Helius Medical Technologies, Inc. (Nasdaq:HSDT) (TSX:HSM) (“Helius”
or the “Company”), a neurotech company focused on neurological
wellness, today reported financial results for the quarter and full
year ended December 31, 2020.
Fourth Quarter and Recent Business Updates
- The Company closed a private
placement for total net proceeds of approximately $3.2 million and
an underwritten public offering of units for net proceeds of
approximately $9.6 million.• Helius expects its existing capital,
including net proceeds from the public offering that closed and net
proceeds raised through the exercise of warrants in the first
quarter of 2021, will be sufficient to fund the Company’s
operations into the first quarter of 2022.
- The Company announced on January
11, 2021 that it submitted its formal response to the U.S. Food and
Drug Administration’s (the “FDA”) request for additional
information, related to Helius’ request for de novo classification
and clearance of the PoNS device.
- The Company received written notice
from The Nasdaq Stock Market LLC on January 19, 2021 that Helius is
in compliance with all applicable listing standards.
- The Centers for Medicare &
Medicaid Services (“CMS”) announced that it is finalizing a new
coverage pathway, Medicare Coverage of Innovative Technology, or
“MCIT,” for FDA-designated breakthrough medical devices cleared by
FDA.• The MCIT rule will provide national Medicare coverage as
early as the same day as FDA market authorization for breakthrough
devices and coverage would last for four years.
Fourth Quarter 2020 Financial Summary
- Revenue of $191 thousand, compared to revenue of $152 thousand
in fourth quarter of 2019.
- Operating loss of $3.0 million,
compared to operating loss of $5.6 million in fourth quarter of
2019.
- Net loss of $2.5 million, compared
to net loss of $5.3 million in fourth quarter of 2019.
Full Year 2020 Financial Summary
- Revenue of $0.7 million, compared
to revenue of $1.5 million in 2019.
- Operating loss of $14.4 million,
compared operating loss of $24.0 million in 2019.
- Net loss of $14.1 million, compared
to net loss of $9.8 million in 2019.
- As of December 31, 2020, the
Company had cash of $3.3 million, compared to $5.5 million at
December 31, 2019. The Company had no debt outstanding at
December 31, 2020.
“During the fourth quarter, we were pleased with
our pace of progress and the commitment our employees have shown in
view of the continued headwinds created by the COVID-19 pandemic,”
said Dane Andreeff, Interim President and Chief Executive Officer
of Helius. “Our regulatory team focused on preparing a thorough
response to FDA’s request for additional information related to our
request for U.S. de novo classification and clearance in MS. As a
result of their efforts, we were pleased to announce the submission
of our response on January 11th, and we hope to receive de novo
classification and clearance during the first half of 2021. In
Canada, while we continued to see the impacts of COVID on the
clinics we serve and their patients, our commercial team
successfully expanded our network of authorized PoNS clinics from 7
to 31 locations by year-end, exceeding our goal. Subsequent to
quarter-end, we also secured approximately $11 million to
strengthen our balance sheet and support our operations going
forward.”
“As we enter 2021, Helius is focused on securing
regulatory clearance and coverage for our breakthrough PoNS device
in the U.S. while supporting our recently expanded network of
Canadian clinics. With our U.S. de novo submission in MS under
review, a network of 31 clinics in Canada and an enhanced balance
sheet, we believe we are well-positioned to weather the continued
effects of the pandemic and expand the availability of our PoNS
Treatment going forward. We remain committed to executing on our
regulatory and commercial strategies as effectively and efficiently
with the ultimate goal of bringing our innovative PoNS Treatment to
the aid of as many patients as possible.”
Fourth Quarter 2020 Financial Results
Total revenue for the fourth quarter of 2020 was
$191 thousand, compared to $152 thousand in the fourth quarter of
2019. Product sales represented approximately 96% of total revenue
in the fourth quarter of 2020 compared to 100% of total revenue in
the fourth quarter of 2019. Product sales in both periods were
generated through sales of the PoNS device pursuant to supply
agreements with PoNS Authorized clinic locations in Canada. License
and fee revenue represented 4% of sales in the fourth quarter of
2020, compared to 0% of sales in the fourth quarter of 2019.Gross
loss for the fourth quarter of 2020 was $10 thousand, compared to
gross loss of $156 thousand in the fourth quarter of 2019.
Operating expenses for the fourth quarter of 2020 decreased $2.5
million, or 45% year-over-year, to $3 million, compared to $5.5
million in the fourth quarter of 2019.Operating loss for the fourth
quarter of 2020 decreased $2.6 million, or 47% year-over-year, to
$3.0 million, compared to $5.6 million in the fourth quarter of
2019. Total other income for the fourth quarter of 2020 was $468
thousand, compared to $294 thousand in the fourth quarter of 2019.
Net loss for the fourth quarter of 2020 was $2.5 million, or
$(1.77) per basic and diluted common share, compared to a net loss
of $5.3 million, or $(6.71) per basic and diluted common share, in
the fourth quarter of 2019. Weighted average shares used to compute
basic and diluted net loss per common share were 1.4 million and
0.8 million for the fourth quarter of 2020 and 2019,
respectively.
Full Year 2020 Financial
Results
Total revenue for the full year 2020 was $0.7
million, compared to $1.5 million for full year 2019. Product sales
represented 95% of total revenue for full year 2020, compared to
97% of total for full year 2019. Product sales in both periods were
generated through sales of the PoNS device pursuant to supply
agreements with PoNS Authorized clinic locations in Canada. License
and fee revenue represented 5% of total revenue for full year 2020,
compared to 3% of total revenue for the full year 2019.Gross profit
for full year 2020 was $0.3 million, compared to gross profit of
$0.7 million for full year 2019. Operating expenses for full year
2020 decreased $9.9 million, or 41% year-over-year, to $14.7
million, compared to $24.6 million for full year 2019.Operating
loss full year 2020 decreased $9.6 million, or 40% year-over-year,
to $14.4 million, compared to operating loss of $24.0 million for
full year 2019. Total other income for full year 2020 was $0.3
million, compared to $14.2 million of other income for full year
2019. The year-over-year change is driven primarily by the change
in fair value of derivative instruments which is primarily
attributable to the change in our stock price, volatility and the
number of derivative financial instruments being measured during
the period. Net loss for full year 2020 was $14.1 million, or
$(11.80) per basic and diluted common share, compared to net loss
of $9.8 million, or $(12.99) per basic and diluted common share,
for full year 2019. Weighted average shares used to compute basic
and diluted net loss per share were 1.2 million and 0.8 million for
full year 2020 and full year 2019, respectively. Net cash provided
by financing activities during the twelve months ended
December 31, 2020 was $9.6 million. As of December 31,
2020, the Company had cash of $3.3 million, compared to $5.5
million at December 31, 2019. The Company had no debt
outstanding at December 31, 2020.
Full Year 2021 Outlook
The Company is not providing a formal financial
outlook for the full year 2021 at this time, given the continued
uncertainty on the duration and impact of the COVID-19 pandemic on
its financial and operating results.
Conference Call
Management will host a conference call at 5:00
p.m. Eastern Time on March 10, 2021 to discuss the results of the
quarter and business outlook. Those who would like to participate
may dial 877-407-2988 (201-389-0923 for international callers) and
provide access code 13715793. A live webcast of the call will also
be provided on the Events section of the Company's investor
relations website at:
https://heliusmedical.com/index.php/investor-relations/events/upcoming-events.
For those unable to participate, a replay of the
call will be available for two weeks at 877-660-6853 (201-612-7415
for international callers); access code 13715793. The webcast will
be archived on the Events section of the Company’s investor
relations website.
About Helius Medical Technologies,
Inc.
Helius Medical Technologies is a neurotech
company focused on neurological wellness. The Company’s purpose is
to develop, license and acquire unique and non-invasive platform
technologies that amplify the brain’s ability to heal itself. The
Company’s first commercial product is the Portable Neuromodulation
Stimulator (PoNS™). For more information, visit
www.heliusmedical.com.
About the PoNS Device and PoNS
Treatment
The Portable Neuromodulation Stimulator (PoNS™)
is an authorized class II, non-implantable, medical device in
Canada intended for use as a short term treatment (14 weeks) of
gait deficit due to mild and moderate symptoms from multiple
sclerosis (MS), and chronic balance deficit due to mild-to-moderate
traumatic brain injury (mmTBI) and is to be used in conjunction
with physical therapy. The PoNS™ is an investigational medical
device in the United States, the European Union (“EU”), and
Australia (“AUS”). The device is currently under review for de novo
classification and clearance by the FDA. It is also under premarket
review by the AUS Therapeutic Goods Administration. PoNS™ is
currently not commercially available in the United States, the
European Union or Australia.Cautionary Disclaimer
Statement:
Certain statements in this news release are not
based on historical facts and constitute forward-looking statements
or forward-looking information within the meaning of the U.S.
Private Securities Litigation Reform Act of 1995 and Canadian
securities laws. All statements other than statements of historical
fact included in this news release are forward-looking statements
that involve risks and uncertainties. Forward-looking statements
are often identified by terms such as “believe,” “continue,”
“expect,” “look forward,” “will” and similar expressions. Such
forward-looking statements include, among others, statements
regarding the COVID-19 pandemic, including its impact on the
Company, the Company’s future growth and operational progress,
including clinical and regulatory development plans for the PoNS
device, the Company’s expectations regarding the sufficiency of
funds for anticipated future operations, potential receipt of
regulatory clearance of the PoNS device in the United States, the
success of the Company’s planned study, business and
commercialization initiatives and objectives, and expectations for
full year 2021.
There can be no assurance that such statements
will prove to be accurate and actual results and future events
could differ materially from those expressed or implied by such
statements. Important factors that could cause actual results to
differ materially from the Company’s expectations include
uncertainties associated with the clinical development process and
FDA regulatory submission and approval process, including that the
Company’s request for de novo classification and clearance may be
declined by the FDA, that the FDA is not required to and may not
respond to the Company’s request in the timeframe indicated by its
de novo review goals or in the time the Company expects, whether
the Company’s response will be satisfactory to the FDA, whether the
FDA will require additional information, whether the Company will
be able to provide it in a timely manner and whether such
additional information will be satisfactory to the FDA, the impact
of the COVID-19 pandemic, uncertainties associated with clinical
trial enrollments and the results of the planned study,
uncertainties associated with the clinical development process and
FDA regulatory submission and approval process, including the
Company’s capital requirements to achieve its business objectives
and other risks detailed from time to time in the filings made by
the Company with securities regulators, and including the risks and
uncertainties about the Company’s business described in the “Risk
Factors” sections of the Company’s Annual Report on Form 10-K for
the year ended December 31, 2020 and its other filings with
the United States Securities and Exchange Commission and the
Canadian securities regulators, which can be obtained from either
at www.sec.gov or www.sedar.com.
The reader is cautioned not to place undue
reliance on any forward-looking statement. The forward-looking
statements contained in this news release are made as of the date
of this news release and the Company assumes no obligation to
update any forward-looking statement or to update the reasons why
actual results could differ from such statements except to the
extent required by law.
The Toronto Stock Exchange has not reviewed and
does not accept responsibility for the adequacy or accuracy of the
content of this news release.
Helius Medical Technologies,
Inc.Unaudited Consolidated Balance
Sheets(Except for share data, amounts in
thousands)
|
|
December 31, 2020 |
|
|
December 31, 2019 |
|
ASSETS |
|
|
|
|
|
|
|
|
Current assets |
|
|
|
|
|
|
|
|
Cash |
|
$ |
3,331 |
|
|
$ |
5,459 |
|
Accounts receivable, net |
|
|
74 |
|
|
|
210 |
|
Other receivables |
|
|
156 |
|
|
|
364 |
|
Inventory, net |
|
|
389 |
|
|
|
598 |
|
Prepaid expenses |
|
|
735 |
|
|
|
610 |
|
Total current assets |
|
|
4,685 |
|
|
|
7,241 |
|
Property and equipment,
net |
|
|
486 |
|
|
|
712 |
|
Other assets |
|
|
|
|
|
|
|
|
Goodwill |
|
|
759 |
|
|
|
1,242 |
|
Intangible assets, net |
|
|
527 |
|
|
|
582 |
|
Operating lease right-of-use asset, net |
|
|
90 |
|
|
|
552 |
|
Other assets |
|
|
— |
|
|
|
18 |
|
Total other assets |
|
|
1,376 |
|
|
|
2,394 |
|
TOTAL
ASSETS |
|
$ |
6,547 |
|
|
$ |
10,347 |
|
LIABILITIES AND STOCKHOLDERS' EQUITY |
|
|
|
|
|
|
|
|
Current liabilities |
|
|
|
|
|
|
|
|
Accounts payable |
|
$ |
747 |
|
|
$ |
1,676 |
|
Accrued liabilities |
|
|
1,337 |
|
|
|
1,519 |
|
Operating lease liability |
|
|
59 |
|
|
|
172 |
|
Derivative financial instruments |
|
|
— |
|
|
|
5 |
|
Deferred revenue |
|
|
281 |
|
|
|
430 |
|
Total current liabilities |
|
|
2,424 |
|
|
|
3,802 |
|
Non-current liabilities |
|
|
|
|
|
|
|
|
Operating lease liability |
|
|
32 |
|
|
|
465 |
|
Deferred revenue |
|
|
220 |
|
|
|
245 |
|
TOTAL
LIABILITIES |
|
|
2,676 |
|
|
|
4,512 |
|
STOCKHOLDERS’
EQUITY |
|
|
|
|
|
|
|
|
Preferred stock, $0.001 par value; 10,000,000 shares authorized; no
shares issued and outstanding as of December 31, 2020 and December
31, 2019 |
|
|
— |
|
|
|
— |
|
Class A Common stock, $0.001 par value; 150,000,000 shares
authorized; 1,484,362 and 877,672 shares issued and outstanding as
of December 31, 2020 and December 31, 2019, respectively |
|
|
1 |
|
|
|
1 |
|
Additional paid-in capital |
|
|
123,872 |
|
|
|
111,509 |
|
Accumulated other comprehensive loss |
|
|
(1,099 |
) |
|
|
(902 |
) |
Accumulated deficit |
|
|
(118,903 |
) |
|
|
(104,773 |
) |
TOTAL STOCKHOLDERS’
EQUITY |
|
|
3,871 |
|
|
|
5,835 |
|
TOTAL LIABILITIES AND
STOCKHOLDERS’ EQUITY |
|
$ |
6,547 |
|
|
$ |
10,347 |
|
|
|
|
|
|
|
|
|
|
Helius Medical Technologies,
Inc.Unaudited Consolidated Statements of
Operations and Comprehensive Loss (Amounts in
thousands except share and per share data)
|
|
Three Months Ended |
|
|
Year Ended |
|
|
|
December 31, |
|
|
December 31, |
|
|
|
2020 |
|
|
2019 |
|
|
2020 |
|
|
2019 |
|
Revenue: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Product sales, net |
|
$ |
184 |
|
|
$ |
159 |
|
|
$ |
625 |
|
|
$ |
1,454 |
|
Fee revenue |
|
|
— |
|
|
|
(12 |
) |
|
|
9 |
|
|
|
37 |
|
License revenue |
|
|
7 |
|
|
|
5 |
|
|
|
27 |
|
|
|
5 |
|
Total operating
revenue |
|
|
191 |
|
|
|
152 |
|
|
|
661 |
|
|
|
1,496 |
|
Cost of
sales: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cost of product sales |
|
|
201 |
|
|
|
308 |
|
|
|
388 |
|
|
|
846 |
|
Gross
profit |
|
|
(10 |
) |
|
|
(156 |
) |
|
|
273 |
|
|
|
650 |
|
Operating
expenses: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Research and development |
|
|
827 |
|
|
|
1,599 |
|
|
|
4,582 |
|
|
|
8,061 |
|
Selling, general and administrative |
|
|
2,089 |
|
|
|
3,806 |
|
|
|
9,714 |
|
|
|
16,521 |
|
Amortization expense |
|
|
76 |
|
|
|
64 |
|
|
|
363 |
|
|
|
64 |
|
Total operating expenses |
|
|
2,992 |
|
|
|
5,469 |
|
|
|
14,659 |
|
|
|
24,646 |
|
Operating
loss |
|
|
(3,002 |
) |
|
|
(5,625 |
) |
|
|
(14,386 |
) |
|
|
(23,996 |
) |
Other
income: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Other income |
|
|
— |
|
|
|
60 |
|
|
|
63 |
|
|
|
95 |
|
Change in fair value of derivative financial instruments |
|
|
— |
|
|
|
80 |
|
|
|
4 |
|
|
|
14,113 |
|
Foreign exchange gain |
|
|
468 |
|
|
|
154 |
|
|
|
189 |
|
|
|
7 |
|
Total other
income |
|
|
468 |
|
|
|
294 |
|
|
|
256 |
|
|
|
14,215 |
|
Net loss |
|
|
(2,534 |
) |
|
|
(5,331 |
) |
|
|
(14,130 |
) |
|
|
(9,781 |
) |
Other comprehensive
loss: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Foreign currency translation adjustments |
|
|
(406 |
) |
|
|
(143 |
) |
|
|
(197 |
) |
|
|
(311 |
) |
Comprehensive
loss |
|
$ |
(2,940 |
) |
|
$ |
(5,474 |
) |
|
$ |
(14,327 |
) |
|
$ |
(10,092 |
) |
Net loss per
share |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic |
|
$ |
(1.77 |
) |
|
$ |
(6.71 |
) |
|
$ |
(11.80 |
) |
|
$ |
(12.99 |
) |
Diluted |
|
$ |
(1.77 |
) |
|
$ |
(6.71 |
) |
|
$ |
(11.80 |
) |
|
$ |
(12.99 |
) |
Weighted average
shares outstanding |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic |
|
|
1,430,504 |
|
|
|
793,934 |
|
|
|
1,197,774 |
|
|
|
752,932 |
|
Diluted |
|
|
1,430,504 |
|
|
|
793,934 |
|
|
|
1,197,774 |
|
|
|
752,932 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Helius Medical Technologies,
Inc.Unaudited Condensed Consolidated Statements of
Cash Flows(Amounts in thousands)
|
|
Year Ended |
|
|
|
December 31, |
|
|
|
2020 |
|
|
2019 |
|
Cash flows from operating activities: |
|
|
|
|
|
|
|
|
Net loss |
|
$ |
(14,130 |
) |
|
$ |
(9,781 |
) |
Adjustments to reconcile net
loss to net cash used in operating activities: |
|
|
|
|
|
|
|
|
Change in fair value of derivative financial instruments |
|
|
(4 |
) |
|
|
(14,113 |
) |
Stock-based compensation expense |
|
|
2,529 |
|
|
|
4,691 |
|
Unrealized foreign exchange (gain) loss |
|
|
(182 |
) |
|
|
70 |
|
Depreciation expense |
|
|
119 |
|
|
|
127 |
|
Amortization expense |
|
|
363 |
|
|
|
64 |
|
Provision for doubtful accounts |
|
|
140 |
|
|
|
220 |
|
Provision for inventory reserve |
|
|
205 |
|
|
|
50 |
|
Intangible asset impairment |
|
|
184 |
|
|
|
— |
|
Loss from disposal of property and equipment |
|
|
110 |
|
|
|
— |
|
Gain from lease modification |
|
|
(56 |
) |
|
|
— |
|
Changes in operating assets
and liabilities: |
|
|
|
|
|
|
|
|
Accounts receivable |
|
|
(4 |
) |
|
|
(438 |
) |
Other receivables |
|
|
226 |
|
|
|
(278 |
) |
Inventory |
|
|
4 |
|
|
|
(256 |
) |
Prepaid expenses |
|
|
(125 |
) |
|
|
(163 |
) |
Other current assets |
|
|
— |
|
|
|
264 |
|
Operating lease liability |
|
|
(28 |
) |
|
|
(13 |
) |
Accounts payable |
|
|
(635 |
) |
|
|
(1,116 |
) |
Accrued liabilities |
|
|
(280 |
) |
|
|
(327 |
) |
Deferred revenue |
|
|
(174 |
) |
|
|
— |
|
Net cash used in
operating activities |
|
|
(11,738 |
) |
|
|
(20,999 |
) |
Cash flows from
investing activities: |
|
|
|
|
|
|
|
|
Purchase of property and
equipment |
|
|
(63 |
) |
|
|
(278 |
) |
Proceeds from sale of property
and equipment |
|
|
61 |
|
|
|
— |
|
Business acquisitions, net of
cash acquired |
|
|
— |
|
|
|
(416 |
) |
Internally developed
software |
|
|
(7 |
) |
|
|
(75 |
) |
Net cash used in
investing activities |
|
|
(9 |
) |
|
|
(769 |
) |
Cash flows from
financing activities: |
|
|
|
|
|
|
|
|
Proceeds from the issuance of
common stock and accompanying warrants |
|
|
10,653 |
|
|
|
1,685 |
|
Share issuance costs |
|
|
(1,015 |
) |
|
|
(247 |
) |
Proceeds from the exercise of
stock options and warrants |
|
|
— |
|
|
|
215 |
|
Proceeds from Paycheck
Protection Program Loan |
|
|
323 |
|
|
|
— |
|
Repayment of Paycheck
Protection Program Loan |
|
|
(323 |
) |
|
|
— |
|
Net cash provided by
financing activities |
|
|
9,638 |
|
|
|
1,653 |
|
Effect of foreign
exchange rate changes on cash |
|
|
(19 |
) |
|
|
(9 |
) |
Net decrease in
cash |
|
|
(2,128 |
) |
|
|
(20,124 |
) |
Cash at beginning of
year |
|
|
5,459 |
|
|
|
25,583 |
|
Cash at end of
year |
|
$ |
3,331 |
|
|
$ |
5,459 |
|
|
|
|
|
|
|
|
|
|
Investor Relations Contact:
Westwicke Partners on behalf of Helius Medical Technologies,
Inc.Jack Powell, Vice
Presidentinvestorrelations@heliusmedical.com
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