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 ended
June 30, 2021.
Second Quarter and Recent Business Updates
- Frederick Fantazzia appointed Vice
President of Sales & Marketing, North America, June 1,
2021
- Dane Andreeff and Jeffrey Mathiesen
appointed President & Chief Executive Officer and Chief
Financial Officer, respectively, June 14, 2021
- Antonella Favit-Van Pelt, M.D.,
Ph.D. appointed Chief Medical Officer, July 7, 2021
- New website launched for U.S.-based
patients and physicians: https://ponstreatment.com
Second Quarter 2021 Financial Summary
- Revenue: $71 thousand, vs. $133 thousand in Q2 2020
- Operating loss: $6.2 million vs.
$3.7 million in Q2 2020
- Q2 2021 included $1.9 million of
increased non-cash stock-based compensation expense comprised of a
one-time fully vested stock option grant valued at $1.0 million and
stock options granted to key management and sales executives
- Net loss: $6.0 million vs. $3.4
million in Q2 2020
- Cash balance: $7.4 million at
June 30, 2021 vs. $3.3 million at December 31, 2020
“Helius made important progress during the
second quarter and in recent weeks in preparing for U.S.
commercialization, following the receipt of U.S. marketing
authorization of our PoNS device for MS in late March,” said Dane
Andreeff, President and Chief Executive Officer of Helius. “Most
notably, we enhanced and expanded our senior leadership team with
the appointment of several highly qualified individuals, including
a Vice President of Sales and Marketing for North America who will
inform and lead our strategy to commercialize in the U.S. We also
secured many of the required state licenses that will enable us to
distribute and sell our PoNS device and are now cleared to sell in
approximately 85% of states in the U.S. Lastly, we continued to
develop our go-to-market strategy by refining our plan to initially
target the estimated 130,000 MS patients with gait deficit who may
require physical therapy. With respect to our operations in Canada,
although the country remained severely impacted by the effects of
the COVID-19 pandemic during the second quarter, with restrictions
on both the clinics and patients we serve, we are cautiously
optimistic that these headwinds will moderate in the second half of
2021 as the operating environment begins to recover.”
Mr. Andreeff continued: “During the second half
of this year, we will remain keenly focused on pursuing our
pre-commercial activities in order to meet our goal of beginning
U.S. commercialization of our PoNS Treatment during the first
quarter of 2022. Specifically, we plan to begin building our
commercial team and appropriately engage centers of excellence to
allow them to gain experience with PoNS in the target population,
with the goal that they will then disseminate their experience with
PoNS to colleagues and health care providers. The focus of these
efforts will include the 10 states we have identified that comprise
more than 50% of the targeted MS patients. We will also be engaging
with payers in our pursuit to establish PoNS pricing in line with
benchmark pricing for comparable devices used in the
neurorehabilitation space. By executing on these near-term
initiatives, we aim to bring our innovative PoNS technology to the
aid of U.S. patients as quickly and efficiently as possible, which
we believe represents the best path to creating value for our
shareholders.”
Second Quarter 2021 Financial Results
Total revenue for the second quarter of 2021 was
$71 thousand, compared to $133 thousand in the second quarter of
2020. Product sales represented 89% of total revenue in the second
quarter of 2021 compared to 95% in the prior year period. 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 11% of
sales in the second quarter of 2021, compared with 5% of sales in
the prior year period.
Gross profit for the second quarter of 2021 was
$4 thousand, compared to gross profit of $69 thousand in the second
quarter of 2020.
Operating expenses for the second quarter of
2021 increased $2.4 million, or 63% year-over-year, to $6.2
million, compared to $3.8 million in the second quarter of 2020.
Operating expenses in the second quarter of 2021 included a $1.9
million increase in non-cash stock-based compensation expense
comprised of a one-time fully vested stock option grant valued at
$1.0 million and stock options granted in conjunction with the
addition of key management and sales executives.
Operating loss for the second quarter of 2021
increased $2.5 million, or 66% year-over-year, to $6.2 million,
compared to $3.7 million in the second quarter of 2020.
Total other income for the second quarter of
2021 was $185 thousand, compared to total other income of $361
thousand in the second quarter of 2020.
Net loss for the second quarter of 2021 was $6.0
million, or $(2.58) per basic and diluted common share, compared to
a net loss of $3.4 million, or $(2.90) per basic and diluted common
share, in the second quarter of 2020. Weighted average shares used
to compute basic and diluted net loss per common share were 2.3
million and 1.2 million for the second quarter of 2021 and 2020,
respectively.
Six Months Ended June 30, 2021
Financial Results
Total revenue for the six months ended
June 30, 2021 was $155 thousand, compared to $339 thousand for
the six months ended June 30, 2020. Product sales represented
90% of total revenue for the six months ended June 30, 2021,
compared to 94% of total revenue for the six months ended
June 30, 2020. 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 10% of total revenue for the six months ended
June 30, 2021, compared to 6% of total revenue for the six
months ended June 30, 2020.
Gross profit for the six months ended
June 30, 2021 was $72 thousand, compared to gross profit of
$174 thousand for the six months ended June 30, 2020.
Operating expenses for the six months ended June 30, 2021
increased $1.8 million, or 23% year-over-year, to $9.7 million,
compared to $7.9 million for the six months ended June 30,
2020.
Operating loss for the six months ended
June 30, 2021 increased $2.0 million, or 25% year-over-year,
to $9.7 million, compared to operating loss of $7.7 million for the
six months ended June 30, 2020. Operating expenses in the six
months ended June 30, 2021 included a $1.7 million increase in
stock-based compensation expense comprised of a one-time fully
vested stock option grant valued at $1.0 million and stock options
granted in conjunction with the addition of key management and
sales executives.
Total other income for the six months ended
June 30, 2021 was $324 thousand, compared to $394 thousand of
total other expense for the six months ended June 30,
2020.
Net loss for the six months ended June 30,
2021 was $9.3 million, or $(4.29) per basic and diluted common
share, compared to net loss of $8.1 million, or $(7.85) per basic
and diluted common share, for the six months ended June 30,
2020. Weighted average shares used to compute basic and diluted net
per share were 2.2 million and 1.0 million for the six months ended
June 30, 2021 and the six months ended June 30, 2020,
respectively.
Net cash provided by financing activities during
the six months ended June 30, 2021 was $10.8 million.
As of June 30, 2021, the Company had cash
of $7.4 million, compared to $3.3 million at December 31,
2020. The Company had no debt outstanding at June 30,
2021.
Conference Call
Management will host a conference call at 5:00
p.m. Eastern Time on August 12, 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 13721027. 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 13721027. 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 innovative non-surgical device, inclusive of a controller and
mouthpiece, which delivers electrical stimulation to the surface of
the tongue to provide treatment of gait deficit. The PoNS device is
indicated for use in the United States as a short term treatment of
gait deficit due to mild-to-moderate symptoms from multiple
sclerosis (“MS”) and is to be used as an adjunct to a supervised
therapeutic exercise program in patients 22 years of age and over
by prescription only. It is authorized for sale in Canada as a
class II, non-implantable, medical device intended as a short term
treatment (14 weeks) of gait deficit due to mild and moderate
symptoms from 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 European Union (“EU”) and
Australia (“AUS”). It is currently under premarket review by the
AUS Therapeutic Goods Administration. 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,”
“will,” “goal,” “aim to” 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 pre-commercial activities for the PoNS device, and
expected time to begin commercialization of the PoNS device in the
U.S..
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 Company’s capital requirements to
achieve its business objectives, the impact of the COVID-19
pandemic, the Company’s ability to train physical therapists in the
supervision of the use of the PoNS Treatment, the Company’s ability
to secure contracts with rehabilitation clinics, the Company’s
ability to obtain national Medicare coverage and to obtain a
reimbursement code so that the PoNS device is covered by Medicare
and Medicaid, the Company’s ability to build internal commercial
infrastructure, secure state distribution licenses, build a
commercial team and build relationships with Key Opinion Leaders,
neurology experts and neurorehabilitation centers, market awareness
of the PoNS device, future clinical trials and the clinical
development process, manufacturing and supply chain risks,
potential changes to the MCIT program resulting from the 60-day
deferral of the program implementation, the product development
process and FDA regulatory submission review and approval process,
other development activities, ongoing government regulation, and
other risks detailed from time to time in the “Risk Factors”
section of the Company’s Annual Report on Form 10-K for the year
ended December 31, 2020, its Quarterly Report on Form 10-Q for the
quarter ended June 30, 2021 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)
|
June 30, 2021 |
|
|
December 31, 2020 |
|
ASSETS |
|
|
|
|
|
|
|
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 |
|
LIABILITIES AND STOCKHOLDERS' EQUITY |
|
|
|
|
|
|
|
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 |
|
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 |
|
Helius Medical Technologies,
Inc.Unaudited Consolidated Statements of
Operations and Comprehensive Loss (Amounts in
thousands except share and per share data)
|
Three Months Ended |
|
|
Six Months Ended |
|
|
June 30, |
|
|
June 30, |
|
|
2021 |
|
|
2020 |
|
|
2021 |
|
|
2020 |
|
Revenue: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Product sales |
$ |
63 |
|
|
$ |
126 |
|
|
$ |
140 |
|
|
$ |
317 |
|
Fee revenue |
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
9 |
|
License revenue |
|
8 |
|
|
|
7 |
|
|
|
15 |
|
|
|
13 |
|
Total operating
revenue |
|
71 |
|
|
|
133 |
|
|
|
155 |
|
|
|
339 |
|
Cost of
sales: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cost of product sales |
|
67 |
|
|
|
64 |
|
|
|
83 |
|
|
|
165 |
|
Gross
profit |
|
4 |
|
|
|
69 |
|
|
|
72 |
|
|
|
174 |
|
Operating
expenses: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Research and development |
|
1,377 |
|
|
|
1,308 |
|
|
|
2,694 |
|
|
|
2,428 |
|
Selling, general and administrative |
|
4,744 |
|
|
|
2,394 |
|
|
|
6,939 |
|
|
|
5,255 |
|
Amortization expense |
|
49 |
|
|
|
89 |
|
|
|
106 |
|
|
|
215 |
|
Total operating expenses |
|
6,170 |
|
|
|
3,791 |
|
|
|
9,739 |
|
|
|
7,898 |
|
Operating
loss |
|
(6,166 |
) |
|
|
(3,722 |
) |
|
|
(9,667 |
) |
|
|
(7,724 |
) |
Other income
(expense): |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Other income |
|
— |
|
|
|
56 |
|
|
|
— |
|
|
|
63 |
|
Change in fair value of derivative financial instruments |
|
— |
|
|
|
(1 |
) |
|
|
— |
|
|
|
3 |
|
Foreign exchange gain (loss) |
|
185 |
|
|
|
306 |
|
|
|
324 |
|
|
|
(460 |
) |
Total other income
(expense) |
|
185 |
|
|
|
361 |
|
|
|
324 |
|
|
|
(394 |
) |
Net loss |
|
(5,981 |
) |
|
|
(3,361 |
) |
|
|
(9,343 |
) |
|
|
(8,118 |
) |
Other comprehensive
loss: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Foreign currency translation adjustments |
|
(185 |
) |
|
|
(255 |
) |
|
|
(313 |
) |
|
|
381 |
|
Comprehensive
loss |
$ |
(6,166 |
) |
|
$ |
(3,616 |
) |
|
$ |
(9,656 |
) |
|
$ |
(7,737 |
) |
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 |
|
Helius Medical Technologies,
Inc.Unaudited Condensed Consolidated Statements of
Cash Flows(Amounts in thousands)
|
Six Months Ended |
|
|
June 30, |
|
|
2021 |
|
|
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 from 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 issuance of
common stock and accompanying warrants |
|
11,037 |
|
|
|
7,233 |
|
Share issuance costs |
|
(1,523 |
) |
|
|
(506 |
) |
Proceeds from the exercise of
warrants |
|
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
year |
|
3,331 |
|
|
|
5,459 |
|
Cash at end of
year |
$ |
7,425 |
|
|
$ |
5,264 |
|
Investor Relations Contact:
Westwicke on behalf of Helius Medical Technologies, Inc.
Jack Powell, Vice President
investorrelations@heliusmedical.com
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