Please standby. Good evening ladies and gentlemen and welcome to the First Quarter Fiscal Year 2021 Earnings Conference Call for Helius Medical Technologies. At this time, all participants have been placed in a listen-only mode. Please note that this conference call is being recorded and that the recording will be available on the company's website for replay shortly. Before we begin, I would like to remind everyone that our remarks and responses to your questions today may contain forward-looking statements that are based on the current expectations of management. These forward-looking statements involve inherent risks and uncertainties that could cause actual results to differ materially from those indicated, including those identified in the risk factor section of our most recent annual report on form 10-K and quarterly report on form 10-Q.

Thank you operator. Welcome everyone to Helius Medical's first quarter 2021 earnings conference call. I'm joined this evening by Joyce LaViscount, our Chief Financial Officer and Chief Operating Officer; and Mark Leno, Vice President and General Manager of our Canadian operations. Let me provide you with a quick agenda of what we are going to focus on today as part of our continued strategy to reposition Helius to create shareholder value. I'll begin my remarks with a brief discussion on our progress in the United States and initiatives we are focused on as we prepare for commercialization. Following this discussion, Mark will provide you with an update on our commercial activities in Canada. Joyce will then briefly review our first quarter financial results, discuss the recent progress we have made to secure additional capital and enhance our balance sheet condition and share some thoughts on our expectations. Following Joyce's remarks, I will share some closing thoughts on our near-term initiatives in 2021 and longer-term outlook before we open the call for questions. With that, let's get started with an update on our recent progress in the U.S. During the first quarter of 2021 we made very strong progress on our U.S. regulatory strategy to pursue an indication in multiple sclerosis or MS as the pathway for obtaining the first U.S. clearance for our PoNS device. Since we announced this shift in our U.S. regulatory strategy in March of 2020, our regulatory and clinical team worked tirelessly to secure clearance for this high unmet medical need and bring our technology to approximately 1 million U.S. patients suffering from MS. Approximately one year later, we were proud to secure U.S. marketing authorization for our PoNS device for the short-term treatment of gait deficit due to mild to moderate symptoms from MS. This achievement represents the most significant milestone in the history of Helius Medical and I would like to personally congratulate our employees, shareholders and the people who conducted and participated in our clinical research for helping to make it possible. The receipt of our first U.S. clearance is an important validation of the safety and efficacy of our innovative PoNS technology and we look forward to bringing it to the U.S. patient population quickly and effectively.

Thanks very much, Dane. Consistent with the expectations we shared on our earnings call in March, we reported total revenue of $84,000 for the first quarter of 2021 compared with $207,000 in the first quarter of last year. Our revenue in both periods was driven by sales to neural therapy clinics in Canada that had been authorized to provide our PoNS treatment. As we had anticipated, our revenue performance in the first quarter of 2021 remains impacted by the significant business disruption in Canada related to the COVID-19 pandemic, including restrictions and protocols implemented to protect patient health and safety. Let me take a moment to update you on these protocols and their impact in more detail. As we've discussed on prior earnings calls, our PoNS authorized clinics across Canada have been constrained by federal and provincial restrictions, which limited their capacity to approximately 50% of normal services through the second half of 2020. Based on surveys of our clinic customers during this period, we also saw that their capacity and productivity was well below this 50% level due to the added impacts of clinic-imposed safety protocols and the effect of the pandemic on patient willingness to seek in-clinic treatment.

Thanks, Mark. For the first quarter of 2021, our gross profit decreased by $37,000 or 35%, year-over-year to $69,000 due to the June 2020 launch of promotional pricing to drive customer access due to COVID. Operating expenses for the first quarter of 2021 decreased by $538,000 or 13% year-over-year to $3.6 million, reflecting the continued benefits of the cost reduction initiatives that we implemented during the past year. Operating loss for the first quarter of 2021 was $3.5 million, compared to $4.0 million for the prior year period. And we reported a net loss for the first quarter of 2021 of $3.4 million, or minus $1.65 per basic and diluted common share, compared to a net loss of $4.8 million or minus $5.38 per basic and diluted common share for the same period last year. As a reminder, on December 31, 2020, we completed a one-for-35 reverse split of our class A common stock in order to regain compliance with the NASDAQ stock market's continued listing requirements. We received written notice from NASDAQ on January 15, 2021, which confirmed our compliance with all applicable listing standards. Turning to a discussion of our balance sheet condition and recent financing activities. Our average cash burn from operations during the first quarter of 2021 was approximately $1 million per month, compared to approximately $1.3 million per month in the first quarter of last year, reflecting the success of our continued efforts to control our expenses and allocate capital prudently. During the first quarter of 2021, we raised $1.3 million in net proceeds through the exercise of warrants in January and closed an underwritten public offering of common stock and warrants for net proceeds of approximately $9.6 million, including a full 15% over-allotment on February 1. As of March 31, 2021, we had $11.4 million in cash, compared to $3.3 million as of December 31, 2020. We had no outstanding debt obligations in either period. Looking ahead, while we expect our expenses in 2021 to increase in conjunction with our pre-commercialization activities, we will continue to maintain a disciplined approach to spending while evaluating options to strengthen our balance sheet and support our operations, including our U.S. commercialization efforts. As a reminder, there are currently approximately 594,000 warrants with a weighted average price of 16.32, which could yield an additional $9.7 million if exercised. Although there is no assurance that these warrants will be exercised in 2021, or ever. Turning to our outlook. In lieu of formal fiscal year guidance, we would like to share some thoughts on our expectations for second quarter sales performance and operating expense trends. Given the COVID-related restrictions in Canada experienced during the second quarter to date and the impact on clinic capacity and patient willingness to seek treatment, we currently anticipate second quarter total revenue of approximately $90,000. Despite these temporary impacts, our Canadian business remains an essential component of our long term commercial and clinical regulatory strategy. We hope to see evidence of a gradual return to a more normalized environment as we enter the second half of the year. As a reminder, we expect to begin our commercialization in the U.S. during the first quarter of 2022 and therefore do not anticipate any revenue from the sales of our PoNS device in the U.S. during 2021. In terms of our operating expenses, we anticipate expenses to increase modestly in the second quarter on a quarter-over-quarter basis with the second half of 2021 reflecting the majority of the incremental investment related to our pre-commercial activities as we prepare for U.S. commercialization.

Thanks Joyce and Mark. In summary, I couldn't be more proud of the dedication and resourcefulness that our team has shown in 2021. By securing marketing authorization in MS, we accomplished the most important milestone required to bring our technology to the U.S. market where nearly half of all diagnosed MS patients reside. We’ve raised $11 million in net proceeds to support our operations and future growth. We are making progress in building our team and executing efficiently to enter the U.S. market in early 2022. Our entire team in Canada continues to perform admirably, laying the groundwork for our future commercial success as the country recovers. Our operations in Canada continue to remain an integral component of our overall clinical, regulatory, and commercial strategy. And we look forward to continuing to leverage the skill set and expertise of our Canadian team as we return to growth and pursue longer-term strategic objectives. As a result of our recent progress, Helius is better positioned as an organization to bring our technology to the large, underserved population of MS patients in the U.S. and Canada as quickly as possible. Over the remaining months of 2021, we are committed to continuing our strong pace of execution with these goals in mind, which we continue to believe represents the best path to creating value for our shareholders. Longer term, based on the success of our U.S. regulatory strategy, our existing clinical data, and capabilities demonstrated by our regulatory and clinical affairs team, we look forward to leveraging the potential of our PoNS device as a platform technology to treat multiple disease states, including balancing gait deficit associated with stroke, traumatic brain injury, cerebral palsy, and Parkinson's disease. With this in mind, we aim to continue our efforts to pursue new indications for use and expand its applications. I would like to close today's remarks by once again thanking our employees for their efforts this past quarter in recent years and congratulating them on our recent success. I would also like to thank our new and existing shareholders for their support, as well as everyone on tonight's call for their interest in Helius Medical Technologies and our mission. With that operator, let's now open up the call for questions.

Thank you. Your first question comes from the line of Jeffrey Cohen with Ladenburg Thalmann. Please proceed with your question.

Hi, this is actually on for Jeff. Thank you for taking my questions. My first one is kind of two parts. I heard you referenced your marketing strategy in regards to the physician. So I'm just curious, are you doing any market development within the MS community meeting directly with patients? I know that they're a very well-educated community and they're typically on top of regulatory approvals. So I'm just wondering how you're kind of leveraging that? And then how are you thinking about the time from investing in raising awareness to actual utilization by patients?

Joyce, do you want to take that question?

Sure. So the first part of the question, working with the neuro-rehabilitation centers, yes, we will also be working with the MS community. You're exactly right. They are very organized and motivated. And we feel that that's a huge opportunity for us to partner with them. With respect to the investment that we're making in developing our sales and marketing strategy as this is a novel technology that we are using, we are going to focus on a small cross-functional team that we have in place already to build out the commercial model and to prove the go-to-market strategy. And then, once we're able to prove out that model, we will continue to expand as we increase the number of neuro-rehabilitation centers that we pursue and spread the investments efforts from there.

Okay, thank you. And then just for my follow-up, could you discuss your supply chain and manufacturing capabilities and if you're making any investments there ahead of the U.S. commercial launch? Thank you.

So from a supply chain and manufacturing capability, our manufacturer is KeyTronics and they're located in Minnesota. We have full-scale manufacturing already in place. And right now, we are working to make some minor modifications to our products to ensure safety, reliability, and improve our yields. And as we move through, we will be able to manufacture ample products to support the demand forecast that we are building at this time.

Okay, thank you.

Your next question comes from the line of Joe Gomes with Noble Capital. Please proceed with your question.

Good evening, and thanks for taking my questions.

Sure. Welcome, Jeff.

First question, just kind of wanted to look at the CMS delay. Do you think that has, it wouldn't appear so, but any impact on the company's U.S. timeline here going into 2022?

No, we do not feel that that will significantly delay our timeline. What our expectation is, is that our first customers will be cash pay, and the processes that we've already started in place to establish the coding and the reimbursement are very similar whether we are going to, whether MCIT would be in place or not. So we're continuing our processes. The potential delay with the MCIT rule means that we would have to spend more time doing our negotiations at a jurisdiction level rather than the national level that the MCIT rule would have provided us that opportunity. But we have already started those efforts and we expect to be able to continue to move forward effectively.

Okay, thank you for that. And for my follow-up in the U.S., I was wondering if you could give us a little more detail here on setting up this network. If you look in Canada you've got 33 clinics, it has taken a number of years to get there. What are your expectations, at least in the near term for the number of clinics you'd have here in the U.S.? How big of a network do you think you can finally get to and what kind of your timing? Any additional color is appreciated. Thank you.

Okay. So as we look at the U.S. opportunity, the big difference between the U.S. and Canada is that in the U.S., it's a prescription product. In Canada, well our initial focus was on the clinic side. In the U.S., we're focusing on both the clinic side and the neurologist. And as we reach out to the neurologists, we will be looking at where they already treat MS patients; they will refer them across to neuro-rehabilitation centers and we will work with those neuro-rehabilitation centers where there already exists the relationship between the neurologist and that center. We expect that patients will get the prescription from the neurologist and go to the centers. We anticipate having a customer care support center that will help the patient with their payment and also getting the clinics identified and get their treatment. And then, once the MS patient starts working with the PT center, there already exists the link between the PT and the neurologist to make decisions with respect to how the treatment is going and future treatment cycles from there.

Your next question comes from the line of Advisory. Please proceed with your question.

Hi Dane and team, congrats on really advancing this thing so well. I was wondering if you could.

Thank you.

I was wondering if you can talk a little bit about how the hiring process is going for C level executives and then I'll follow up with another.

Yes. So thanks, Mitch. It's a great question. A couple answers to that. We've engaged multiple search firms as well as our network internally to search for the best candidates for each individual position. And that not only includes the C-suite, but as you drop down below that as well. So and also with the C-suite we've got a very active and engaged board of directors and they bring a wealth of experience, knowledge, and contacts that we're leveraging that experience and wisdom as well.

Okay, thanks. The other thing I wanted to ask you about was, sorry, bear with me a second. Where was that question? Yes. Can you talk about what your plans are for both international where we are with that because I know there is China, there is Australia, there is Europe and so on. But then also in terms of expansion to other applications through other FDA approval processes; where do we stand with those different items?

Yes. So we are right now, our application has been in Australia right now at the TGA. That application is pending. Also, with the authorization by the FDA, we have an agreement with China Medical as well so that we can take our documentation of our clearance and with that agreement we could partner and proceed to an application and hopefully clearance as well in four provinces within China. But right now, Mitch, our focus clearly is on the U.S. market.

Okay. And what about the second part of that question relating to other potential applications and applying to the FDA for those?

Yes. So definitely, we have a platform technology. Again, one of the most common symptoms across neurological diseases and trauma is balancing gait deficit. Given our MS clearance, as well, we're also cleared by Health Canada for MS and traumatic brain injury. We expect because of our ability in our clinical data we have the opportunity to approach the FDA again in a multifaceted approach, not only in stroke, but TBI, and cerebral palsy and expand our capabilities.

And can you feel for where we are in that process?

At the moment, Mitch, it's part of our company's strategy right now, and right now, we cannot reveal that.

Okay, thanks a lot. Great work. Keep it up.

Thanks, Mitch for your questions.

Ladies and gentlemen, we are currently showing no additional participants in the queue. That does conclude our conference call for today. Thank you all for your participation.

Thank you.

Thank you.

Thank you, everybody.