0001558370-24-004260 | 10-K | XBRL Viewer | Helius Medical Technologies INC

DEFINED CONTRIBUTION PLAN	12 Months Ended
Dec. 31, 2023
DEFINED CONTRIBUTION PLAN
DEFINED CONTRIBUTION PLAN	12.DEFINED CONTRIBUTION PLAN The Company’s employees in the United States are eligible to participate in the Helius Medical Inc. Savings Plan, as amended, a safe harbor 401(k) plan (“401(k) Plan”). The 401(k) Plan allows eligible employees to make contributions through payroll deductions up to IRS limits. The Company matches the first 3% of the participant's annual eligible compensation contributed to the plan on a dollar-for-dollar basis and matches the next 2% of the participant's annual eligible compensation to the plan on a 50% basis. Pursuant to the 401(k) safe harbor provisions, the Company’s matching contributions are 100% vested. For the years ended December 31, 2023 and 2022, the Company’s defined contribution plan expense was $148 thousand and $143 thousand, respectively.

DEFINED CONTRIBUTION PLAN

12 Months Ended

Dec. 31, 2023

12.DEFINED CONTRIBUTION PLAN

The Company’s employees in the United States are eligible to participate in the Helius Medical Inc. Savings Plan, as amended, a safe harbor 401(k) plan (“401(k) Plan”). The 401(k) Plan allows eligible employees to make contributions through payroll deductions up to IRS limits. The Company matches the first 3% of the participant's annual eligible compensation contributed to the plan on a dollar-for-dollar basis and matches the next 2% of the participant's annual eligible compensation to the plan on a 50% basis. Pursuant to the 401(k) safe harbor provisions, the Company’s matching contributions are 100% vested. For the years ended December 31, 2023 and 2022, the Company’s defined contribution plan expense was $148 thousand and $143 thousand, respectively.

GOODWILL AND FIXED ASSET IMPAIRMENT (Details) $ in Thousands	1 Months Ended	3 Months Ended	9 Months Ended
	Sep. 30, 2022 USD ($)	Sep. 30, 2023 USD ($)	Sep. 30, 2022 item
GOODWILL AND FIXED ASSET IMPAIRMENT
Long-lived tangible assets impairment charges		$ 159
Goodwill impairment charge	$ 757
Number of reporting units \| item			1

Consolidated Balance Sheets - USD ($) $ in Thousands	Dec. 31, 2023	Dec. 31, 2022
Current assets
Cash and cash equivalents	$ 5,182	$ 14,549
Accounts receivable, net	117	71
Other receivables	520	272
Inventory, net	457	589
Prepaid expenses and other current assets	1,162	1,216
Total current assets	7,438	16,697
Property and equipment, net	178	347
Intangible assets, net	24	140
Operating lease right-of-use asset, net	52	103
Total assets	7,692	17,287
Current liabilities
Accounts payable	531	627
Accrued and other current liabilities	1,260	1,280
Current portion of operating lease liabilities	45	54
Current portion of deferred revenue	43	27
Total current liabilities	1,879	1,988
Operating lease liabilities, net of current portion	12	56
Deferred revenue, net of current portion	128	175
Derivative liability	3,323	6,917
Total liabilities	5,342	9,136
Commitments and contingencies
Stockholders' equity
Class A common stock, $0.001 par value; 150,000,000 shares authorized; 714,590 and 564,094 shares issued and outstanding as of December 31, 2023 and December 31, 2022, respectively	1	1
Additional paid-in capital	162,979	159,645
Accumulated deficit	(159,957)	(151,107)
Accumulated other comprehensive loss	(673)	(388)
Total stockholders' equity	2,350	8,151
Total liabilities and stockholders' equity	$ 7,692	$ 17,287

Consolidated Statements of Cash Flows - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2023	Dec. 31, 2022
Cash flows from operating activities:
Net loss	$ (8,850)	$ (14,072)
Adjustments to reconcile net loss to net cash used in operating activities:
Change in fair value of derivative liability	(2,966)	(3,027)
Stock-based compensation expense	1,629	2,254
Common stock issued for services		34
Foreign exchange (gain) loss	(286)	746
Depreciation expense	45	74
Amortization expense	117	181
Goodwill and fixed asset impairment	159	757
Provision for (reversal of) inventory reserve	(5)	(2)
Non-cash operating lease expense	52	51
Changes in operating assets and liabilities:
Accounts receivable	(44)	(9)
Other receivables	(247)	(94)
Inventory	137	(111)
Prepaid expense and other current assets	54	(354)
Operating lease liabilities	(53)	(44)
Accounts payable	(103)	(418)
Accrued and other current liabilities	(20)	(152)
Deferred revenue	(35)	(124)
Net cash used in operating activities	(10,416)	(14,310)
Cash flows from investing activities:
Purchase of property and equipment	(29)	(17)
Proceeds from sale of property and equipment		6
Net cash used in investing activities	(29)	(11)
Cash flows from financing activities:
Proceeds from issuance of common stock	500	18,644
Proceeds from exercise of warrants	642
Share issuance costs	(65)	(775)
Net cash provided by financing activities	1,077	17,869
Effect of currency exchange rate changes on cash and cash equivalents	1	(4)
Net increase (decrease) in cash and cash equivalents	(9,367)	3,544
Cash and cash equivalents at beginning of period	14,549	11,005
Cash and cash equivalents at end of period	5,182	14,549
Supplemental cash flow information
Cash paid for interest (share issuance costs allocated to derivative liability)		927
Non-cash investing and financing transactions:
Right-of-use assets obtained in exchange for new lease liabilities		$ 151
Derivative warrant liability reclassified to equity on exercise of warrants	$ 628

STOCK-BASED COMPENSATION - Stock Option Activity (Details) - USD ($) $ / shares in Units, $ in Thousands	12 Months Ended
	Dec. 31, 2023	Dec. 31, 2022
Stock option activity, Shares
Outstanding, beginning of period (in shares)	23,800
Granted (in shares)	223,268
Forfeited (in shares)	(1,238)
Outstanding, end of period (in shares)	245,830	23,800
Exercisable (in shares)	98,350
Stock option activity, Weighted Average Exercise Price
Outstanding (in dollars per share)	$ 76.28	$ 670.36
Granted (in dollars per share)	14.63
Forfeited (in dollars per share)	377.94
Exercisable (in dollars per share)	$ 149.43
Additional information
Weighted Average Remaining Contractual Term, Outstanding	9 years 10 days	8 years 6 months 21 days
Weighted Average Remaining Contractual Term, Exercisable	8 years 11 months 4 days
Aggregate Intrinsic Value , Outstanding	$ 5
Aggregate Intrinsic Value, Exercisable	$ 4

COMMITMENTS AND CONTINGENCIES

12 Months Ended

Dec. 31, 2023

COMMITMENTS AND CONTINGENCIES.

COMMITMENTS AND CONTINGENCIES

13.COMMITMENTS AND CONTINGENCIES

The Company is obligated under a license agreement with Advanced NeuroRehabilitation, LLC (“ANR”) to pay a 4% royalty on net revenue collected from the sale of devices covered by ANR’s patent pending technology, claims and knowhow. For the years ended December 31, 2023 and 2022, the Company recorded royalty expense from the sale of devices of approximately $24 thousand and $31 thousand, respectively, in its Consolidated Statements of Operations and Comprehensive Loss.

GOODWILL AND FIXED ASSET IMPAIRMENT

12 Months Ended

Dec. 31, 2023

GOODWILL AND FIXED ASSET IMPAIRMENT

GOODWILL AND FIXED ASSET IMPAIRMENT

3.GOODWILL AND FIXED ASSETS IMPAIRMENT

Fixed Asset Impairment

The Company identified an impairment indicator associated with its property and equipment and performed interim impairment tests on the long-lived tangible assets as a result of a planned change of the Company’s contract manufacturing partner to be completed in less than one year from September 30, 2023. The interim impairment tests were performed using estimated market prices. The Company has determined that the fair value of certain long-lived tangible assets is lower than the related book values. Additionally, for certain long-lived tangible assets, it is more likely than not that those long-lived assets will be disposed significantly before the end of their previously estimated useful lives. As a result, impairment charges of $159 thousand were recorded in the third quarter of 2023 on its long-lived tangible assets.

Goodwill Impairment

In September 2022, the Company recorded an impairment charge of $757 thousand for the full write-down of the goodwill recorded in connection with its acquisition of Heuro Canada, Inc. The significant decline in the price of the Company’s Class A common stock (“common stock”) following the Company’s registered public offering in August 2022 was considered a triggering event for testing whether goodwill was impaired. The Company elected to perform a quantitative impairment test as of September 30, 2022 for its one identified reporting unit, and determined that the carrying value exceeded the estimated fair value based on the closing price of the Company’s common stock on the Nasdaq Capital Market.

BASIC AND DILUTED LOSS PER SHARE (Details) - USD ($) $ / shares in Units, $ in Thousands	12 Months Ended
	Dec. 31, 2023	Dec. 31, 2022
Basic:
Net loss available to common stockholders - basic	$ (8,850)	$ (14,072)
Weighted average common shares outstanding - basic (in shares)	607,890	269,929
Loss per share - basic (in dollar per share)	$ (14.56)	$ (52.13)
Diluted:
Net loss available to common stockholders - diluted	$ (8,850)	$ (14,072)
Weighted average common shares outstanding - diluted (in shares)	607,890	269,929
Loss per share - diluted (in dollar per share)	$ (14.56)	$ (52.13)

- Definition

The amount of net income (loss) for the period per each share of common stock or unit outstanding during the reporting period.

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The amount of net income (loss) for the period available to each share of common stock or common unit outstanding during the reporting period and to each share or unit that would have been outstanding assuming the issuance of common shares or units for all dilutive potential common shares or units outstanding during the reporting period.

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Amount, after deduction of tax, noncontrolling interests, dividends on preferred stock and participating securities, and addition from assumption of issuance of common shares for dilutive potential common shares; of income (loss) available to common shareholders.

+ References + Details

INCOME TAXES - Components of Deferred Income Tax Assets and Liabilities (Details) - USD ($) $ in Thousands	Dec. 31, 2023	Dec. 31, 2022
Deferred tax assets
Net operating loss carryforwards	$ 30,642	$ 29,130
Stock-based compensation	3,316	1,696
Research and development	2,164	1,642
Tax credit carryforwards	1,267	1,114
Compensation and benefits	120	108
Unrealized foreign currency losses	33	102
Deferred revenue	45	53
Lease liability	13	25
Inventory reserve	13	18
Total deferred tax assets	37,613	33,888
Deferred tax liabilities
Property and equipment	(16)	(57)
Intangible assets	(7)	(37)
Right-of-use asset	(12)	(23)
Total deferred tax liabilities	(35)	(117)
Valuation allowance	$ (37,578)	$ (33,771)

SUPPLEMENTAL BALANCE SHEET DISCLOSURES - Prepaid expenses and other current assets (Details) - USD ($) $ in Thousands	Dec. 31, 2023	Dec. 31, 2022
SUPPLEMENTAL BALANCE SHEET DISCLOSURES
Prepaid expenses	$ 689	$ 817
Inventory related	333	399
Deferred offering costs	140
Total prepaid expenses and other current assets	$ 1,162	$ 1,216

BASIC AND DILUTED LOSS PER SHARE (Tables)

12 Months Ended

Dec. 31, 2023

BASIC AND DILUTED LOSS PER SHARE

Schedule of computation of basic and diluted loss per share

The table below presents the computation of basic and diluted loss per share (in thousands, except share and per share information):


	Years Ended
	December 31,
	2023		2022
Basic:
Net loss available to common stockholders — basic	$	(8,850)	$	(14,072)
Weighted average common shares outstanding — basic		607,890		269,929
Loss per share - basic	$	(14.56)	$	(52.13)

Diluted:
Net loss available to common stockholders — diluted ⁽¹⁾	$	(8,850)	$	(14,072)
Weighted average common shares outstanding — diluted ⁽¹⁾		607,890		269,929
Loss per share — diluted	$	(14.56)	$	(52.13)

⁽¹⁾

For the years ended December 31, 2023 and 2022, no adjustment was made to the numerator and no incremental shares were added to the denominator for the Public Warrants being accounted for as a derivative liability, as the Public Warrants were out-of-the-money. Refer to Note 8 for additional information about the Public Warrants.

Schedule of anti-dilutive securities


	Years Ended
	December 31,
	2023	2022
Stock options	245,830	23,800
Restricted stock units	2,228	160
Warrants	637,059	731,853

COMMON STOCK AND WARRANTS - ATM Offering, Series B Preferred Stock, Stock Split, August 2022 Issuance of Common Stock and Warrants (Details)							6 Months Ended	12 Months Ended
	Feb. 08, 2024 USD ($) shares	Aug. 11, 2023	Jun. 23, 2023 USD ($)	May 24, 2023 $ / shares	Mar. 23, 2023 USD ($) Vote	Aug. 09, 2022 USD ($) shares	Dec. 31, 2023 USD ($) shares	Dec. 31, 2023 USD ($)	Dec. 31, 2022 USD ($) $ / shares shares
Common stock and warrants
Fair value of derivative liability							$ 3,323,000	$ 3,323,000	$ 6,917,000
Issuance cost allocated to equity								65,000	758,000
Value of issuance allocated to equity								500,000	8,056,000
Share issuance costs								65,000	775,000
Issuance cost allocated to derivative liability									927,000
Proceeds from issuance of common stock								500,000	18,644,000
Reverse stock split		0.02
Public Warrants
Common stock and warrants
Shares of common stock purchasable with warrants \| shares						720,000
Additional Paid-In Capital
Common stock and warrants
Issuance cost allocated to equity								65,000	758,000
Value of issuance allocated to equity								500,000	8,055,000
At-The-Market Offering
Common stock and warrants
Shares issued \| shares	148,201						53,010
Net proceeds from issuance of common stock	$ 1,300,000						$ 400,000
Share issuance costs							100,000
Aggregate offering amount			$ 2,000,000.0
Maximum commission rate, percentage of gross proceeds pursuant to the Sales Agreement			3.00%
August 9, 2022 registered public offering
Common stock and warrants
Shares issued \| shares						480,000
Fair value of derivative liability						$ 9,900,000	$ 3,300,000	$ 3,300,000	$ 6,900,000
Value of issuance allocated to equity						8,100,000
Issuance cost allocated to derivative liability						900,000
August 9, 2022 registered public offering \| Additional Paid-In Capital
Common stock and warrants
Issuance cost allocated to equity						800,000
LPC Purchase Agreement
Common stock and warrants
Price per share \| $ / shares									$ 82.32
Common stock issued under purchase agreement, Shares \| shares									7,827
Public Offering
Common stock and warrants
Gross proceeds from stock and warrants						18,000,000
Issuance cost for shares and warrants, allocated between equity and derivative						$ 1,700,000
Series B Preferred Stock
Common stock and warrants
Dividend declared in shares of Series B Preferred Stock for each outstanding share of Class A common stock					0.001
Number of voting rights per share of preferred stock each holder is entitled to \| Vote					1,000,000
Preferred stock redemption rate (in dollars per share) \| $ / shares				$ 0.001
Class A Common Stock \| Minimum
Common stock and warrants
Reverse stock split				0.10
Class A Common Stock \| Maximum
Common stock and warrants
Reverse stock split				0.0125

INTANGIBLE ASSETS (Tables)

12 Months Ended

Dec. 31, 2023

INTANGIBLE ASSETS

Schedule of intangible assets

Intangible assets consist of the following (in thousands):


			December 31,
			2023						2022
							Net						Net
	Useful Life				Accumulated		Carrying				Accumulated		Carrying
	(in years)		Cost		Amortization		Value		Cost		Amortization		Value
Reacquired rights		3.87	$	486	$	(486)	$	—	$	475	$	(388)	$	87
Acquired proprietary software		5.00		145		(121)		24		142		(90)		52
Internally developed software		3.00		84		(84)		—		84		(83)		1
Total intangible assets			$	715	$	(691)	$	24	$	701	$	(561)	$	140

SUPPLEMENTAL BALANCE SHEET DISCLOSURES

12 Months Ended

Dec. 31, 2023

SUPPLEMENTAL BALANCE SHEET DISCLOSURES

SUPPLEMENTAL BALANCE SHEET DISCLOSURES

4.SUPPLEMENTAL BALANCE SHEET DISCLOSURES

Components of selected captions in the Consolidated Balance Sheets are as follows:

Accounts receivable, net

Accounts receivable are net of allowance for doubtful accounts of $0 and less than $1 thousand as of December 31, 2023 and 2022, respectively.

Inventory, net (in thousands)


	December 31,
	2023		2022
Raw materials	$	351	$	344
Work-in-process		67		284
Finished goods		96		39
Inventory, gross		514		667
Inventory reserve		(57)		(78)
Inventory, net	$	457	$	589

During the years ended December 31, 2023 and 2022, existing reserves of $16 thousand and $175 thousand were charged against inventory, respectively.

Prepaid expenses and other current assets (in thousands)


	December 31,
	2023		2022
Prepaid expenses	$	689	$	817
Inventory related		333		399
Deferred offering costs		140		—
Total prepaid expenses and other current assets	$	1,162	$	1,216

Property and equipment, net (in thousands)


	December 31,
	2023		2022
Furniture and fixtures	$	59	$	59
Equipment		243		373
Computer software and hardware		235		229
Property and equipment		537		661
Accumulated depreciation		(359)		(314)
Property and equipment, net	$	178	$	347

Accrued and other current liabilities (in thousands)


	December 31,
	2023		2022
Insurance payable	$	446	$	592
Employees benefits		509		509
Professional services		52		119
Franchise tax		168		—
Other		85		60
Total accrued and other current liabilities	$	1,260	$	1,280

Deferred revenue

Exclusive Distribution Agreement

Pursuant to an Exclusive Distribution Agreement with Health Tech Connex Inc. (“HTC”) (“Exclusivity Agreement”) entered into on March 3, 2023, subject to certain terms and conditions, the Company granted to HTC the exclusive right to provide PoNS Therapy® in the Fraser Valley and Vancouver metro regions of British Columbia. HTC is to purchase the PoNS devices for use in these regions exclusively from the Company and on terms no less favorable than the then-current standard terms and conditions. This Exclusivity Agreement replaced the previous Clinical Research and Co-Promotion Agreement (“Co-Promotion Agreement”) between the parties entered into in October 2019 that included a similar exclusive right provision. The exclusive right under the Exclusivity Agreement was granted for a value of CAD$273 thousand, which is represented by the unamortized up-front payment under the former Co-Promotion Agreement. The initial term of the Exclusivity Agreement expires on December 31, 2027, and is renewable by HTC for one additional five-year term upon sixty days’ written notice to the Company.

Deferred revenue as of both December 31, 2023 and 2022 is comprised of the remaining unamortized amount under these agreements. Revenue recognized is included in other revenue in the Consolidated Statements of Operations and Comprehensive Loss.

LEASES (Details) $ in Thousands	12 Months Ended
LEASES (Details) $ in Thousands	Dec. 31, 2023 USD ($) lease	Dec. 31, 2022 USD ($)
LEASES
Number of operating leases \| lease	1
Lessee options to extend lease	false
Operating lease costs	$ 54	$ 56
Maturities of operating lease liabilities
2024	46
2025	12
Total lease payments	58
Less: imputed interest	(1)
Total lease liabilities	$ 57
Other disclosures
Weighted average remaining lease term (in years)	1 year 3 months
Weighted average discount rate	4.55%

INCOME TAXES - Reconciliation of Income Tax Provision Computed at Statutory Rates (Details) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2023	Dec. 31, 2022
INCOME TAXES
Income tax benefit at United States federal statutory rate	$ (1,858)	$ (2,955)
Increase (decrease) in income tax recovery resulting from:
Derivative liability	(623)	(636)
Share based payments	(791)	500
Goodwill impairment		198
Tax credits	(142)	(157)
Foreign income taxed at foreign rate	(9)	(91)
Other permanent difference	126	59
Other	144	164
Increase in valuation allowance	3,153	2,918
Income tax expense	$ 0	$ 0

STOCK-BASED COMPENSATION - Plan information (Details) - shares	12 Months Ended
	Dec. 31, 2023	Jan. 01, 2024
2022 Plan
STOCK-BASED COMPENSATION
Expiration period	10 years
Automatic increase to number of shares authorized for issuance, as a percentage of fully diluted shares of common stock outstanding	20.00%
Shares authorized for issuance	264,319	319,941
Shares of common stock available for issuance		74,643
2022 Plan \| Minimum
STOCK-BASED COMPENSATION
Vesting period	1 year
2022 Plan \| Maximum
STOCK-BASED COMPENSATION
Vesting period	3 years
Inducement Plan
STOCK-BASED COMPENSATION
Shares of common stock available for issuance	9,240
Inducement Plan \| Minimum
STOCK-BASED COMPENSATION
Vesting period	4 years
Inducement Plan \| Maximum
STOCK-BASED COMPENSATION
Vesting period	10 years

INCOME TAXES - Loss Before Provision for Income Taxes (Details) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2023	Dec. 31, 2022
INCOME TAXES
U.S.	$ 8,689	$ 12,417
Non-U.S.	161	1,655
Loss before income taxes	$ 8,850	$ 14,072

- Definition

Amount of income (loss) from continuing operations, including income (loss) from equity method investments, before deduction of income tax expense (benefit), and income (loss) attributable to noncontrolling interest.

+ References

Reference 1: http://www.xbrl.org/2003/role/disclosureRef
-Topic 944
-SubTopic 220
-Name Accounting Standards Codification
-Section S99
-Paragraph 1
-Subparagraph (SX 210.7-04(11))
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147483586/944-220-S99-1

Reference 2: http://www.xbrl.org/2003/role/disclosureRef
-Topic 280
-SubTopic 10
-Name Accounting Standards Codification
-Section 50
-Paragraph 22
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147482810/280-10-50-22

Reference 3: http://www.xbrl.org/2003/role/disclosureRef
-Topic 280
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-Name Accounting Standards Codification
-Section 50
-Paragraph 30
-Subparagraph (b)
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147482810/280-10-50-30

Reference 4: http://www.xbrl.org/2003/role/disclosureRef
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-Name Accounting Standards Codification
-Section 50
-Paragraph 32
-Subparagraph (f)
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147482810/280-10-50-32

Reference 5: http://www.xbrl.org/2003/role/exampleRef
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-Name Accounting Standards Codification
-Section 50
-Paragraph 31
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147482810/280-10-50-31

Reference 6: http://www.xbrl.org/2003/role/disclosureRef
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-Paragraph 32
-Subparagraph (c)
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Reference 7: http://www.xbrl.org/2003/role/disclosureRef
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-Name Accounting Standards Codification
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-Paragraph 1
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+ Details

LEASES (Tables)

12 Months Ended

Dec. 31, 2023

LEASES

Schedule of maturities of operating lease liabilities

Maturities of operating lease liabilities as of December 31, 2023 were as follows (in thousands):


2024	$	46
2025		12
Total lease payments		58
Less: imputed interest		(1)
Total lease liabilities	$	57

The following table provides information on the lease terms and discount rates for the operating lease as of December 31, 2023:


Weighted average remaining lease term (in years)	1.25
Weighted average discount rate	4.55	%

DESCRIPTION OF BUSINESS

12 Months Ended

Dec. 31, 2023

BASIS OF PRESENTATION

DESCRIPTION OF BUSINESS

1.DESCRIPTION OF BUSINESS

Helius Medical Technologies, Inc. (together with its wholly owned subsidiaries the “Company”) conducts operations in the United States and Canada. The Company’s product, known as the Portable Neuromodulation Stimulator (“PoNS®”) has been commercially available in Canada since March 2019. The Company began accepting prescriptions for its PoNS product in the United States in the first quarter of 2022, and the first commercial sales began in April 2022. PoNS is authorized for sale as a Class IIa medical device in Australia. The Company is working to establish a distribution partner for Australia but has not yet had any commercial sales of PoNS in Australia.

Going Concern Uncertainty

As of December 31, 2023, the Company had cash and cash equivalents of $5.2 million. For the year ended December 31, 2023, the Company had an operating loss of $12.4 million, and as of December 31, 2023, its accumulated deficit was $160.0 million. For the year ended December 31, 2023, the Company had $0.6 million of net revenue from the commercial sale of products. The Company expects to continue to incur operating losses and net cash outflows until such time as it generates a level of revenue to support its cost structure. There is no assurance that the Company will achieve profitable operations, and, if achieved, whether it will be sustained on a continued basis. These factors indicate substantial doubt about the Company’s ability to continue as a going concern within one year after the date the consolidated financial statements are filed. The Company’s 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 and cash equivalents on hand, cash received from the sale of its PoNS device in the U.S. and Canada and by raising additional capital through equity or debt financings. There can be no assurance that the Company will be successful in raising additional capital or that such capital, if available, will be on terms that are acceptable to the Company. If the Company is unable to raise sufficient additional capital, the Company may be compelled to reduce the scope of its operations.

COMMON STOCK AND WARRANTS - Warrants (Details) - USD ($) $ / shares in Units, $ in Millions	12 Months Ended
	Dec. 31, 2023	Aug. 09, 2022
Public Warrants
Warrant activity
Number of warrants outstanding	627,090
Shares of common stock purchasable with warrants		720,000
Number of days, warrants exercise price reset	5 days
Warrant expiration period	5 years
Number of warrants exercised	(92,910)
Number of warrants cancelled	0
Gross proceeds from exercise of warrants	$ 0.6
Equity-classified Warrants
Warrant activity
Shares of common stock purchasable with warrants	9,969
Number of warrants exercised	0
Number of warrants cancelled	1,884
Equity-classified Warrants \| Weighted Average
Warrant activity
Exercise price	$ 819.77
Public Offering \| Public Warrants
Warrant activity
Exercise price	$ 6.9135

DEFINED CONTRIBUTION PLAN (Details) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2023	Dec. 31, 2022
DEFINED CONTRIBUTION PLAN
Percentage of first annual eligible compensation that employer matched	3.00%
Percentage of next annual eligible compensation that employer matched	2.00%
Percent of match	50.00%
Percentage of vesting	100.00%
Defined contribution plan expense	$ 148	$ 143

INCOME TAXES - Net operating losses (Details) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2023	Dec. 31, 2022
INCOME TAXES
Accrual relating to uncertain tax positions	$ 0	$ 0
2032-2037 \| Domestic
INCOME TAXES
Net operating losses	$ 39,561
2032-2037 \| Domestic \| Minimum
INCOME TAXES
Operating Loss Carryforwards, Expiration Date	Dec. 31, 2032
2032-2037 \| Domestic \| Maximum
INCOME TAXES
Operating Loss Carryforwards, Expiration Date	Dec. 31, 2037
Indefinite \| Domestic
INCOME TAXES
Net operating losses	$ 74,943
Indefinite \| State
INCOME TAXES
Net operating losses	3,213
2034-2043 \| State
INCOME TAXES
Net operating losses	$ 71,165
2034-2043 \| State \| Minimum
INCOME TAXES
Operating Loss Carryforwards, Expiration Date	Dec. 31, 2034
2034-2043 \| State \| Maximum
INCOME TAXES
Operating Loss Carryforwards, Expiration Date	Dec. 31, 2043
2034-2043 \| Foreign
INCOME TAXES
Net operating losses	$ 6,532
2034-2043 \| Foreign \| Minimum
INCOME TAXES
Operating Loss Carryforwards, Expiration Date	Dec. 31, 2034
2034-2043 \| Foreign \| Maximum
INCOME TAXES
Operating Loss Carryforwards, Expiration Date	Dec. 31, 2043

LEASES

12 Months Ended

Dec. 31, 2023

LEASES

LEASES

5.LEASES

The Company has an operating lease for office space with lease terms that commenced in January 2022 and will expire in March 2025. The lease does not contain any options to extend. Operating lease costs for the years ended December 31, 2023 and 2022 were $54 thousand and $56 thousand, respectively.

Maturities of operating lease liabilities as of December 31, 2023 were as follows (in thousands):


2024	$	46
2025		12
Total lease payments		58
Less: imputed interest		(1)
Total lease liabilities	$	57

The following table provides information on the lease terms and discount rates for the operating lease as of December 31, 2023:


Weighted average remaining lease term (in years)	1.25
Weighted average discount rate	4.55	%

SUPPLEMENTAL BALANCE SHEET DISCLOSURES - Employee Retention Credit (Details) $ in Millions	12 Months Ended
	Dec. 31, 2023 USD ($)
SUPPLEMENTAL BALANCE SHEET DISCLOSURES
Employee retention credit recorded against operating expenses	$ 0.5

SIGNIFICANT ACCOUNTING POLICIES - Additional Information (Details) $ in Millions	12 Months Ended
	Dec. 31, 2023 USD ($) segment
Schedule Of Significant Accounting Policies [Line Items]
Employee retention credit amount \| $	$ 0.5
Number of operating segments	1
Number of reportable segments	1
Furniture and fixtures
Schedule Of Significant Accounting Policies [Line Items]
Estimated useful life	7 years
Equipment \| Minimum
Schedule Of Significant Accounting Policies [Line Items]
Estimated useful life	5 years
Equipment \| Maximum
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

STOCK-BASED COMPENSATION - Fair value assumptions (Details) - Stock options - $ / shares	12 Months Ended
	Dec. 31, 2023	Dec. 31, 2022
STOCK-BASED COMPENSATION
Risk-free interest rate	3.93%	2.95%
Expected volatility	79.43%	74.91%
Expected term	5 years 8 months 12 days	5 years 8 months 12 days
Expected dividend yield	0.00%	0.00%
Fair value, per share	$ 10.17	$ 50.93

- Definition

Line items represent financial concepts included in a table. These concepts are used to disclose reportable information associated with domain members defined in one or many axes to the table.

+ References

Reference 1: http://www.xbrl.org/2003/role/disclosureRef
-Topic 718
-SubTopic 10
-Name Accounting Standards Codification
-Section 35
-Paragraph 1D
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-URI https://asc.fasb.org//1943274/2147480483/718-10-35-1D

Reference 2: http://www.xbrl.org/2003/role/disclosureRef
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Reference 4: http://www.xbrl.org/2003/role/disclosureRef
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-URI https://asc.fasb.org//1943274/2147480429/718-10-50-2

Reference 21: http://www.xbrl.org/2003/role/disclosureRef
-Topic 718
-SubTopic 10
-Name Accounting Standards Codification
-Section 50
-Paragraph 2
-Subparagraph (d)(2)
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147480429/718-10-50-2

Reference 22: http://www.xbrl.org/2003/role/disclosureRef
-Topic 718
-SubTopic 10
-Name Accounting Standards Codification
-Section 50
-Paragraph 2
-Subparagraph (e)(1)
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147480429/718-10-50-2

Reference 23: http://www.xbrl.org/2003/role/disclosureRef
-Topic 718
-SubTopic 10
-Name Accounting Standards Codification
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-Paragraph 2
-Subparagraph (e)(2)
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147480429/718-10-50-2

Reference 24: http://www.xbrl.org/2003/role/disclosureRef
-Topic 718
-SubTopic 10
-Name Accounting Standards Codification
-Section 50
-Paragraph 2
-Subparagraph (f)(2)(i)
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147480429/718-10-50-2

Reference 25: http://www.xbrl.org/2003/role/disclosureRef
-Topic 718
-SubTopic 10
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-Section 50
-Paragraph 2
-Subparagraph (f)(2)(ii)
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Reference 26: http://www.xbrl.org/2003/role/disclosureRef
-Topic 718
-SubTopic 10
-Name Accounting Standards Codification
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-Subparagraph (f)(2)(iii)
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147480429/718-10-50-2

Reference 27: http://www.xbrl.org/2003/role/disclosureRef
-Topic 718
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-Name Accounting Standards Codification
-Section 50
-Paragraph 2
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-URI https://asc.fasb.org//1943274/2147480429/718-10-50-2

Reference 28: http://www.xbrl.org/2003/role/disclosureRef
-Topic 718
-SubTopic 10
-Name Accounting Standards Codification
-Section 50
-Paragraph 2
-Subparagraph (f)(2)(v)
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147480429/718-10-50-2

+ Details

SUPPLEMENTAL BALANCE SHEET DISCLOSURES - Accounts receivable, net (Details) - USD ($) $ in Thousands	Dec. 31, 2023	Dec. 31, 2022
Accounts receivable, net
Allowance for credit losses	$ 0
Maximum
Accounts receivable, net
Allowance for credit losses		$ 1

INCOME TAXES

12 Months Ended

Dec. 31, 2023

INCOME TAXES

INCOME TAXES

11.INCOME TAXES

The Company's loss before provision for income taxes was generated from operations in the United States and outside of the United States as follows (in thousands):


	Years Ended December 31,
	2023		2022
U.S.	$	8,689	$	12,417
Non-U.S.		161		1,655
	$	8,850	$	14,072

A reconciliation of the United States federal statutory income tax rate to the Company's effective income tax rate is as follows (in thousands):


	Years Ended December 31,
	2023		2022
Income tax benefit at United States federal statutory rate	$	(1,858)	$	(2,955)
Derivative liability		(623)		(636)
Share based payments		(791)		500
Goodwill impairment		—		198
Tax credits		(142)		(157)
Foreign income taxed at foreign rate		(9)		(91)
Other permanent difference		126		59
Other		144		164
Increase in valuation allowance		3,153		2,918
Income tax expense	$	—	$	—

The components of deferred tax assets and liabilities are as follows (in thousands):


	As of December 31,
	2023		2022
Deferred tax assets
Net operating loss carryforwards	$	30,642	$	29,130
Stock-based compensation		3,316		1,696
Research and development		2,164		1,642
Tax credit carryforwards		1,267		1,114
Compensation and benefits		120		108
Unrealized foreign currency losses		33		102
Deferred revenue		45		53
Lease liability		13		25
Inventory reserve		13		18
Total deferred tax assets		37,613		33,888
Deferred tax liabilities
Property and equipment		(16)		(57)
Intangible assets		(7)		(37)
Right-of-use asset		(12)		(23)
Unrealized foreign currency gains		—		—
Total deferred tax liabilities		(35)		(117)
Valuation allowance		(37,578)		(33,771)
Net deferred tax assets	$	—	$	—

Net operating loss carryforwards and the related carryforward expiration periods as of December 31, 2023 are summarized as follows (in thousands):


		Carryforward
		Amount	Expiration
United States federal net operating losses	$	39,561	2032-2037
United States federal net operating losses		74,943	Indefinite
United States state net operating losses		71,165	2034-2043
United States state net operating losses		3,213	Indefinite
Canada federal net operating losses		6,532	2034-2043

The gross tax credit carryforwards and the related carryforward expiration periods as of December 31, 2023 are summarized as follows (in thousands):


		Carryforward
		Amount	Expiration
United States federal research expenditure tax credits	$	797	2034-2043
Canada federal research expenditure tax credits		470	2034-2037

Under the provisions of the Internal Revenue Code of 1986, as amended (the “Code”), the net operating loss carryforwards are subject to review and possible adjustment by the Internal Revenue Service and state tax authorities. Net operating loss carryforwards may become subject to an annual limitation in the event of certain cumulative changes in the ownership interest of significant shareholders over a three-year period in excess of 50 percent, as defined under Section 382 of the Code, as well as similar state provisions. This could substantially limit the amount of tax attributes that can be utilized annually to offset future taxable income or tax liabilities. The amount of the annual limitation is determined based on the value of the Company immediately prior to the ownership change. Subsequent ownership changes may further affect the limitation in future years. Although a formal Section 382 analysis has not yet been completed, the Company believes it is possible ownership changes have occurred. The annual limitation may result in the expiration of United States net operating losses and credits before utilization; however, due to the valuation allowance against deferred tax assets as of December 31, 2023, the net effect of any limitation will have no impact on results of operations.

The accounting guidance related to uncertain tax positions prescribes a recognition threshold and measurement attribute for recognition and measurement of a tax position taken or expected to be taken in a tax return. It also provides guidance on de-recognition, classification, interest and penalties, accounting in interim periods, disclosure and transition. As of both December 31, 2023 and 2022, the Company does not have an accrual relating to uncertain tax positions. It is not anticipated that unrecognized tax benefits would significantly increase or decrease within 12 months of the reporting date.

The Company files income tax returns in the United States and Canada. The Company’s tax returns are subject to tax examinations by United States federal and state tax authorities, or examinations by foreign tax authorities until the expiration of the respective statutes of limitation. The Company currently has no tax years under examination.

- Definition

The entire disclosure for income taxes. Disclosures may include net deferred tax liability or asset recognized in an enterprise's statement of financial position, net change during the year in the total valuation allowance, approximate tax effect of each type of temporary difference and carryforward that gives rise to a significant portion of deferred tax liabilities and deferred tax assets, utilization of a tax carryback, and tax uncertainties information.

+ References

Reference 1: http://www.xbrl.org/2003/role/disclosureRef
-Topic 946
-SubTopic 20
-Name Accounting Standards Codification
-Section 50
-Paragraph 13
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147480990/946-20-50-13

Reference 2: http://www.xbrl.org/2003/role/disclosureRef
-Topic 235
-SubTopic 10
-Name Accounting Standards Codification
-Section S99
-Paragraph 1
-Subparagraph (SX 210.4-08(h)(2))
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147480678/235-10-S99-1

Reference 3: http://www.xbrl.org/2003/role/disclosureRef
-Topic 740
-Name Accounting Standards Codification
-Publisher FASB
-URI https://asc.fasb.org//740/tableOfContent

Reference 4: http://www.xbrl.org/2003/role/disclosureRef
-Topic 740
-SubTopic 10
-Name Accounting Standards Codification
-Section 50
-Paragraph 14
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147482685/740-10-50-14

Reference 5: http://www.xbrl.org/2003/role/disclosureRef
-Topic 740
-SubTopic 10
-Name Accounting Standards Codification
-Section 50
-Paragraph 21
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147482685/740-10-50-21

Reference 6: http://www.xbrl.org/2003/role/disclosureRef
-Topic 740
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-Name Accounting Standards Codification
-Section 50
-Paragraph 1
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147482526/740-270-50-1

Reference 7: http://www.xbrl.org/2003/role/disclosureRef
-Topic 740
-SubTopic 10
-Name Accounting Standards Codification
-Section 50
-Paragraph 17
-Subparagraph (b)
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147482685/740-10-50-17

Reference 8: http://www.xbrl.org/2003/role/disclosureRef
-Topic 740
-SubTopic 10
-Name Accounting Standards Codification
-Section S99
-Paragraph 1
-Subparagraph (SAB TOPIC 6.I.5.Q1)
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147479360/740-10-S99-1

Reference 9: http://www.xbrl.org/2003/role/disclosureRef
-Topic 740
-SubTopic 10
-Name Accounting Standards Codification
-Section S99
-Paragraph 2
-Subparagraph (SAB Topic 11.C)
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147479360/740-10-S99-2

Reference 10: http://www.xbrl.org/2003/role/disclosureRef
-Topic 740
-SubTopic 30
-Name Accounting Standards Codification
-Section 50
-Paragraph 2
-Subparagraph (a)
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147482603/740-30-50-2

+ Details

ENTERPRISE-WIDE DISCLOSURES (Details) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2023	Dec. 31, 2022
Revenue disaggregated by geographic area
Product sales, net	$ 605	$ 778
Other revenue	39	9
Total revenue	$ 644	$ 787
Net product sales \| Customer \| Two customers
Revenue disaggregated by geographic area
Concentration of risk (percent)	65.00%
Net product sales \| Customer \| Single customer
Revenue disaggregated by geographic area
Concentration of risk (percent)		35.00%
Accounts receivable, net \| Customer \| Single customer
Revenue disaggregated by geographic area
Concentration of risk (percent)	83.00%	89.00%
United States
Revenue disaggregated by geographic area
Product sales, net	$ 324	$ 318
Canada
Revenue disaggregated by geographic area
Product sales, net	$ 281	$ 460

Consolidated Statements of Stockholders' Equity - USD ($) $ in Thousands	Class A Common Stock	Additional Paid-In Capital	Accumulated Deficit	Accumulated Other Comprehensive Loss	Total
Beginning Balance, Shares at Dec. 31, 2021	75,570
Beginning Balance at Dec. 31, 2021		$ 149,416	$ (137,035)	$ (1,125)	$ 11,256
Common stock issued under equity line of credit, Shares	7,827
Common stock issued under equity line of credit		644			644
Issuance of common stock in public offering, Shares	480,000
Issuance of common stock in public offering	$ 1	8,055			8,056
Share issuance costs		(758)			(758)
Settlement of restricted stock units, Shares	364
Common stock issued for services, Shares	173
Common stock issued for services		34			34
Stock-based compensation, Shares	160
Stock-based compensation		2,254			2,254
Other comprehensive loss (income)				737	737
Net Income (Loss)			(14,072)		(14,072)
Ending Balance, Shares at Dec. 31, 2022	564,094
Ending Balance at Dec. 31, 2022	$ 1	159,645	(151,107)	(388)	8,151
Issuance of common stock in public offering, Shares	53,010
Issuance of common stock in public offering		500			500
Share issuance costs		(65)			(65)
Exercise of warrants, Shares	92,910
Exercise of warrants		1,270			1,270
Settlement of restricted stock units, Shares	4,576
Stock-based compensation		1,629			1,629
Other comprehensive loss (income)				(285)	(285)
Net Income (Loss)			(8,850)		(8,850)
Ending Balance, Shares at Dec. 31, 2023	714,590
Ending Balance at Dec. 31, 2023	$ 1	$ 162,979	$ (159,957)	$ (673)	$ 2,350

COMMITMENTS AND CONTINGENCIES - License agreement (Details) - Advanced NeuroRehabilitation, LLC - License Agreement for Exclusive Right on Patent Pending Technology - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2023	Dec. 31, 2022
COMMITMENTS AND CONTINGENCIES
Percentage of royalty on net revenue	4.00%
Royalty expense	$ 24	$ 31

INTANGIBLE ASSETS - Estimated Amortization Expense (Details) $ in Thousands	Dec. 31, 2023 USD ($)
Estimated amortization expense
Amortization expense in next fiscal year	$ 24

DESCRIPTION OF BUSINESS (Details) - USD ($) $ in Thousands	12 Months Ended
DESCRIPTION OF BUSINESS (Details) - USD ($) $ in Thousands	Dec. 31, 2023	Dec. 31, 2022
BASIS OF PRESENTATION
Cash and cash equivalents	$ 5,182	$ 14,549
Operating loss	12,428	15,516
Accumulated deficit	159,957	151,107
Product sales, net	$ 605	$ 778

- Definition

Amount of accumulated undistributed earnings (deficit).

+ References + Details

- Definition

Amount, excluding tax collected from customer, of revenue from satisfaction of performance obligation by transferring promised good or service to customer. Tax collected from customer is tax assessed by governmental authority that is both imposed on and concurrent with specific revenue-producing transaction, including, but not limited to, sales, use, value added and excise.

+ References

Reference 1: http://www.xbrl.org/2003/role/disclosureRef
-Topic 924
-SubTopic 10
-Name Accounting Standards Codification
-Section S99
-Paragraph 1
-Subparagraph (SAB Topic 11.L)
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147479941/924-10-S99-1

Reference 2: http://www.xbrl.org/2003/role/disclosureRef
-Topic 606
-SubTopic 10
-Name Accounting Standards Codification
-Section 50
-Paragraph 5
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147479806/606-10-50-5

Reference 3: http://www.xbrl.org/2003/role/disclosureRef
-Topic 280
-SubTopic 10
-Name Accounting Standards Codification
-Section 50
-Paragraph 30
-Subparagraph (a)
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147482810/280-10-50-30

Reference 4: http://www.xbrl.org/2003/role/disclosureRef
-Topic 280
-SubTopic 10
-Name Accounting Standards Codification
-Section 50
-Paragraph 42
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147482810/280-10-50-42

Reference 5: http://www.xbrl.org/2003/role/disclosureRef
-Topic 280
-SubTopic 10
-Name Accounting Standards Codification
-Section 50
-Paragraph 22
-Subparagraph (b)
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147482810/280-10-50-22

Reference 6: http://www.xbrl.org/2003/role/disclosureRef
-Topic 280
-SubTopic 10
-Name Accounting Standards Codification
-Section 50
-Paragraph 32
-Subparagraph (b)
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147482810/280-10-50-32

Reference 7: http://www.xbrl.org/2003/role/disclosureRef
-Topic 280
-SubTopic 10
-Name Accounting Standards Codification
-Section 50
-Paragraph 40
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147482810/280-10-50-40

Reference 8: http://www.xbrl.org/2003/role/disclosureRef
-Topic 280
-SubTopic 10
-Name Accounting Standards Codification
-Section 50
-Paragraph 22
-Subparagraph (a)
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147482810/280-10-50-22

Reference 9: http://www.xbrl.org/2003/role/disclosureRef
-Topic 280
-SubTopic 10
-Name Accounting Standards Codification
-Section 50
-Paragraph 32
-Subparagraph (a)
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147482810/280-10-50-32

Reference 10: http://www.xbrl.org/2003/role/disclosureRef
-Topic 280
-SubTopic 10
-Name Accounting Standards Codification
-Section 50
-Paragraph 41
-Subparagraph (a)
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147482810/280-10-50-41

Reference 11: http://www.xbrl.org/2003/role/disclosureRef
-Topic 606
-SubTopic 10
-Name Accounting Standards Codification
-Section 50
-Paragraph 4
-Subparagraph (a)
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147479806/606-10-50-4

+ Details

INCOME TAXES (Tables)

12 Months Ended

Dec. 31, 2023

INCOME TAXES

Schedule of loss before provision for income taxes

The Company's loss before provision for income taxes was generated from operations in the United States and outside of the United States as follows (in thousands):


	Years Ended December 31,
	2023		2022
U.S.	$	8,689	$	12,417
Non-U.S.		161		1,655
	$	8,850	$	14,072

Reconciliation of United States federal statutory income tax rate to effective income tax rate

A reconciliation of the United States federal statutory income tax rate to the Company's effective income tax rate is as follows (in thousands):


	Years Ended December 31,
	2023		2022
Income tax benefit at United States federal statutory rate	$	(1,858)	$	(2,955)
Derivative liability		(623)		(636)
Share based payments		(791)		500
Goodwill impairment		—		198
Tax credits		(142)		(157)
Foreign income taxed at foreign rate		(9)		(91)
Other permanent difference		126		59
Other		144		164
Increase in valuation allowance		3,153		2,918
Income tax expense	$	—	$	—

Schedule of components of deferred tax assets and liabilities

The components of deferred tax assets and liabilities are as follows (in thousands):


	As of December 31,
	2023		2022
Deferred tax assets
Net operating loss carryforwards	$	30,642	$	29,130
Stock-based compensation		3,316		1,696
Research and development		2,164		1,642
Tax credit carryforwards		1,267		1,114
Compensation and benefits		120		108
Unrealized foreign currency losses		33		102
Deferred revenue		45		53
Lease liability		13		25
Inventory reserve		13		18
Total deferred tax assets		37,613		33,888
Deferred tax liabilities
Property and equipment		(16)		(57)
Intangible assets		(7)		(37)
Right-of-use asset		(12)		(23)
Unrealized foreign currency gains		—		—
Total deferred tax liabilities		(35)		(117)
Valuation allowance		(37,578)		(33,771)
Net deferred tax assets	$	—	$	—

Schedule of net operating loss carryforwards and related carryforward expiration periods


		Carryforward
		Amount	Expiration
United States federal net operating losses	$	39,561	2032-2037
United States federal net operating losses		74,943	Indefinite
United States state net operating losses		71,165	2034-2043
United States state net operating losses		3,213	Indefinite
Canada federal net operating losses		6,532	2034-2043

Schedule of gross tax credit carryforwards and related carryforward expiration periods


		Carryforward
		Amount	Expiration
United States federal research expenditure tax credits	$	797	2034-2043
Canada federal research expenditure tax credits		470	2034-2037

SIGNIFICANT ACCOUNTING POLICIES

12 Months Ended

Dec. 31, 2023

SIGNIFICANT ACCOUNTING POLICIES

SIGNIFICANT ACCOUNTING POLICIES

2.SIGNIFICANT ACCOUNTING POLICIES

Principles of Consolidation

The accompanying consolidated financial statements reflect the operations of Helius Medical Technologies, Inc. and its wholly owned subsidiaries. All intercompany balances and transactions have been eliminated in consolidation.

Reclassifications

Certain prior period amounts have been reclassified to conform to the current period presentation.

Use of Estimates

The preparation of the consolidated financial statements in accordance with U.S. GAAP requires management to make estimates and assumptions that affect the amounts reported in the consolidated financial statements and disclosure of contingent assets and liabilities. Significant estimates include the assumptions used in the valuation of the fair value-pricing model for stock-based compensation, liability classified warrants and deferred income tax asset valuation allowance. Financial statements include estimates, which, by their nature, are uncertain. Actual results could differ from those estimates.

Foreign Currency Translation

The local currency, or CAD$, is the functional currency of the Company’s foreign operating subsidiary, Helius Medical Technologies (Canada), Inc. All assets and liabilities are translated into United States dollars at the rate of exchange in effect at the balance sheet date. Income and expense items are translated at the weighted-average exchange rate prevailing during the period. The effects of foreign currency translation adjustments are deferred and reported in stockholders' equity as a component of “Accumulated Other Comprehensive Loss.” The effects of foreign currency transactions denominated in a currency other than an entity's functional currency are included in “Foreign Exchange (Loss) Gain” in the Consolidated Statements of Operations and Comprehensive Loss.

Revenue Recognition

The Company generates nearly all revenue from product sales directly to patients, its e-commerce partner in the United States and to clinics in Canada. Revenue from product sales is recognized at a point in time as the performance obligation is satisfied and when the customer obtains control of the product at the established transaction price. Taxes that the Company collects concurrent with revenue-producing activities are excluded from revenue.

The Company requires some customers in the United States to prepay the full product selling price, net of cash discount, prior to shipment. The Company records a contract liability for any customer prepayment received for which delivery had not yet occurred as of the end of the period.

Concentration of Credit Risk

The Company deposits its cash and cash equivalents in demand commercial checking, unrestricted money market savings account, money market mutual funds, treasury bills or certificates of deposit at high-quality credit institutions. At times, such deposits may be in excess of federally insured limits. The Company has not experienced any losses.

Cash Equivalents

The Company considers highly liquid investments with original maturities of three months or less to be cash equivalents. Cash equivalents are valued at cost, which approximates fair value.

Accounts Receivable

Accounts receivable arise primarily from product sales in Canada and generally require payment within 30 days. The Company provides reserves against accounts receivable for estimated credit losses that may result from a customer’s inability to pay based on a combination of factors, such as the aging of accounts receivable, the customer’s financial strength and payment history. Amounts determined to be uncollectible are charged or written off against the reserve.

Employee Retention Credit

The employee retention credit (“ERC”), as originally enacted through the Coronavirus Aid, Relief, and Economic Security Act, is a refundable credit against certain employment taxes equal to 50% of the qualified wages an eligible employer pays to employees from March 17, 2020 to December 31, 2020. The Disaster Tax Relief Act extended the ERC for qualified wages paid from January 1, 2021 to June 30, 2021 and the credit was increased to 70% of qualified wages an eligible employer pays to employees during the extended period. The American Rescue Plan Act of 2021, enacted on March 11, 2021, further extended the ERC through December 31, 2021.

The Company qualified for the employee retention credit for the period from March 17, 2020 to September 30, 2021. The Company recognizes government credits for which there is a reasonable assurance of compliance with credit conditions and receipt of credits. The Company recorded a credit of $0.5 million against operating expenses on the Consolidated Statement of Operations and Comprehensive Loss and as a current asset on the consolidated balance sheets during the year ended December 31, 2023. The Company expects to receive the credit in the next twelve months.

Inventory

Inventories are stated at the lower of cost (average cost method) or net realizable value. The Company establishes inventory reserves for obsolescence based upon specific identification of expired or unusable units with a corresponding provision included in cost of revenue. 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.

Property and Equipment

Property and equipment are recorded at cost. Depreciation is calculated for financial reporting purposes on the straight-line method over the estimated useful lives of the related assets, which are seven years for furniture and fixtures, five to fifteen years for equipment and three to five years for computer software and hardware. Depreciation expense is recorded in selling, general and administrative expenses. Expenditures for repairs and maintenance, which do not improve or extend the expected useful life of the assets, are expensed as incurred.

Long-Lived Assets

Management reviews the carrying amounts of definite-lived intangible assets and long-lived assets, including right-of-use (“ROU”) assets, property and equipment whenever events or circumstances indicate that the carrying amounts of an asset may not be recoverable. For purposes of assessing recoverability, definite-lived intangible assets and long-lived tangible assets are each deemed to be one asset group. The carrying amount of the asset group is compared to the estimated undiscounted future cash flows associated with it. If the sum of the expected future net cash flows is less than the carrying value of the asset group being evaluated, an impairment loss is calculated as the amount by which the carrying value of the asset group exceeds its estimated fair value.

Leases

The Company has an operating lease for its corporate office. The Company determines whether a contract is, or contains, a lease at inception. ROU assets represent the Company’s right to use an underlying asset during the lease term, and lease liabilities represent the Company’s obligation to make lease payments arising from the lease. ROU assets and lease liabilities are recognized at lease commencement based upon the estimated present value of unpaid lease payments over the lease term. The Company uses its incremental borrowing rate based on the information available at lease commencement in determining the present value of unpaid lease payments. The Company's incremental borrowing rate is determined based on the estimated rate of interest for collateralized borrowing over a similar term as the associated lease. The Company’s lease arrangement does not have any lease and non-lease components.

Stock-Based Compensation

The Company measures and recognizes compensation expense for all stock-based awards based on estimated fair values. Stock-based awards consist of stock options and restricted stock units. Stock-based compensation expense is measured at the grant date based on the fair value of the award and is recognized as expense over the requisite service period (vesting period) on a straight-line basis. Forfeitures are not estimated, but instead stock-based compensation expense is adjusted upon an actual forfeiture of a stock option. Upon exercise of stock options or vesting of restricted stock units, the Company issues common stock.

Income Taxes

Deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases and operating loss and tax credit carryforwards. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to

taxable income in the years in which those temporary differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in income in the period that includes the enactment date. A valuation allowance for deferred income tax assets is recorded when it is more likely than not that some portion or all of the deferred income tax assets will not be realized.

Research and Development Expenses

Research and development costs are charged to expense when incurred.

Segment Information

Operating segments are defined as components of an enterprise for which discrete financial information is available that is evaluated regularly by the chief operating decision maker (“CODM”) in deciding how to allocate resources and in assessing performance. Our CODM is the Chief Executive Officer. The Company operates and manages its business within one operating and reportable segment related to the sale of PoNS devices in the United States and Canada.

Derivatives

The Company does not engage in hedging activities. 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. The result of this accounting treatment is that the fair value of the derivative is re-measured at each balance sheet date and recorded as a liability or asset and the change in fair value is recorded in the Consolidated Statements of Operations and Comprehensive Loss. Refer to Note 8 for additional information about the derivative liability.

Basic and Diluted Loss per Share

Basic loss per share is computed by dividing net loss by the weighted-average number of common shares outstanding during the period. Diluted loss per share is based on the weighted-average common shares outstanding during the period plus dilutive potential common shares calculated using the treasury stock method. Such potentially dilutive shares are excluded when the effect would be to reduce a net loss per share.

Recent Accounting Pronouncements

In June 2016, the Financial Accounting Standards Board issued Accounting Standards Update 2016-13, Financial Instruments – Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments, which requires measurement and recognition of expected credit losses for financial assets held and requires enhanced disclosures regarding significant estimates and judgments used in estimating credit losses. As the Company meets the SEC definition of a Smaller Reporting Company filer, the guidance was effective for fiscal years beginning after December 15, 2022. The adoption of this guidance on January 1, 2023 did not have a material impact on the Company's Consolidated Financial Statements.

Pay vs Performance Disclosure - USD ($) $ in Thousands	12 Months Ended
Pay vs Performance Disclosure - USD ($) $ in Thousands	Dec. 31, 2023	Dec. 31, 2022
Pay vs Performance Disclosure
Net Income (Loss)	$ (8,850)	$ (14,072)

- Definition

The portion of profit or loss for the period, net of income taxes, which is attributable to the parent.

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+ Details

ENTERPRISE-WIDE DISCLOSURES (Tables)

12 Months Ended

Dec. 31, 2023

ENTERPRISE-WIDE DISCLOSURES

Schedule of revenue disaggregated by geographic area

The following table presents the Company’s revenue disaggregated by geographic area (in thousands):


	Years Ended
	December 31,
	2023		2022
Product sales, net:
United States	$	324	$	318
Canada		281		460
Total product sales, net		605		778
Other revenue		39		9
Total revenue	$	644	$	787

SIGNIFICANT ACCOUNTING POLICIES (Policies)	12 Months Ended
SIGNIFICANT ACCOUNTING POLICIES (Policies)	Dec. 31, 2023
SIGNIFICANT ACCOUNTING POLICIES
Principles of Consolidation	Principles of Consolidation The accompanying consolidated financial statements reflect the operations of Helius Medical Technologies, Inc. and its wholly owned subsidiaries. All intercompany balances and transactions have been eliminated in consolidation.
Reclassifications	Reclassifications Certain prior period amounts have been reclassified to conform to the current period presentation.
Use of Estimates	Use of Estimates The preparation of the consolidated financial statements in accordance with U.S. GAAP requires management to make estimates and assumptions that affect the amounts reported in the consolidated financial statements and disclosure of contingent assets and liabilities. Significant estimates include the assumptions used in the valuation of the fair value-pricing model for stock-based compensation, liability classified warrants and deferred income tax asset valuation allowance. Financial statements include estimates, which, by their nature, are uncertain. Actual results could differ from those estimates.
Foreign Currency Translation	The local currency, or CAD$, is the functional currency of the Company’s foreign operating subsidiary, Helius Medical Technologies (Canada), Inc. All assets and liabilities are translated into United States dollars at the rate of exchange in effect at the balance sheet date. Income and expense items are translated at the weighted-average exchange rate prevailing during the period. The effects of foreign currency translation adjustments are deferred and reported in stockholders' equity as a component of “Accumulated Other Comprehensive Loss.” The effects of foreign currency transactions denominated in a currency other than an entity's functional currency are included in “Foreign Exchange (Loss) Gain” in the Consolidated Statements of Operations and Comprehensive Loss.
Revenue Recognition	Revenue Recognition The Company generates nearly all revenue from product sales directly to patients, its e-commerce partner in the United States and to clinics in Canada. Revenue from product sales is recognized at a point in time as the performance obligation is satisfied and when the customer obtains control of the product at the established transaction price. Taxes that the Company collects concurrent with revenue-producing activities are excluded from revenue. The Company requires some customers in the United States to prepay the full product selling price, net of cash discount, prior to shipment. The Company records a contract liability for any customer prepayment received for which delivery had not yet occurred as of the end of the period.
Concentration of Credit Risk	Concentration of Credit Risk The Company deposits its cash and cash equivalents in demand commercial checking, unrestricted money market savings account, money market mutual funds, treasury bills or certificates of deposit at high-quality credit institutions. At times, such deposits may be in excess of federally insured limits. The Company has not experienced any losses.
Cash Equivalents	Cash Equivalents The Company considers highly liquid investments with original maturities of three months or less to be cash equivalents. Cash equivalents are valued at cost, which approximates fair value.
Accounts Receivable	Accounts Receivable Accounts receivable arise primarily from product sales in Canada and generally require payment within 30 days. The Company provides reserves against accounts receivable for estimated credit losses that may result from a customer’s inability to pay based on a combination of factors, such as the aging of accounts receivable, the customer’s financial strength and payment history. Amounts determined to be uncollectible are charged or written off against the reserve.
Employee Retention Credit	Employee Retention Credit The employee retention credit (“ERC”), as originally enacted through the Coronavirus Aid, Relief, and Economic Security Act, is a refundable credit against certain employment taxes equal to 50% of the qualified wages an eligible employer pays to employees from March 17, 2020 to December 31, 2020. The Disaster Tax Relief Act extended the ERC for qualified wages paid from January 1, 2021 to June 30, 2021 and the credit was increased to 70% of qualified wages an eligible employer pays to employees during the extended period. The American Rescue Plan Act of 2021, enacted on March 11, 2021, further extended the ERC through December 31, 2021. The Company qualified for the employee retention credit for the period from March 17, 2020 to September 30, 2021. The Company recognizes government credits for which there is a reasonable assurance of compliance with credit conditions and receipt of credits. The Company recorded a credit of $0.5 million against operating expenses on the Consolidated Statement of Operations and Comprehensive Loss and as a current asset on the consolidated balance sheets during the year ended December 31, 2023. The Company expects to receive the credit in the next twelve months.
Inventory	Inventory Inventories are stated at the lower of cost (average cost method) or net realizable value. The Company establishes inventory reserves for obsolescence based upon specific identification of expired or unusable units with a corresponding provision included in cost of revenue. 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.
Property and Equipment	Property and Equipment Property and equipment are recorded at cost. Depreciation is calculated for financial reporting purposes on the straight-line method over the estimated useful lives of the related assets, which are seven years for furniture and fixtures, five to fifteen years for equipment and three to five years for computer software and hardware. Depreciation expense is recorded in selling, general and administrative expenses. Expenditures for repairs and maintenance, which do not improve or extend the expected useful life of the assets, are expensed as incurred.
Long-Lived Assets	Long-Lived Assets Management reviews the carrying amounts of definite-lived intangible assets and long-lived assets, including right-of-use (“ROU”) assets, property and equipment whenever events or circumstances indicate that the carrying amounts of an asset may not be recoverable. For purposes of assessing recoverability, definite-lived intangible assets and long-lived tangible assets are each deemed to be one asset group. The carrying amount of the asset group is compared to the estimated undiscounted future cash flows associated with it. If the sum of the expected future net cash flows is less than the carrying value of the asset group being evaluated, an impairment loss is calculated as the amount by which the carrying value of the asset group exceeds its estimated fair value.
Leases	Leases The Company has an operating lease for its corporate office. The Company determines whether a contract is, or contains, a lease at inception. ROU assets represent the Company’s right to use an underlying asset during the lease term, and lease liabilities represent the Company’s obligation to make lease payments arising from the lease. ROU assets and lease liabilities are recognized at lease commencement based upon the estimated present value of unpaid lease payments over the lease term. The Company uses its incremental borrowing rate based on the information available at lease commencement in determining the present value of unpaid lease payments. The Company's incremental borrowing rate is determined based on the estimated rate of interest for collateralized borrowing over a similar term as the associated lease. The Company’s lease arrangement does not have any lease and non-lease components.
Stock-Based Compensation	Stock-Based Compensation The Company measures and recognizes compensation expense for all stock-based awards based on estimated fair values. Stock-based awards consist of stock options and restricted stock units. Stock-based compensation expense is measured at the grant date based on the fair value of the award and is recognized as expense over the requisite service period (vesting period) on a straight-line basis. Forfeitures are not estimated, but instead stock-based compensation expense is adjusted upon an actual forfeiture of a stock option. Upon exercise of stock options or vesting of restricted stock units, the Company issues common stock.
Income Taxes	Income Taxes Deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases and operating loss and tax credit carryforwards. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in income in the period that includes the enactment date. A valuation allowance for deferred income tax assets is recorded when it is more likely than not that some portion or all of the deferred income tax assets will not be realized.
Research and Development Expenses	Research and Development Expenses Research and development costs are charged to expense when incurred.
Segment Information	Segment Information Operating segments are defined as components of an enterprise for which discrete financial information is available that is evaluated regularly by the chief operating decision maker (“CODM”) in deciding how to allocate resources and in assessing performance. Our CODM is the Chief Executive Officer. The Company operates and manages its business within one operating and reportable segment related to the sale of PoNS devices in the United States and Canada.
Derivatives	Derivatives The Company does not engage in hedging activities. 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. The result of this accounting treatment is that the fair value of the derivative is re-measured at each balance sheet date and recorded as a liability or asset and the change in fair value is recorded in the Consolidated Statements of Operations and Comprehensive Loss. Refer to Note 8 for additional information about the derivative liability.
Basic and Diluted Loss per Share	Basic and Diluted Loss per Share Basic loss per share is computed by dividing net loss by the weighted-average number of common shares outstanding during the period. Diluted loss per share is based on the weighted-average common shares outstanding during the period plus dilutive potential common shares calculated using the treasury stock method. Such potentially dilutive shares are excluded when the effect would be to reduce a net loss per share.
Recent Accounting Pronouncements	Recent Accounting Pronouncements In June 2016, the Financial Accounting Standards Board issued Accounting Standards Update 2016-13, Financial Instruments – Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments, which requires measurement and recognition of expected credit losses for financial assets held and requires enhanced disclosures regarding significant estimates and judgments used in estimating credit losses. As the Company meets the SEC definition of a Smaller Reporting Company filer, the guidance was effective for fiscal years beginning after December 15, 2022. The adoption of this guidance on January 1, 2023 did not have a material impact on the Company's Consolidated Financial Statements.

ENTERPRISE-WIDE DISCLOSURES

12 Months Ended

Dec. 31, 2023

ENTERPRISE-WIDE DISCLOSURES

ENTERPRISE-WIDE DISCLOSURES

14.ENTERPRISE-WIDE DISCLOSURES

The following table presents the Company’s revenue disaggregated by geographic area (in thousands):


	Years Ended
	December 31,
	2023		2022
Product sales, net:
United States	$	324	$	318
Canada		281		460
Total product sales, net		605		778
Other revenue		39		9
Total revenue	$	644	$	787

Two customers accounted for 65% of net product sales for the year ended December 31, 2023 and a single customer accounted for 35% of net product sales for the year ended December 31, 2022. A single customer accounted for 83% and 89% of accounts receivable, net for the years ended December 31, 2023 and 2022, respectively.

- Definition

The entire disclosure for reporting segments including data and tables. Reportable segments include those that meet any of the following quantitative thresholds a) it's reported revenue, including sales to external customers and intersegment sales or transfers is 10 percent or more of the combined revenue, internal and external, of all operating segments b) the absolute amount of its reported profit or loss is 10 percent or more of the greater, in absolute amount of 1) the combined reported profit of all operating segments that did not report a loss or 2) the combined reported loss of all operating segments that did report a loss c) its assets are 10 percent or more of the combined assets of all operating segments.

+ References

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Reference 9: http://www.xbrl.org/2003/role/disclosureRef
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Reference 13: http://www.xbrl.org/2003/role/disclosureRef
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Reference 14: http://www.xbrl.org/2003/role/disclosureRef
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+ Details

Document and Entity Information - USD ($)	12 Months Ended
Document and Entity Information - USD ($)	Dec. 31, 2023	Mar. 21, 2024	Jun. 30, 2023
Document and Entity Information
Document Type	10-K
Document Annual Report	true
Document Period End Date	Dec. 31, 2023
Document Transition Report	false
Entity File Number	001-38445
Entity Registrant Name	HELIUS MEDICAL TECHNOLOGIES, INC.
Entity Incorporation, State or Country Code	DE
Entity Tax Identification Number	36-4787690
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
Trading Symbol	HSDT
Security Exchange Name	NASDAQ
Entity Well-known Seasoned Issuer	No
Entity Voluntary Filers	No
Entity Current Reporting Status	Yes
Entity Interactive Data Current	Yes
Entity Filer Category	Non-accelerated Filer
Entity Small Business	true
Entity Emerging Growth Company	false
ICFR Auditor Attestation Flag	false
Document Financial Statement Error Correction [Flag]	false
Entity Shell Company	false
Entity Public Float			$ 5,259,746
Entity Common Stock, Shares Outstanding		887,295
Auditor Firm ID	23
Auditor Name	Baker Tilly US, LLP
Auditor Location	Minneapolis, Minnesota
Entity Central Index Key	0001610853
Current Fiscal Year End Date	--12-31
Document Fiscal Year Focus	2023
Document Fiscal Period Focus	FY
Amendment Flag	false

SUPPLEMENTAL BALANCE SHEET DISCLOSURES - Deferred revenue (Details) - HTC - Exclusivity Agreement $ in Thousands	Mar. 03, 2023 USD ($) item
Deferred Revenue
Value of exclusivity right granted \| $	$ 273
Number of additional terms \| item	1
Additional term	5 years
Period for written notice for renewal	60 days

Consolidated Balance Sheets (Parenthetical) - $ / shares	Dec. 31, 2023	Dec. 31, 2022
Consolidated Balance Sheets
Common stock, par value (in dollars per share)	$ 0.001	$ 0.001
Common stock, shares authorized (in shares)	150,000,000	150,000,000
Common stock, shares, issued (in shares)	714,590	564,094
Common stock, shares, outstanding (in shares)	714,590	564,094

COMMON STOCK AND WARRANTS - Warrant fair value inputs (Details) - Warrants	Dec. 31, 2023	Dec. 31, 2022
Stock price
Fair value inputs
Derivative Liability, Measurement Input	8.04	15.35
Warrant term (in years)
Fair value inputs
Derivative Liability, Measurement Input	3.61	4.61
Expected volatility
Fair value inputs
Derivative Liability, Measurement Input	84.10	80.90
Risk-free interest rate
Fair value inputs
Derivative Liability, Measurement Input	3.96	4.04
Dividend rate
Fair value inputs
Derivative Liability, Measurement Input	0.00	0.00

Consolidated Statements of Operations and Comprehensive Loss - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2023	Dec. 31, 2022
Revenue
Product sales, net	$ 605	$ 778
Revenue from Contract with Customer, Product and Service [Extensible Enumeration]	us-gaap:ProductMember	us-gaap:ProductMember
Other revenue	$ 39	$ 9
Total revenue	644	787
Cost of revenue
Cost of revenue	$ 583	$ 463
Cost, Product and Service [Extensible Enumeration]	us-gaap:ProductMember	us-gaap:ProductMember
Gross profit	$ 61	$ 324
Operating expenses
Selling, general and administrative expenses	9,271	10,640
Research and development expenses	2,942	4,262
Amortization expense	117	181
Goodwill and fixed asset impairment	159	757
Total operating expenses	12,489	15,840
Loss from operations	(12,428)	(15,516)
Nonoperating income (expense)
Interest income (expense), net	257	(834)
Change in fair value of derivative liability	2,966	3,027
Foreign exchange gain (loss)	275	(756)
Other income (expense), net	80	7
Nonoperating income (expense), net	3,578	1,444
Loss before provision for income taxes	(8,850)	(14,072)
Provision for income taxes	0	0
Net loss	(8,850)	(14,072)
Other comprehensive income (loss)
Foreign currency translation adjustments	(285)	737
Comprehensive loss	$ (9,135)	$ (13,335)
Loss per share
Basic (in dollar per share)	$ (14.56)	$ (52.13)
Diluted (in dollar per share)	$ (14.56)	$ (52.13)
Weighted average number of common shares outstanding
Basic (in shares)	607,890	269,929
Diluted (in shares)	607,890	269,929

STOCK-BASED COMPENSATION - Stock-based compensation expense (Details) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2023	Dec. 31, 2022
STOCK-BASED COMPENSATION
Stock based compensation expense	$ 1,629	$ 2,254
Share-Based Payment Arrangement, Nonvested Award	$ 2,500
Weighted-average remaining requisite service period	1 year
Performance-based \| August 9, 2022 registered public offering
STOCK-BASED COMPENSATION
Stock based compensation expense		1,200
Cost of sales
STOCK-BASED COMPENSATION
Stock based compensation expense	$ 18	15
Selling, general and administrative
STOCK-BASED COMPENSATION
Stock based compensation expense	1,320	2,015
Research and development
STOCK-BASED COMPENSATION
Stock based compensation expense	$ 291	$ 224

INTANGIBLE ASSETS

12 Months Ended

Dec. 31, 2023

INTANGIBLE ASSETS

INTANGIBLE ASSETS

6.INTANGIBLE ASSETS

Intangible assets consist of the following (in thousands):


			December 31,
			2023						2022
							Net						Net
	Useful Life				Accumulated		Carrying				Accumulated		Carrying
	(in years)		Cost		Amortization		Value		Cost		Amortization		Value
Reacquired rights		3.87	$	486	$	(486)	$	—	$	475	$	(388)	$	87
Acquired proprietary software		5.00		145		(121)		24		142		(90)		52
Internally developed software		3.00		84		(84)		—		84		(83)		1
Total intangible assets			$	715	$	(691)	$	24	$	701	$	(561)	$	140

Estimated amortization expense for the year ending December 31, 2024 is $24 thousand.

BASIC AND DILUTED LOSS PER SHARE - Antidilutive securities (Details) - shares	12 Months Ended
	Dec. 31, 2023	Dec. 31, 2022
Stock options
Anti-dilutive securities
Anti-dilutive outstanding securities not included in computation of diluted loss per share	245,830	23,800
Restricted Stock Units
Anti-dilutive securities
Anti-dilutive outstanding securities not included in computation of diluted loss per share	2,228	160
Warrants
Anti-dilutive securities
Anti-dilutive outstanding securities not included in computation of diluted loss per share	637,059	731,853

BASIC AND DILUTED LOSS PER SHARE

12 Months Ended

Dec. 31, 2023

BASIC AND DILUTED LOSS PER SHARE

BASIC AND DILUTED LOSS PER SHARE

10.BASIC AND DILUTED LOSS PER SHARE

The table below presents the computation of basic and diluted loss per share (in thousands, except share and per share information):


	Years Ended
	December 31,
	2023		2022
Basic:
Net loss available to common stockholders — basic	$	(8,850)	$	(14,072)
Weighted average common shares outstanding — basic		607,890		269,929
Loss per share - basic	$	(14.56)	$	(52.13)

Diluted:
Net loss available to common stockholders — diluted ⁽¹⁾	$	(8,850)	$	(14,072)
Weighted average common shares outstanding — diluted ⁽¹⁾		607,890		269,929
Loss per share — diluted	$	(14.56)	$	(52.13)

⁽¹⁾

The following outstanding securities, presented based on amounts outstanding as of the end of each period, were not included in the computation of diluted loss per share for the periods indicated, as they would have been anti-dilutive due to the net loss in each period.


	Years Ended
	December 31,
	2023	2022
Stock options	245,830	23,800
Restricted stock units	2,228	160
Warrants	637,059	731,853

INCOME TAXES - Tax credit carryforward (Details) - Research expenditure $ in Thousands	12 Months Ended
	Dec. 31, 2023 USD ($)
United States federal \| 2034-2043
INCOME TAXES
Gross tax credit carryforward	$ 797
United States federal \| 2034-2043 \| Minimum
INCOME TAXES
Tax Credit Carryforward, Expiration Date	Dec. 31, 2034
United States federal \| 2034-2043 \| Maximum
INCOME TAXES
Tax Credit Carryforward, Expiration Date	Dec. 31, 2043
Canada federal \| 2034-2037
INCOME TAXES
Gross tax credit carryforward	$ 470
Canada federal \| 2034-2037 \| Minimum
INCOME TAXES
Tax Credit Carryforward, Expiration Date	Dec. 31, 2034
Canada federal \| 2034-2037 \| Maximum
INCOME TAXES
Tax Credit Carryforward, Expiration Date	Dec. 31, 2037

Insider Trading Arrangements	3 Months Ended
Insider Trading Arrangements	Dec. 31, 2023
Trading Arrangements, by Individual
Rule 10b5-1 Arrangement Adopted	false
Non-Rule 10b5-1 Arrangement Adopted	false
Rule 10b5-1 Arrangement Terminated	false
Non-Rule 10b5-1 Arrangement Terminated	false

STOCK-BASED COMPENSATION (Tables)

12 Months Ended

Dec. 31, 2023

STOCK-BASED COMPENSATION

Schedule of weighted-average assumptions used in Black-Scholes option pricing model


	Years Ended December 31,
	2023			2022
Risk-free interest rate		3.93	%		2.95	%
Expected volatility		79.43	%		74.91
Expected term (years)		5.70			5.70
Expected dividend yield		0.00	%		0.00	%
Fair value, per share	$	10.17		$	50.93

Summary of stock option activity


				Weighted Average	Aggregate
		Weighted		Remaining	Intrinsic
		Average		Contractual	Value
	Shares	Exercise Price		Term (in years)	(in thousands)
Outstanding as of December 31, 2022	23,800	$	670.36	8.56		—
Granted	223,268		14.63	—		—
Exercised	—		—	—		—
Forfeited	(1,238)		377.94	—		—
Outstanding as of December 31, 2023	245,830		76.28	9.03	$	5.00
Exercisable as of December 31, 2023	98,350		149.43	8.93	$	4.00

Summary of nonvested restricted stock unit activity


		Weighted Average
		Grant Date
	Shares	Fair Value
Nonvested as of December 31, 2022	160	$	70.00
Granted	6,644		7.81
Vested	(4,576)		9.98
Forfeited	—		—
Nonvested as of December 31, 2023	2,228	$	7.81

Schedule of stock-based compensation expense


		Weighted Average
		Grant Date
	Shares	Fair Value
Nonvested as of December 31, 2022	160	$	70.00
Granted	6,644		7.81
Vested	(4,576)		9.98
Forfeited	—		—
Nonvested as of December 31, 2023	2,228	$	7.81

Total stock-based compensation expense was as follows (in thousands):


	Years Ended
	December 31,
	2023		2022
Cost of sales	$	18	$	15
Selling, general and administrative		1,320		2,015
Research and development		291		224
Total stock-based compensation expense	$	1,629	$	2,254

SUPPLEMENTAL BALANCE SHEET DISCLOSURES - Property and equipment, net (Details) - 10K - USD ($) $ in Thousands	Dec. 31, 2023	Dec. 31, 2022
Property and equipment, net
Property and equipment	$ 537	$ 661
Accumulated depreciation	(359)	(314)
Property and equipment, net	178	347
Furniture and fixtures
Property and equipment, net
Property and equipment	59	59
Equipment
Property and equipment, net
Property and equipment	243	373
Computer software and hardware
Property and equipment, net
Property and equipment	$ 235	$ 229

FAIR VALUE MEASUREMENTS

12 Months Ended

Dec. 31, 2023

FAIR VALUE MEASUREMENTS

FAIR VALUE MEASUREMENTS

7.FAIR VALUE MEASUREMENTS

Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants. Fair value of an asset or liability considers assumptions that market participants would use in pricing the asset or liability, including consideration of non-performance risk. The inputs used to determine fair values are categorized in one of the following three levels of the fair value hierarchy:

Level 1 – Quoted market prices in active markets for identical assets or liabilities.

Level 2 – Inputs, other than quoted prices in active markets, that are observable, either directly or indirectly.

Level 3 – Unobservable inputs that are not corroborated by market data.

The Consolidated Financial Statements include financial instruments for which the fair market value of such instruments may differ from amounts reflected on a historical cost basis. Financial instruments of the Company as of December 31, 2023 and 2022 consist of cash equivalents, which were comprised of deposits of excess cash in an unrestricted money market savings account, money market mutual funds, treasury bills and a certificate of deposit. The carrying value of cash equivalents generally approximates fair value due to their short-term nature.

The Company’s derivative liability as of December 31, 2023 and 2022 is comprised of warrants issued in connection with the registered public offering completed in August 2022 discussed in Note 8. The derivative liability is classified as Level 3 within the fair value hierarchy and is required to be recorded at fair value on a recurring basis. See Note 8 for further information on the fair value of the derivative liability.

The majority of the Company’s non-financial instruments, which include intangible assets, lease assets, inventories and property and equipment, are not required to be carried at fair value on a recurring basis. However, if certain triggering events occur (or at least annually for indefinite-lived intangible assets), a non-financial instrument is required to be evaluated for impairment. If the Company determines that the non-financial instrument is impaired, the Company would be required to write down the non-financial instrument to its fair value. See Note 3 – Goodwill and Fixed Asset Impairment for further detail.

- Definition

The entire disclosure for the fair value of financial instruments (as defined), including financial assets and financial liabilities (collectively, as defined), and the measurements of those instruments as well as disclosures related to the fair value of non-financial assets and liabilities. Such disclosures about the financial instruments, assets, and liabilities would include: (1) the fair value of the required items together with their carrying amounts (as appropriate); (2) for items for which it is not practicable to estimate fair value, disclosure would include: (a) information pertinent to estimating fair value (including, carrying amount, effective interest rate, and maturity, and (b) the reasons why it is not practicable to estimate fair value; (3) significant concentrations of credit risk including: (a) information about the activity, region, or economic characteristics identifying a concentration, (b) the maximum amount of loss the entity is exposed to based on the gross fair value of the related item, (c) policy for requiring collateral or other security and information as to accessing such collateral or security, and (d) the nature and brief description of such collateral or security; (4) quantitative information about market risks and how such risks are managed; (5) for items measured on both a recurring and nonrecurring basis information regarding the inputs used to develop the fair value measurement; and (6) for items presented in the financial statement for which fair value measurement is elected: (a) information necessary to understand the reasons for the election, (b) discussion of the effect of fair value changes on earnings, (c) a description of [similar groups] items for which the election is made and the relation thereof to the balance sheet, the aggregate carrying value of items included in the balance sheet that are not eligible for the election; (7) all other required (as defined) and desired information.

+ References + Details

COMMON STOCK AND WARRANTS

12 Months Ended

Dec. 31, 2023

COMMON STOCK AND WARRANTS

COMMON STOCK AND WARRANTS

8.COMMON STOCK AND WARRANTS

The Company may issue common stock in connection with underwritten public offerings, registered direct public offerings or other financing transactions. Such issuances of common stock may include the issuance or sale of warrants to purchase common stock.

Equity Transactions

At-The-Market Offering

On June 23, 2023, the Company entered into a Sales Agreement (the “Sales Agreement”) with Roth Capital Partners, LLC (“Roth”) to create an at-the-market offering program (“ATM”) under which the Company may offer and sell shares having an aggregate offering price of up to $2.0 million. Roth is entitled to a commission at a fixed commission rate equal to up to 3% of the gross proceeds pursuant to the Sales Agreement. As of December 31, 2023, 53,010 share issuances of securities have occurred in connection with the ATM generating net proceeds of $0.4 million inclusive of $0.1 million of share issuance costs. On February 8, 2024, 148,201 shares were issued with the ATM, generating net proceeds of $1.3 million.

Series B Preferred Stock

On March 23, 2023, the Board of Directors declared a dividend of one one-thousandth of a share of Series B Preferred Stock (“Series B Preferred Stock”) for each outstanding share of Common Stock held of record on April 3, 2023, and the Certificate of Designation was filed with the Delaware Secretary of State and became effective on March 24, 2023. The value of the Series B Preferred Stock issued in connection with the stock dividend was immaterial.

The Series B Preferred Stock is not transferrable by the holder except in connection with a transfer by such holder of any shares of common stock held by such holder. The Series B Preferred Stock is not convertible into, or exchangeable for, shares of any other class or series of stock or other securities of the Company. The Series B Preferred Stock has no stated maturity and is not subject to any sinking fund. The Series B Preferred Stock is not subject to any restriction on the redemption or repurchase of shares by the Company while there is any arrearage in the payment of dividends or sinking fund installments. The holder of Series B Preferred Stock is not entitled to receive dividends.

Each share of Series B Preferred Stock entitled the holder to 1,000,000 votes per share and each fraction of a share of Series B Preferred Stock had a ratable number of votes. The outstanding shares of Series B Preferred Stock voted together with the outstanding shares of the Company’s common stock, as a single class, exclusively with respect to the proposal giving the Board of Directors the authority, as it would determine appropriate, to implement a reverse stock split within twelve months following the approval of such proposal by the Company’s stockholders (the “Reverse Stock Split Proposal”), as well as any proposal to adjourn any meeting of stockholders called for the purpose of voting on the foregoing matters (the “Adjournment Proposal”).

At the annual meeting of stockholders of the Company held on May 24, 2023, the Company’s stockholders approved an amendment to the Company’s Certificate of Incorporation to effect a reverse stock split of its outstanding common stock. All shares of Series B Preferred Stock that did not vote in person or by proxy were redeemed in whole by the Company. Shares of Series B Preferred Stock that did vote in person or by proxy will need to request redemption from the Company at a rate of $0.001 per share in cash. As of December 31, 2023, no shareholders of Series B Preferred Stock have requested such redemption.

Reverse Stock Split

At the annual meeting of stockholders on May 24, 2023, our stockholders voted to approve a reverse stock split of our outstanding Class A common stock at a ratio in the range of 1-for-10 to 1-for-80 to be determined at the discretion of the Board of Directors. On August 11, 2023, the Board approved a 1-for-50 reverse stock split of the Company’s issued and outstanding Common Stock (the “Reverse Stock Split”) that became effective 5:00 p.m. Eastern Time on August 16, 2023.

All issued and outstanding Common Stock and per share amounts contained in the financial statements have been retroactively adjusted to reflect this Reverse Stock Split for all periods presented. In addition, a proportionate adjustment was made to the per share exercise price and the number of shares issuable upon the exercise of all outstanding stock options, restricted stock units and warrants to purchase shares of Common Stock. Per the warrant agreement for the Public Warrants, the exercise price for these warrants was reset to the volume-weighted average price for the five days following the Reverse Stock Split. A proportionate adjustment was also made to the number of shares reserved for issuance pursuant

to the Company’s equity incentive compensation plans to reflect the Reverse Stock Split. Any fraction of a share of Common Stock that was created as a result of the Reverse Stock Split was rounded down to the next whole share and stockholders received cash settlement equal to the market value of the fractional share, determined by multiplying such fraction by the closing sales price of the Company’s Common Stock as reported on Nasdaq on the last trading day before the Reverse Stock Split effective date. The authorized shares and par value of the Common Stock and preferred stock were not adjusted as a result of the Reverse Stock Split.

August 2022 Issuance of Common Stock and Warrants

On August 9, 2022, the Company closed on a registered public offering (“August 2022 Public Offering”) and issued an aggregate of 480,000 shares of common stock for gross proceeds of $18 million. The Company paid $1.7 million of share issuance costs, which consisted of placement agent fees and expenses and other offering costs.

In connection with the August 2022 Public Offering, the Company issued warrants to purchase an aggregate of 720,000 shares of common stock (“Public Warrants”). The Company performed an analysis of the provisions of the Public Warrants and concluded that the Public Warrants did not meet the guidance for being classified as an equity instrument due to a potential price reset prompted by a change in an unrelated instrument’s conversion rate or, in the event of a fundamental transaction, settlement rights that differ from those of the underlying common stockholders. As a result of the derivative liability classification of the Public Warrants, the gross proceeds were first allocated to the fair value of the Public Warrants as of August 9, 2022 of $9.9 million and the remaining $8.1 million in gross proceeds were allocated to stockholders’ equity. The share issuance costs associated with the August 2022 Public Offering were allocated between the issuance of common stock and Public Warrants on a pro rata basis with the allocation of the gross proceeds, which resulted in $0.8 million of share issuance costs being recorded as a reduction of additional paid-in capital and $0.9 million of share issuance costs being recorded in interest expense on the Consolidated Statements of Operations and Comprehensive Loss.

The fair value of the derivative liability as of December 31, 2023 and 2022 was $3.3 million and $6.9 million, respectively. The change in the fair value of the derivative liability was recognized as a component of nonoperating income (expense) in the Company’s Consolidated Statements of Operations and Comprehensive Loss.

The fair value of the Public Warrants was determined using both a Monte Carlo simulation model, which uses multiple input variables to determine the probability of the occurrence of a price reset or a fundamental transaction and the Black-Scholes option pricing model. The following table includes the stock price and the inputs used to estimate the fair value of the warrants:


	December 31,
	2023			2022
Stock price	$	8.04		$	15.35
Warrant term (in years)		3.61			4.61
Expected volatility		84.10	%		80.90	%
Risk-free interest rate		3.96	%		4.04	%
Dividend rate		0.00	%		0.00	%

Lincoln Park Purchase Agreement

During the year ended December 31, 2022 the Company issued 7,827 shares at an average price per share of $82.32 to Lincoln Park Capital Fund, LLC (“Lincoln Park”) pursuant to a purchase agreement (the “LPC Purchase Agreement”) and registration rights agreement with Lincoln Park entered into on September 1, 2021. Lincoln Park has no right to require the Company to sell any shares of common stock to Lincoln Park, but Lincoln Park is obligated to make purchases as the Company directs, subject to the provisions of the LPC Purchase Agreement and applicable rules of the Nasdaq Capital Market. The Company does not intend to issue any additional shares under the LPC Purchase Agreement.

Warrants

The 627,090 of outstanding liability classified Public Warrants have an exercise price that was reset to $6.9135 per share as a result of the Company’s Reverse Stock Split on August 16, 2023 are exercisable upon issuance and will expire five years following the date of issuance. 92,910 Public Warrants were exercised and the Company received gross proceeds of $0.6 million. No warrants were cancelled during the year ended December 31, 2023.

The Company has outstanding equity-classified warrants to purchase 9,969 shares of common stock at a weighted average exercise price of $819.77, with expiration dates ranging from March 2025 to February 2026. During the year ended December 31, 2023, no warrants were exercised and 1,884 warrants were cancelled due to expiration.

- Definition

The entire disclosure for equity.

+ References

Reference 1: http://www.xbrl.org/2003/role/disclosureRef
-Topic 505
-SubTopic 10
-Name Accounting Standards Codification
-Section 50
-Paragraph 13
-Subparagraph (b)
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147481112/505-10-50-13

Reference 2: http://www.xbrl.org/2003/role/disclosureRef
-Topic 505
-SubTopic 10
-Name Accounting Standards Codification
-Section 50
-Paragraph 13
-Subparagraph (h)
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147481112/505-10-50-13

Reference 3: http://www.xbrl.org/2003/role/disclosureRef
-Topic 505
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-Section 50
-Paragraph 14
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-Publisher FASB
-URI https://asc.fasb.org//1943274/2147481112/505-10-50-14

Reference 4: http://www.xbrl.org/2003/role/disclosureRef
-Topic 946
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-Name Accounting Standards Codification
-Section 50
-Paragraph 2
-Subparagraph (a)
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147481062/946-235-50-2

Reference 5: http://www.xbrl.org/2003/role/disclosureRef
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-SubTopic 235
-Name Accounting Standards Codification
-Section 50
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-Publisher FASB
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Reference 6: http://www.xbrl.org/2003/role/disclosureRef
-Topic 946
-SubTopic 505
-Name Accounting Standards Codification
-Section 50
-Paragraph 6
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Reference 7: http://www.xbrl.org/2003/role/disclosureRef
-Topic 815
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-Name Accounting Standards Codification
-Section 50
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Reference 8: http://www.xbrl.org/2003/role/disclosureRef
-Topic 505
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+ Details

SUPPLEMENTAL BALANCE SHEET DISCLOSURES (Tables)

12 Months Ended

Dec. 31, 2023

SUPPLEMENTAL BALANCE SHEET DISCLOSURES

Schedule of inventory, net

Inventory, net (in thousands)


	December 31,
	2023		2022
Raw materials	$	351	$	344
Work-in-process		67		284
Finished goods		96		39
Inventory, gross		514		667
Inventory reserve		(57)		(78)
Inventory, net	$	457	$	589

Schedule of prepaid expenses and other current assets

Prepaid expenses and other current assets (in thousands)


	December 31,
	2023		2022
Prepaid expenses	$	689	$	817
Inventory related		333		399
Deferred offering costs		140		—
Total prepaid expenses and other current assets	$	1,162	$	1,216

Schedule of property and equipment, net

Property and equipment, net (in thousands)


	December 31,
	2023		2022
Furniture and fixtures	$	59	$	59
Equipment		243		373
Computer software and hardware		235		229
Property and equipment		537		661
Accumulated depreciation		(359)		(314)
Property and equipment, net	$	178	$	347

Schedule of accrued and other current liabilities

Accrued and other current liabilities (in thousands)


	December 31,
	2023		2022
Insurance payable	$	446	$	592
Employees benefits		509		509
Professional services		52		119
Franchise tax		168		—
Other		85		60
Total accrued and other current liabilities	$	1,260	$	1,280

STOCK-BASED COMPENSATION - Nonvested Restricted Stock Unit Activity (Details) - Restricted Stock Units	12 Months Ended
	Dec. 31, 2023 $ / shares shares
Nonvested restricted stock unit activity, Shares
Nonvested, beginning of period (in shares) \| shares	160
Granted (in shares) \| shares	6,644
Vested (in shares) \| shares	(4,576)
Nonvested, end of period (in shares) \| shares	2,228
Nonvested restricted stock unit activity, Weighted Average Grant Date Fair Value
Nonvested, beginning of period (in dollars per share) \| $ / shares	$ 70.00
Granted (in dollars per share) \| $ / shares	7.81
Vested (in dollars per share) \| $ / shares	9.98
Nonvested, end of period (in dollars per share) \| $ / shares	$ 7.81

COMMON STOCK AND WARRANTS (Tables)

12 Months Ended

Dec. 31, 2023

August 9, 2022 registered public offering

Common stock and warrants

Schedule of estimate the fair value of the warrants


	December 31,
	2023			2022
Stock price	$	8.04		$	15.35
Warrant term (in years)		3.61			4.61
Expected volatility		84.10	%		80.90	%
Risk-free interest rate		3.96	%		4.04	%
Dividend rate		0.00	%		0.00	%

INTANGIBLE ASSETS - Summary (Details) - USD ($) $ in Thousands	Dec. 31, 2023	Dec. 31, 2022
Intangible Assets
Intangible assets, Cost	$ 715	$ 701
Intangible assets, Accumulated Amortization	(691)	(561)
Net Carrying Value	$ 24	140
Reacquired rights
Intangible Assets
Intangible assets, Useful Life	3 years 10 months 13 days
Intangible assets, Cost	$ 486	475
Intangible assets, Accumulated Amortization	$ (486)	(388)
Net Carrying Value		87
Acquired proprietary software
Intangible Assets
Intangible assets, Useful Life	5 years
Intangible assets, Cost	$ 145	142
Intangible assets, Accumulated Amortization	(121)	(90)
Net Carrying Value	$ 24	52
Internally developed software
Intangible Assets
Intangible assets, Useful Life	3 years
Intangible assets, Cost	$ 84	84
Intangible assets, Accumulated Amortization	$ (84)	(83)
Net Carrying Value		$ 1

SUPPLEMENTAL BALANCE SHEET DISCLOSURES - Inventory, net (Details) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2023	Dec. 31, 2022
Inventory
Raw materials	$ 351	$ 344
Work-in-process	67	284
Finished goods	96	39
Inventory, gross	514	667
Inventory reserve	(57)	(78)
Inventory, net	457	589
Inventory reserves charged against work-in-process inventory	$ 16	$ 175

SUPPLEMENTAL BALANCE SHEET DISCLOSURES - Accrued and other current liabilities (Details) - USD ($) $ in Thousands	Dec. 31, 2023	Dec. 31, 2022
Accrued and other current liabilities
Insurance payable	$ 446	$ 592
Employees benefits	509	509
Professional services	52	119
Franchise tax	168
Other	85	60
Total accrued and other current liabilities	$ 1,260	$ 1,280

STOCK-BASED COMPENSATION

12 Months Ended

Dec. 31, 2023

STOCK-BASED COMPENSATION

STOCK-BASED COMPENSATION

9.STOCK-BASED COMPENSATION

The Company may issue stock-based compensation awards under The Helius Medical Technologies, Inc. 2022 Equity Incentive Plan (“2022 Plan”) or the Helius Medical Technologies, Inc. 2021 Inducement Plan (as amended, the “Inducement Plan”). The 2022 Plan provides for the grant of incentive stock options (“ISOs”), nonstatutory stock options (“NSOs”), stock appreciation rights, restricted stock awards, restricted stock unit awards, performance awards and other forms of awards to employees, directors and consultants. Options to purchase shares of the Company’s common stock granted under the 2022 Plan are awarded at a price equal to the fair market value at the date of grant based upon the closing price on that date. Options granted under the 2022 Plan generally vest over periods of between one to three years and expire no later than ten years from the date of grant.

The 2022 Plan contains an automatic increase provision which provides for an annual increase to the maximum number of authorized shares on January 1 of each year beginning on January 1, 2023 through January 1, 2027, to an amount equal to (i) 20% of the fully diluted number of shares of common stock outstanding on December 31 of the fiscal year before the date of each automatic increase, or (ii) a lesser number of shares determined by the board of directors prior to the date of the increase. As of January 1, 2024, the number of shares authorized for issuance increased from 264,319 to 319,941 and there were 74,643 shares of common stock available for issuance under the 2022 Plan.

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 The Inducement Plan is used exclusively for grants of awards to individuals who were not previously employees or directors of the Company. Options granted under the Inducement Plan generally vest over four years and expire after ten years. The exercise price of each option is equal to the fair market value of the common stock at the date of grant. As of December 31, 2023, there were 9,240 shares of common stock available for issuance under the Inducement Plan.

The fair value of each stock option award is estimated on the date of grant using the Black-Scholes option valuation model that uses the assumptions noted in the following tables. The risk-free interest rate is estimated using the United States Treasury yield curve and is based on the expected term of the award. The expected term of stock option awards granted is estimated based on the “simplified” method described in the SEC Staff Accounting Bulletin, Topic 14: Share-Based Payment. Expected volatility is calculated using historical volatility over the expected term.

The Black-Scholes option pricing model was used with the following weighted-average assumptions for options granted during the years ended December 31, 2023 and 2022:


	Years Ended December 31,
	2023			2022
Risk-free interest rate		3.93	%		2.95	%
Expected volatility		79.43	%		74.91
Expected term (years)		5.70			5.70
Expected dividend yield		0.00	%		0.00	%
Fair value, per share	$	10.17		$	50.93

The fair value of restricted stock units granted during the years ended December 31, 2023 and 2022 was based on the closing price of the Company’s common stock on the Nasdaq Capital Market on the day of the grant.

Stock option activity during the year ended December 31, 2023 was as follows:


				Weighted Average	Aggregate
		Weighted		Remaining	Intrinsic
		Average		Contractual	Value
	Shares	Exercise Price		Term (in years)	(in thousands)
Outstanding as of December 31, 2022	23,800	$	670.36	8.56		—
Granted	223,268		14.63	—		—
Exercised	—		—	—		—
Forfeited	(1,238)		377.94	—		—
Outstanding as of December 31, 2023	245,830		76.28	9.03	$	5.00
Exercisable as of December 31, 2023	98,350		149.43	8.93	$	4.00

The following table summarizes nonvested restricted stock unit activity during the year ended December 31, 2023:


		Weighted Average
		Grant Date
	Shares	Fair Value
Nonvested as of December 31, 2022	160	$	70.00
Granted	6,644		7.81
Vested	(4,576)		9.98
Forfeited	—		—
Nonvested as of December 31, 2023	2,228	$	7.81

Total stock-based compensation expense was as follows (in thousands):


	Years Ended
	December 31,
	2023		2022
Cost of sales	$	18	$	15
Selling, general and administrative		1,320		2,015
Research and development		291		224
Total stock-based compensation expense	$	1,629	$	2,254

Stock-based compensation expense for the year ended December 31, 2022 included $1.2 million of expense associated with the vesting of performance-based stock options upon the achievement of the performance criteria when the public offering in August 2022 was completed.

As of December 31, 2023, the total remaining unrecognized compensation expense related to nonvested stock options and restricted stock units was $2.5 million which will be amortized over weighted-average remaining requisite service period of 1.0 years.