization expense related to intangible assets was $49 thousand and $0.1 million during the three and six months ended June 30, 2021, respectively. Amortization expense related to intangible assets was $0.1 million and $0.2 million during the three and six months ended June 30, 2020. During the six months ended June 30, 2020, the Company incurred an intangible asset impairment loss of $0.2 million related to the customer relationships, all of which was incurred during the first quarter of 2020, which is included in selling, general and administrative expenses in the accompanying condensed consolidated statement of operations and comprehensive loss. During the six months ended June 30, 2021, the Company wrote-off $0.2 million of fully amortized customer relationships, all of which occurred during the first quarter of 2021. Intangible assets as of June 30, 2021 and December 31, 2020 consist of the following: As of June 30, 2021 As of December 31, 2020 Useful Life Gross Carrying Amount Accumulated Amortization Net Carrying Value Gross Carrying Amount Accumulated Amortization Net Carrying Value Customer relationships (1) 1.25 years $ — $ — $ — $ 237 $ (228 ) $ 9 Acquired proprietary software 5 years 155 (52 ) 103 150 (35 ) 115 Reacquired rights 3.87 years 519 (224 ) 295 503 (152 ) 351 Internally developed software 3 years 84 (44 ) 40 82 (30 ) 52 Total intangible assets $ 758 $ (320 ) $ 438 $ 972 $ (445 ) $ 527 (1) During the six months ended June 30, 2021, the Company wrote off $0.2 million of fully amortized customer relationships. Amortization expense is anticipated to be as follows in future years: For the Year Ending December 31, 2021 (remaining 6 months) $ 96 2022 189 2023 127 2024 26 $ 438 |
Leases | Leases The Company accounts for its leases under ASU No. 2016-02, Leases The Company does not record an operating lease right of use (“ROU”) asset and corresponding lease liability for leases with an initial term of twelve months or less and recognizes lease expense for these leases as incurred over the lease term. The Company had only one operating lease, which was for its headquarters office in Newtown, Pennsylvania upon the adoption date. As of June 30, 2021, the Company has not entered into any additional lease arrangements, but did modify the existing lease arrangement in the second quarter of 2020 and again in the first quarter of 2021. |
Foreign Currency | Foreign Currency The Company’s functional currency is the U.S. dollar. Monetary assets and liabilities denominated in foreign currencies are translated into U.S. dollars using exchange rates in effect at the balance sheet date. Opening balances related to non-monetary assets and liabilities are based on prior period translated amounts, and non-monetary assets acquired, and non-monetary liabilities incurred are translated at the approximate exchange rate prevailing at the date of the transaction. Revenue and expense transactions are translated at the approximate exchange rate in effect at the time of the transaction. Foreign exchange gains and losses are included in the condensed consolidated statement of operations and comprehensive loss as foreign exchange gain (loss). The functional currency of HMC and HCA, the Company’s Canadian subsidiaries, is the CAD$ and the functional currency of HMI and HNR is the USD$. Transactions in foreign currencies are recorded into the functional currency of the relevant subsidiary at the exchange rate in effect at the date of the transaction. Any monetary assets and liabilities arising from these transactions are translated into the functional currency at exchange rates in effect at the balance sheet date or on settlement. Revenues, expenses and cash flows are translated at the weighted-average rates of exchanges for the reporting period. The resulting currency translation adjustments are not included in the Company’s condensed consolidated statements of operations and comprehensive loss for the reporting period, but rather are accumulated and gains and losses are recorded in foreign exchange gain (loss), as a component of comprehensive loss, within the condensed consolidated statements of operations and comprehensive loss. |
Stock-Based Compensation | Stock-Based Compensation The Company accounts for all stock-based payments and awards under the fair value-based method. The Company recognizes its stock-based compensation expense using the straight-line method. Compensation cost is not adjusted for estimated forfeitures, but instead is adjusted upon an actual forfeiture of a stock option. The Company accounts for the granting of stock options to employees and non-employees using the fair value method whereby all awards are measured at fair value on the date of the grant. The fair value of all employee-related stock options is expensed over the requisite service period with a corresponding increase to additional paid-in capital. Upon exercise of stock options, the consideration paid by the option holder, together with the amount previously recognized in additional paid-in capital is recorded as an increase to common stock, while the par value of the shares received is reclassified from additional paid in capital. Stock options granted to employees are accounted for as liabilities when they contain conditions or other features that are indexed to other than a market, performance or service condition. In accordance with ASU 2018-07, Improvements to Nonemployee Share-Based Payment Accounting The Company uses the Black-Scholes option pricing model to calculate the fair value of stock options. The use of the Black-Scholes option pricing model requires management to make assumptions with respect to the expected term of the option, the expected volatility of the common stock consistent with the expected term of the option, risk-free interest rates, the value of the common stock and expected dividend yield of the common stock. Changes in these assumptions can materially affect the fair value estimate. Awards of options that provide for an exercise price that is not denominated in: (a) the currency of a market in which a substantial portion of the Company's equity securities trades, (b) the currency in which the employee's pay is denominated, or (c) the Company's functional currency, are required to be classified as liabilities. |
Revenue Recognition | Revenue Recognition In accordance with the FASB’s ASC 606, Revenue from Contracts with Customers (i) identify the contract(s) with a customer; (ii) identify the performance obligations in the contract; (iii) determine the transaction price; (iv) allocate the transaction price to the performance obligations in the contract; and (v) recognize revenue when (or as) the entity satisfies a performance obligation. The Company applies the five-step model to contracts when it determines that it is probable it will collect substantially all of the consideration it is entitled to in exchange for the goods or services it transfers to the customer. At contract inception, once the contract is determined to be within the scope of ASC 606, the Company assesses the goods or services promised within each contract and determines those that are performance obligations and assesses whether each promised good or service is distinct. The Company then recognizes as revenue the amount of the transaction price, after consideration of variability and constraints, if any, that is allocated to the respective performance obligation when the performance obligation is satisfied. Product Sales, net Product sales are derived from the sale of the PoNS device to clinics. According to the supply agreement with each of these clinics, the Company’s performance obligation was met when it delivered the PoNS device to the clinic’s facility and the clinic assumed title of the PoNS device upon acceptance. As such, revenue is recognized at a point in time. Shipping and handling costs associated with outbound freight before control of a product has been transferred to a customer is accounted for as a fulfillment cost and are included in cost of sales. For the three and six months ended June 30, 2020, the Company recorded $0.1 million and $0.3 million, respectively, in product sales. As of June 30, 2020, the control of 11 of the 55 PoNS devices included as consideration in the Heuro acquisition had been transferred resulting in revenue of $0.1 million being recognized which is included in the aforementioned $0.3 million in product sales for the six months ended June 30, 2020. For the three and six months ended June 30, 2021, the Company recorded $63 thousand and $0.1 million, respectively, in product sales. There were no PoNS devices, included as consideration in the Heuro acquisition, transferred during the six months ended June 30, 2021. As of June 30, 2021, there were 34 devices remaining to be transferred. The fair value of the remaining devices is recorded as deferred revenue of $0.3 million on the condensed consolidated balance sheet. The returns during the three and six months ended June 30, 2021 were the result of warranty returns for defective products. These returns were insignificant and any future replacements are expected to be insignificant. Fee Revenue During the three and six months ended June 30, 2020, the Company recognized $0 and $9 thousand, respectively, of fee revenue related to engaging new neuroplasticity clinics to provide the PoNS Treatment. These agreements were terminated in the second quarter of 2020. As a result, during the three and six months ended June 30, 2021, the Company did not recognize any fee revenue. License Revenue In connection with the Heuro acquisition, the Company entered into a Clinical Research and Co-Promotion Agreement with HTC (the “Co-Promotion Agreement”). The Co-Promotion Agreement had a fair value of CAD$360 thousand at the time of acquisition and a ten-year ten-year As of June 30, 2021 and December 31, 2020, the Company had no contract assets or liabilities on its condensed consolidated balance sheets related to the supply agreements with each clinic. |
Cost of Sales | Cost of Sales Cost of product sales includes the cost to manufacture the PoNS device, inventory markdowns to net realizable value, royalty expenses, freight charges, customs duties, wages and salaries of employees involved in the management of the supply chain and logistics of fulfilling the Company’s sales orders. |
Income Taxes | Income Taxes The Company accounts for income taxes using the asset and liability method. The asset and liability method provide that deferred tax assets and liabilities are recognized for the expected future tax consequences of temporary differences between the financial reporting and tax bases of assets and liabilities, and for operating loss and tax credit carryforwards. Deferred tax assets and liabilities are measured using the currently enacted tax rates and laws that will be in effect when the differences are expected to reverse. The Company records a valuation allowance to reduce deferred tax assets to the amount that is believed more likely than not to be realized. The Company has adopted the provisions of ASC 740 Income Taxes On March 27, 2020, President Trump signed into law the Coronavirus Aid, Relief, and Economic Security Act (“CARES Act”). The CARES Act, among other things, includes provisions relating to refundable payroll tax credits, deferment of employer side social security payments, net operating loss carryback periods, alternative minimum tax credit refunds, modifications to the net interest deduction limitations, increased limitations on qualified charitable contributions, and technical corrections to tax depreciation methods for qualified improvement property. We continue to examine the impact that the CARES Act may have on our business. The CARES Act has not had a material impact on our accounting for income taxes. |
Research and Development Expenses | Research and Development Expenses Research and development (“R&D”) expenses consist primarily of personnel costs, including salaries, benefits and stock-based compensation, clinical studies performed by contract research organizations, development and manufacturing of clinical trial devices and devices for manufacturing testing and materials and supplies as well as regulatory costs related to post market surveillance, quality assurance complaint handling and adverse event reporting. R&D costs are charged to operations when they are incurred. |
Segment Information | Segment Information Operating segments are defined as components of an enterprise about which separate discrete information is available for evaluation by the chief operating decision maker, or decision-making group, in deciding how to allocate resources and in assessing performance. The Company operates and manages its business within one operating and reportable segment. Accordingly, the Company reports the accompanying condensed consolidated financial statements in the aggregate in one reportable segment. |
Derivative Financial Instruments | Derivative Financial Instruments The Company evaluates its financial instruments and other contracts to determine if those contracts or embedded components of those contracts qualify as derivatives to be separately accounted for in accordance with ASC 815, Derivatives and Hedging The classification of derivative financial instruments, including whether such instruments should be recorded as liabilities/assets or as equity, is reassessed at the end of each reporting period. Derivative financial instruments that become subject to reclassification are reclassified at the fair value of the instrument on the reclassification date. Derivative financial instruments will be classified in the condensed consolidated balance sheet as current if the right to exercise or settle the derivative financial instrument lies with the holder. The last of the warrants accounted for in accordance with ASC 815 expired in April 2021 |
Fair Value Measurements | Fair Value Measurements The Company accounts for financial instruments in accordance with ASC 820, Fair Value Measurements and Disclosures Level 1 – Unadjusted quoted prices in active markets that are accessible at the measurement date for identical, unrestricted assets or liabilities; Level 2 – Quoted prices in markets that are not active or financial instruments for which all significant inputs are observable, either directly or indirectly; and Level 3 – Prices or valuations that require inputs that are both significant to the fair value measurement and unobservable. The Company’s financial instruments recorded in its condensed consolidated balance sheets consist primarily of cash, accounts receivable, other current receivables, operating lease ROU asset, accounts payable, accrued liabilities, operating lease liability and derivative financial instruments. The book values of these instruments, with the exception of derivative financial instruments, non-current lease liability and operating lease ROU asset approximate their fair values due to the immediate or short-term nature of these instruments. The Company’s derivative financial instruments are classified as Level 3 within the fair value hierarchy. Unobservable inputs used in the valuation of these financial instruments include volatility of the underlying share price and the expected term. See Note 3 for the inputs used in the Black-Scholes option pricing model as of December 31, 2020 and the roll forward of the Company’s derivative financial instruments. The Company’s derivative financial instruments were comprised of warrants classified as liabilities. The fair value of the derivative financial instruments as of December 31, 2020 was zero. The warrants classified as liabilities expired in April 2021 There were no transfers between any levels for any of the periods presented. In addition to assets and liabilities that are recorded at fair value on a recurring basis, the Company's assets and liabilities are also subject to nonrecurring fair value measurements. Generally, assets are recorded at fair value on a nonrecurring basis as a result of impairment charges. Due to the COVID-19 pandemic and the related risks and uncertainties, the Company’s customer relationship intangible asset incurred an impairment loss during the six months ended June 30, 2020 of $0.2 million, all of which was incurred during the first quarter of 2020. The fair value of this intangible asset was determined based on Level 3 measurements within the fair value hierarchy. Inputs to these fair value measurements included estimates of the amount and timing of the asset’s net future discounted cash flows based on historical data, current trends and market conditions. As of June 30, 2021, the Company’s customer relationship intangible asset had been fully amortized and written off. |
Basic and Diluted Net Loss per Share | Basic and Diluted Net Loss per Share Earnings or loss per share (“EPS”) is computed by dividing net income (loss) by the weighted average number of common shares outstanding during the period. Diluted EPS is computed by dividing net income (loss) by the weighted average of all potentially dilutive shares of common stock that were outstanding during the periods presented. The treasury stock method is used in calculating diluted EPS for potentially dilutive stock options and share purchase warrants, which assumes that any proceeds received from the exercise of in-the-money stock options and share purchase warrants, would be used to purchase common shares at the average market price for the period, unless including the effects of these potentially dilutive securities would be anti-dilutive. The basic and diluted loss per share for the periods noted below is as follows (amounts in thousands except shares and per share data): Three Months Ended Six Months Ended June 30, June 30, 2021 2020 2021 2020 Basic and Diluted Numerator: Net loss $ (5,981 ) $ (3,361 ) $ (9,343 ) $ (8,118 ) Denominator: Weighted average common shares outstanding 2,317,389 1,160,661 2,179,878 1,033,692 Basic and diluted net loss per share $ (2.58 ) $ (2.90 ) $ (4.29 ) $ (7.85 ) No incremental common stock equivalents, consisting of outstanding stock options, warrants and restricted stock units, were included in calculating diluted loss per share because such inclusion would be anti-dilutive due to the Company’s losses for the three and six months ended June 30, 2021 and 2020. Common stock equivalents excluded from the computation of diluted weighted average shares outstanding were 1,233,230 and 388,344 for the three months ended June 30, 2021 and 2020, respectively. Common stock equivalents excluded from the computation of diluted weighted average shares outstanding were 1,233,230 and 388,344 for the six months ended June 30, 2021 and 2020, respectively. |
Recent Accounting Pronouncements | 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 Financial Instruments – Credit Losses (Topic 326), Derivatives and Hedging (Topic 815) and Leases (Topic 842): Effective Dates In August 2020, FASB issued ASU 2020-06, Debt with Conversion and Other Options (Subtopic 470-20) and Derivatives and Hedging – Contracts in Entity’s Own Equity (Subtopic 815-40) 2020, including interim periods within those fiscal years. FASB has specified that an entity should adopt the guidance as of the beginning of its annual fiscal year. The guidance is to be applied using either a full retrospective or modified retrospective method. In applying the full retrospective method, the cumulative effect of the accounting change should be recognized as an adjustment to the opening balance of retained earnings in the first comparative period presented. In applying the modified retrospective method, the cumulative effect of the accounting change should be recognized as an adjustment to the opening balance of retained earnings at the date of adoption. The Company early adopted ASU 2020-06 effective January 1, 2021 under the modified retrospective approach. The adoption of this guidance did not have a material impact on the Company’s consolidated financial statements. |
Summary of Significant Accoun_3
Summary of Significant Accounting Policies (Tables) | 6 Months Ended |
Jun. 30, 2021 | |
Accounting Policies [Abstract] | |
Schedule of Inventory | As of June 30, 2021 and December 31, 2020, inventory consisted of the following (amounts in thousands): As of As of June 30, 2021 December 31, 2020 Raw materials $ 167 $ 160 Work-in-process 526 440 Finished goods 69 44 Inventory $ 762 $ 644 Inventory reserve (255 ) (255 ) Total inventory, net of reserve $ 507 $ 389 |
Summary of Property and Equipment | As of June 30, 2021 and December 31, 2020, property and equipment consisted of the following (amounts in thousands): As of As of June 30, 2021 December 31, 2020 Leasehold improvement $ 64 $ 64 Furniture and fixtures 93 93 Equipment 354 335 Computer software and hardware 197 197 Property and equipment 708 689 Less accumulated depreciation (259 ) (203 ) Property and equipment, net $ 449 $ 486 |
Summary of Activity for Goodwill | The following is a summary of the activity for the period ended June 30, 2021 for goodwill: Carrying amount at December 31, 2020 $ 759 Foreign currency translation 24 Carrying amount at June 30, 2021 $ 783 |
Summary of Intangible Assets | Intangible assets as of June 30, 2021 and December 31, 2020 consist of the following: As of June 30, 2021 As of December 31, 2020 Useful Life Gross Carrying Amount Accumulated Amortization Net Carrying Value Gross Carrying Amount Accumulated Amortization Net Carrying Value Customer relationships (1) 1.25 years $ — $ — $ — $ 237 $ (228 ) $ 9 Acquired proprietary software 5 years 155 (52 ) 103 150 (35 ) 115 Reacquired rights 3.87 years 519 (224 ) 295 503 (152 ) 351 Internally developed software 3 years 84 (44 ) 40 82 (30 ) 52 Total intangible assets $ 758 $ (320 ) $ 438 $ 972 $ (445 ) $ 527 |
Summary of Anticipated Amortization Expense | Amortization expense is anticipated to be as follows in future years: For the Year Ending December 31, 2021 (remaining 6 months) $ 96 2022 189 2023 127 2024 26 $ 438 |
Summary of Basic and Diluted Net Loss per Share | The basic and diluted loss per share for the periods noted below is as follows (amounts in thousands except shares and per share data): Three Months Ended Six Months Ended June 30, June 30, 2021 2020 2021 2020 Basic and Diluted Numerator: Net loss $ (5,981 ) $ (3,361 ) $ (9,343 ) $ (8,118 ) Denominator: Weighted average common shares outstanding 2,317,389 1,160,661 2,179,878 1,033,692 Basic and diluted net loss per share $ (2.58 ) $ (2.90 ) $ (4.29 ) $ (7.85 ) |
Common Stock and Warrants (Tabl
Common Stock and Warrants (Tables) | 6 Months Ended |
Jun. 30, 2021 | |
Summary of Weighted Average Assumptions Used in Estimating Fair Value of Warrants | The fair value of all warrants classified as derivative financial instruments outstanding as of December 31, 2020 were estimated using the Black-Scholes option pricing model with the following weighted average assumptions: December 31, 2020 Stock price CAD$ 17.15 Exercise price CAD$ 428.75 Warrant term 0.27 years Expected volatility 64.48 % Risk-free interest rate 0.06 % Dividend rate 0.00 % |
Summary of Warrants Accounted for as Liabilities and Recorded as Derivative Financial Instruments | The following table summarizes warrants accounted for as liabilities and recorded as derivative financial instruments on the Company’s condensed consolidated balance sheets for the six months ended June 30, 2021 and 2020 (amounts in thousands): Six Months Ended June 30, 2021 2020 Fair value of warrants at beginning of period $ — $ 5 Exercise of warrants — — Foreign exchange losses — — Change in fair value of warrants during the period — (4 ) Fair value of warrants at end of period $ — $ 1 |
Summary of Warrant Activity | The following is a summary of the Company’s warrant activity during the six months ended June 30, 2021: Number of Warrants Weighted Average Exercise Price CAD US CAD$ USD$ Outstanding as of December 31, 2020 68,351 273,554 $ 428.75 $ 16.04 Granted — 402,265 — 16.47 Cancelled/Expired (68,351 ) — 428.75 — Exercised — (81,895 ) — 16.10 Outstanding as of June 30, 2021 — 593,924 $ — $ 16.32 |
Warrants Outstanding and Exercisable | The Company’s warrants outstanding and exercisable as of June 30, 2021 were as follows: Number of Warrants Outstanding Exercise Price Expiration Date 97,143 USD$16.10 March 20, 2025 17,431 USD$16.1665 October 26, 2023 76,386 USD$15.82 October 26, 2023 961 USD$19.775 October 26, 2023 372,206 USD$16.302 February 1, 2026 29,797 USD$18.525 February 1, 2026 593,924 |
April 2018 Offering | |
Summary of Weighted Average Assumptions Used in Estimating Fair Value of Warrants | The following table summarizes the weighted average assumptions used in estimating the fair value of the warrants issued in the April 2018 Offering using the Black-Scholes option pricing model as of the date of the initial closing of the offering and the date of the closing of the over-allotment option. April 24, 2018 April 13, 2018 Stock price CAD$ 376.60 CAD$ 344.75 Exercise price CAD$ 428.75 CAD$ 428.75 Warrant term 3.00 years 3.00 years Expected volatility 64.49 % 64.20 % Risk-free interest rate 2.02 % 1.99 % Dividend rate 0.00 % 0.00 % |
March 2020 Offering | |
Summary of Weighted Average Assumptions Used in Estimating Fair Value of Warrants | The following table summarizes the weighted average assumptions used in estimating the fair value of the warrants granted in the March 2020 Offering using the Black-Scholes option pricing model as of the date of the closing of the offering on March 20, 2020. March 20, 2020 Stock price $ 12.25 Exercise price $ 16.10 Warrant term 5.50 years Expected volatility 82.41 % Risk-free interest rate 0.52 % Dividend rate 0.00 % |
October 2020 Private Placement Offering | |
Summary of Weighted Average Assumptions Used in Estimating Fair Value of Warrants | The following table summarizes the weighted average assumptions used in estimating the fair value of the warrants granted in the October 2020 Offering using the Black-Scholes option pricing model as of the date of the closing of the offering on October 26, 2020. October 26, 2020 Stock price $ 15.92 Exercise price $ 15.92 Warrant term 3.00 years Expected volatility 80.91 % Risk-free interest rate 0.18 % Dividend rate 0.00 % |
February 2021 Offering | |
Summary of Weighted Average Assumptions Used in Estimating Fair Value of Warrants | The following table summarizes the weighted average assumptions used in estimating the fair value of the warrants granted in the February 2021 Offering using the Black-Scholes option pricing model as of the date of the closing of the offering on February 1, 2021. February 1, 2021 Stock price $ 14.82 Exercise price $ 16.47 Warrant term 5.00 years Expected volatility 75.02 % Risk-free interest rate 0.42 % Dividend rate 0.00 % |
Stock-Based Payments (Tables)
Stock-Based Payments (Tables) | 6 Months Ended |
Jun. 30, 2021 | |
Summary of Company's Stock Option Activity | The following is a summary of the Company’s stock option activity during the six months ended June 30, 2021: Weighted Average Aggregate Remaining Weighted Intrinsic Number of Contractual Average Value Stock Options Life (in years) Exercise Price (in thousands) Outstanding as of December 31, 2020 113,558 7.75 $ 159.33 $ — Granted 532,068 15.00 — Forfeited/Cancelled (14,396 ) 105.15 — Exercised (214 ) 10.50 — Outstanding as of June 30, 2021 631,016 9.47 $ 38.92 $ — Exercisable as of June 30, 2021 252,920 8.97 $ 26.73 $ — |
Summary of Company's Restricted Stock Award Activity | The following is a summary of the Company’s RSU award activity for the six months ended June 30, 2021: Number of RSUs Weighted Average Grant Date Fair Value per Unit Outstanding as of December 31, 2020 168 $ 13.20 Granted 9,150 15.46 Settled (1,028 ) 14.50 Outstanding as of June 30, 2021 8,290 $ 15.53 |
Summary of Stock-Based Compensation Expense is Classified in Condensed Consolidated Statements of Operations and Comprehensive Loss | Stock-based compensation expense is classified in the Company’s condensed consolidated statements of operations and comprehensive loss as follows (amounts in thousands): Three Months Ended June 30, Six Months Ended June 30, 2021 2020 2021 2020 Research and development $ 162 $ 243 $ 384 $ 482 Cost of sales 3 (2 ) 3 (1 ) Selling, general and administrative 2,464 488 2,769 1,090 Total $ 2,629 $ 729 $ 3,156 $ 1,571 |
Employee and Director Stock Options | |
Estimation Using Black-Scholes Option Pricing Model With Following Weighted Average Assumptions | The weighted average grant date fair value of employee and director stock options granted for the six months ended June 30, 2021 was $11.27 per option and 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, 2021 Stock price $ 15.10 Exercise price $ 15.00 Expected term 7.17 years Expected volatility 1.19 % Risk-free interest rate 85.99 % Dividend rate 0.00 % |
Accrued Expenses (Tables)
Accrued Expenses (Tables) | 6 Months Ended |
Jun. 30, 2021 | |
Payables And Accruals [Abstract] | |
Schedule of Accrued Expenses | Accrued expenses consisted of the following (amounts in thousands): As of June 30, 2021 December 31, 2020 Employees benefits $ 457 $ 496 Professional services 107 292 Legal fees 144 133 Royalty fees 3 12 Severance 139 347 Other 23 57 Total $ 873 $ 1,337 |
Commitments and Contingencies (
Commitments and Contingencies (Tables) | 6 Months Ended |
Jun. 30, 2021 | |
Commitments And Contingencies Disclosure [Abstract] | |
Schedule of Future Minimum Lease Payments Related to Non-cancellable Operating Lease Commitments | The following table summarizes the Company’s operating lease information including future minimum lease payments under a non-cancellable lease as of June 30, 2021 (amounts in thousands). For the Six Months Ended June 30, 2021 Operating lease cost $ 5 Operating lease - operating cash flows $ 31 Weighted average remaining lease term 1.00 years Weighted average discount rate 7.2 % Future minimum lease payments under non-cancellable lease as of June 30, 2021 were as follows: For the Period Ending December 31, 2021 (remaining six months) $ 32 2022 32 Total future minimum lease payments 64 Less imputed interest (2 ) Total liability $ 62 Reported as of June 30, 2021 Current operating lease liability 62 Non-current operating lease liability — Total $ 62 |
Description of Business - Addit
Description of Business - Additional Information (Details) $ in Thousands | Dec. 31, 2020USD ($) | Jun. 30, 2021USD ($) | Jun. 30, 2020USD ($) | Jun. 30, 2021USD ($) | Jun. 30, 2020USD ($) |
Organization Consolidation And Presentation Of Financial Statements [Abstract] | |||||
Date of incorporation | Mar. 13, 2014 | ||||
Reverse stock split | 1-for-35 | ||||
Reverse stock split, conversion ratio | 0.028571429 | ||||
Cash | $ 3,331 | $ 7,425 | $ 7,425 | ||
Operating loss | 6,166 | $ 3,722 | 9,667 | $ 7,724 | |
Accumulated deficit | $ 118,903 | 128,246 | 128,246 | ||
Revenue from the sale of products or services | $ 71 | $ 133 | $ 155 | $ 339 |
Summary of Significant Accoun_4
Summary of Significant Accounting Policies - Additional Information (Details) $ in Thousands | Oct. 30, 2019CAD ($) | Jun. 30, 2021USD ($)Leaseshares | Jun. 30, 2020USD ($)shares | Jun. 30, 2021USD ($)LeaseDeviceSegmentshares | Jun. 30, 2020USD ($)Deviceshares | Dec. 31, 2020USD ($) |
Schedule Of Significant Accounting Policies [Line Items] | ||||||
Accounts receivable | $ 51,000 | $ 51,000 | $ 74,000 | |||
Allowance for doubtful accounts | 400,000 | 400,000 | 400,000 | |||
Refunds from research and development tax credits | 1,000 | 1,000 | 1,000 | |||
Rent deposits receivable | 18,000 | |||||
Inventory markdowns to net realizable value | 0 | $ 0 | 0 | $ 2,000 | ||
Depreciation expense | 28,000 | 29,000 | 56,000 | 67,000 | ||
Amortization expense related to intangible assets | $ 49,000 | 89,000 | $ 106,000 | 215,000 | ||
Intangible asset impairment loss | 181,000 | |||||
Leases, initial term | 12 months | 12 months | ||||
Number of operating lease | Lease | 1 | 1 | ||||
Revenue | $ 71,000 | $ 133,000 | $ 155,000 | $ 339,000 | ||
Number of operating segment | Segment | 1 | |||||
Number of reportable segment | Segment | 1 | |||||
Common stock equivalents excluded from the computation of diluted weighted average shares outstanding | shares | 1,233,230 | 388,344 | 1,233,230 | 388,344 | ||
ASU 2020-06 | ||||||
Schedule Of Significant Accounting Policies [Line Items] | ||||||
Change in accounting principle, accounting standards update, adopted [true false] | true | true | ||||
Change in accounting principle, accounting standards update, early adoption [true false] | true | true | ||||
Change in accounting principle, accounting standards update, adoption date | Jan. 1, 2021 | Jan. 1, 2021 | ||||
Change in accounting principle, accounting standards update, immaterial effect [true false] | true | true | ||||
Outstanding Stock Options | ||||||
Schedule Of Significant Accounting Policies [Line Items] | ||||||
Incremental common stock equivalents | shares | 0 | 0 | 0 | 0 | ||
Warrants | ||||||
Schedule Of Significant Accounting Policies [Line Items] | ||||||
Incremental common stock equivalents | shares | 0 | 0 | 0 | 0 | ||
Restricted Stock Units | ||||||
Schedule Of Significant Accounting Policies [Line Items] | ||||||
Incremental common stock equivalents | shares | 0 | 0 | 0 | 0 | ||
Derivative Financial Instruments | ||||||
Schedule Of Significant Accounting Policies [Line Items] | ||||||
Warrants expiration date | Apr. 30, 2021 | Apr. 30, 2021 | ||||
Fair value of derivative financial instruments | 0 | |||||
HealthTech Connex, Inc. | Clinical Research and Co-Promotion Agreement | ||||||
Schedule Of Significant Accounting Policies [Line Items] | ||||||
Acquisition date fair value | $ 360 | |||||
Agreement term at acquisition | 10 years | |||||
License revenue agreement term | 10 years | |||||
HealthTech Connex, Inc. | Strategic Alliance Agreement | Heuro Canada Incorporation | ||||||
Schedule Of Significant Accounting Policies [Line Items] | ||||||
Contract assets | $ 0 | $ 0 | 0 | |||
Contract liabilities | 0 | 0 | 0 | |||
Fee Revenue | ||||||
Schedule Of Significant Accounting Policies [Line Items] | ||||||
Revenue | 0 | $ 0 | 0 | $ 9,000 | ||
License Revenue | ||||||
Schedule Of Significant Accounting Policies [Line Items] | ||||||
Revenue | 8,000 | 7,000 | 15,000 | 13,000 | ||
License Revenue | HealthTech Connex, Inc. | Clinical Research and Co-Promotion Agreement | ||||||
Schedule Of Significant Accounting Policies [Line Items] | ||||||
Revenue | 8,000 | 7,000 | 15,000 | 13,000 | ||
Deferred revenue | 200,000 | 200,000 | ||||
Customer Relationships | ||||||
Schedule Of Significant Accounting Policies [Line Items] | ||||||
Fully amortized finite-lived intangible assets written-off | 200,000 | |||||
Customer Relationships | Level 3 | ||||||
Schedule Of Significant Accounting Policies [Line Items] | ||||||
Intangible asset impairment loss | 200,000 | |||||
Heuro Canada Incorporation | ||||||
Schedule Of Significant Accounting Policies [Line Items] | ||||||
Goodwill impairment loss recognized | 0 | |||||
Heuro Canada Incorporation | Selling, General and Administrative Expenses | ||||||
Schedule Of Significant Accounting Policies [Line Items] | ||||||
Amortization expense related to intangible assets | 49,000 | 100,000 | $ 100,000 | 200,000 | ||
Heuro Canada Incorporation | Selling, General and Administrative Expenses | Customer Relationships | ||||||
Schedule Of Significant Accounting Policies [Line Items] | ||||||
Intangible asset impairment loss | 200,000 | |||||
Minimum | ||||||
Schedule Of Significant Accounting Policies [Line Items] | ||||||
Effective income tax rate | 50.00% | |||||
Leasehold Improvements | ||||||
Schedule Of Significant Accounting Policies [Line Items] | ||||||
Estimated useful life | 5 years | |||||
Furniture and Fixtures | ||||||
Schedule Of Significant Accounting Policies [Line Items] | ||||||
Estimated useful life | 7 years | |||||
Equipment | ||||||
Schedule Of Significant Accounting Policies [Line Items] | ||||||
Estimated useful life | 15 years | |||||
Computer Software and Hardware | Minimum | ||||||
Schedule Of Significant Accounting Policies [Line Items] | ||||||
Estimated useful life | 3 years | |||||
Computer Software and Hardware | Maximum | ||||||
Schedule Of Significant Accounting Policies [Line Items] | ||||||
Estimated useful life | 5 years | |||||
PoNS | ||||||
Schedule Of Significant Accounting Policies [Line Items] | ||||||
Number of devices recorded as deferred revenue | Device | 34 | |||||
Deferred revenue | 300,000 | $ 300,000 | ||||
PoNS | Heuro Canada Incorporation | ||||||
Schedule Of Significant Accounting Policies [Line Items] | ||||||
Revenue | $ 100,000 | |||||
Number of devices resulting in recognition of revenue | Device | 0 | 11 | ||||
Number of devices | Device | 55 | |||||
Quebec | ||||||
Schedule Of Significant Accounting Policies [Line Items] | ||||||
Other receivables refunds related to goods, services and sales tax | 200,000 | $ 200,000 | 100,000 | |||
Revenue from Product Sales | ||||||
Schedule Of Significant Accounting Policies [Line Items] | ||||||
Accounts receivable | 51,000 | 51,000 | $ 100,000 | |||
Revenue | $ 63,000 | $ 100,000 | $ 100,000 | $ 300,000 |
Summary of Significant Accoun_5
Summary of Significant Accounting Policies - Schedule of Inventory (Details) - USD ($) $ in Thousands | Jun. 30, 2021 | Dec. 31, 2020 |
Accounting Policies [Abstract] | ||
Raw materials | $ 167 | $ 160 |
Work-in-process | 526 | 440 |
Finished goods | 69 | 44 |
Inventory | 762 | 644 |
Inventory reserve | (255) | (255) |
Total inventory, net of reserve | $ 507 | $ 389 |
Summary of Significant Accoun_6
Summary of Significant Accounting Policies - Summary of Property and Equipment (Details) - USD ($) $ in Thousands | Jun. 30, 2021 | Dec. 31, 2020 |
Property Plant And Equipment [Line Items] | ||
Property and equipment | $ 708 | $ 689 |
Less accumulated depreciation | (259) | (203) |
Property and equipment, net | 449 | 486 |
Leasehold Improvement | ||
Property Plant And Equipment [Line Items] | ||
Property and equipment | 64 | 64 |
Furniture and Fixtures | ||
Property Plant And Equipment [Line Items] | ||
Property and equipment | 93 | 93 |
Equipment | ||
Property Plant And Equipment [Line Items] | ||
Property and equipment | 354 | 335 |
Computer Software and Hardware | ||
Property Plant And Equipment [Line Items] | ||
Property and equipment | $ 197 | $ 197 |
Summary of Significant Accoun_7
Summary of Significant Accounting Policies - Summary of Activity for Goodwill (Details) $ in Thousands | 6 Months Ended |
Jun. 30, 2021USD ($) | |
Accounting Policies [Abstract] | |
Carrying amount at December 31, 2020 | $ 759 |
Foreign currency translation | 24 |
Carrying amount at June 30, 2021 | $ 783 |
Summary of Significant Accoun_8
Summary of Significant Accounting Policies - Summary of Intangible Assets (Details) - USD ($) $ in Thousands | 6 Months Ended | |
Jun. 30, 2021 | Dec. 31, 2020 | |
Finite Lived Intangible Assets [Line Items] | ||
Intangible assets, Gross Carrying Amount | $ 758 | $ 972 |
Intangible assets, Accumulated Amortization | (320) | (445) |
Intangible assets, Net Carrying Value | $ 438 | 527 |
Customer Relationships | ||
Finite Lived Intangible Assets [Line Items] | ||
Intangible assets, Useful Life | 1 year 3 months | |
Intangible assets, Gross Carrying Amount | 237 | |
Intangible assets, Accumulated Amortization | (228) | |
Intangible assets, Net Carrying Value | 9 | |
Acquired Proprietary Software | ||
Finite Lived Intangible Assets [Line Items] | ||
Intangible assets, Useful Life | 5 years | |
Intangible assets, Gross Carrying Amount | $ 155 | 150 |
Intangible assets, Accumulated Amortization | (52) | (35) |
Intangible assets, Net Carrying Value | $ 103 | 115 |
Reacquired Rights | ||
Finite Lived Intangible Assets [Line Items] | ||
Intangible assets, Useful Life | 3 years 10 months 13 days | |
Intangible assets, Gross Carrying Amount | $ 519 | 503 |
Intangible assets, Accumulated Amortization | (224) | (152) |
Intangible assets, Net Carrying Value | $ 295 | 351 |
Internally Developed Software | ||
Finite Lived Intangible Assets [Line Items] | ||
Intangible assets, Useful Life | 3 years | |
Intangible assets, Gross Carrying Amount | $ 84 | 82 |
Intangible assets, Accumulated Amortization | (44) | (30) |
Intangible assets, Net Carrying Value | $ 40 | $ 52 |
Summary of Significant Accoun_9
Summary of Significant Accounting Policies - Summary of Intangible Assets (Parenthetical) (Details) $ in Millions | 6 Months Ended |
Jun. 30, 2021USD ($) | |
Customer Relationships | |
Finite Lived Intangible Assets [Line Items] | |
Fully amortized finite-lived intangible assets written-off | $ 0.2 |
Summary of Significant Accou_10
Summary of Significant Accounting Policies - Summary of Anticipated Amortization Expense (Details) - USD ($) $ in Thousands | Jun. 30, 2021 | Dec. 31, 2020 |
Accounting Policies [Abstract] | ||
2021 (remaining 6 months) | $ 96 | |
2022 | 189 | |
2023 | 127 | |
2024 | 26 | |
Intangible assets, Net Carrying Value | $ 438 | $ 527 |
Summary of Significant Accou_11
Summary of Significant Accounting Policies - Summary of Basic and Diluted Loss per Share (Details) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2021 | Jun. 30, 2020 | Jun. 30, 2021 | Jun. 30, 2020 | |
Numerator: | ||||
Net loss | $ (5,981) | $ (3,361) | $ (9,343) | $ (8,118) |
Weighted average shares outstanding | ||||
Weighted average common shares outstanding | 2,317,389 | 1,160,661 | 2,179,878 | 1,033,692 |
Basic and diluted net loss per share | $ (2.58) | $ (2.90) | $ (4.29) | $ (7.85) |
Common Stock and Warrants - Add
Common Stock and Warrants - Additional Information (Details) $ / shares in Units, $ / shares in Units, $ in Millions | Jun. 30, 2021USD ($)$ / sharesshares | Jun. 30, 2021CAD ($)shares | Feb. 01, 2021USD ($)$ / sharesshares | Oct. 26, 2020USD ($)$ / sharesshares | Mar. 20, 2020USD ($)$ / sharesshares | Jan. 27, 2020USD ($) | Apr. 24, 2018shares | Apr. 24, 2018USD ($)shares | Apr. 13, 2018USD ($)$ / sharesshares | Apr. 30, 2021shares | Mar. 31, 2020USD ($) | Jun. 30, 2021USD ($)$ / sharesshares | Jun. 30, 2020USD ($)$ / sharesshares | Dec. 31, 2020$ / sharesshares | Dec. 31, 2019USD ($) | Apr. 13, 2018$ / sharesshares |
Schedule Of Stockholders Equity [Line Items] | ||||||||||||||||
Common stock, shares authorized | 150,000,000 | 150,000,000 | 150,000,000 | |||||||||||||
Common stock, par value | $ / shares | $ 0.001 | $ 0.001 | $ 0.001 | |||||||||||||
Preferred stock, shares authorized | 10,000,000 | 10,000,000 | 10,000,000 | |||||||||||||
Preferred stock, par value | $ / shares | $ 0.001 | $ 0.001 | $ 0.001 | |||||||||||||
Common share, voting rights | one vote per share | |||||||||||||||
Common share, dividends declared | $ | $ 0 | |||||||||||||||
Gross proceeds from issuance of common stock | $ | 11,037,000 | $ 7,233,000 | ||||||||||||||
Warrants liability | $ | $ 0 | 0 | $ 1,000 | $ 5,000 | ||||||||||||
Warrants Outstanding | $ | $ 0 | $ 0 | ||||||||||||||
April 2018 Offering | ||||||||||||||||
Schedule Of Stockholders Equity [Line Items] | ||||||||||||||||
Warrants to purchase number of common stock, shares | 61,197 | 61,197 | ||||||||||||||
Price per share | $ / shares | $ 261.45 | |||||||||||||||
Net proceeds from offering | $ | $ 16,300,000 | |||||||||||||||
Fair value of warrants at issuance | $ | $ 7,400,000 | |||||||||||||||
Warrant exercisable price per share | $ / shares | $ 428.75 | |||||||||||||||
Warrants expiration date | Apr. 10, 2021 | |||||||||||||||
Number of common stock converted by each warrant | 1 | 1 | ||||||||||||||
Class of warrants exercised | 2,025 | 2,025 | ||||||||||||||
Proceeds from the exercise of warrants | $ | $ 0.9 | |||||||||||||||
Class of warrants expired | 68,351 | |||||||||||||||
April 2018 Offering | Common Stock | ||||||||||||||||
Schedule Of Stockholders Equity [Line Items] | ||||||||||||||||
Shares issued | 61,197 | |||||||||||||||
Over-Allotment Option | ||||||||||||||||
Schedule Of Stockholders Equity [Line Items] | ||||||||||||||||
Warrants to purchase number of common stock, shares | 9,179 | 9,179 | ||||||||||||||
Price per share | $ / shares | $ 18.525 | |||||||||||||||
Over-Allotment Option | Common Stock | ||||||||||||||||
Schedule Of Stockholders Equity [Line Items] | ||||||||||||||||
Shares issued | 29,797 | 9,179 | ||||||||||||||
2020 ATM | ||||||||||||||||
Schedule Of Stockholders Equity [Line Items] | ||||||||||||||||
Price per share | $ / shares | $ 21.68 | |||||||||||||||
Gross proceeds from issuance of common stock | $ | $ 5,000,000 | |||||||||||||||
Offering expenses incurred | $ | $ 181,000 | |||||||||||||||
2020 ATM | Form S3 Shelf Registration | ||||||||||||||||
Schedule Of Stockholders Equity [Line Items] | ||||||||||||||||
Aggregate offering amount | $ | $ 11,340,000 | $ 9,150,000 | ||||||||||||||
2020 ATM | Common Stock | ||||||||||||||||
Schedule Of Stockholders Equity [Line Items] | ||||||||||||||||
Shares issued | 2 | |||||||||||||||
March 2020 Offering | ||||||||||||||||
Schedule Of Stockholders Equity [Line Items] | ||||||||||||||||
Warrants to purchase number of common stock, shares | 178,776 | |||||||||||||||
Price per share | $ / shares | $ 12.25 | |||||||||||||||
Fair value of warrants at issuance | $ | $ 800,000 | |||||||||||||||
Warrant exercisable price per share | $ / shares | $ 16.10 | |||||||||||||||
Number of common stock converted by each warrant | 1 | |||||||||||||||
Class of warrants exercised | 81,633 | 81,633 | ||||||||||||||
Proceeds from the exercise of warrants | $ | $ 1,300,000 | |||||||||||||||
Gross proceeds from issuance of common stock | $ | $ 2,200,000 | |||||||||||||||
Underwriting discounts and commissions paid | $ | $ 300,000 | |||||||||||||||
Warrants expiration date | Mar. 20, 2025 | |||||||||||||||
March 2020 Offering | Common Stock | ||||||||||||||||
Schedule Of Stockholders Equity [Line Items] | ||||||||||||||||
Shares issued | 178,776 | |||||||||||||||
October 2020 Offering | ||||||||||||||||
Schedule Of Stockholders Equity [Line Items] | ||||||||||||||||
Shares issued | 187,646 | |||||||||||||||
Warrants to purchase number of common stock, shares | 93,817 | |||||||||||||||
Price per share | $ / shares | $ 18.20 | |||||||||||||||
Fair value of warrants at issuance | $ | $ 600,000 | |||||||||||||||
Warrant exercisable price per share | $ / shares | $ 15.82 | |||||||||||||||
Gross proceeds from issuance of common stock | $ | $ 3,400,000 | |||||||||||||||
Share issuance cost including placement agent fees | $ | $ 300,000 | |||||||||||||||
Warrants expiration period | 3 years | |||||||||||||||
Percentage of right to participate subsequent financing | 30.00% | |||||||||||||||
October 2020 Offering | Minimum | ||||||||||||||||
Schedule Of Stockholders Equity [Line Items] | ||||||||||||||||
Subscription to participate subsequent financing | $ | $ 250,000 | |||||||||||||||
October 2020 Offering | Officer, Affiliates of an Officer and Director | ||||||||||||||||
Schedule Of Stockholders Equity [Line Items] | ||||||||||||||||
Price per share | $ / shares | $ 18.354 | |||||||||||||||
Warrant exercisable price per share | $ / shares | $ 16.1665 | |||||||||||||||
October 2020 Offering | Placement Agent | ||||||||||||||||
Schedule Of Stockholders Equity [Line Items] | ||||||||||||||||
Shares issued | 961 | |||||||||||||||
Price per share | $ / shares | $ 19.775 | |||||||||||||||
October 2020 Offering | Common Stock | ||||||||||||||||
Schedule Of Stockholders Equity [Line Items] | ||||||||||||||||
Number of common stock converted by each warrant | 0.50 | |||||||||||||||
Common unit issued | 1 | |||||||||||||||
February 2021 Offering | ||||||||||||||||
Schedule Of Stockholders Equity [Line Items] | ||||||||||||||||
Warrants to purchase number of common stock, shares | 372,468 | |||||||||||||||
Price per share | $ / shares | $ 14.82 | |||||||||||||||
Net proceeds from offering | $ | $ 9,600,000 | |||||||||||||||
Fair value of warrants at issuance | $ | $ 2,600,000 | |||||||||||||||
Warrant exercisable price per share | $ / shares | $ 16.302 | |||||||||||||||
Number of common stock converted by each warrant | 0.50 | |||||||||||||||
Class of warrants exercised | 262 | 262 | ||||||||||||||
Proceeds from the exercise of warrants | $ | $ 4,000 | |||||||||||||||
Warrants expiration period | 5 years | |||||||||||||||
February 2021 Offering | Common Stock | ||||||||||||||||
Schedule Of Stockholders Equity [Line Items] | ||||||||||||||||
Shares issued | 744,936 | |||||||||||||||
Class A Common Stock | ||||||||||||||||
Schedule Of Stockholders Equity [Line Items] | ||||||||||||||||
Common stock, shares authorized | 150,000,000 | 150,000,000 | ||||||||||||||
Common stock, par value | $ / shares | $ 0.001 | $ 0.001 |
Common Stock and Warrants - Sum
Common Stock and Warrants - Summary of Weighted Average Assumptions Used in Estimating Fair Value of Warrants (Details) | Feb. 01, 2021$ / shares | Dec. 31, 2020$ / shares | Oct. 26, 2020$ / shares | Mar. 20, 2020$ / shares | Apr. 24, 2018$ / shares | Apr. 13, 2018$ / shares |
Outsiders | ||||||
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis Valuation Techniques [Line Items] | ||||||
Stock price | $ 15.92 | |||||
Exercise price | $ 15.92 | |||||
Warrant Term | Outsiders | ||||||
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis Valuation Techniques [Line Items] | ||||||
Weighted average assumptions, term | 3 years | |||||
Expected Volatility | Outsiders | ||||||
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis Valuation Techniques [Line Items] | ||||||
Weighted average assumptions, measurement input | 80.91 | |||||
Risk-Free Interest Rate | Outsiders | ||||||
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis Valuation Techniques [Line Items] | ||||||
Weighted average assumptions, measurement input | 0.18 | |||||
Dividend Rate | Outsiders | ||||||
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis Valuation Techniques [Line Items] | ||||||
Weighted average assumptions, measurement input | 0 | |||||
April 2018 Offering | ||||||
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis Valuation Techniques [Line Items] | ||||||
Exercise price | $ 428.75 | |||||
February 2021 Offering | ||||||
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis Valuation Techniques [Line Items] | ||||||
Exercise price | $ 16.302 | |||||
Warrants Granted | April 2018 Offering | ||||||
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis Valuation Techniques [Line Items] | ||||||
Stock price | $ 376.60 | 344.75 | ||||
Exercise price | $ 428.75 | $ 428.75 | ||||
Warrants and Rights Outstanding, Type [Extensible List] | hsdt:BlackScholesOptionPricingModelMember | hsdt:BlackScholesOptionPricingModelMember | ||||
Warrants Granted | April 2018 Offering | Warrant Term | ||||||
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis Valuation Techniques [Line Items] | ||||||
Weighted average assumptions, term | 3 years | 3 years | ||||
Warrants Granted | April 2018 Offering | Expected Volatility | ||||||
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis Valuation Techniques [Line Items] | ||||||
Weighted average assumptions, measurement input | 64.49 | 64.20 | ||||
Warrants Granted | April 2018 Offering | Risk-Free Interest Rate | ||||||
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis Valuation Techniques [Line Items] | ||||||
Weighted average assumptions, measurement input | 2.02 | 1.99 | ||||
Warrants Granted | April 2018 Offering | Dividend Rate | ||||||
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis Valuation Techniques [Line Items] | ||||||
Weighted average assumptions, measurement input | 0 | 0 | ||||
Warrants Granted | March 2020 Offering | ||||||
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis Valuation Techniques [Line Items] | ||||||
Stock price | $ 12.25 | |||||
Exercise price | $ 16.10 | |||||
Warrants and Rights Outstanding, Type [Extensible List] | hsdt:BlackScholesOptionPricingModelMember | |||||
Warrants Granted | March 2020 Offering | Warrant Term | ||||||
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis Valuation Techniques [Line Items] | ||||||
Weighted average assumptions, term | 5 years 6 months | |||||
Warrants Granted | March 2020 Offering | Expected Volatility | ||||||
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis Valuation Techniques [Line Items] | ||||||
Weighted average assumptions, measurement input | 82.41 | |||||
Warrants Granted | March 2020 Offering | Risk-Free Interest Rate | ||||||
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis Valuation Techniques [Line Items] | ||||||
Weighted average assumptions, measurement input | 0.52 | |||||
Warrants Granted | March 2020 Offering | Dividend Rate | ||||||
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis Valuation Techniques [Line Items] | ||||||
Weighted average assumptions, measurement input | 0 | |||||
Warrants Granted | February 2021 Offering | ||||||
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis Valuation Techniques [Line Items] | ||||||
Stock price | 14.82 | |||||
Exercise price | $ 16.47 | |||||
Warrants and Rights Outstanding, Type [Extensible List] | hsdt:BlackScholesOptionPricingModelMember | |||||
Warrants Granted | February 2021 Offering | Warrant Term | ||||||
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis Valuation Techniques [Line Items] | ||||||
Weighted average assumptions, term | 5 years | |||||
Warrants Granted | February 2021 Offering | Expected Volatility | ||||||
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis Valuation Techniques [Line Items] | ||||||
Weighted average assumptions, measurement input | 75.02 | |||||
Warrants Granted | February 2021 Offering | Risk-Free Interest Rate | ||||||
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis Valuation Techniques [Line Items] | ||||||
Weighted average assumptions, measurement input | 0.42 | |||||
Warrants Granted | February 2021 Offering | Dividend Rate | ||||||
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis Valuation Techniques [Line Items] | ||||||
Weighted average assumptions, measurement input | 0 | |||||
Warrant | Derivative Financial Instruments, Liabilities | ||||||
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis Valuation Techniques [Line Items] | ||||||
Stock price | $ 17.15 | |||||
Exercise price | $ 428.75 | |||||
Warrants and Rights Outstanding, Type [Extensible List] | hsdt:BlackScholesOptionPricingModelMember | |||||
Warrant | Warrant Term | Derivative Financial Instruments, Liabilities | ||||||
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis Valuation Techniques [Line Items] | ||||||
Weighted average assumptions, term | 3 months 7 days | |||||
Warrant | Expected Volatility | Derivative Financial Instruments, Liabilities | ||||||
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis Valuation Techniques [Line Items] | ||||||
Weighted average assumptions, measurement input | 64.48 | |||||
Warrant | Risk-Free Interest Rate | Derivative Financial Instruments, Liabilities | ||||||
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis Valuation Techniques [Line Items] | ||||||
Weighted average assumptions, measurement input | 0.06 | |||||
Warrant | Dividend Rate | Derivative Financial Instruments, Liabilities | ||||||
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis Valuation Techniques [Line Items] | ||||||
Weighted average assumptions, measurement input | 0 |
Common Stock and Warrants - S_2
Common Stock and Warrants - Summary of Warrants Accounted for as Liabilities and Recorded as Derivative Financial Instruments (Details) $ in Thousands | 6 Months Ended |
Jun. 30, 2020USD ($) | |
Fair Value Disclosures [Abstract] | |
Fair value of warrants at beginning of period | $ 5 |
Change in fair value of warrants during the period | (4) |
Fair value of warrants at end of period | $ 1 |
Common Stock and Warrants - S_3
Common Stock and Warrants - Summary of Warrant Activity (Details) | 6 Months Ended | |
Jun. 30, 2021$ / sharesshares | Jun. 30, 2021$ / sharesshares | |
Class Of Warrant Or Right [Line Items] | ||
Number of Warrants, Outstanding | 593,924 | 593,924 |
CAD | ||
Class Of Warrant Or Right [Line Items] | ||
Number of Warrants, Outstanding | 68,351 | 68,351 |
Number of Warrants, Cancelled/Expired | (68,351) | (68,351) |
Weighted Average Exercise Price, Outstanding | $ / shares | $ 428.75 | |
Weighted Average Exercise Price, Cancelled/Expired | $ / shares | $ 428.75 | |
USD | ||
Class Of Warrant Or Right [Line Items] | ||
Number of Warrants, Outstanding | 273,554 | 273,554 |
Number of Warrants, Granted | 402,265 | 402,265 |
Number of Warrants, Exercised | (81,895) | (81,895) |
Number of Warrants, Outstanding | 593,924 | 593,924 |
Weighted Average Exercise Price, Outstanding | $ / shares | $ 16.04 | |
Weighted Average Exercise Price, Granted | $ / shares | 16.47 | |
Weighted Average Exercise Price, Exercised | $ / shares | 16.10 | |
Weighted Average Exercise Price, Outstanding | $ / shares | $ 16.32 |
Common Stock and Warrants - War
Common Stock and Warrants - Warrants Outstanding and Exercisable (Details) | 6 Months Ended |
Jun. 30, 2021$ / sharesshares | |
Class Of Warrant Or Right [Line Items] | |
Number of Warrants Outstanding | 593,924 |
Warrants Expiration Date, March 20, 2025 | |
Class Of Warrant Or Right [Line Items] | |
Number of Warrants Outstanding | 97,143 |
Exercise price | $ / shares | $ 16.10 |
Expiration Date | Mar. 20, 2025 |
Warrants Expiration Date, October 26, 2023 | |
Class Of Warrant Or Right [Line Items] | |
Number of Warrants Outstanding | 17,431 |
Exercise price | $ / shares | $ 16.1665 |
Expiration Date | Oct. 26, 2023 |
Warrants Expiration Date, October 26, 2023 | |
Class Of Warrant Or Right [Line Items] | |
Number of Warrants Outstanding | 76,386 |
Exercise price | $ / shares | $ 15.82 |
Expiration Date | Oct. 26, 2023 |
Warrants Expiration Date, October 26, 2023 | |
Class Of Warrant Or Right [Line Items] | |
Number of Warrants Outstanding | 961 |
Exercise price | $ / shares | $ 19.775 |
Expiration Date | Oct. 26, 2023 |
Warrants Expiration Date, February 1, 2026 | |
Class Of Warrant Or Right [Line Items] | |
Number of Warrants Outstanding | 372,206 |
Exercise price | $ / shares | $ 16.302 |
Expiration Date | Feb. 1, 2026 |
Warrants Expiration Date, February 1, 2026 | |
Class Of Warrant Or Right [Line Items] | |
Number of Warrants Outstanding | 29,797 |
Exercise price | $ / shares | $ 18.525 |
Expiration Date | Feb. 1, 2026 |
Stock-Based Payments - Addition
Stock-Based Payments - Additional Information (Details) - USD ($) $ / shares in Units, $ in Thousands | Apr. 01, 2021 | Jun. 30, 2021 | Jun. 30, 2021 | May 25, 2021 | May 15, 2018 |
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | |||||
Number of stock option issued | 532,068 | ||||
Employee and Director Stock Options | |||||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | |||||
Number of stock option issued | 532,068 | ||||
Stock option forfeited | 5,500 | ||||
Unrecognized compensation cost related to non-vested stock options outstanding | $ 3,900 | $ 3,900 | |||
Weighted-average remaining vesting period | 3 years 6 months | ||||
Unrecognized compensation cost related to Performance-based stock options | 1,200 | $ 1,200 | |||
Weighted average grant date fair value | $ 11.27 | ||||
Consultants Stock Options | |||||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | |||||
Number of stock option issued | 0 | ||||
Unrecognized compensation cost related to non-vested stock options outstanding | $ 13 | $ 13 | |||
Weighted-average remaining vesting period | 3 months 18 days | ||||
Restricted Stock Units | |||||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | |||||
Shares granted | 9,150 | ||||
Restricted Stock Units | Board of Directors | |||||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | |||||
Shares granted | 5,622 | ||||
Vesting period in installments | 12 months | ||||
2018 Omnibus Incentive Plan | |||||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | |||||
Common stock shares authorized and approved to issue under plan | 565,000 | 153,031 | |||
Common stock shares available for issuance | 85,714 | ||||
Common stock remaining available for grant | 127,328 | 127,328 | |||
2018 Omnibus Incentive Plan | Restricted Stock Units | Officer | |||||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | |||||
Shares granted | 2,668 | ||||
Scheduled to vest date | Oct. 2, 2021 | ||||
2018 Omnibus Incentive Plan | Unrestricted Stock | Officer | Class A Common Stock | |||||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | |||||
Shares granted | 5,337 | ||||
2016 Omnibus Incentive Plan | |||||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | |||||
Common stock shares available for issuance | 67,317 |
Stock-Based Payments - Summary
Stock-Based Payments - Summary of Company's Stock Option Activity (Details) | 6 Months Ended | 12 Months Ended |
Jun. 30, 2021$ / sharesshares | Dec. 31, 2020$ / sharesshares | |
Disclosure Of Compensation Related Costs Sharebased Payments [Abstract] | ||
Number of Stock Options, Beginning balance outstanding | shares | 113,558 | |
Number of Stock Options, Granted | shares | 532,068 | |
Number of Stock Options Forfeited/Cancelled | shares | (14,396) | |
Number of Stock Options, Exercised | shares | (214) | |
Number of Stock Options, Ending balance outstanding | shares | 631,016 | 113,558 |
Number of Stock Options, Exercisable | shares | 252,920 | |
Weighted Average Remaining Contractual Life | 9 years 5 months 19 days | 7 years 9 months |
Weighted Average Remaining Contractual Life, Exercisable | 8 years 11 months 19 days | |
Weighted Average Exercise Price, Beginning balance outstanding | $ / shares | $ 159.33 | |
Weighted Average Exercise Price, Granted | $ / shares | 15 | |
Weighted Average Exercise Price, Forfeited/Cancelled | $ / shares | 105.15 | |
Weighted Average Exercise Price, Exercised | $ / shares | 10.50 | |
Weighted Average Exercise Price, Ending balance outstanding | $ / shares | 38.92 | $ 159.33 |
Weighted Average Exercise Price, Exercisable | $ / shares | $ 26.73 |
Stock-Based Payments - Schedule
Stock-Based Payments - Schedule of Fair Value of Employee and Director Stock Options Granted Estimated Using Black-Scholes Option Pricing Model With Following Weighted Average Assumptions (Details) - Employee and Director Stock Options | 6 Months Ended |
Jun. 30, 2021$ / shares | |
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | |
Stock price | $ 15.10 |
Exercise price | $ 15 |
Expected term | 7 years 2 months 1 day |
Expected volatility | 1.19% |
Risk-free interest rate | 85.99% |
Dividend rate | 0.00% |
Stock-Based Payments - Summar_2
Stock-Based Payments - Summary of Company's Restricted Stock Award Activity (Details) - Restricted Stock Units | 6 Months Ended |
Jun. 30, 2021$ / sharesshares | |
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | |
Number of RSU, Beginning balance outstanding | shares | 168 |
Number of RSU, Granted | shares | 9,150 |
Number of RSU, Settled | shares | (1,028) |
Number of RSU, Ending balance outstanding | shares | 8,290 |
Weighted Average Grant Date Fair Value per Unit, Beginning balance outstanding | $ / shares | $ 13.20 |
Weighted Average Grant Date Fair Value per Unit, Granted | $ / shares | 15.46 |
Weighted Average Grant Date Fair Value per Unit, Settled | $ / shares | 14.50 |
Weighted Average Grant Date Fair Value per Unit, Ending balance outstanding | $ / shares | $ 15.53 |
Stock-Based Payments - Summar_3
Stock-Based Payments - Summary of Stock-Based Compensation Expense is Classified in Condensed Consolidated Statements of Operations and Comprehensive Loss (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2021 | Jun. 30, 2020 | Jun. 30, 2021 | Jun. 30, 2020 | |
Employee Service Share Based Compensation Allocation Of Recognized Period Costs [Line Items] | ||||
Share-based compensation expense | $ 2,629 | $ 729 | $ 3,156 | $ 1,571 |
Research and Development Expense | ||||
Employee Service Share Based Compensation Allocation Of Recognized Period Costs [Line Items] | ||||
Share-based compensation expense | 162 | 243 | 384 | 482 |
Cost of Sales | ||||
Employee Service Share Based Compensation Allocation Of Recognized Period Costs [Line Items] | ||||
Share-based compensation expense | 3 | (2) | 3 | (1) |
Selling, General and Administrative Expense | ||||
Employee Service Share Based Compensation Allocation Of Recognized Period Costs [Line Items] | ||||
Share-based compensation expense | $ 2,464 | $ 488 | $ 2,769 | $ 1,090 |
Accrued Expenses - Schedule of
Accrued Expenses - Schedule of Accrued Expenses (Details) - USD ($) $ in Thousands | Jun. 30, 2021 | Dec. 31, 2020 |
Payables And Accruals [Abstract] | ||
Employees benefits | $ 457 | $ 496 |
Professional services | 107 | 292 |
Legal fees | 144 | 133 |
Royalty fees | 3 | 12 |
Severance | 139 | 347 |
Other | 23 | 57 |
Total | $ 873 | $ 1,337 |
Commitments and Contingencies -
Commitments and Contingencies - Additional Information (Details) - USD ($) | Jun. 30, 2021 | Jun. 01, 2020 | Dec. 29, 2017 | Jan. 22, 2013 | Jan. 31, 2021 | May 31, 2020 | Jul. 31, 2017 | Mar. 31, 2017 | Jun. 30, 2021 | Jun. 30, 2020 | Jun. 30, 2021 | Jun. 30, 2020 |
Commitments And Contingencies [Line Items] | ||||||||||||
Lease commencement date | Jul. 1, 2020 | Jul. 17, 2017 | Jul. 1, 2017 | |||||||||
Lease termination date | Sep. 30, 2021 | Jun. 30, 2021 | Jan. 16, 2023 | Dec. 31, 2022 | ||||||||
Lease option to extend termination year | 2027 | |||||||||||
Lease option to extend termination date | Jan. 31, 2028 | |||||||||||
Lease option to extend lease term | 6 months | |||||||||||
Lease monthly rent plus utilities | $ 5,000 | $ 20,000 | ||||||||||
Lease monthly rent plus utilities beginning date | Jan. 31, 2021 | Jan. 31, 2018 | ||||||||||
Lease annual increase in rental percentage | 3.00% | 3.00% | ||||||||||
Decrease in operating lease right of use asset, partial termination | $ 400,000 | |||||||||||
Decrease in operating lease liability | $ 400,000 | |||||||||||
Other Income | ||||||||||||
Commitments And Contingencies [Line Items] | ||||||||||||
Gain on termination of lease | $ 100,000 | |||||||||||
Advanced NeuroRehabilitation, LLC | License Agreement for Exclusive Right on Patent Pending Technology | ||||||||||||
Commitments And Contingencies [Line Items] | ||||||||||||
Issuance of common stock for license agreement | 91,628 | |||||||||||
Percentage of royalty on net revenue | 4.00% | |||||||||||
Royalty expense | $ 3,000 | $ 5,000 | $ 6,000 | $ 10,000 | ||||||||
Key Tronic Corporation | Manufacturing and Supply Agreement | ||||||||||||
Commitments And Contingencies [Line Items] | ||||||||||||
Agreement description | On December 29, 2017, HMI (formerly known as NeuroHabilitation Corporation) entered into a Manufacturing and Supply Agreement (“MSA”) with Key Tronic Corporation (“Key Tronic”), for the manufacture and supply of the Company’s PoNS device based upon the Company’s product specifications as set forth in the MSA. Per the agreement, the Company shall provide to Key Tronic a rolling forecast for the procurement of parts and material and within normal lead times based on estimated delivery dates for the manufacture of the PoNS device. The term of the agreement is for three years and will automatically renew for additional consecutive terms of one year, unless cancelled by either party upon 180-day written notice to the other party prior to the end of the then current term. On June 1, 2020, HMI extended the existing manufacturing agreement with Key Tronic for a second three year term from December 29, 2020 until December 31, 2023. As of June 30, 2021, the Company did not have any outstanding commitments to Key Tronic to complete the Company’s forecasts for the procurement of materials necessary for the delivery of PoNS devices. | |||||||||||
Agreement term | 3 years | |||||||||||
Agreement auto renewal period | 1 year | |||||||||||
Notice period to cancel the renewal of agreement | 180 days | |||||||||||
Long-term purchase commitment amount | $ 0 | |||||||||||
Extended manufacturing agreement term | 3 years |
Commitments and Contingencies_2
Commitments and Contingencies - Schedule of Future Minimum Lease Payments Related to Non-cancellable Operating Lease Commitments (Details) - USD ($) $ in Thousands | 6 Months Ended | |
Jun. 30, 2021 | Dec. 31, 2020 | |
Operating Leases Future Minimum Payments Due [Abstract] | ||
Operating lease cost | $ 5 | |
Operating lease - operating cash flows | $ 31 | |
Weighted average remaining lease term | 1 year | |
Weighted average discount rate | 7.20% | |
2021 (remaining six months) | $ 32 | |
2022 | 32 | |
Total future minimum lease payments | 64 | |
Less imputed interest | (2) | |
Total liability | 62 | |
Current operating lease liability | 62 | $ 59 |
Non-current operating lease liability | $ 32 | |
Total | $ 62 |
Related Party Transactions - Ad
Related Party Transactions - Additional Information (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2021 | Jun. 30, 2020 | Jun. 30, 2021 | Jun. 30, 2020 | |
Directors | ||||
Related Party Transaction [Line Items] | ||||
Consulting fees paid | $ 0 | $ 0 | $ 0 | $ 5 |
Subsequent Events - Additional
Subsequent Events - Additional Information (Details) | Jul. 02, 2021shares |
2021 Inducement Plan | Subsequent Event | Class A Common Stock | |
Subsequent Event [Line Items] | |
Common stock shares available for issuance | 100,000 |