Please standby. Good evening, ladies and gentlemen and welcome to the Second Quarter of 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 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 Factors section of our most recent annual report on Form 10-K and quarterly report on Form 10-Q. Such factors may be updated from time-to-time in our other filings with the SEC, which are available on our website. All statements may made during this call are as of August 12, 2021. We undertake no obligation to publicly update or revise our forward-looking statements, as a result of new information, future events or otherwise except as required by law. I would now like to turn the conference over to Mr. Dane Andreeff, Helius Medical’s President and Chief Executive Officer. Please go ahead, sir.

Great. Thank you, operator and my apologies, we had some technical difficulties, but welcome everyone to Helius Medical second quarter 2021 earnings conference call. I’m joined on the call this evening by Jeff Mathiesen, our Chief Financial Officer. 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 the initiatives we are focused on as we prepare for commercialization. I’ll then share a brief update on our commercial activities in Canada. Jeff will then provide you with a review of our second quarter financial results. And finally, following Jeff remarks, I will share some closing thoughts before we open the call for questions. Before I continue, I believe it is important to stress that our commercial activities in Canada continue to provide the company with invaluable information and data about our PoNS device and treatment. We have been able to utilize this data to secure our first regulatory clearance in the U.S. and to inform our planning process for U.S. commercialization. We continue to expand our commercial activities and grow our business in Canada and we consider this to be a very important market for PoNS. With that said, our belief is that the real value potential for Helius over the next few years is tied to the successful commercialization of PoNS in the U.S. for the treatment of gait deficit in MS patients followed by the potential approval of PoNS device in other indication in the U.S. With that as a backdrop, we are excited to share our recent progress with you. After obtaining the first U.S. regulatory clearance for our PoNS device…

Thanks, Dane. Good evening, everyone. It is a pleasure to be with you tonight on the first of what I hope to be many quarterly update costs. We reported to our revenue of $71,000 for the second quarter of 2021 compared to $133,000 in the second quarter of last year. Our revenue in both periods was driven by sales to neurotherapy clinics in Canada that have been authorized provider PoNS treatment and remained impacted by the significant business disruption in Canada related to the COVID-19 pandemic. For the second quarter of 2021, our gross profit decreased to $4,000 versus $69,000 in the prior year, primarily driven by the year-over-year, decrease in total revenue. Operating expenses for the second quarter of 2021 increased by $2.4 million or 63% year-over-year to $6.2 million. Operating expenses in the second quarter of 2021 included non-cash $1.9 million increase in stock based compensation expense, which was comprised of a one-time fully diluted stock option grant valued at $1 million and stock options granted in conjunction with the addition of management and sales executives. Operating loss for the second quarter of 2021 was $6.2 million compared to $3.7 million for the prior year period. We reported net loss for the second quarter of 2021 of $6 million or $2.58 per basic and diluted common share compared to net loss of $3.4 million or $2.90 per basic and diluted common share for the same period last year. Turning to a discussion of our balance sheet condition and recent financial activities, our cash burn from operations for the first six months of 2021 was $6.7 million compared to $7 million during the first six months of 2020, reflecting the continued success of our efforts to control expenses and allocate capital prudently. As of June 30, 2021, we had…

Thank you, Jeff. In conclusion, we are pleased to report continued progress in both pairing for U.S. commercialization, which we remain on track to begin during the first quarter of 2022. As I've said before, I believe the quality of our team is one of the Helius’s strongest and most essential attributes. With this in mind, I'm especially pleased with the level of talent that we have continued to attract to lead and support our U.S. commercial efforts, as we enter the second half of 2021, we will continue to execute on our strategic pre-commercial activities, as we position Helius to bring our PoNS technology to the large underserved population of U.S. MS patients as quickly as possible. We continued to believe that our focus and our strategic execution on this front represents the best path to creating value for our shareholders. We are excited by the potential of the U.S. market for MS, and we believe we may have the opportunity to become the standard of care for gait deficit in MS patients. In Canada, we continue to expect evidence of improvement in the operating environment during the remaining months of the year, as the environment recovers, we look forward to leveraging our operations in Canada and our Canadian team's expertise as an important component of our long-term clinical regulatory and commercial strategy. And lastly, we will continue to develop and capitalize on the long-term potential of our PoNS device as a platform technology by pursuing new indications for use and expanding its applications to treat multiple disease states. I would like to thank our teams in both the U.S. and Canada for the dedication and commitment that they're shown in advancing our mission to treat patients suffering from the effects of chronic neurological conditions like MS and TBI. A special thanks as well to our new and existing shareholders, as well as everyone on tonight's call for their interest in Helius Medical Technologies. With that Operator, let's now open the call for questions.

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

Dan and Jeff, how are you? Just so I have three, I'm going to start with Jeff actually. So the $4.744 million SG&A $1.9 million was non-cash, correct? Was there more that those non-cash or just the $1.9 million?

No, there's more of it. So the $1.9 million was actually the increased amount. And so if you look at the quarter, the total SG&A that was non-cash was just under $2.5 million and then R&D had another $162,000 of non-cash. So total non-cash expenses, operating expenses for the quarter were $2.6 million. So if you back that out our cash operating expenses were about $3.6 million.

Yes, from the $6.170 million. That's great. Okay. That's helpful.

So it's a big number, but once you back out the non-cash, the cast spending is closer, I think, to what we've been doing in the past.

Yes. Okay, got it. And Dan, could you talk a little more about the payers out there. And well, I guess the ruling from December we'll hear about one way or another, but the CMS and the payers out there, the commercial payers in particular, what are they looking for? What do they want on the evidence and data side, in addition to what you've done this for?

So with the new team involved we're still focused on the MCIT rule and what that could bring us. So starting in middle of December, we'll be waiting patiently for that decision, but we're also going to be advocating for the MCIT rule to be passed in, partnering with potential groups and MCIT I'm sorry, MS organizations to help us through this, a critical pathway for us to have MCIT to pass. On the commercial side, we're putting together our package of the dossier to and health economics studies to help us through that process. We know that process can take some time. So we are forecasting on day one to be a cash payer, a cash pay market. So that's where we are today.

Okay. Got it. And along those fronts, could you talk to us a little bit about commercial facing folks out there, as far as what's there now up in Canada and in any that may be in the U.S., and then talk us through what that might look like, let's say by the balance of 2022, I'm just trying to get an understanding of whether it looks more like 10 or 15 commercial folks or more higher number?

Yes. I think that's a question for Jeff. So Jeff, can you?

Yes, I think as far as bringing on a sales force, we basically has, Dane had talked about that we're really focused on 10 states but they're spread around the country. So there's really four key areas within that we're targeting for that. And so we'll start by putting the sales kind of leader in each one of those territories, and then fill in below that person as we develop those out. So kind of start with one in each spot, in the four different territories and then fill in maybe another three people within those territories as they fully developed, but that'll play out over 2022 and into 2023. So that's kind of the way that we'll build out from a candidate standpoint, we got a great team up there. And I think with COVID, we haven't necessarily been able to leverage them as well as we can in a normal environment. So as things normalize, we think that team is going to be able to give us pretty good coverage in Canada in the foreseeable future.

Okay. That’s it for me, thanks for taking my questions.

Our next question comes from Joe Gomes with Noble Capital Markets. Please proceed.

Hello. This is Gregory Aurand in for Joe. And I just have a couple of questions. Thanks for taking the questions by the way. In terms of the number of clinics added in Canada, where are there, additional ones in this quarter compared to the first quarter?

Okay. Jeff, I'm sorry. Yes, that’s the question…

Yes. So again, with the activity being kind of shut down, which is really kind of clamped down during the quarter, we didn’t really have any additional clinic activity during the quarter, but as things are starting to open up, we’ll look to continue to add clinics.

Thank you. In terms of this new website obviously, or at least from my perspective, it was just launched. What kind of traction have you received so far and what kind of traction you expect to get out of it?

So I’ll answer that, it’s Jeff. So this is a brand new website. It’s a landing page for clinicians and patients for them to be educated and in our PoNS device and therapy. And right now we’re seeing some really good uptake into the MS community at this time.

If you don’t mind one more follow-on in terms of any new applications Australia, are there any movement there in terms of Australia?

Yes. We’re still pending with the TGA. It’s been quite a while, but we’re waiting for their decision on our application.

Great. Thank you so much. Great.

Thank you, Greg.

Our next question comes again from the line of Jeffrey Cohen with Ladenburg Thalmann. Please proceed.

I wanted to jump back in with one more, if I may. I think for Dane, could you talk about in the U.S. how this may look from the commercial payer point of view. Would this be an upfront payment followed by scripts for a particular amount of energy per therapy, more of a prescription therapy model? Would that be exclusive and upfront or an upfront and then with the following script cover the reposable component?

Jeff, we’re looking at prescription by the neurologist, so it would be an upfront prescription.

Okay. And it would need to be refilled periodically every quarter, every month.

That will be up to the prescribing neurologist.

Okay. So the capital part of the company would retain control of and depreciate from year end.

I’m sorry, I didn’t hear your question. I’m sorry. I might have a bad connection.

Yes. Actually, I think – this is Jeff. I think if you’re asking, so the initial prescription is a 14 week therapy, which is the PoNS system, which is a controller and a mouthpiece. So the patient in the U.S. then would be the owner of the controller if there’s additional treatment prescribed it would be for additional mouthpieces. But the controller would be with the patients. So any additional beyond the first treatment would be a mouthpiece component and not the full system.

Does that answer your question?

I think so, should there be two different prescriptions? It would be an initiation of therapy and a follow-on of therapy in the case of patients.

As far as the way the it’s prescribed, I’m not sure if the prescription would look different. But after the initial prescription, if the patient needs another 14 weeks, it would be the mouthpiece that they would need to be able to complete that second set of or second round of therapy.

Yes. Okay. Got it. Thanks for taking my questions.

Thank you. We are currently showing no additional participants in the queue. That does conclude our conference call for today. Thank you for your participation.

Thank you, everyone.