0001558370-24-007971 | 10-Q | XBRL Viewer | Helius Medical Technologies INC

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COMMITMENTS AND CONTINGENCIES - License agreement (Details) - Advanced NeuroRehabilitation, LLC - License Agreement for Exclusive Right on Patent Pending Technology - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2024	Mar. 31, 2023
COMMITMENTS AND CONTINGENCIES
Percentage of royalty on net revenue	4.00%
Royalty expense	$ 5	$ 4

COMMON STOCK, PREFERRED STOCK AND WARRANTS - Offerings, Series B Preferred Stock and Warrants (Details)					3 Months Ended	9 Months Ended
	Aug. 11, 2023	Jun. 23, 2023 USD ($)	May 24, 2023 $ / shares	Mar. 23, 2023 USD ($) Vote	Mar. 31, 2024 USD ($)	Mar. 31, 2024 USD ($) shares
Common stock and warrants
Proceeds from issuance of common stock					$ 1,374,000
Reverse stock split	0.02
At-The-Market Offering
Common stock and warrants
Shares issued \| shares						201,211
Aggregate offering amount		$ 2,000,000.0
Proceeds from issuance of common stock						$ 1,800,000
At-The-Market Offering \| Roth
Common stock and warrants
Maximum commission rate, percentage of gross proceeds pursuant to the Sales Agreement		3.00%
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

SUPPLEMENTAL BALANCE SHEET DISCLOSURES - Deferred revenue (Details) - HTC - Exclusivity Agreement $ in Thousands	Mar. 03, 2023 CAD ($) 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

RECENT ACCOUNTING PRONOUNCEMENTS

3 Months Ended

Mar. 31, 2024

RECENT ACCOUNTING PRONOUNCEMENTS

RECENT ACCOUNTING PRONOUNCEMENTS

2. RECENT ACCOUNTING PRONOUNCEMENTS

In November 2023, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2023-07, Segment Reporting (Topic 280): Improvements to Reportable Segment Disclosures. The guidance requires expanded interim and annual disclosures of segment information including the disclosure of significant segment expenses that are regularly provided to the chief operating decision maker and included within segment profit and loss. The guidance is effective for the Company's fiscal 2024 Form 10-K and interim periods thereafter. The Company is currently evaluating the ASU to determine its impact on the Company's disclosures.

In December 2023, the FASB issued ASU 2023-09, Income Taxes (Topic 740): Improvements to Income Tax Disclosures. The guidance requires expanded annual disclosures including the standardization and disaggregation of income tax rate reconciliation categories and the amount of income taxes paid by jurisdiction. The guidance is effective for the Company’s fiscal 2025 Form 10-K. The Company is currently evaluating the ASU to determine its impact on the Company’s disclosures.

- Definition

The entire disclosure for change in accounting principle. Includes, but is not limited to, nature, reason, and method of adopting amendment to accounting standards or other change in accounting principle.

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+ Details

SUBSEQUENT EVENTS (Details) - USD ($) $ / shares in Units, $ in Millions		3 Months Ended
	May 09, 2024	Mar. 31, 2024
Common Stock.
Subsequent Events
Shares issued		148,201
Subsequent Event \| 2024 Public Offering
Subsequent Events
Combined offering price (in dollars per share)	$ 2.25
Offering price per pre-funded warrant and accompanying Public Warrants (in dollars per share)	$ 2.249
Net proceeds from issuance of common stock	$ 5.6
Subsequent Event \| Pre-Funded Warrants \| 2024 Public Offering
Subsequent Events
Shares of common stock purchasable with warrants	2,147,222
Exercise price	$ 0.001
Number of warrants exercised	1,076,445
Subsequent Event \| Series A Warrants \| 2024 Public Offering
Subsequent Events
Shares of common stock purchasable with warrants	2,852,221
Warrants expiration period	5 years
Subsequent Event \| Series B Warrants \| 2024 Public Offering
Subsequent Events
Shares of common stock purchasable with warrants	2,852,221
Warrants expiration period	12 months
Subsequent Event \| Public Warrants \| 2024 Public Offering
Subsequent Events
Exercise price	$ 2.25
Subsequent Event \| Common Stock. \| 2024 Public Offering
Subsequent Events
Shares issued	704,999

SUPPLEMENTAL BALANCE SHEET DISCLOSURES

3 Months Ended

Mar. 31, 2024

SUPPLEMENTAL BALANCE SHEET DISCLOSURES

SUPPLEMENTAL BALANCE SHEET DISCLOSURES

3. SUPPLEMENTAL BALANCE SHEET DISCLOSURES

Components of selected captions in the unaudited condensed consolidated balance sheets consisted of the following:

Accounts receivable, net

Accounts receivable from product sales are net of allowance for credit losses of less than $1 thousand as of both March 31, 2024 and December 31, 2023.

Inventory, net (in thousands)


	March 31,		December 31,
	2024		2023
Raw materials	$	295	$	351
Work-in-process		62		67
Finished goods		66		96
Inventory, gross		423		514
Inventory reserve		(39)		(57)
Inventory, net	$	384	$	457

During the three months ended March 31, 2024, $0 and $14 thousand of inventory was written off to the inventory reserve.

Prepaid expenses and other current assets (in thousands)


	March 31,		December 31,
	2024		2023
Prepaid expenses	$	547	$	689
Inventory related		355		333
Deferred offering costs		38		140
Total prepaid expenses and other current assets	$	940	$	1,162

Accrued and other current liabilities (in thousands)


	March 31,		December 31,
	2024		2023
Insurance payable	$	281	$	446
Employees benefits		275		509
Professional services		41		52
Franchise tax		50		168
Other		27		85
Total accrued and other current liabilities	$	674	$	1,260

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 will 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 March 31, 2024 and December 31, 2023 is comprised of the remaining unamortized amount under these agreements. Revenue recognized is included in Other revenue in the Unaudited Condensed Consolidated Statements of Operations and Comprehensive Loss.

SUPPLEMENTAL BALANCE SHEET DISCLOSURES - Inventory, net (Details) - USD ($) $ in Thousands	3 Months Ended	12 Months Ended
	Mar. 31, 2024	Dec. 31, 2023
Inventory
Raw materials	$ 295	$ 351
Work-in-process	62	67
Finished goods	66	96
Inventory, gross	423	514
Inventory reserve	(39)	(57)
Inventory, net	384	457
Work-in-process inventory written off to inventory reserve	$ 0	$ 14

STOCK-BASED COMPENSATION

3 Months Ended

Mar. 31, 2024

STOCK-BASED COMPENSATION

STOCK-BASED COMPENSATION

7. 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”), as described more fully in the 2023 10-K. On January 1, 2023, pursuant to the automatic increase provision of the 2022 Plan, the number of shares authorized for issuance increased from 264,319 to 319,941. As of March 31, 2024, the remaining shares available for grant were 74,643 under the 2022 Plan and 9,240 under the Inducement Plan.

During the three months ended March 31, 2024, the Company did not grant any stock options or restricted stock units out of the 2022 Plan or the Inducement Plan.

As of March 31, 2024, there were an aggregate of 245,830 stock options outstanding with a weighted average exercise price of $76.28 per share and 572 unvested restricted stock units outstanding with a weighted average grant date fair value of $7.81 per share.

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


	Three Months Ended
	March 31,
	2024		2023
Cost of sales	$	4	$	4
Selling, general and administrative		331		320
Research and development		66		81
Total stock-based compensation expense	$	401	$	405

As of March 31, 2024, the total remaining unrecognized compensation expense related to nonvested stock options and restricted stock units was $2.1 million which will be amortized over the weighted-average remaining requisite service period of 0.9 years.

Insider Trading Arrangements	3 Months Ended
Insider Trading Arrangements	Mar. 31, 2024
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

COMMON STOCK, PREFERRED STOCK AND WARRANTS - Warrant fair value inputs (Details) - 2022 Warrants	Mar. 31, 2024 USD ($)	Dec. 31, 2023 USD ($)
Stock price
Fair value inputs
Derivative Liability, Measurement Input	5.83	8.04
Warrant term (in years)
Fair value inputs
Derivative Liability, Measurement Input	3.36	3.61
Expected volatility
Fair value inputs
Derivative Liability, Measurement Input	0.8210	0.8410
Risk-free interest rate
Fair value inputs
Derivative Liability, Measurement Input	0.0437	0.0396
Dividend rate
Fair value inputs
Derivative Liability, Measurement Input	0.0000	0.0000

BASIC AND DILUTED LOSS PER SHARE

3 Months Ended

Mar. 31, 2024

BASIC AND DILUTED LOSS PER SHARE

BASIC AND DILUTED LOSS PER SHARE

8. 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):


	Three Months Ended
	March 31,
	2024		2023
Basic:
Net loss available to common stockholders — basic	$	(2,516)	$	(2,494)
Weighted average common shares outstanding — basic		817,327		564,134
Loss per share - basic	$	(3.08)	$	(4.42)

Diluted:
Net loss available to common stockholders — diluted ⁽¹⁾	$	(2,516)	$	(2,494)
Weighted average common shares outstanding — diluted ⁽¹⁾		817,327		564,134
Loss per share — diluted	$	(3.08)	$	(4.42)

(1)

For the three months ended March 31, 2024 and March 31, 2023, 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 during the periods. Refer to Note 6 for additional information about the Public Warrants.

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


	Three Months Ended
	March 31,
	2024	2023
Stock options	245,830	222,424
Restricted stock units	572	40
Warrants	613,659	731,853

Unaudited Condensed Consolidated Statements of Cash Flows - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2024	Mar. 31, 2023
Cash flows from operating activities:
Net loss	$ (2,516)	$ (2,494)
Adjustments to reconcile net loss to net cash used in operating activities:
Change in fair value of derivative liability	(1,142)	(1,221)
Stock-based compensation expense	401	405
Foreign exchange loss	288	5
Depreciation expense	9	12
Amortization expense	7	39
Provision for (reversal of) inventory reserve	(19)
Non-cash operating lease expense	10	12
Changes in operating assets and liabilities:
Accounts receivable	66	60
Other receivables	6	116
Inventory	92	(28)
Prepaid expense and other current assets	120	131
Operating lease liabilities	(11)	(13)
Accounts payable	284	213
Accrued and other current liabilities	(586)	(424)
Deferred revenue	(10)	(3)
Net cash used in operating activities	(3,001)	(3,190)
Cash flows from investing activities:
Purchase of property and equipment	(5)	(19)
Net cash used in investing activities	(5)	(19)
Cash flows from financing activities:
Proceeds from issuance of common stock	1,374
Proceeds from exercise of warrants	162
Payment of deferred offering costs	(31)
Share issuance costs	(42)
Net cash provided by financing activities	1,463
Effect of currency exchange rate changes on cash and cash equivalents	(1)
Net decrease in cash and cash equivalents	(1,544)	(3,209)
Cash and cash equivalents at beginning of period	5,182	14,549
Cash and cash equivalents at end of period	3,638	$ 11,340
Non-cash investing and financing transactions:
Derivative warrant liability reclassified to equity on exercise of warrants	101
Deferred offering costs reclassified to equity upon public offering	$ 132

COMMITMENTS AND CONTINGENCIES

3 Months Ended

Mar. 31, 2024

COMMITMENTS AND CONTINGENCIES.

COMMITMENTS AND CONTINGENCIES

9. COMMITMENTS AND CONTINGENCIES

The Company is obligated under a license agreement with Advanced NeuroRehabilitation, LLC to pay a 4% royalty on net revenue collected from the sale of devices covered by the patent-pending technology. During the three months ended March 31, 2024 and 2023, the Company recorded royalty expense from the sale of devices of approximately $5 thousand and $4 thousand, respectively, in its Unaudited Condensed Consolidated Statements of Operations and Comprehensive Loss.

STOCK-BASED COMPENSATION - Awards granted and outstanding (Details)	3 Months Ended
	Mar. 31, 2024 $ / shares shares
Stock options
STOCK-BASED COMPENSATION
Outstanding stock options (in shares)	245,830
Weighted average exercise price (in dollars per share) \| $ / shares	$ 76.28
Restricted Stock Units
STOCK-BASED COMPENSATION
Outstanding unvested RSU (in shares)	572
Weighted average grant date fair value (in dollars per share) \| $ / shares	$ 7.81
2022 Plan \| Stock options
STOCK-BASED COMPENSATION
Granted (in shares)	0
2022 Plan \| Restricted Stock Units
STOCK-BASED COMPENSATION
Granted (in shares)	0
Inducement Plan \| Stock options
STOCK-BASED COMPENSATION
Granted (in shares)	0
Inducement Plan \| Restricted Stock Units
STOCK-BASED COMPENSATION
Granted (in shares)	0

LEASES

3 Months Ended

Mar. 31, 2024

LEASES

LEASES

4. LEASES

The Company has an operating lease for office space with lease terms expiring in March 2025. The lease does not contain any options to extend. Operating lease costs for the three months ended March 31, 2024 and 2023 were $10 thousand and $14 thousand, respectively.

Maturities of operating lease liabilities as of March 31, 2024 were as follows (in thousands):


2024 (remaining)	$	35
2025		12
Total lease payments		47
Less: imputed interest		(1)
Total lease liabilities	$	46

ENTERPRISE-WIDE DISCLOSURES (Details) $ in Thousands	3 Months Ended
ENTERPRISE-WIDE DISCLOSURES (Details) $ in Thousands	Mar. 31, 2024 USD ($) segment customer	Mar. 31, 2023 USD ($)
Revenue disaggregated by geographic area
Product sales, net	$ 124	$ 106
Other revenue	11	5
Total revenue	$ 135	$ 111
Number Of Operating Segments \| segment	1
Number Of Reportable Segments \| segment	1
Net product sales \| Customer \| Two customers
Revenue disaggregated by geographic area
Number of customers \| customer	2
Concentration of risk (percent)	94.00%
Net product sales \| Customer \| Single customer
Revenue disaggregated by geographic area
Concentration of risk (percent)		14.00%
Accounts receivable, net \| Credit \| Two customers
Revenue disaggregated by geographic area
Number of customers \| customer	2
Concentration of risk (percent)	94.00%
Accounts receivable, net \| Credit \| Single customer
Revenue disaggregated by geographic area
Concentration of risk (percent)		68.00%
United States
Revenue disaggregated by geographic area
Product sales, net	$ 79	$ 75
Canada
Revenue disaggregated by geographic area
Product sales, net	$ 45	$ 31

SUPPLEMENTAL BALANCE SHEET DISCLOSURES - Accounts receivable, net (Details) - USD ($) $ in Thousands	Mar. 31, 2024	Dec. 31, 2023
Maximum
Accounts receivable, net
Allowance for credit losses	$ 1	$ 1

BASIC AND DILUTED LOSS PER SHARE (Tables)

3 Months Ended

Mar. 31, 2024

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):


	Three Months Ended
	March 31,
	2024		2023
Basic:
Net loss available to common stockholders — basic	$	(2,516)	$	(2,494)
Weighted average common shares outstanding — basic		817,327		564,134
Loss per share - basic	$	(3.08)	$	(4.42)

Diluted:
Net loss available to common stockholders — diluted ⁽¹⁾	$	(2,516)	$	(2,494)
Weighted average common shares outstanding — diluted ⁽¹⁾		817,327		564,134
Loss per share — diluted	$	(3.08)	$	(4.42)

(1)

Schedule of anti-dilutive securities


	Three Months Ended
	March 31,
	2024	2023
Stock options	245,830	222,424
Restricted stock units	572	40
Warrants	613,659	731,853

STOCK-BASED COMPENSATION - Plan information- (Details) - shares	Mar. 31, 2024	Jan. 01, 2023	Dec. 31, 2022
2022 Plan
STOCK-BASED COMPENSATION
Shares authorized for issuance		319,941	264,319
Shares of common stock available for issuance	74,643
Inducement Plan
STOCK-BASED COMPENSATION
Shares of common stock available for issuance	9,240

- 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
-Publisher FASB
-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 3: http://www.xbrl.org/2003/role/disclosureRef
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Reference 4: 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 25: http://www.xbrl.org/2003/role/disclosureRef
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Reference 26: http://www.xbrl.org/2003/role/disclosureRef
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Reference 27: http://www.xbrl.org/2003/role/disclosureRef
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Reference 28: http://www.xbrl.org/2003/role/disclosureRef
-Topic 718
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-Publisher FASB
-URI https://asc.fasb.org//1943274/2147480429/718-10-50-2

+ Details

COMMON STOCK, PREFERRED STOCK AND WARRANTS

3 Months Ended

Mar. 31, 2024

COMMON STOCK, PREFERRED STOCK AND WARRANTS

COMMON STOCK, PREFERRED STOCK AND WARRANTS

6. COMMON STOCK, PREFERRED STOCK AND WARRANTS

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 with an aggregate offering price of up to $2.0 million. Roth is entitled to a fixed commission rate equal to up to 3% of the gross proceeds pursuant to the Sales Agreement. As of March 31, 2024, 201,211 shares have been sold under the ATM generating net proceeds of $1.8 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. The value of the Series B Preferred Stock issued in connection with the stock dividend was immaterial.

The outstanding shares of Series B Preferred Stock will vote together with the outstanding shares of the Company’s Common Stock, as a single class, exclusively with respect to a proposal giving the Board of Directors the authority, as it determines appropriate, to implement a reverse stock split within twelve months following the approval of such proposal by the Company’s stockholders as well as any proposal to adjourn any meeting of stockholders called for the purpose of voting on the foregoing matters.

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 holder of Series B Preferred Stock, as such, will not be entitled to receive dividends.

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 March 31, 2024, no shareholders of Series B Preferred Stock have requested such redemption.

Warrants

The Company issued warrants to purchase an aggregate of 720,000 shares of Common Stock (“2022 Warrants”) in connection with the August 2022 Public Offering, as more fully described in Note 8 to our Consolidated Financial Statements included our 2023 10-K. The 2022 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. Accordingly, the 2022 Warrants are being accounted for as a derivative liability instrument. As a result of the Company’s Reverse Stock Split on August 16, 2023, refer to Note 1, the exercise price on the 2022 Warrants was reset to $6.9135 per share based on the volume-weighted average price for the five stock trading days immediately following the Reverse Stock Split.

The fair value of the 2022 Warrants as of March 31, 2024 and December 31, 2023 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 share price and the inputs used to estimate the fair value of the warrants:


	March 31,			December 31,
	2024			2023
Stock price	$	5.83		$	8.04
Warrant term (in years)		3.36			3.61
Expected volatility		82.10	%		84.10	%
Risk-free interest rate		4.37	%		3.96	%
Dividend rate		0.00	%		0.00	%

The fair value of the derivative liability associated with the 2022 Warrants as of March 31, 2024 and December 31, 2023 was $2.1 million and $3.3 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 Unaudited Condensed Consolidated Statements of Operations and Comprehensive Loss. 2022 Warrants were exercised to purchase of 23,400 shares of Common Stock at $6.9135 per share for $162 thousand in net proceeds and no 2022 Warrants were cancelled during the three months ended March 31, 2024. The portion of the derivative liability relating to the exercised warrants of $101 thousand was reclassified into stockholders’ equity based on the fair value on the date of reclassification. The remaining outstanding 2022 Warrants to purchase 603,690 shares of Common Stock are classified as a derivative liability as of March 31, 2024, are exercisable upon issuance and will expire five years following the date of issuance.

On May 9, 2024, in connection with the 2024 Public Offering (as defined below), the exercise price of the 2022 Warrants was repriced again. Refer to Note 11 for additional information.

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 October 2023 to February 2026. During the three months ended March 31, 2024, no equity-classified warrants were exercised or cancelled.

- 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
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-Publisher FASB
-URI https://asc.fasb.org//1943274/2147481112/505-10-50-13

Reference 3: http://www.xbrl.org/2003/role/disclosureRef
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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
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Reference 5: http://www.xbrl.org/2003/role/disclosureRef
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Reference 6: http://www.xbrl.org/2003/role/disclosureRef
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-Name Accounting Standards Codification
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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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Reference 8: http://www.xbrl.org/2003/role/disclosureRef
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Reference 9: http://www.xbrl.org/2003/role/disclosureRef
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-URI https://asc.fasb.org//505/tableOfContent

Reference 11: 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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Reference 15: http://www.xbrl.org/2003/role/disclosureRef
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Reference 18: http://www.xbrl.org/2003/role/disclosureRef
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+ Details

Unaudited Condensed Consolidated Statements of Operations and Comprehensive Loss - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2024	Mar. 31, 2023
Revenue
Product sales, net	$ 124	$ 106
Revenue from Contract with Customer, Product and Service [Extensible Enumeration]	us-gaap:ProductMember	us-gaap:ProductMember
Other revenue	$ 11	$ 5
Total revenue	135	111
Cost of revenue
Cost of revenue	$ 123	$ 122
Cost, Product and Service [Extensible Enumeration]	us-gaap:ProductMember	us-gaap:ProductMember
Gross profit (loss)	$ 12	$ (11)
Operating expenses
Selling, general and administrative expenses	2,633	2,874
Research and development expenses	788	886
Amortization expense	7	39
Total operating expenses	3,428	3,799
Loss from operations	(3,416)	(3,810)
Nonoperating income (expense)
Interest income (expense), net	(8)	100
Change in fair value of derivative liability	1,142	1,221
Foreign exchange loss	(288)	(5)
Other income, net	54
Nonoperating income, net	900	1,316
Loss before provision for income taxes	(2,516)	(2,494)
Provision for income taxes
Net loss	(2,516)	(2,494)
Other comprehensive income (loss)
Foreign currency translation adjustments	288	5
Comprehensive loss	$ (2,228)	$ (2,489)
Loss per share
Basic (in dollar per share)	$ (3.08)	$ (4.42)
Diluted (in dollar per share)	$ (3.08)	$ (4.42)
Weighted average number of common shares outstanding
Basic (in shares)	817,327	564,134
Diluted (in shares)	817,327	564,134

BASIS OF PRESENTATION (Details) $ in Thousands			3 Months Ended
BASIS OF PRESENTATION (Details) $ in Thousands	Aug. 11, 2023	May 24, 2023	Mar. 31, 2024 USD ($)	Mar. 31, 2023 USD ($)	Dec. 31, 2023 USD ($)
BASIS OF PRESENTATION
Reverse stock split	0.02
Cash and cash equivalents			$ 3,638		$ 5,182
Operating loss			3,416	$ 3,810
Accumulated deficit			162,473		$ 159,957
Product sales, net			$ 124	$ 106
2022 Warrants
BASIS OF PRESENTATION
Number of days, warrants exercise price reset			5 days
Class A Common Stock \| Minimum
BASIS OF PRESENTATION
Reverse stock split		0.10
Class A Common Stock \| Maximum
BASIS OF PRESENTATION
Reverse stock split		0.0125

STOCK-BASED COMPENSATION (Tables)

3 Months Ended

Mar. 31, 2024

STOCK-BASED COMPENSATION

Schedule of stock-based compensation expense

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


	Three Months Ended
	March 31,
	2024		2023
Cost of sales	$	4	$	4
Selling, general and administrative		331		320
Research and development		66		81
Total stock-based compensation expense	$	401	$	405

Pay vs Performance Disclosure - USD ($) $ in Thousands	3 Months Ended
Pay vs Performance Disclosure - USD ($) $ in Thousands	Mar. 31, 2024	Mar. 31, 2023
Pay vs Performance Disclosure
Net Income (Loss)	$ (2,516)	$ (2,494)

- Definition

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

+ References

Reference 1: http://www.xbrl.org/2003/role/disclosureRef
-Topic 235
-SubTopic 10
-Name Accounting Standards Codification
-Section S99
-Paragraph 1
-Subparagraph (SX 210.4-08(g)(1)(ii))
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Reference 2: http://www.xbrl.org/2003/role/disclosureRef
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Reference 3: http://www.xbrl.org/2003/role/disclosureRef
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Reference 4: http://www.xbrl.org/2003/role/disclosureRef
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BASIC AND DILUTED LOSS PER SHARE (Details) - USD ($) $ / shares in Units, $ in Thousands	3 Months Ended
	Mar. 31, 2024	Mar. 31, 2023
Basic:
Net loss available to common stockholders - basic	$ (2,516)	$ (2,494)
Weighted average common shares outstanding - basic (in shares)	817,327	564,134
Loss per share - basic (in dollar per share)	$ (3.08)	$ (4.42)
Diluted:
Net loss available to common stockholders - diluted	$ (2,516)	$ (2,494)
Weighted average common shares outstanding - diluted (in shares)	817,327	564,134
Loss per share - diluted (in dollar per share)	$ (3.08)	$ (4.42)

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-SubTopic 10
-Name Accounting Standards Codification
-Section 45
-Paragraph 10
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147482689/260-10-45-10

Reference 11: http://www.xbrl.org/2003/role/exampleRef
-Topic 280
-SubTopic 10
-Name Accounting Standards Codification
-Section 50
-Paragraph 31
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147482810/280-10-50-31

Reference 12: http://www.xbrl.org/2003/role/disclosureRef
-Topic 280
-SubTopic 10
-Name Accounting Standards Codification
-Section 50
-Paragraph 32
-Subparagraph (c)
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147482810/280-10-50-32

Reference 13: http://www.xbrl.org/2003/role/disclosureRef
-Topic 260
-SubTopic 10
-Name Accounting Standards Codification
-Section 45
-Paragraph 11
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147482689/260-10-45-11

Reference 14: http://www.xbrl.org/2003/role/disclosureRef
-Topic 260
-SubTopic 10
-Name Accounting Standards Codification
-Section 45
-Paragraph 60B
-Subparagraph (c)
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147482689/260-10-45-60B

+ Details

- Definition

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

FAIR VALUE MEASUREMENTS

3 Months Ended

Mar. 31, 2024

FAIR VALUE MEASUREMENTS

FAIR VALUE MEASUREMENTS

5. 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 Unaudited Condensed 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. As of March 31, 2024 and December 31, 2023, financial instruments of the Company consist of cash equivalents, which were comprised of deposits of excess cash in an unrestricted money market savings account and a money market mutual fund. The carrying value of cash equivalents generally approximates fair value due to their short-term nature.

The Company’s derivative liability as of March 31, 2024 and December 31, 2023 is comprised of warrants issued in connection with the registered public offering completed in August 2022 (“August 2022 Public Offering”) discussed in more detail in Note 8 to our Consolidated Financial Statements included our 2023 10-K. 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 6 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.

- 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

LEASES (Details) $ in Thousands	3 Months Ended
LEASES (Details) $ in Thousands	Mar. 31, 2024 USD ($) lease	Mar. 31, 2023 USD ($)
LEASES
Number of operating leases \| lease	1
Lessee options to extend lease	false
Operating lease costs	$ 10	$ 14
Maturities of operating lease liabilities
2024 (remaining)	35
2025	12
Total lease payments	47
Less: imputed interest	(1)
Total lease liabilities	$ 46

LEASES (Tables)

3 Months Ended

Mar. 31, 2024

LEASES

Schedule of maturities of operating lease liabilities

Maturities of operating lease liabilities as of March 31, 2024 were as follows (in thousands):


2024 (remaining)	$	35
2025		12
Total lease payments		47
Less: imputed interest		(1)
Total lease liabilities	$	46

Unaudited Condensed Consolidated Balance Sheets - USD ($) $ in Thousands	Mar. 31, 2024	Dec. 31, 2023
Current assets
Cash and cash equivalents	$ 3,638	$ 5,182
Accounts receivable, net	49	117
Other receivables	513	520
Inventory, net	384	457
Prepaid expenses and other current assets	940	1,162
Total current assets	5,524	7,438
Property and equipment, net	174	178
Intangible assets, net	17	24
Operating lease right-of-use asset, net	42	52
Total assets	5,757	7,692
Current liabilities
Accounts payable	814	531
Accrued and other current liabilities	674	1,260
Current portion of operating lease liabilities	46	45
Current portion of deferred revenue	42	43
Total current liabilities	1,576	1,879
Operating lease liabilities, net of current portion		12
Deferred revenue, net of current portion	115	128
Derivative liability	2,080	3,323
Total liabilities	3,771	5,342
Commitments and contingencies (Note 9)
Stockholders' equity
Class A common stock, $0.001 par value; 150,000,000 shares authorized; 887,847 and 714,590 shares issued and outstanding as of March 31, 2024 and December 31, 2023, respectively	1	1
Additional paid-in capital	164,843	162,979
Accumulated deficit	(162,473)	(159,957)
Accumulated other comprehensive loss	(385)	(673)
Total stockholders' equity	1,986	2,350
Total liabilities and stockholders' equity	$ 5,757	$ 7,692

COMMON STOCK, PREFERRED STOCK AND WARRANTS (Tables)

3 Months Ended

Mar. 31, 2024

COMMON STOCK, PREFERRED STOCK AND WARRANTS

Schedule of estimate the fair value of the warrants


	March 31,			December 31,
	2024			2023
Stock price	$	5.83		$	8.04
Warrant term (in years)		3.36			3.61
Expected volatility		82.10	%		84.10	%
Risk-free interest rate		4.37	%		3.96	%
Dividend rate		0.00	%		0.00	%

Unaudited Condensed Consolidated Statements of Stockholders' Equity - USD ($) $ in Thousands	Class A Common Stock	Additional Paid-In Capital	Accumulated Deficit	Accumulated Other Comprehensive Loss	Total
Beginning Balance, Shares at Dec. 31, 2022	564,094
Beginning Balance at Dec. 31, 2022	$ 1	$ 159,645	$ (151,107)	$ (388)	$ 8,151
Settlement of restricted stock units, Shares	120
Stock-based compensation		405			405
Other comprehensive gain (loss)				5	5
Net Income (Loss)			(2,494)		(2,494)
Ending Balance, Shares at Mar. 31, 2023	564,214
Ending Balance at Mar. 31, 2023	$ 1	160,050	(153,601)	(383)	6,067
Beginning Balance, Shares at Dec. 31, 2023	714,590
Beginning Balance at Dec. 31, 2023	$ 1	162,979	(159,957)	(673)	2,350
Issuance of common stock in public offering, Shares	148,201
Issuance of common stock in public offering		1,374			1,374
Share issuance costs		(174)			(174)
Exercise of warrants, Shares	23,400
Exercise of warrants		263			263
Settlement of restricted stock units, Shares	1,656
Stock-based compensation		401			401
Other comprehensive gain (loss)				288	288
Net Income (Loss)			(2,516)		(2,516)
Ending Balance, Shares at Mar. 31, 2024	887,847
Ending Balance at Mar. 31, 2024	$ 1	$ 164,843	$ (162,473)	$ (385)	$ 1,986

Document and Entity Information - shares	3 Months Ended
Document and Entity Information - shares	Mar. 31, 2024	May 09, 2024
Document and Entity Information
Document Type	10-Q
Document Period End Date	Mar. 31, 2024
Document Quarterly Report	true
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 Current Reporting Status	Yes
Entity Interactive Data Current	Yes
Entity Filer Category	Non-accelerated Filer
Entity Small Business	true
Entity Emerging Growth Company	false
Entity Shell Company	false
Entity Common Stock, Shares Outstanding		2,529,863
Entity Central Index Key	0001610853
Current Fiscal Year End Date	--12-31
Document Fiscal Year Focus	2024
Document Fiscal Period Focus	Q1
Amendment Flag	false

SUPPLEMENTAL BALANCE SHEET DISCLOSURES - Accrued and other current liabilities (Details) - USD ($) $ in Thousands	Mar. 31, 2024	Dec. 31, 2023
Accrued and other current liabilities
Insurance payable	$ 281	$ 446
Employees benefits	275	509
Professional services	41	52
Franchise tax	50	168
Other	27	85
Total accrued and other current liabilities	$ 674	$ 1,260

SUPPLEMENTAL BALANCE SHEET DISCLOSURES (Tables)

3 Months Ended

Mar. 31, 2024

SUPPLEMENTAL BALANCE SHEET DISCLOSURES

Schedule of inventory, net

Inventory, net (in thousands)


	March 31,		December 31,
	2024		2023
Raw materials	$	295	$	351
Work-in-process		62		67
Finished goods		66		96
Inventory, gross		423		514
Inventory reserve		(39)		(57)
Inventory, net	$	384	$	457

Schedule of prepaid expenses and other current assets

Prepaid expenses and other current assets (in thousands)


	March 31,		December 31,
	2024		2023
Prepaid expenses	$	547	$	689
Inventory related		355		333
Deferred offering costs		38		140
Total prepaid expenses and other current assets	$	940	$	1,162

Schedule of accrued and other current liabilities

Accrued and other current liabilities (in thousands)


	March 31,		December 31,
	2024		2023
Insurance payable	$	281	$	446
Employees benefits		275		509
Professional services		41		52
Franchise tax		50		168
Other		27		85
Total accrued and other current liabilities	$	674	$	1,260

ENTERPRISE-WIDE DISCLOSURES (Tables)

3 Months Ended

Mar. 31, 2024

ENTERPRISE-WIDE DISCLOSURES

Schedule of revenue disaggregated by geographic area

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


	Three Months Ended
	March 31,
	2024		2023
Product sales, net:
United States	$	79	$	75
Canada		45		31
Total product sales, net		124		106
Other revenue		11		5
Total revenue	$	135	$	111

COMMON STOCK, PREFERRED STOCK AND WARRANTS - Warrants (Details) - USD ($) $ / shares in Units, $ in Thousands	3 Months Ended
	Mar. 31, 2024	Dec. 31, 2023	Aug. 09, 2022
Warrant activity
Fair value of derivative liability	$ 2,080	$ 3,323
Derivative warrant liability reclassified to equity on exercise of warrants	101
2022 Warrants
Warrant activity
Fair value of derivative liability	$ 2,100	$ 3,300
Number of warrants outstanding	603,690
Exercise price	$ 6.9135
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	23,400
Number of warrants cancelled	0
Net proceeds of warrant exercise amount	$ 162
Equity-classified Warrants
Warrant activity
Number of warrants outstanding	9,969
Number of warrants exercised	0
Number of warrants cancelled	0
Equity-classified Warrants \| Weighted Average
Warrant activity
Exercise price	$ 819.77

SUPPLEMENTAL BALANCE SHEET DISCLOSURES - Prepaid expenses and other current assets (Details) - USD ($) $ in Thousands	Mar. 31, 2024	Dec. 31, 2023
SUPPLEMENTAL BALANCE SHEET DISCLOSURES
Prepaid expenses	$ 547	$ 689
Inventory related	355	333
Deferred offering costs	38	140
Total prepaid expenses and other current assets	$ 940	$ 1,162

SUBSEQUENT EVENTS

3 Months Ended

Mar. 31, 2024

SUBSEQUENT EVENTS

SUBSEQUENT EVENTS

11. SUBSEQUENT EVENTS

On May 9, 2024, the Company closed on a registered public offering consisting of 704,999 shares of Common Stock (the “2024 Public Offering”), pre-funded warrants to purchase 2,147,222 shares of Common Stock (the “Pre-funded Warrants”) and accompanying Series A Warrants to purchase up to 2,852,221 shares of its Common Stock (“Series A Warrants”) and Series B Warrants to purchase up to 2,852,221 shares of its Common Stock (“Series B Warrants”, and together with the Series A Warrants, the “2024 Public Warrants”). The 2024 Public Offering price per share of Common Stock and accompanying Series A Warrants and Series B Warrants was $2.25, the public offering price per Pre-funded Warrant and accompanying Series A and Series B warrant was $2.249. The Pre-funded Warrants have an exercise price of $0.001 per share and 1,076,445 were exercised on the closing date. Net proceeds from the 2024 Public Offering, after deducting placement agent fees and expenses and other offering costs, were approximately $5.6 million.

The 2024 Public Warrants have an exercise price of $2.25 per share, are exercisable upon issuance, and the Series A Warrants will expire five years following the date of issuance and the Series B Warrants will expire twelve months following the date of issuance. The Pre-funded Warrants are exercisable upon issuance and may be exercised at any time until the Pre-funded Warrants are exercised in full.

As a result of the 2024 Public Offering, the exercise price of the 2022 Warrants will be repriced per the terms of the warrant agreement.

STOCK-BASED COMPENSATION - Stock-based compensation expense (Details) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2024	Mar. 31, 2023
STOCK-BASED COMPENSATION
Stock based compensation expense	$ 401	$ 405
Remaining unrecognized compensation expense related to nonvested awards	$ 2,100
Weighted-average remaining requisite service period	10 months 24 days
Cost of sales
STOCK-BASED COMPENSATION
Stock based compensation expense	$ 4	4
Selling, general and administrative
STOCK-BASED COMPENSATION
Stock based compensation expense	331	320
Research and development
STOCK-BASED COMPENSATION
Stock based compensation expense	$ 66	$ 81

Unaudited Condensed Consolidated Balance Sheets (Parenthetical) - $ / shares	Mar. 31, 2024	Dec. 31, 2023
Unaudited Condensed 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)	887,847	714,590
Common stock, shares, outstanding (in shares)	887,847	714,590

BASIS OF PRESENTATION

3 Months Ended

Mar. 31, 2024

BASIS OF PRESENTATION

BASIS OF PRESENTATION

1. BASIS OF PRESENTATION

The accompanying interim Unaudited Condensed Consolidated Financial Statements of Helius Medical Technologies, Inc. (together with its wholly owned subsidiaries the “Company”) have been prepared in accordance with the rules and regulations of the Securities and Exchange Commission ("SEC") and should be read in conjunction with the audited consolidated financial statements and notes included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2023 that was filed with the Securities and Exchange Commission on March 28, 2024 (“2023 10-K”). Certain information and footnote disclosures normally included in financial statements prepared in accordance with generally accepted accounting principles in the United States of America ("GAAP") have been condensed or omitted.

There have been no material changes to the Company's significant accounting policies from those described in the 2023 Form 10-K. Certain prior period amounts have been reclassified to conform to the current period presentation.

The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the amounts reported in the financial statements. Actual results could differ from those estimates.

In the opinion of management, the Unaudited Condensed Consolidated Financial Statements reflect all adjustments necessary for a fair statement of the results for the interim periods presented. All such adjustments, unless otherwise noted herein, are of a normal, recurring nature. The results of operations for the interim periods are not necessarily indicative of the results of operations to be expected for the full year.

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 (“Common Stock”) at a ratio in the range of 1-for-10 to 1-for-80 to be determined at the discretion of the Company’s Board of Directors (the “Board”). 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”). Refer to Note 6 for additional information.

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. In accordance with the terms of the warrant agreement for the Public Warrants described further in Note 6, 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.

Going Concern Uncertainty

As of March 31, 2024, the Company had cash, cash equivalents of $3.6 million. For the three months ended March 31, 2024, the Company had an operating loss of $3.4 million, and as of March 31, 2024, its accumulated deficit was $162.5 million. For the three months ended March 31, 2024, the Company had $0.1 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 Unaudited Condensed Consolidated Financial Statements have been prepared on the basis of continuity of operations, realization of assets and satisfaction of liabilities in the ordinary course of business; no adjustments have been made relating to the recoverability and classification of recorded asset amounts and classification of liabilities that might be necessary should the Company not continue as a going concern.

The Company intends to fund ongoing activities by utilizing its current cash 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.

Global Economic Conditions

Generally, worldwide economic conditions remain uncertain, particularly due to the conflict between Russia and Ukraine, as well as in the Middle East between Israel and Hamas, disruptions in the banking system and financial markets and increased inflation. The general economic and capital market conditions both in the United States and worldwide, have been volatile in the past and at times have adversely affected the Company’s access to capital and increased the cost of capital. The capital and credit markets may not be available to support future capital raising activity on favorable terms. If economic conditions decline, the Company’s future cost of equity or debt capital and access to the capital markets could be adversely affected.

Changes in economic conditions, supply chain constraints, logistics challenges, labor shortages, the effects of conflicts in Ukraine and the Middle East, disruptions in the banking system and financial markets, high levels of inflation and an increase in interest rates have increased costs and have had and may continue to have a negative impact on the Company’s business. Although the Company has taken and may continue to take measures to mitigate these impacts, if these measures are not effective, the Company’s business, financial condition, results of operations, and liquidity could be materially adversely affected.

ENTERPRISE-WIDE DISCLOSURES

3 Months Ended

Mar. 31, 2024

ENTERPRISE-WIDE DISCLOSURES

ENTERPRISE-WIDE DISCLOSURES

10. ENTERPRISE-WIDE DISCLOSURES

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 directly to patients in the United States and to clinics in Canada.

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


	Three Months Ended
	March 31,
	2024		2023
Product sales, net:
United States	$	79	$	75
Canada		45		31
Total product sales, net		124		106
Other revenue		11		5
Total revenue	$	135	$	111

Two customers accounted for 94% of net product sales for the three months ended March 31, 2024 and a single customer accounted for 14% of net product sales for the three months ended March 31, 2023. Two customers accounted for 94% of accounts receivable, net as of March 31, 2024 and a single customer accounted for 68% of accounts receivable, net as of March 31, 2023.

- 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

Reference 1: 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 2: http://www.xbrl.org/2003/role/disclosureRef
-Topic 280
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-Name Accounting Standards Codification
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-Paragraph 15
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Reference 3: http://www.xbrl.org/2003/role/disclosureRef
-Topic 280
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Reference 4: http://www.xbrl.org/2003/role/disclosureRef
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Reference 5: http://www.xbrl.org/2003/role/disclosureRef
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Reference 6: http://www.xbrl.org/2003/role/disclosureRef
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Reference 9: http://www.xbrl.org/2003/role/disclosureRef
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Reference 10: http://www.xbrl.org/2003/role/disclosureRef
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Reference 11: http://www.xbrl.org/2003/role/disclosureRef
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Reference 12: 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
-Topic 280
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-Publisher FASB
-URI https://asc.fasb.org//1943274/2147482810/280-10-50-32

+ Details

BASIC AND DILUTED LOSS PER SHARE - Antidilutive securities (Details) - shares	3 Months Ended
	Mar. 31, 2024	Mar. 31, 2023
Stock options
Anti-dilutive securities
Anti-dilutive outstanding securities not included in computation of diluted loss per share	245,830	222,424
Restricted Stock Units
Anti-dilutive securities
Anti-dilutive outstanding securities not included in computation of diluted loss per share	572	40
Warrants
Anti-dilutive securities
Anti-dilutive outstanding securities not included in computation of diluted loss per share	613,659	731,853