Document and Entity Information
Document and Entity Information - shares | 9 Months Ended | |
Sep. 30, 2020 | Nov. 06, 2020 | |
Cover [Abstract] | ||
Document Type | 10-Q | |
Amendment Flag | false | |
Document Period End Date | Sep. 30, 2020 | |
Document Fiscal Year Focus | 2020 | |
Document Fiscal Period Focus | Q3 | |
Trading Symbol | HSDT | |
Entity Registrant Name | HELIUS MEDICAL TECHNOLOGIES, INC. | |
Entity Central Index Key | 0001610853 | |
Current Fiscal Year End Date | --12-31 | |
Entity Filer Category | Non-accelerated Filer | |
Entity Small Business | true | |
Entity Emerging Growth Company | true | |
Entity Ex Transition Period | true | |
Entity Common Stock, Shares Outstanding | 51,922,480 | |
Entity Current Reporting Status | Yes | |
Entity Shell Company | false | |
Entity File Number | 001-38445 | |
Entity Tax Identification Number | 36-4787690 | |
Entity Incorporation, State or Country Code | DE | |
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, $0.001 par value per share | |
Security Exchange Name | NASDAQ | |
Entity Interactive Data Current | Yes | |
Document Quarterly Report | true | |
Document Transition Report | false |
Unaudited Condensed Consolidate
Unaudited Condensed Consolidated Balance Sheets - USD ($) $ in Thousands | Sep. 30, 2020 | Dec. 31, 2019 |
Current assets | ||
Cash | $ 2,680 | $ 5,459 |
Accounts receivable, net | 80 | 210 |
Other receivables | 138 | 364 |
Inventory, net | 572 | 598 |
Prepaid expenses | 666 | 610 |
Total current assets | 4,136 | 7,241 |
Property and equipment, net | 463 | 712 |
Other assets | ||
Goodwill | 725 | 1,242 |
Intangible assets, net | 579 | 582 |
Operating lease right-of-use asset, net | 105 | 552 |
Other assets | 18 | 18 |
Total other assets | 1,427 | 2,394 |
TOTAL ASSETS | 6,026 | 10,347 |
Current liabilities | ||
Accounts payable | 720 | 1,676 |
Accrued liabilities | 1,399 | 1,519 |
Operating lease liability | 107 | 172 |
Derivative financial instruments | 5 | |
Deferred revenue | 339 | 430 |
Total current liabilities | 2,565 | 3,802 |
Non-current liabilities | ||
Operating lease liability | 47 | 465 |
Deferred revenue | 217 | 245 |
TOTAL LIABILITIES | 2,829 | 4,512 |
Commitments and contingencies (Note 6) | ||
STOCKHOLDERS’ EQUITY | ||
Preferred stock, $0.001 par value; 10,000,000 shares authorized; no shares issued and outstanding as of September 30, 2020 and December 31, 2019 | ||
Class A common stock, $0.001 par value; 150,000,000 shares authorized; 45,354,612 and 30,718,554 shares issued and outstanding as of September 30, 2020 and December 31, 2019, respectively | 45 | 31 |
Additional paid-in capital | 120,213 | 111,479 |
Accumulated other comprehensive loss | (693) | (902) |
Accumulated deficit | (116,368) | (104,773) |
TOTAL STOCKHOLDERS’ EQUITY | 3,197 | 5,835 |
TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY | $ 6,026 | $ 10,347 |
Unaudited Condensed Consolida_2
Unaudited Condensed Consolidated Balance Sheets (Parenthetical) - $ / shares | Sep. 30, 2020 | Dec. 31, 2019 |
Statement Of Financial Position [Abstract] | ||
Preferred stock, Par Value | $ 0.001 | $ 0.001 |
Preferred Stock, Shares Authorized | 10,000,000 | 10,000,000 |
Preferred Stock, Shares Issued | 0 | 0 |
Preferred Stock, Shares Outstanding | 0 | 0 |
Common Stock, Par Value | $ 0.001 | $ 0.001 |
Common Stock, Shares Authorized | 150,000,000 | 150,000,000 |
Common Stock, Shares, Issued | 45,354,612 | 30,718,554 |
Common Stock, Shares, Outstanding | 45,354,612 | 30,718,554 |
Unaudited Condensed Consolida_3
Unaudited Condensed Consolidated Statements of Operations and Comprehensive Loss - USD ($) | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2020 | Sep. 30, 2019 | Sep. 30, 2020 | Sep. 30, 2019 | |
Revenue: | ||||
Total operating revenue | $ 131,000 | $ 150,000 | $ 470,000 | $ 1,344,000 |
Cost of sales: | ||||
Cost of product sales | $ 22,000 | $ 89,000 | $ 187,000 | $ 538,000 |
Type of Cost, Good or Service [Extensible List] | us-gaap:ProductMember | us-gaap:ProductMember | us-gaap:ProductMember | us-gaap:ProductMember |
Gross profit | $ 109,000 | $ 61,000 | $ 283,000 | $ 806,000 |
Operating expenses: | ||||
Research and development | 1,327,000 | 1,506,000 | 3,755,000 | 6,462,000 |
Selling, general and administrative | 2,370,000 | 4,291,000 | 7,625,000 | 12,715,000 |
Amortization expense | 72,000 | 287,000 | ||
Total operating expenses | 3,769,000 | 5,797,000 | 11,667,000 | 19,177,000 |
Operating loss | (3,660,000) | (5,736,000) | (11,384,000) | (18,371,000) |
Other income (expense): | ||||
Other income | 11,000 | 63,000 | 35,000 | |
Change in fair value of derivative financial instruments | 1,000 | 196,000 | 4,000 | 14,033,000 |
Foreign exchange gain (loss) | 182,000 | (59,000) | (278,000) | (147,000) |
Total other income (expense) | 183,000 | 148,000 | (211,000) | 13,921,000 |
Net loss | (3,477,000) | (5,588,000) | (11,595,000) | (4,450,000) |
Other comprehensive loss: | ||||
Foreign currency translation adjustments | (172,000) | 68,000 | 209,000 | (168,000) |
Comprehensive loss | $ (3,649,000) | $ (5,520,000) | $ (11,386,000) | $ (4,618,000) |
Net loss per share | ||||
Basic | $ (0.08) | $ (0.22) | $ (0.30) | $ (0.17) |
Diluted | $ (0.08) | $ (0.22) | $ (0.30) | $ (0.17) |
Weighted average shares outstanding | ||||
Basic | 45,137,995 | 25,903,544 | 39,187,370 | 25,869,039 |
Diluted | 45,137,995 | 25,903,544 | 39,187,370 | 25,869,039 |
Product Sales | ||||
Revenue: | ||||
Total operating revenue | $ 124,000 | $ 150,000 | $ 441,000 | $ 1,295,000 |
Fee Revenue | ||||
Revenue: | ||||
Total operating revenue | 9,000 | 49,000 | ||
License Revenue | ||||
Revenue: | ||||
Total operating revenue | $ 7,000 | $ 20,000 | $ 0 |
Unaudited Condensed Consolida_4
Unaudited Condensed Consolidated Statements of Stockholders' Equity - USD ($) $ in Thousands | Total | At-the-Market Program | March 2020 Offering | Common Stock $0.001 par value | Common Stock $0.001 par valueAt-the-Market Program | Common Stock $0.001 par valueMarch 2020 Offering | Additional Paid-In Capital | Additional Paid-In CapitalAt-the-Market Program | Additional Paid-In CapitalMarch 2020 Offering | Accumulated Other Comprehensive Loss | Accumulated Deficit |
Beginning Balance at Dec. 31, 2018 | $ 9,854 | $ 26 | $ 105,411 | $ (591) | $ (94,992) | ||||||
Beginning Balance, Shares at Dec. 31, 2018 | 25,827,860 | ||||||||||
Proceeds from the exercise of stock options and warrants | 215 | 215 | |||||||||
Proceeds from exercise of stock options and warrants, Shares | 74,720 | ||||||||||
Settlement of restricted stock units, Shares | 964 | ||||||||||
Reclassification of derivative financial instruments from exercise of warrants | 35 | 35 | |||||||||
Stock-based compensation | 3,336 | 3,336 | |||||||||
Foreign currency translation adjustments | (168) | (168) | |||||||||
Net loss | (4,450) | (4,450) | |||||||||
Ending Balance at Sep. 30, 2019 | 8,822 | $ 26 | 108,997 | (759) | (99,442) | ||||||
Ending Balance, Shares at Sep. 30, 2019 | 25,903,544 | ||||||||||
Beginning Balance at Jun. 30, 2019 | 12,782 | $ 26 | 107,437 | (827) | (93,854) | ||||||
Beginning Balance, Shares at Jun. 30, 2019 | 25,903,544 | ||||||||||
Stock-based compensation | 1,560 | 1,560 | |||||||||
Foreign currency translation adjustments | 68 | 68 | |||||||||
Net loss | (5,588) | (5,588) | |||||||||
Ending Balance at Sep. 30, 2019 | 8,822 | $ 26 | 108,997 | (759) | (99,442) | ||||||
Ending Balance, Shares at Sep. 30, 2019 | 25,903,544 | ||||||||||
Beginning Balance at Dec. 31, 2019 | 5,835 | $ 31 | 111,479 | (902) | (104,773) | ||||||
Beginning Balance, Shares at Dec. 31, 2019 | 30,718,554 | ||||||||||
Proceeds from the issuance of common stock | $ 5,043 | $ 1,348 | $ 8 | $ 6 | $ 5,035 | $ 1,342 | |||||
Proceeds from the issuance of common stock, Shares | 8,138,808 | 6,257,144 | |||||||||
Warrant issuance from the March 2020 Offering | $ 842 | $ 842 | |||||||||
Share issuance costs | (506) | (506) | |||||||||
Settlement of restricted stock units, Shares | 240,106 | ||||||||||
Stock-based compensation | 2,021 | 2,021 | |||||||||
Foreign currency translation adjustments | 209 | 209 | |||||||||
Net loss | (11,595) | (11,595) | |||||||||
Ending Balance at Sep. 30, 2020 | 3,197 | $ 45 | 120,213 | (693) | (116,368) | ||||||
Ending Balance, Shares at Sep. 30, 2020 | 45,354,612 | ||||||||||
Beginning Balance at Jun. 30, 2020 | 6,396 | $ 45 | 119,763 | (521) | (112,891) | ||||||
Beginning Balance, Shares at Jun. 30, 2020 | 45,114,506 | ||||||||||
Settlement of restricted stock units, Shares | 240,106 | ||||||||||
Stock-based compensation | 450 | 450 | |||||||||
Foreign currency translation adjustments | (172) | (172) | |||||||||
Net loss | (3,477) | (3,477) | |||||||||
Ending Balance at Sep. 30, 2020 | $ 3,197 | $ 45 | $ 120,213 | $ (693) | $ (116,368) | ||||||
Ending Balance, Shares at Sep. 30, 2020 | 45,354,612 |
Unaudited Condensed Consolida_5
Unaudited Condensed Consolidated Statements of Cash Flows - USD ($) $ in Thousands | 9 Months Ended | |
Sep. 30, 2020 | Sep. 30, 2019 | |
Cash flows from operating activities: | ||
Net loss | $ (11,595) | $ (4,450) |
Adjustments to reconcile net loss to net cash used in operating activities: | ||
Change in fair value of derivative financial instruments | (4) | (14,033) |
Stock-based compensation expense | 2,021 | 3,336 |
Unrealized foreign exchange loss | 245 | 211 |
Depreciation expense | 92 | 89 |
Amortization expense | 287 | |
Provision for doubtful accounts | 160 | |
Intangible asset impairment | 182 | |
Loss from disposal of property and equipment | 110 | |
Gain on lease modification | (56) | |
Changes in operating assets and liabilities: | ||
Accounts receivable | (30) | (380) |
Other receivables | 226 | (123) |
Inventory | 26 | (897) |
Prepaid expenses | (56) | 285 |
Other current assets | 264 | |
Operating lease liability | 20 | (9) |
Accounts payable | (956) | (678) |
Accrued liabilities | (120) | (75) |
Deferred revenue | (119) | |
Net cash used in operating activities | (9,567) | (16,460) |
Cash flows from investing activities: | ||
Purchase of property and equipment | (14) | (260) |
Proceeds from sale of property and equipment | 61 | |
Internally developed software | (7) | |
Net cash provided by (used in) investing activities | 40 | (260) |
Cash flows from financing activities: | ||
Proceeds from the issuances of common stock and warrants | 7,233 | |
Share issuance costs | (506) | (52) |
Proceeds from the exercise of stock options and warrants | 215 | |
Proceeds from Paycheck Protection Program Loan | 323 | |
Repayment of Paycheck Protection Program Loan | (323) | |
Net cash provided by financing activities | 6,727 | 163 |
Effect of foreign exchange rate changes on cash | 21 | (7) |
Net decrease in cash | (2,779) | (16,564) |
Cash at beginning of period | 5,459 | 25,583 |
Cash at end of period | $ 2,680 | $ 9,019 |
Description of Business
Description of Business | 9 Months Ended |
Sep. 30, 2020 | |
Organization Consolidation And Presentation Of Financial Statements [Abstract] | |
Description of Business | Helius Medical Technologies, Inc. (“we” or the “Company”), is a neurotech company focused on neurological wellness. The Company’s purpose is to develop, license or acquire unique and non-invasive technologies targeted at reducing symptoms of neurological disease or trauma. The Company’s first product, known as the Portable Neuromodulation Stimulator (“PoNS TM TM The Company was incorporated in British Columbia, Canada on March 13, 2014. On May 28, 2014, we were reincorporated from British Columbia to the State of Wyoming, and on July 20, 2018, we were reincorporated from the State of Wyoming to the State of Delaware. We are headquartered in Newtown, Pennsylvania. On December 21, 2018, the Company’s wholly owned subsidiary, NeuroHabilitation Corporation, changed its name to Helius Medical, Inc (“HMI”). On January 31, 2019, the Company formed another wholly owned subsidiary, Helius NeuroRehab, Inc., (“HNR”), a Delaware corporation. On October 10, 2019, the Company formed Helius Canada Acquisition Ltd. (“HCA”), a company incorporated under the federal laws of Canada and a wholly owned subsidiary of Helius Medical Technologies (Canada), Inc. (“HMC”), a company incorporated under the federal laws of Canada, which acquired Heuro Canada, Inc. (“Heuro”) from Health Tech Connex Inc. (“HTC”) on October 30, 2019. Going Concern Uncertainty As of September 30, 2020, the Company had cash of $2.7 million. For the nine months ended September 30, 2020, the Company had an operating loss of $11.4 million, and as of September 30, 2020, its accumulated deficit was $116.4 million. For the nine months ended September 30, 2020, the Company had $0.5 million of revenue from the commercial sale of products or services. 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 financial statements are filed. The Company’s 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 on hand, cash received from the sale of its PoNS™ device in Canada and by raising additional capital through equity or debt financings. As discussed further in Note 8, on October 26, 2020, the Company closed a private placement and received net proceeds of approximately $3.2 million. There can be no assurance that the Company will be successful in raising that 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 and planned capital expenditures. Risks and Uncertainties COVID-19 On March 11, 2020, the World Health Organization declared the outbreak of a novel coronavirus (“COVID-19”) as a global pandemic, which continues to spread throughout the United States and around the world. The Company’s business, results of operations and financial condition have been and may continue to be adversely impacted by the COVID-19 pandemic and global economic conditions. The outbreak and spread of COVID-19 has significantly increased economic uncertainty. Authorities implemented numerous measures to try to contain COVID-19, such as travel bans and restrictions, quarantines, shelter in place orders, and business shutdowns. The COVID-19 pandemic initially led to the closure of PoNS Authorized clinic locations across Canada. While all clinics have re-opened, they are all currently operating at reduced capacity, and patients have been and may continue to be less willing to return to these clinics, impacting our commercial activities and our customer engagement efforts. Moreover, the Company’s ability to conduct its ongoing clinical experience programs in Canada has been and may continue to be impaired due to trial participants’ attendance being adversely affected by COVID-19, leading to further delays in the development and approval of the Company’s product candidate. In addition, the COVID-19 pandemic has and may continue to cause delays in the Company’s suppliers’ ability to ship materials that the Company relies upon, and disruptions in business or governmental operations due to COVID-19 may delay the timing for the submission and approval of the Company’s marketing applications with regulatory agencies. Further, the economic impact of the COVID-19 pandemic could affect the Company’s ability to access the public markets and obtain necessary capital in order to properly capitalize and continue its operations. The extent to which the COVID-19 pandemic will continue to impact the Company’s business, results of operations and financial condition will depend on future developments, which are highly uncertain and cannot be predicted. The Company does not know yet the full extent of the impact of COVID-19 on its business, operations or the global economy as a whole. Nasdaq Delisting On March 23, 2020, the Company received a letter (the “Notice”) from the Listing Qualifications staff of Nasdaq indicating that, based on the closing bid price of the Company’s Class A common stock (the “common stock”) for the 30 consecutive business days preceding the Notice, the Company no longer meets the requirement to maintain a minimum bid price of $1.00 per share, as set forth in Nasdaq Listing Rule 5550(a)(2) (the “Minimum Bid Price Requirement”). The Notice did not result in the immediate delisting of the Company’s common stock from Nasdaq. In accordance with Nasdaq Listing Rule 5810(c)(3)(A), the Company was provided a period of 180 calendar days in which to regain compliance. On April 17, 2020, the Company received a second letter (the “Second Notice”) for the Listing Qualifications staff of Nasdaq In the event that the Company does not regain compliance by December 3, 2020, the Company may be eligible to obtain an additional compliance period of 180 calendar days so long as the Company satisfies the continued listing requirement for market value of publicly held shares and all criteria for initial listing on the Nasdaq Capital Market, but for the Minimum Bid Price Requirement and market value of publicly held shares requirement, and provides written notice to Nasdaq of its intent to cure the deficiency during the second compliance period via the implementation of a reverse stock split if necessary. If the Company does not regain compliance with the Minimum Bid Price Requirement by the end of the applicable compliance period (either December 3, 2020 or June 1, 2021 in the event a second compliance period is requested and granted), the Company’s common stock would be subject to delisting from Nasdaq. In that case, however, the Company would have the right to request a hearing before a Nasdaq Hearings Panel to address its plan to remedy the deficiency, which request would stay any delisting action by the Listing Qualifications staff pending the ultimate outcome of the hearing process. |
Summary of Significant Accounti
Summary of Significant Accounting Policies | 9 Months Ended |
Sep. 30, 2020 | |
Accounting Policies [Abstract] | |
Summary of Significant Accounting Policies | 2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Basis of Presentation The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”). The condensed consolidated financial statements have also been prepared on a basis substantially consistent with, and should be read in conjunction with the Company’s audited consolidated financial statements for the year ended December 31, 2019, included in its Annual Report on Form 10-K that was filed with the Securities and Exchange Commission on March 12, 2020. The Company’s reporting currency is the U.S. Dollar (“USD$”). Use of Estimates The preparation of the condensed consolidated financial statements in accordance with GAAP requires management to make estimates and assumptions that affect the amounts reported in the condensed consolidated financial statements and disclosure of contingent assets and liabilities. Significant estimates include the assumptions used in the fair value pricing model for stock-based compensation, derivative financial instruments and deferred income tax asset valuation allowance. Financial statements include estimates which, by their nature, are uncertain. Actual outcomes could differ from these estimates. Principles of Consolidation The accompanying unaudited condensed consolidated financial statements reflect the operations of Helius Medical Technologies, Inc. and its wholly owned subsidiaries. The usual condition for a controlling financial interest is ownership of a majority of the voting interests of an entity. However, a controlling financial interest may also exist through arrangements that do not involve controlling voting interests. As such, the Company applies the guidance of the Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) 810 – Consolidation , Concentrations of Credit Risk The Company is subject to credit risk with respect to its cash. Amounts invested in such instruments are limited by credit rating, maturity, industry group, investment type and issuer. The Company is not currently exposed to any significant concentrations of credit risk from these financial instruments. The Company seeks to maintain safety and preservation of principal and diversification of risk, liquidity of investments sufficient to meet cash flow requirements and a competitive after-tax rate of return. Receivables Accounts receivables are stated at their net realizable value. In determining the appropriate allowance for doubtful accounts, the Company considers a combination of factors, such as the aging of trade receivables, its customers’ financial strength, and payment history. Changes in these factors, among others, may lead to adjustments in the Company’s allowance for doubtful accounts. The calculation of the allowance required judgment by Company management. As of September 30, 2020, the Company’s accounts receivable of $0.1 million, is net of an allowance for doubtful accounts of $0.4 million and is the result of revenue from product sales. As of December 31, 2019, the Company’s accounts receivable of $0.2 million, is net of an allowance for doubtful accounts of $0.2 million and is the result of revenue from product sales. Other receivables as of September 30, 2020 and December 31, 2019 included refunds from research and development (“R&D”) tax credits of $21 thousand and $0.2 million, respectively, and Goods and Services Tax (“GST”) and Quebec Sales Tax (“QST”) refunds of $0.1 million and $0.1 million, respectively, related to the Company’s Canadian expenditures. Inventory The Company’s inventory consists of raw materials, work in progress and finished goods of the PoNS device. Inventory is stated at the lower of cost (average cost method) or net realizable value. Adjustments to reduce the cost of inventory to its net realizable value are made if required. 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. Inventory markdowns to net realizable value of $0 thousand and $2 thousand were recorded during the three and nine months ended September 30, 2020, respectively. No inventory markdowns to net realizable value were recorded during the three and nine months ended September 30, 2019. As of September 30, 2020 and December 31, 2019, inventory consisted of the following (amounts in thousands): As of As of September 30, 2020 December 31, 2019 Raw materials $ 159 $ 144 Work-in-process 446 375 Finished goods 19 129 Inventory $ 624 $ 648 Inventory reserve (52 ) (50 ) Total inventory, net of reserve $ 572 $ 598 Property and Equipment Property and equipment are carried at cost, less accumulated depreciation. Depreciation is recognized using the straight-line method over the useful lives of the related asset or the term of the related lease. Expenditures for maintenance and repairs, which do not improve or extend the expected useful life of the assets, are expensed to operations while major repairs are capitalized. The estimated useful life of the Company’s leasehold improvements is over the shorter of its lease term or useful life of 5 years; the estimated useful life for the Company’s furniture and fixtures is 7 years; and equipment has an estimated useful life of 15 years, while computer software and hardware has an estimated useful life of 3 to 5 years. As of September 30, 2020 and December 31, 2019, property and equipment consisted of the following (amounts in thousands): As of As of September 30, 2020 December 31, 2019 Leasehold improvement $ 64 $ 182 Furniture and fixtures 93 247 Equipment 300 286 Computer software and hardware 182 182 Property and equipment 639 897 Less accumulated depreciation (176 ) (185 ) Property and equipment, net $ 463 $ 712 Depreciation expense was $26 thousand and $43 thousand for the three months ended September 30, 2020 and 2019, respectively. Depreciation expense was $92 thousand and $89 thousand for the nine months ended September 30, 2020 and 2019, respectively. During the second quarter of 2020, the Company sold furniture and fixtures with a net book value of $118 thousand for $61 thousand. Additionally, the Company abandoned leasehold improvements with a net book value of $53 thousand. The loss on the disposal of the furniture and fixtures and leasehold improvements of $110 thousand was recorded as selling, general and administrative expense in the condensed consolidated statements of operations and comprehensive loss. Business Combinations Transactions in which the Company obtains control of a business are accounted for according to the acquisition method as described in FASB ASC 805 – Business Combinations. The assets acquired and liabilities assumed are recognized and measured at their fair values as of the date control is obtained. Acquisition related costs in connection with a business combination are expensed as incurred. Contingent consideration is recognized and measured at fair value at the acquisition date and until paid re-measured on a recurring basis. It is classified as a liability based on appropriate GAAP. On October 30, 2019, the Company and HTC entered into a Share Purchase Agreement (the “SPA”) whereby the Company, through its wholly owned subsidiary, acquired Heuro from HTC. Under the terms of the SPA, total consideration of approximately CAD$2.1 million (USD$1.6 million) was transferred to HTC, which included (1) cash of CAD$0.5 million (USD$0.4 million), (2) delivery of 55 PoNS devices for which the fair value was determined to be CAD$0.5 million (USD$0.4 million), (3) the forgiveness of CAD$750 thousand (USD$0.5 million) receivable from the September 2018 strategic alliance agreement and (4) the exclusivity rights granted to HTC in the Co-Promotion Agreement (as defined below) to provide PoNS Treatment in the Fraser Valley and Vancouver metro regions of British Columbia with a determined fair value of CAD$0.4 million (USD$0.3 million). The transaction has been accounted for as a business combination. The acquisition related costs were $0.1 million and were accounted for as selling, general and administrative expenses in the consolidated statement of operations and comprehensive loss for the year ended December 31, 2019. The following table summarizes the recognized fair values of identifiable assets acquired and liabilities assumed as of October 30, 2019: October 30, 2019 Fair Value Assets: Cash and cash equivalents $ 1 Other receivables 19 Fixed assets 7 Intangibles 1,053 Goodwill 737 Total assets $ 1,817 Liabilities: Accounts payable $ 186 Other current liabilities 9 Total liabilities $ 195 Net assets acquired $ 1,622 The fair values assigned to identifiable intangible assets assumed were based on management’s estimates and assumptions as of such date and are considered finalized. The Company recorded measurement adjustments of $0.4 million during the nine months ended September 30, 2020, all of which was recorded during the first quarter of 2020. The recorded adjustments related to the recognition of reacquired exclusivity rights. Acquired intangibles consisted of customer relationships, proprietary technology and reacquired rights. The remaining useful life at acquisition was 1.25 years, 5 years and 3.87 years, respectively, and the acquired intangibles are amortized using the straight-line method. Factors considered by the Company in determination of goodwill include synergies, strategic fit and other benefits that do not meet the recognition criteria of acquired identifiable intangible assets. The recognized goodwill of $0.7 million is not expected to be deductible for tax purposes. The fair value of 55 PoNS devices which we agreed to transfer to HTC pursuant to the SPA in the amount of CAD$0.5 million will be recognized as revenue within the consolidated statements of operations and comprehensive loss once control has been transferred in accordance with ASC 606. As of December 31, 2019, the control had not been transferred resulting in the fair value being recorded as deferred revenue on the condensed consolidated balance sheet. As of September 30, 2020, the control of 11 devices had been transferred resulting in recognition of revenue for these devices. The fair value of the remaining 44 devices is still recorded as deferred revenue on the condensed consolidated balance sheet. In connection with the SPA, on October 30, 2019, the Company entered into a Clinical Research and Co-Promotion Agreement with HTC (the “Co-Promotion Agreement”), whereby each company will promote the sales of the Company’s PoNS Treatment and HTC’s NeuroCatch TM Goodwill and Other Intangible Assets Goodwill represents the excess of purchase price over the fair values underlying net assets acquired in an acquisition. All of the Company’s goodwill as of September 30, 2020 is the result of the Heuro acquisition discussed above. Goodwill is not amortized, but rather will be tested annually for impairment or more frequently if events or changes in circumstances indicate that the carrying amount of the asset may not be recoverable. The Company will test goodwill for impairment annually in the fourth quarter of each year using data as of October 1 of that year. Goodwill is allocated to and evaluated for impairment at the Company’s one identified reporting unit. Goodwill is tested for impairment by either performing a qualitative evaluation or a quantitative test. The qualitative evaluation is an assessment of factors to determine whether it is more likely than not that a reporting unit’s fair value is less than its carrying amount. The Company may elect not to perform the qualitative assessment for its reporting unit and perform the quantitative impairment test. The quantitative goodwill impairment test requires the Company to compare the carrying value of the reporting unit’s net assets to the estimated fair value of the reporting unit. If the estimated fair value exceeds the carrying value, no further evaluation is required, and no impairment loss is recognized. If the carrying amount of a reporting unit, including goodwill, exceeds the estimated fair value, the excess of the carrying value over the estimated fair value is recorded as an impairment loss, the amount of which is not to exceed the total amount of goodwill allocated to the reporting unit. The COVID-19 pandemic was a triggering event for testing whether goodwill is impaired. The Company performed quantitative assessments at March 31, 2020, June 30, 2020 and September 30, 2020. As a result of these assessments, the Company determined that the estimated fair value of the reporting unit exceeded the carrying value of the reporting unit. Therefore, the Company concluded that goodwill was not impaired as of any of the aforementioned periods. The Company will continue to monitor the impacts of the COVID-19 pandemic in future periods. The following is a summary of the activity for the period ended September 30, 2020 for goodwill: Goodwill 2020 Carrying amount at beginning of period $ 1,242 Business acquisition fair value allocation adjustment (454 ) Foreign currency translation (63 ) Carrying amount at end of period $ 725 Definite-lived intangibles consist principally of acquired customer relationships, proprietary software and reacquired rights as well as internally developed software. All are amortized straight-line over their estimated useful lives. Amortization expense related to intangible assets was $0.1 million and $0.3 million during the three and nine months ended September 30, 2020, respectively. No amortization expense related to intangible assets was recorded during the three and nine months ended September 30, 2019. During the nine months ended September 30, 2020, the Company incurred an intangible asset impairment loss of $0.2 million related to the customer relationships, all of which was incurred during the first quarter of 2020, which is included in selling, general and administrative expenses in the accompanying condensed consolidated statement of operations and comprehensive loss. Intangible assets as of September 30, 2020 and December 31, 2019 consist of the following: As of September 30, 2020 As of December 31, 2019 Useful Life Gross Carrying Amount Accumulated Amortization Gross Carrying Amount Accumulated Amortization Customer relationships 1.25 years $ 227 $ (191 ) $ 423 $ (55 ) Acquired proprietary software 5 years 143 (26 ) 148 (5 ) Reacquired rights 3.87 years 480 (113 ) — — Internally developed software 3 years 82 (23 ) 75 (4 ) Total intangible assets $ 932 $ (353 ) $ 646 $ (64 ) Amortization expense is anticipated to be as follows in future years: For the Year Ending December 31, 2020 (remaining 3 months) $ 73 2021 189 2022 176 2023 117 2024 24 $ 579 Leases On January 1, 2019, the Company adopted ASU No. 2016-02, Leases The Company does not record an operating lease ROU asset and corresponding lease liability for leases with an initial term of twelve months or less and recognizes lease expense for these leases as incurred over the lease term. The Company had only one operating lease, which was for its headquarters office in Newtown, Pennsylvania upon the adoption date. As of September 30, 2020, the Company has not entered into any additional lease arrangements, but did modify the existing lease arrangement. Foreign Currency The Company’s functional currency is the U.S. dollar. Monetary assets and liabilities denominated in foreign currencies are translated into U.S. dollars using exchange rates in effect at the balance sheet date. Opening balances related to non-monetary assets and liabilities are based on prior period translated amounts, and non-monetary assets acquired, and non-monetary liabilities incurred are translated at the approximate exchange rate prevailing at the date of the transaction. Revenue and expense transactions are translated at the approximate exchange rate in effect at the time of the transaction. Foreign exchange gains and losses are included in the condensed consolidated statement of operations and comprehensive loss as foreign exchange (loss) gain. The functional currency of HMC and HCA, the Company’s Canadian subsidiaries, is the CAD$ and the functional currency of HMI and HNR is the USD$. Transactions in foreign currencies are recorded into the functional currency of the relevant subsidiary at the exchange rate in effect at the date of the transaction. Any monetary assets and liabilities arising from these transactions are translated into the functional currency at exchange rates in effect at the balance sheet date or on settlement. Revenues, expenses and cash flows are translated at the weighted-average rates of exchanges for the reporting period. The resulting currency translation adjustments are not included in the Company’s condensed consolidated statements of operations and comprehensive loss for the reporting period, but rather are accumulated and gains and losses are recorded in foreign exchange (loss) gain, as a component of comprehensive loss, within the condensed consolidated statements of operations and comprehensive loss. Stock-Based Compensation The Company accounts for all stock-based payments and awards under the fair value-based method. The Company recognizes its stock-based compensation expense using the straight-line method. Compensation cost is not adjusted for estimated forfeitures, but instead is adjusted upon an actual forfeiture of a stock option. The Company accounts for the granting of stock options to employees and non-employees using the fair value method whereby all awards are measured at fair value on the date of the grant. The fair value of all employee-related stock options is expensed over the requisite service period with a corresponding increase to additional paid-in capital. Upon exercise of stock options, the consideration paid by the option holder, together with the amount previously recognized in additional paid-in capital is recorded as an increase to common stock, while the par value of the shares received is reclassified from additional paid in capital. Stock options granted to employees are accounted for as liabilities when they contain conditions or other features that are indexed to other than a market, performance or service condition. In accordance with ASU 2018-07, Improvements to Nonemployee Share-Based Payment Accounting The Company uses the Black-Scholes option pricing model to calculate the fair value of stock options. The use of the Black-Scholes option pricing model requires management to make assumptions with respect to the expected term of the option, the expected volatility of the common stock consistent with the expected term of the option, risk-free interest rates, the value of the common stock and expected dividend yield of the common stock. Changes in these assumptions can materially affect the fair value estimate. Awards of options that provide for an exercise price that is not denominated in: (a) the currency of a market in which a substantial portion of the Company's equity securities trades, (b) the currency in which the employee's pay is denominated, or (c) the Company's functional currency, are required to be classified as liabilities. Revenue Recognition In accordance with the FASB’s ASC 606, Revenue from Contracts with Customers (i) identify the contract(s) with a customer; (ii) identify the performance obligations in the contract; (iii) determine the transaction price; (iv) allocate the transaction price to the performance obligations in the contract; and (v) recognize revenue when (or as) the entity satisfies a performance obligation. The Company applies the five-step model to contracts when it determines that it is probable it will collect substantially all of the consideration it is entitled to in exchange for the goods or services it transfers to the customer. At contract inception, once the contract is determined to be within the scope of ASC 606, the Company assesses the goods or services promised within each contract and determines those that are performance obligations and assesses whether each promised good or service is distinct. The Company then recognizes as revenue the amount of the transaction price, after consideration of variability and constraints, if any, that is allocated to the respective performance obligation when the performance obligation is satisfied. Product Sales, net During the first half of 2019, product sales were derived from the sale of the PoNS device and certain support services including services from the use of the NeuroCatch TM Fee Revenue During the three and nine months ended September 30, 2020, the Company recognized $0 and $9 thousand, respectively, of fee revenue related to engaging new neuroplasticity clinics to provide the PoNS Treatment. During the three and nine months ended September 30, 2019, the Company recognized $0 and $49 thousand, respectively, of fee revenue associated with the Company’s agreement with HTC and Heuro that entitled the Company to 50% of the franchise fees collected by Heuro from each executed franchise agreement. As of September 30, 2020 and December 31, 2019, the Company had no contract assets or liabilities on its condensed consolidated balance sheets related to the supply agreements with each clinic. License Revenue The Company did not record any license revenue during the nine months ended September 30, 2019. As described above, the Company modified its arrangement with HTC on October 30, 2019. License revenue will be recognized ratably over the ten-year term as the performance obligation is met in connection with the Co-Promotion Agreement. During the three and nine months ended September 30, 2020, the Company recognized revenues of $7 thousand and $20 thousand, respectively, in license fees associated with the Co-Promotion Agreement. Revenue not yet recognized of $0.2 million is recorded as deferred revenue on the condensed consolidated balance sheet. Cost of Sales Cost of product sales includes the cost to manufacture the PoNS device, royalty expenses, freight charges, customs duties, wages and salaries of employees involved in the management of the supply chain and logistics of fulfilling the Company’s sales orders and certain support services provided by Heuro on the Company’s behalf. Income Taxes The Company accounts for income taxes using the asset and liability method. The asset and liability method provide that deferred tax assets and liabilities are recognized for the expected future tax consequences of temporary differences between the financial reporting and tax bases of assets and liabilities, and for operating loss and tax credit carryforwards. Deferred tax assets and liabilities are measured using the currently enacted tax rates and laws that will be in effect when the differences are expected to reverse. The Company records a valuation allowance to reduce deferred tax assets to the amount that is believed more likely than not to be realized. The Company has adopted the provisions of ASC 740 Income Taxes On March 27, 2020, President Trump signed into law the Coronavirus Aid, Relief, and Economic Security Act (“CARES Act”). The CARES Act, among other things, includes provisions relating to refundable payroll tax credits, deferment of employer side social security payments, net operating loss carryback periods, alternative minimum tax credit refunds, modifications to the net interest deduction limitations, increased limitations on qualified charitable contributions, and technical corrections to tax depreciation methods for qualified improvement property. We continue to examine the impact that the CARES Act may have on our business. Currently, we do not believe the CARES Act will have a material impact on our accounting for income taxes. Research and Development Expenses Research and development (“R&D”) expenses consist primarily of personnel costs, including salaries, benefits and stock-based compensation, clinical studies performed by contract research organizations, development and manufacturing of clinical trial devices and devices for manufacturing testing and materials and supplies as well as regulatory costs related to post market surveillance, quality assurance complaint handling and adverse event reporting. R&D costs are charged to operations when they are incurred. Segment Information Operating segments are defined as components of an enterprise about which separate discrete information is available for evaluation by the chief operating decision maker, or decision-making group, in deciding how to allocate resources and in assessing performance. The Company operates and manages its business within one operating and reportable segment. Accordingly, the Company reports the accompanying condensed consolidated financial statements in the aggregate in one reportable segment. Derivative Financial Instruments 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 in accordance with ASC 815, Derivatives and Hedging The classification of derivative financial instruments, including whether such instruments should be recorded as liabilities/assets or as equity, is reassessed at the end of each reporting period. Derivative financial instruments that become subject to reclassification are reclassified at the fair value of the instrument on the reclassification date. Derivative financial instruments will be classified in the condensed consolidated balance sheet as current if the right to exercise or settle the derivative financial instrument lies with the holder. Fair Value Measurements The Company accounts for financial instruments in accordance with ASC 820, Fair Value Measurements and Disclosures Level 1 – Unadjusted quoted prices in active markets that are accessible at the measurement date for identical, unrestricted assets or liabilities; Level 2 – Quoted prices in markets that are not active or financial instruments for which all significant inputs are observable, either directly or indirectly; and Level 3 – Prices or valuations that require inputs that are both significant to the fair value measurement and unobservable. The Company’s financial instruments recorded in its condensed consolidated balance sheets consist primarily of cash, accounts receivable, other current receivables, operating lease ROU asset, accounts payable, accrued liabilities, operating lease liability and derivative financial instruments. The book values of these instruments, with the exception of derivative financial instruments, non-current lease liability, operating lease ROU asset and non-current receivables approximate their fair values due to the immediate or short-term nature of these instruments. The Company’s derivative financial instruments are classified as Level 3 within the fair value hierarchy. Unobservable inputs used in the valuation of these financial instruments include volatility of the underlying share price and the expected term. See Note 3 for the inputs used in the Black-Scholes option pricing model as of September 30, 2020 and December 31, 2019 and the roll forward of the Company’s derivative financial instruments. The Company’s derivative financial instruments are comprised of warrants which are classified as liabilities. Fair Value Level 1 Level 2 Level 3 September 30, 2020 Liabilities: Derivative financial instruments $ — — — $ — December 31, 2019 Liabilities: Derivative financial instruments $ 5 — — $ 5 There were no transfers between any levels for any of the periods presented. In addition to assets and liabilities that are recorded at fair value on a recurring basis, the Company's assets and liabilities are also subject to nonrecurring fair value measurements. Generally, assets are recorded at fair value on a nonrecurring basis as a result of impairment charges. Due to the COVID-19 pandemic and the related risks and uncertainties, the Company’s customer relationship intangible asset incurred an impairment loss during the nine months ended September 30, 2020 of $0.2 million, all of which was recorded during the first quarter of 2020, and has a remaining net book value of $0.1 million as of September 30, 2020. The fair value of this intangible asset was determined based on Level 3 measurements within the fair value hierarchy. Inputs to these fair value measurements included estimates of the amount and timing of the asset’s net future discounted cash flows based on historical data, current trends and market conditions. Basic and Diluted Loss per Share Earnings or loss per share (“EPS”) is computed by dividing net income (loss) by the weighted average number of common shares outstanding during the period. Diluted EPS is computed by dividing net income (loss) by the weighted average of all potentially dilutive shares of common stock that were outstanding during the periods presented. The treasury stock method is used in calculating diluted EPS for potentially dilutive stock options and share purchase warrants, which assumes that any proceeds received from the exercise of in-the-money stock options and share purchase warrants, would be used to purchase common shares at the average market price for the period, unless including the effects of these potentially dilutive securities would be anti-dilutive. Three Months Ended Nine Months Ended September 30, September 30, 2020 2019 2020 2019 Basic Numerator: Net loss $ (3,477 ) $ (5,588 ) $ (11,595 ) $ (4,450 ) Denominator: Weighted average common shares outstanding 45,137,995 25,903,544 39,187,370 25,869,039 Basic net loss per share $ (0.08 ) $ (0.22 ) $ (0.30 ) $ (0.17 ) Diluted Numerator: Net loss, basic $ (3,477 ) $ (5,588 ) $ (11,595 ) $ (4,450 ) Effect of dilutive securities — — — — Net loss, diluted $ (3,477 ) $ (5,588 ) $ (11,595 ) $ (4,450 ) Denominator: Weighted average common shares outstanding - basic 45,137,995 25,903,544 39,187,370 25,869,039 Potential common share issuances: Incremental dilutive shares from equity instruments (treasury stock method) — — — — Weighted average common shares outstanding 45,137,995 25,903,544 39,187,370 25,869,039 Diluted net loss per share $ (0.08 ) $ (0.22 ) $ (0.30 ) $ (0.17 ) The following outstanding securities have been excluded from the computation of diluted weighted shares outstanding for the periods noted below, as they would have been anti-dilutive due to the Company’s losses for the three and nine months ended September 30, 2020 and 2019 and because the exercise price of certain of these outstanding securities was greater than the average closing price of the Company’s common stock. Three Months Ended Nine Months Ended September 30, September 30, 2020 2019 2020 2019 Stock options outstanding 3,929,944 3,629,288 3,929,944 3,629,288 RSUs 5,752 — 5,752 — Warrants outstanding 9,295,445 3,043,605 9,295,445 3,043,605 Total 13,231,141 6,672,893 13,231,141 6,672,893 Recent Accounting Pronouncements In June 2016, the FASB issued ASU 2016-13, Financial Instruments – Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments Financial Instruments – Credit Losses (Topic 326), Derivatives and Hedging (Topic 815) and Leases (Topic 842): Effective Dates In August 2018, the FASB issued ASU 2018-13, Fair Value Measurement (Topic 820): Disclosure Framework-Changes to the Disclosure Requirements for Fair Value Measurement This ASU is effective for interim and annual reporting periods beginning after In November 2018, FASB issued ASU 2018-18, C ollaborative Arrangements (Topic 808): Clarifying the Interaction Between Topic 808 and Topic 606, the adoption did not have a material impact on the Company’s condensed consolidated financial statements |
Common Stock and Warrants
Common Stock and Warrants | 9 Months Ended |
Sep. 30, 2020 | |
Equity [Abstract] | |
Common Stock and Warrants | 3. COMMON STOCK AND WARRANTS The Company’s authorized capital stock pursuant to its Delaware charter consists of 150,000,000 authorized shares of common stock, at a par value per share of $0.001 and 10,000,000 authorized shares of preferred stock at a par value per share of $0.001. Holders of common stock are entitled to vote at any meeting of the Company’s stockholders on the basis of one vote per share of common stock owned as of the record date of such meeting. Each share of common stock entitles the holder to receive dividends, if any, as declared by the Company’s Board of Directors. No dividends have been declared since inception of the Company through September 30, 2020. In the event of a liquidation, dissolution or winding-up of the Company, other distribution of assets of the Company among its stockholders for the purposes of winding-up its affairs or upon a reduction of capital, the stockholders shall, share equally, share for share, in the remaining assets and property of the Company. On April 13, 2018, the Company issued 2,141,900 shares of its common stock and warrants to purchase 2,141,900 shares of the Company’s common stock in an underwritten public offering at a price of $7.47 per share and accompanying warrant. On April 24, 2018, the Company closed on the sale of an additional 321,285 shares of its common stock and warrants to purchase 321,285 shares of the Company’s common stock pursuant to the exercise of the underwriters’ over-allotment option (collectively the “April 2018 Offering”). The Company received net proceeds of $16.3 million from the April 2018 Offering. The fair value of these warrants at issuance was approximately $7.4 million. Each warrant issued in connection with the April 2018 Offering entitles the holder to acquire one additional share of common stock at an exercise price of CAD$12.25 per share on or before April 10, 2021. Pursuant to the guidance of ASC 815 Derivatives and Hedging The following table summarizes the weighted average assumptions used in estimating the fair value of the warrants issued in the April 2018 Offering using the Black-Scholes option pricing model as of the date of the initial closing of the offering and the date of the closing of the over-allotment option and September 30, 2020. September 30, 2020 April 24, 2018 April 13, 2018 Stock price CAD$ 0.53 CAD$ 10.76 CAD$ 9.85 Exercise price CAD$ 12.25 CAD$ 12.25 CAD$ 12.25 Warrant term 0.53 years 3.00 years 3.00 years Expected volatility 107.16 % 64.49 % 64.20 % Risk-free interest rate 0.16 % 2.02 % 1.99 % Dividend rate 0.00 % 0.00 % 0.00 % On November 22, 2019, the Company issued 4,815,010 shares of its common stock in an underwritten public offering at a price of $0.35 per share. The Company received net proceeds of $1.1 million. On January 27, 2020, the Company filed a Form S-3 shelf registration under the Securities Act which was declared effective by the SEC on February 6, 2020 (the “2020 Shelf”). In conjunction with the 2020 Shelf, on January 27, 2020, the Company entered into an At The Market Offering Agreement (the “2020 ATM”) with H.C. Wainwright & Co., LLC (“Wainwright”) under which the Company may offer and sell, from time to time at its sole discretion, to or through Wainwright, acting as agent and/or principal, shares of its common stock having an aggregate offering price of up to $11.34 million, which, in March 2020, was subsequently reduced to $9.15 million, including the shares previously sold under the 2020 ATM . For the nine months ended September 30, 2020, under the 2020 ATM, the Company sold and issued shares of its common stock with an aggregated market value of $ million at an average price of $ per share and paid Wainwright a sales commission of approximately $ thousand related to those shares. On March 20, 2020, the Company, in a registered direct offering, issued an aggregate of 6,257,144 shares of its common stock at a price of $0.35 per share. Additionally, the Company issued unregistered warrants in a concurrent private placement to purchase up to 6,257,144 shares of its common stock at an exercise price of $0.46 per share. Gross proceeds from the offering (the “March 2020 Offering”) were approximately $2.2 million. The underwriting discounts and commissions and offering expenses of $0.3 million were recorded to share issuance costs. Each warrant issued in connection with the March 2020 Offering entitles the holder to acquire one additional share of common stock at an exercise price of $0.46 per share, which became exercisable on September 20, 2020 and will expire on March 20, 2025. Pursuant to the guidance of ASC 480 Distinguishing Liabilities from Equity Derivatives and Hedging The relative fair value of these warrants at issuance was approximately $0.8 million and was included in additional paid-in capital. The following table summarizes the weighted average assumptions used in estimating the fair value of the warrants granted in the March 2020 Offering using the Black-Scholes option pricing model as of the date of the closing of the offering on March 20, 2020. March 20, 2020 Stock price $ 0.35 Exercise price $ 0.46 Warrant term 5.50 years Expected volatility 82.41 % Risk-free interest rate 0.52 % Dividend rate 0.00 % Nine Months Ended September 30, 2020 2019 Fair value of warrants at beginning of period $ 5 $ 13,769 Exercise of warrants — (35 ) Foreign exchange losses (1 ) 382 Change in fair value of warrants during the period (4 ) (14,033 ) Fair value of warrants at end of period $ — $ 83 These warrants which are classified as derivative financial instruments in the Company’s condensed consolidated balance sheets are required to be re-measured at each reporting period, with the change in fair value recorded as a gain or loss in the change in fair value of derivative financial instruments, included in other income (expense) in the Company’s condensed consolidated statements of operations and comprehensive loss. The fair value of the warrants will continue to be classified as a liability until such time as they are exercised, expire or there is an amendment to the respective agreements that renders these financial instruments to be no longer classified as such. September 30, 2020 December 31, 2019 Stock price CAD$ 0.53 CAD$ 1.23 Exercise price CAD$ 12.25 CAD$ 12.25 Warrant term 0.53 years 1.28 years Expected volatility 107.16 % 72.43 % Risk-free interest rate 0.16 % 1.72 % Dividend rate 0.00 % 0.00 % Number of Warrants Weighted Average Exercise Price CAD US CAD$ USD$ Outstanding as of December 31, 2019 2,392,285 651,320 $ 12.25 $ 12.24 Granted — 6,257,144 — 0.46 Cancelled/Expired — (5,304 ) — 10.75 Exercised — — — — Outstanding as of September 30, 2020 2,392,285 6,903,160 $ 12.25 $ 1.56 The Company’s warrants outstanding and exercisable as of September 30, 2020 were as follows: Number of Warrants Outstanding Exercise Price Expiration Date 270,915 USD$12.25 December 22, 2020 171,020 USD$12.25 December 28, 2020 204,081 USD$12.25 December 29, 2020 2,392,285 CAD$12.25 April 10, 2021 6,257,144 USD$0.46 March 20, 2025 9,295,445 |
Stock-Based Payments
Stock-Based Payments | 9 Months Ended |
Sep. 30, 2020 | |
Disclosure Of Compensation Related Costs Sharebased Payments [Abstract] | |
Stock-Based Payments | 4. STOCK-BASED PAYMENTS On May 15, 2018, the Company’s Board of Directors authorized and approved the adoption of the 2018 Omnibus Incentive Plan, (as amended, the “2018 Plan”), which was effective upon approval by the stockholders of the Company on June 28, 2018 and under which an aggregate of 5,356,114 shares may be issued. This share reserve is the sum of 3,000,000 new shares, plus the 2,356,114 shares that remained available for issuance under the Company’s 2016 Omnibus Incentive Plan (the “2016 Plan”), the predecessor incentive plan at the time of the adoption of the 2018 Plan. Pursuant to the terms of the 2018 Plan, the Company is authorized to grant stock options, as well as awards of stock appreciation rights, restricted stock, unrestricted shares, restricted stock units (“RSUs”), stock equivalent units and performance-based cash awards. These awards may be granted to directors, officers, employees and eligible consultants. Vesting and the term of an option is determined at the discretion of the Company’s Board of Directors. Subsequent to the adoption of the 2018 Plan, the Company ceased granting awards under the 2016 Plan, the predecessor incentive plan. However, outstanding stock options granted prior to the effective date of the 2018 Plan are still governed by the 2016 Plan or the Company’s 2014 Stock Incentive Plan, which preceded the 2016 Plan. As of September 30, 2020, there was an aggregate of 3,387,958 shares of common stock remaining available for grant under the Company’s 2018 Plan. For the nine months ended September 30, 2020, the Company issued 809,590 stock options to employees and directors. The Company issued no stock options to consultants during the nine months ended September 30, 2020. Weighted Aggregate Number of Average Intrinsic Value Stock Options Exercise Price (in thousands) Outstanding as of December 31, 2019 3,467,292 $ 6.76 $ — Granted 809,590 0.47 — Forfeited/Cancelled (346,938 ) (5.66 ) — Exercised — — — Outstanding as of September 30, 2020 3,929,944 $ 5.56 $ — Exercisable as of September 30, 2020 2,449,829 $ 4.27 $ — As of September 30, 2020, the unrecognized compensation cost related to non-vested stock options outstanding for employees and directors, was $4.1 million which will be recognized over a weighted-average remaining vesting period of approximately 2.8 years. Compensation cost is not adjusted for estimated forfeitures, but instead is adjusted upon an actual forfeiture of a stock option. The weighted average grant date fair value of employee and director stock options granted for the nine months ended September 30, 2020 was $0.30 per option and the grant date fair values of these stock options were estimated using the Black-Scholes option pricing model using the following weighted average assumptions: Nine Months Ended September 30, 2020 Stock price $ 0.47 Exercise price $ 0.47 Expected term 5.26 years Expected volatility 77.35 % Risk-free interest rate 0.58 % Dividend rate 0.00 % As of September 30, 2020, the unrecognized compensation cost related to non-vested stock options outstanding for non-employees was $15 thousand which will be recognized over a weighted-average remaining vesting period of approximately 0.9 years. Compensation cost is not adjusted for estimated forfeitures, but instead is adjusted upon an actual forfeiture of a stock option. Restricted Stock Awards Beginning in the fourth quarter of 2019, certain members of the Company’s executive management team elected to receive restricted stock awards in lieu of cash compensation under the 2018 Plan that vest upon issuance. The fair value of the restricted stock awards is based on the closing price of the Company’s common stock on the day of the grant. The following is a summary of the Company’s restricted stock award activity for the nine months ended September 30, 2020: Number of Restricted Stock Units Weighted Average Grant Date Fair Value per Unit Outstanding as of December 31, 2019 27,697 $ 0.61 Granted 218,161 0.50 Settled (240,106 ) 0.52 Outstanding as of September 30, 2020 5,752 $ 0.39 Stock-Based Compensation Expense Three Months Ended September 30, Nine Months Ended September 30, 2020 2019 2020 2019 Research and development $ 245 $ 233 $ 727 $ 643 Cost of sales — (6 ) (1 ) — Selling, general and administrative 205 1,333 1,295 2,693 Total $ 450 $ 1,560 $ 2,021 $ 3,336 Stock-based compensation expense for the three and nine months ended September 30, 2020 includes the reversal of $125 thousand of expense as a result of forfeitures due to the departure of our former chief executive officer in August 2020. |
Accrued Expenses
Accrued Expenses | 9 Months Ended |
Sep. 30, 2020 | |
Payables And Accruals [Abstract] | |
Accrued Expenses | 5. ACCRUED EXPENSES Accrued expenses consisted of the following (amounts in thousands): As of September 30, 2020 December 31, 2019 Employees benefits $ 557 $ 722 Professional services 6 67 Legal fees 163 81 Royalty fees 5 13 Franchise fees 40 28 Severance 550 606 Other 78 2 Total $ 1,399 $ 1,519 Accrued severance expenses as of September 30, 2020 included $0.5 million in severance costs related to the departure of our former chief executive officer in August 2020. |
Commitments and Contingencies
Commitments and Contingencies | 9 Months Ended |
Sep. 30, 2020 | |
Commitments And Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | 6. COMMITMENTS AND CONTINGENCIES (a) On January 22, 2013, the Company entered into a license agreement with Advanced NeuroRehabilitation, LLC (“ANR”) for an exclusive right to ANR’s patent pending technology, claims and knowhow. In addition to the issuance of 3,207,005 shares of common stock to ANR, the Company agreed to pay a 4% royalty on net revenue on the sales of devices covered by the patent-pending technology and services related to the therapy or use of devices covered by the patent-pending technology. For the three and nine months ended September 30, 2020, the Company recorded approximately $5 thousand and $15 thousand, respectively, in royalty expenses in its condensed consolidated statement of operations and comprehensive loss. For the three and nine months ended September 30, 2019, the Company recorded approximately $6 thousand and $52 thousand, respectively, in royalty expenses in its condensed consolidated statement of operations and comprehensive loss. (b) On October 30, 2017, HMI amended the Asset Purchase Agreement with A&B (HK) Company Ltd. (“A&B”) which specified that if the Company fails to obtain FDA marketing authorization for commercialization of or otherwise fails to ensure that the PoNS device is available for purchase by the U.S. Government by December 31, 2021, the Company would be subject to a $2.0 million contract penalty payable to A&B, unless the Company receives an exemption for the requirement of FDA marketing authorization from the U.S. Army Medical Material Agency. In December 2018, the U.S. Army notified the Company that it was amending the Agreement such that the satisfaction of the obligation of the contract was changed from FDA marketing authorization of the PoNS device to submitting of an application for marketing authorization of the PoNS device with the FDA. As the Company submitted its application for marketing authorization of the PoNS device to the FDA on August 31, 2018, and with copies of the submission documents provided to the U.S. Army, the Company has met its obligation under the amended agreement. Based on this amendment the Company has determined that the possibility of a payment under this contractual penalty is remote. ( c ) In March 2017, the Company entered into a lease for office space in Newtown, Pennsylvania. The initial term of the lease was from July 1, 2017 through December 31, 2022, with an option to extend until 2027. In July 2017, the Company amended the contract to commence the lease on July 17, 2017 through January 16, 2023, with an option to extend until January 2028. Lease extension options were not included in the lease term as it was not reasonably certain that the Company would elect to utilize the option to extend. Monthly rent plus utilities were approximately $20 thousand per month beginning in January 2018 with a 3% annual increase. In May 2020, the Company terminated its lease and entered into a new lease (the “Lease Amendment”) for a smaller footprint of the current office space in Newtown, Pennsylvania. Lease payments under the original contract will be made through December 2020. The Lease Amendment was determined to be a partial termination that qualified as a change of accounting of the existing lease and not a separate contract. As such, the ROU assets and operating lease liabilities were remeasured using an incremental borrowing rate at the date of modification. The carrying value of the ROU asset decreased on a basis proportionate to the partial termination by approximately $0.4 million and the related lease liability decreased by approximately $0.4 million. The Company recorded a gain of approximately $0.1 million resulting from the difference between the reduction in the lease liability and the proportionate reduction of the ROU asset. This amount is recorded as a component of other income in the condensed consolidated statement of operations and comprehensive loss for the nine months ended September 30, 2020. The initial lease term of the Lease Amendment is from July 1, 2020 through June 30, 2021, with options to extend for successive six month periods. Two lease extension options were included in the lease term as it was reasonably certain that the Company would elect to utilize the option to extend for this period of time. Monthly rent plus utilities will be approximately $5 thousand per month beginning in January 2021 with a 3% annual increase. The following table summarizes the Company’s operating lease information including future minimum lease payments under a non-cancellable lease as of September 30, 2020 (amounts in thousands). For the Nine Months Ended September 30, 2020 Operating lease cost $ 57 Operating lease - operating cash flows $ 189 Weighted average remaining lease term 1.75 years Weighted average discount rate 7.2 % Future minimum lease payments under non-cancellable lease as of September 30, 2020 were as follows: For the Period Ending December 31, 2020 (remaining three months) $ 63 2021 63 2022 32 Total future minimum lease payments 158 Less imputed interest (4 ) Total liability $ 154 Reported as of September 30, 2020 Current operating lease liability 107 Non-current operating lease liability 47 Total $ 154 ( d ) On December 29, 2017, HMI (formerly known as NeuroHabilitation Corporation) entered into a Manufacturing and Supply Agreement (“MSA”) with Key Tronic Corporation (“Key Tronic”), for the manufacture and supply of the Company’s PoNS device based upon the Company’s product specifications as set forth in the MSA. Per the agreement, the Company shall provide to Key Tronic a rolling forecast for the procurement of parts and material and within normal lead times based on estimated delivery dates for the manufacture of the PoNS device. The term of the agreement is for three years and will automatically renew for additional consecutive terms of one year, unless cancelled by either party upon 180-day written notice to the other party prior to the end of the then current term. On June 1, 2020, HMI extended the existing manufacturing agreement with Key Tronic for a second three year term from December 29, 2020 until December 31, 2023. As of September 30, 2020, the Company did not have any outstanding commitments to Key Tronic to complete the Company’s forecasts for the procurement of materials necessary for the delivery of PoNS devices. (e) The Company was granted a $323 thousand loan on April 13, 2020 under the Paycheck Protection Program (the “PPP Loan”) established under the CARES Act. The Company planned to use the proceeds from the PPP Loan for covered payroll costs, rent and utilities in accordance with the relevant terms and conditions of the CARES Act. However, based upon subsequent guidance issued by the Federal Government, including a presumption that publicly traded companies may not be eligible for a PPP loan, the Company returned the PPP Loan proceeds in May 2020 and paid interest for the period of time the loan was outstanding. Legal Contingencies Caramahai v. Helius Medical Technologies, Inc. et al. On or about July 9, 2019, a putative shareholder class action lawsuit, Caramahai v. Helius Medical Technologies, Inc. et al. , Case No. 1:19-cv-06365 (S.D.N.Y.), was filed against the Company and three of its individual officers in the Southern District of New York (“the Caramahai Action”). The lawsuit alleges that the Company made materially false and misleading statements regarding the prospects for FDA approval of Helius’ application for de novo classification and clearance of its PoNS device in the United States. As a result of these alleged misstatements, the Caramahai Action asserts claims on behalf of shareholders who bought or sold Helius common stock between from November 9, 2017 to April 10, 2019 for alleged violations of the federal securities laws, specifically Section 10(b) and Rule 10b-5 of the Securities Exchange Act of 1934, as amended. On or about July 31, 2019, a putative shareholder class action lawsuit, Evans v. Helius Medical Technologies, Inc. et al. , Case No. 1:19-cv-07171 (S.D.N.Y.), was filed against the Company and three of its individual officers in the Southern District of New York (the “ Evans Action”). The Evans Action alleges similar claims as the Caramahai Action. On September 9, 2019, three Helius shareholders each filed motions in the Caramahai Evans seeking to consolidate the two proceedings into (the plaintiff responsible for prosecuting the class’s claims and has the power to settle and release claims of all class members) movants The third movant was appointed Lead Plaintiff on April 28, 2020 and movant’s attorneys were appointed as Lead Counsel. During the second quarter of 2020, the plaintiffs voluntarily dismissed the lawsuit without prejudice, ending the case. The U.S. District Judge signed the final order dismissing the litigation on July 1, 2020. |
Related Party Transactions
Related Party Transactions | 9 Months Ended |
Sep. 30, 2020 | |
Related Party Transactions [Abstract] | |
Related Party Transactions | 7. RELATED PARTY TRANSACTIONS During the three and nine months ended September 30, 2020, the Company paid $0 and approximately $5 thousand, respectively, in consulting fees to a director of the Company. During the three and nine months ended September 30, 2019, the Company paid approximately $2 thousand and $25 thousand, respectively, in consulting fees to a director of the Company. As of September 30, 2020, the Company did not have an accrued liability for consulting fees to a director of the Company. |
Subsequent Events
Subsequent Events | 9 Months Ended |
Sep. 30, 2020 | |
Subsequent Events [Abstract] | |
Subsequent Events | 8. SUBSEQUENT EVENTS On October 26, 2020, the Company closed on a private placement of an aggregate of 6,567,868 shares of common stock and warrants to purchase an aggregate of 3,283,936 shares of common stock at a purchase price of $0.52 per unit, consisting of one share and a warrant to purchase 0.50 shares of common stock, resulting in gross proceeds of approximately $3.4 million, excluding the proceeds, if any, that the Company may receive in the future from the exercise of the warrants. The Company incurred $0.2 million in share issuance costs, including placement agent fees. The warrants have an initial exercise price of $0.452 per share and are exercisable for a period of three years from the date of issuance. The Company also issued warrants to the placement agent to purchase 33,654 shares of common stock, with an exercise price of $0.565 per share. An officer of the Company and affiliates of an officer and director of the Company participated in the private placement on the same terms and conditions as all other purchasers, except that they paid $0.5244 per unit and their warrants have an exercise price of $0.4619 per share. Pursuant to the securities purchase agreement for the private placement, if the Company issues any shares of common stock or common stock equivalents for cash consideration, indebtedness or a combination thereof, with certain exceptions, within twelve months of the closing of the private placement, each purchaser who subscribed for at least $250,000 has the right to participate in up to such purchaser’s pro rata portion of 30% of the such subsequent financing on the same terms, conditions and price provided for in the subsequent financing. The following table sets forth the Company’s total stockholders’ equity as reported as of September 30, 2020 and as adjusted on a pro forma basis to reflect the recently completed private placement (amounts in thousands): Total stockholders' equity as of September 30, 2020 $ 3,197 Net proceeds from October 2020 private placement 3,254 Pro forma total stockholders' equity as of September 30, 2020 $ 6,451 |
Summary of Significant Accoun_2
Summary of Significant Accounting Policies (Policies) | 9 Months Ended |
Sep. 30, 2020 | |
Accounting Policies [Abstract] | |
Going Concern Uncertainty | Going Concern Uncertainty As of September 30, 2020, the Company had cash of $2.7 million. For the nine months ended September 30, 2020, the Company had an operating loss of $11.4 million, and as of September 30, 2020, its accumulated deficit was $116.4 million. For the nine months ended September 30, 2020, the Company had $0.5 million of revenue from the commercial sale of products or services. 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 financial statements are filed. The Company’s 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 on hand, cash received from the sale of its PoNS™ device in Canada and by raising additional capital through equity or debt financings. As discussed further in Note 8, on October 26, 2020, the Company closed a private placement and received net proceeds of approximately $3.2 million. There can be no assurance that the Company will be successful in raising that 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 and planned capital expenditures. |
Risks and Uncertainties | Risks and Uncertainties COVID-19 On March 11, 2020, the World Health Organization declared the outbreak of a novel coronavirus (“COVID-19”) as a global pandemic, which continues to spread throughout the United States and around the world. The Company’s business, results of operations and financial condition have been and may continue to be adversely impacted by the COVID-19 pandemic and global economic conditions. The outbreak and spread of COVID-19 has significantly increased economic uncertainty. Authorities implemented numerous measures to try to contain COVID-19, such as travel bans and restrictions, quarantines, shelter in place orders, and business shutdowns. The COVID-19 pandemic initially led to the closure of PoNS Authorized clinic locations across Canada. While all clinics have re-opened, they are all currently operating at reduced capacity, and patients have been and may continue to be less willing to return to these clinics, impacting our commercial activities and our customer engagement efforts. Moreover, the Company’s ability to conduct its ongoing clinical experience programs in Canada has been and may continue to be impaired due to trial participants’ attendance being adversely affected by COVID-19, leading to further delays in the development and approval of the Company’s product candidate. In addition, the COVID-19 pandemic has and may continue to cause delays in the Company’s suppliers’ ability to ship materials that the Company relies upon, and disruptions in business or governmental operations due to COVID-19 may delay the timing for the submission and approval of the Company’s marketing applications with regulatory agencies. Further, the economic impact of the COVID-19 pandemic could affect the Company’s ability to access the public markets and obtain necessary capital in order to properly capitalize and continue its operations. The extent to which the COVID-19 pandemic will continue to impact the Company’s business, results of operations and financial condition will depend on future developments, which are highly uncertain and cannot be predicted. The Company does not know yet the full extent of the impact of COVID-19 on its business, operations or the global economy as a whole. Nasdaq Delisting On March 23, 2020, the Company received a letter (the “Notice”) from the Listing Qualifications staff of Nasdaq indicating that, based on the closing bid price of the Company’s Class A common stock (the “common stock”) for the 30 consecutive business days preceding the Notice, the Company no longer meets the requirement to maintain a minimum bid price of $1.00 per share, as set forth in Nasdaq Listing Rule 5550(a)(2) (the “Minimum Bid Price Requirement”). The Notice did not result in the immediate delisting of the Company’s common stock from Nasdaq. In accordance with Nasdaq Listing Rule 5810(c)(3)(A), the Company was provided a period of 180 calendar days in which to regain compliance. On April 17, 2020, the Company received a second letter (the “Second Notice”) for the Listing Qualifications staff of Nasdaq In the event that the Company does not regain compliance by December 3, 2020, the Company may be eligible to obtain an additional compliance period of 180 calendar days so long as the Company satisfies the continued listing requirement for market value of publicly held shares and all criteria for initial listing on the Nasdaq Capital Market, but for the Minimum Bid Price Requirement and market value of publicly held shares requirement, and provides written notice to Nasdaq of its intent to cure the deficiency during the second compliance period via the implementation of a reverse stock split if necessary. If the Company does not regain compliance with the Minimum Bid Price Requirement by the end of the applicable compliance period (either December 3, 2020 or June 1, 2021 in the event a second compliance period is requested and granted), the Company’s common stock would be subject to delisting from Nasdaq. In that case, however, the Company would have the right to request a hearing before a Nasdaq Hearings Panel to address its plan to remedy the deficiency, which request would stay any delisting action by the Listing Qualifications staff pending the ultimate outcome of the hearing process. |
Basis of Presentation | Basis of Presentation The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”). The condensed consolidated financial statements have also been prepared on a basis substantially consistent with, and should be read in conjunction with the Company’s audited consolidated financial statements for the year ended December 31, 2019, included in its Annual Report on Form 10-K that was filed with the Securities and Exchange Commission on March 12, 2020. The Company’s reporting currency is the U.S. Dollar (“USD$”). |
Use of Estimates | Use of Estimates The preparation of the condensed consolidated financial statements in accordance with GAAP requires management to make estimates and assumptions that affect the amounts reported in the condensed consolidated financial statements and disclosure of contingent assets and liabilities. Significant estimates include the assumptions used in the fair value pricing model for stock-based compensation, derivative financial instruments and deferred income tax asset valuation allowance. Financial statements include estimates which, by their nature, are uncertain. Actual outcomes could differ from these estimates. |
Principles of Consolidation | Principles of Consolidation The accompanying unaudited condensed consolidated financial statements reflect the operations of Helius Medical Technologies, Inc. and its wholly owned subsidiaries. The usual condition for a controlling financial interest is ownership of a majority of the voting interests of an entity. However, a controlling financial interest may also exist through arrangements that do not involve controlling voting interests. As such, the Company applies the guidance of the Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) 810 – Consolidation , |
Concentrations of Credit Risk | Concentrations of Credit Risk The Company is subject to credit risk with respect to its cash. Amounts invested in such instruments are limited by credit rating, maturity, industry group, investment type and issuer. The Company is not currently exposed to any significant concentrations of credit risk from these financial instruments. The Company seeks to maintain safety and preservation of principal and diversification of risk, liquidity of investments sufficient to meet cash flow requirements and a competitive after-tax rate of return. |
Receivables | Receivables Accounts receivables are stated at their net realizable value. In determining the appropriate allowance for doubtful accounts, the Company considers a combination of factors, such as the aging of trade receivables, its customers’ financial strength, and payment history. Changes in these factors, among others, may lead to adjustments in the Company’s allowance for doubtful accounts. The calculation of the allowance required judgment by Company management. As of September 30, 2020, the Company’s accounts receivable of $0.1 million, is net of an allowance for doubtful accounts of $0.4 million and is the result of revenue from product sales. As of December 31, 2019, the Company’s accounts receivable of $0.2 million, is net of an allowance for doubtful accounts of $0.2 million and is the result of revenue from product sales. Other receivables as of September 30, 2020 and December 31, 2019 included refunds from research and development (“R&D”) tax credits of $21 thousand and $0.2 million, respectively, and Goods and Services Tax (“GST”) and Quebec Sales Tax (“QST”) refunds of $0.1 million and $0.1 million, respectively, related to the Company’s Canadian expenditures. |
Inventory | Inventory The Company’s inventory consists of raw materials, work in progress and finished goods of the PoNS device. Inventory is stated at the lower of cost (average cost method) or net realizable value. Adjustments to reduce the cost of inventory to its net realizable value are made if required. 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. Inventory markdowns to net realizable value of $0 thousand and $2 thousand were recorded during the three and nine months ended September 30, 2020, respectively. No inventory markdowns to net realizable value were recorded during the three and nine months ended September 30, 2019. As of September 30, 2020 and December 31, 2019, inventory consisted of the following (amounts in thousands): As of As of September 30, 2020 December 31, 2019 Raw materials $ 159 $ 144 Work-in-process 446 375 Finished goods 19 129 Inventory $ 624 $ 648 Inventory reserve (52 ) (50 ) Total inventory, net of reserve $ 572 $ 598 |
Property and Equipment | Property and Equipment Property and equipment are carried at cost, less accumulated depreciation. Depreciation is recognized using the straight-line method over the useful lives of the related asset or the term of the related lease. Expenditures for maintenance and repairs, which do not improve or extend the expected useful life of the assets, are expensed to operations while major repairs are capitalized. The estimated useful life of the Company’s leasehold improvements is over the shorter of its lease term or useful life of 5 years; the estimated useful life for the Company’s furniture and fixtures is 7 years; and equipment has an estimated useful life of 15 years, while computer software and hardware has an estimated useful life of 3 to 5 years. As of September 30, 2020 and December 31, 2019, property and equipment consisted of the following (amounts in thousands): As of As of September 30, 2020 December 31, 2019 Leasehold improvement $ 64 $ 182 Furniture and fixtures 93 247 Equipment 300 286 Computer software and hardware 182 182 Property and equipment 639 897 Less accumulated depreciation (176 ) (185 ) Property and equipment, net $ 463 $ 712 Depreciation expense was $26 thousand and $43 thousand for the three months ended September 30, 2020 and 2019, respectively. Depreciation expense was $92 thousand and $89 thousand for the nine months ended September 30, 2020 and 2019, respectively. During the second quarter of 2020, the Company sold furniture and fixtures with a net book value of $118 thousand for $61 thousand. Additionally, the Company abandoned leasehold improvements with a net book value of $53 thousand. The loss on the disposal of the furniture and fixtures and leasehold improvements of $110 thousand was recorded as selling, general and administrative expense in the condensed consolidated statements of operations and comprehensive loss. |
Business Combinations | Business Combinations Transactions in which the Company obtains control of a business are accounted for according to the acquisition method as described in FASB ASC 805 – Business Combinations. The assets acquired and liabilities assumed are recognized and measured at their fair values as of the date control is obtained. Acquisition related costs in connection with a business combination are expensed as incurred. Contingent consideration is recognized and measured at fair value at the acquisition date and until paid re-measured on a recurring basis. It is classified as a liability based on appropriate GAAP. On October 30, 2019, the Company and HTC entered into a Share Purchase Agreement (the “SPA”) whereby the Company, through its wholly owned subsidiary, acquired Heuro from HTC. Under the terms of the SPA, total consideration of approximately CAD$2.1 million (USD$1.6 million) was transferred to HTC, which included (1) cash of CAD$0.5 million (USD$0.4 million), (2) delivery of 55 PoNS devices for which the fair value was determined to be CAD$0.5 million (USD$0.4 million), (3) the forgiveness of CAD$750 thousand (USD$0.5 million) receivable from the September 2018 strategic alliance agreement and (4) the exclusivity rights granted to HTC in the Co-Promotion Agreement (as defined below) to provide PoNS Treatment in the Fraser Valley and Vancouver metro regions of British Columbia with a determined fair value of CAD$0.4 million (USD$0.3 million). The transaction has been accounted for as a business combination. The acquisition related costs were $0.1 million and were accounted for as selling, general and administrative expenses in the consolidated statement of operations and comprehensive loss for the year ended December 31, 2019. The following table summarizes the recognized fair values of identifiable assets acquired and liabilities assumed as of October 30, 2019: October 30, 2019 Fair Value Assets: Cash and cash equivalents $ 1 Other receivables 19 Fixed assets 7 Intangibles 1,053 Goodwill 737 Total assets $ 1,817 Liabilities: Accounts payable $ 186 Other current liabilities 9 Total liabilities $ 195 Net assets acquired $ 1,622 The fair values assigned to identifiable intangible assets assumed were based on management’s estimates and assumptions as of such date and are considered finalized. The Company recorded measurement adjustments of $0.4 million during the nine months ended September 30, 2020, all of which was recorded during the first quarter of 2020. The recorded adjustments related to the recognition of reacquired exclusivity rights. Acquired intangibles consisted of customer relationships, proprietary technology and reacquired rights. The remaining useful life at acquisition was 1.25 years, 5 years and 3.87 years, respectively, and the acquired intangibles are amortized using the straight-line method. Factors considered by the Company in determination of goodwill include synergies, strategic fit and other benefits that do not meet the recognition criteria of acquired identifiable intangible assets. The recognized goodwill of $0.7 million is not expected to be deductible for tax purposes. The fair value of 55 PoNS devices which we agreed to transfer to HTC pursuant to the SPA in the amount of CAD$0.5 million will be recognized as revenue within the consolidated statements of operations and comprehensive loss once control has been transferred in accordance with ASC 606. As of December 31, 2019, the control had not been transferred resulting in the fair value being recorded as deferred revenue on the condensed consolidated balance sheet. As of September 30, 2020, the control of 11 devices had been transferred resulting in recognition of revenue for these devices. The fair value of the remaining 44 devices is still recorded as deferred revenue on the condensed consolidated balance sheet. In connection with the SPA, on October 30, 2019, the Company entered into a Clinical Research and Co-Promotion Agreement with HTC (the “Co-Promotion Agreement”), whereby each company will promote the sales of the Company’s PoNS Treatment and HTC’s NeuroCatch TM |
Goodwill and Other Intangible Assets | Goodwill and Other Intangible Assets Goodwill represents the excess of purchase price over the fair values underlying net assets acquired in an acquisition. All of the Company’s goodwill as of September 30, 2020 is the result of the Heuro acquisition discussed above. Goodwill is not amortized, but rather will be tested annually for impairment or more frequently if events or changes in circumstances indicate that the carrying amount of the asset may not be recoverable. The Company will test goodwill for impairment annually in the fourth quarter of each year using data as of October 1 of that year. Goodwill is allocated to and evaluated for impairment at the Company’s one identified reporting unit. Goodwill is tested for impairment by either performing a qualitative evaluation or a quantitative test. The qualitative evaluation is an assessment of factors to determine whether it is more likely than not that a reporting unit’s fair value is less than its carrying amount. The Company may elect not to perform the qualitative assessment for its reporting unit and perform the quantitative impairment test. The quantitative goodwill impairment test requires the Company to compare the carrying value of the reporting unit’s net assets to the estimated fair value of the reporting unit. If the estimated fair value exceeds the carrying value, no further evaluation is required, and no impairment loss is recognized. If the carrying amount of a reporting unit, including goodwill, exceeds the estimated fair value, the excess of the carrying value over the estimated fair value is recorded as an impairment loss, the amount of which is not to exceed the total amount of goodwill allocated to the reporting unit. The COVID-19 pandemic was a triggering event for testing whether goodwill is impaired. The Company performed quantitative assessments at March 31, 2020, June 30, 2020 and September 30, 2020. As a result of these assessments, the Company determined that the estimated fair value of the reporting unit exceeded the carrying value of the reporting unit. Therefore, the Company concluded that goodwill was not impaired as of any of the aforementioned periods. The Company will continue to monitor the impacts of the COVID-19 pandemic in future periods. The following is a summary of the activity for the period ended September 30, 2020 for goodwill: Goodwill 2020 Carrying amount at beginning of period $ 1,242 Business acquisition fair value allocation adjustment (454 ) Foreign currency translation (63 ) Carrying amount at end of period $ 725 Definite-lived intangibles consist principally of acquired customer relationships, proprietary software and reacquired rights as well as internally developed software. All are amortized straight-line over their estimated useful lives. Amortization expense related to intangible assets was $0.1 million and $0.3 million during the three and nine months ended September 30, 2020, respectively. No amortization expense related to intangible assets was recorded during the three and nine months ended September 30, 2019. During the nine months ended September 30, 2020, the Company incurred an intangible asset impairment loss of $0.2 million related to the customer relationships, all of which was incurred during the first quarter of 2020, which is included in selling, general and administrative expenses in the accompanying condensed consolidated statement of operations and comprehensive loss. Intangible assets as of September 30, 2020 and December 31, 2019 consist of the following: As of September 30, 2020 As of December 31, 2019 Useful Life Gross Carrying Amount Accumulated Amortization Gross Carrying Amount Accumulated Amortization Customer relationships 1.25 years $ 227 $ (191 ) $ 423 $ (55 ) Acquired proprietary software 5 years 143 (26 ) 148 (5 ) Reacquired rights 3.87 years 480 (113 ) — — Internally developed software 3 years 82 (23 ) 75 (4 ) Total intangible assets $ 932 $ (353 ) $ 646 $ (64 ) Amortization expense is anticipated to be as follows in future years: For the Year Ending December 31, 2020 (remaining 3 months) $ 73 2021 189 2022 176 2023 117 2024 24 $ 579 |
Leases | Leases On January 1, 2019, the Company adopted ASU No. 2016-02, Leases The Company does not record an operating lease ROU asset and corresponding lease liability for leases with an initial term of twelve months or less and recognizes lease expense for these leases as incurred over the lease term. The Company had only one operating lease, which was for its headquarters office in Newtown, Pennsylvania upon the adoption date. As of September 30, 2020, the Company has not entered into any additional lease arrangements, but did modify the existing lease arrangement. |
Foreign Currency | Foreign Currency The Company’s functional currency is the U.S. dollar. Monetary assets and liabilities denominated in foreign currencies are translated into U.S. dollars using exchange rates in effect at the balance sheet date. Opening balances related to non-monetary assets and liabilities are based on prior period translated amounts, and non-monetary assets acquired, and non-monetary liabilities incurred are translated at the approximate exchange rate prevailing at the date of the transaction. Revenue and expense transactions are translated at the approximate exchange rate in effect at the time of the transaction. Foreign exchange gains and losses are included in the condensed consolidated statement of operations and comprehensive loss as foreign exchange (loss) gain. The functional currency of HMC and HCA, the Company’s Canadian subsidiaries, is the CAD$ and the functional currency of HMI and HNR is the USD$. Transactions in foreign currencies are recorded into the functional currency of the relevant subsidiary at the exchange rate in effect at the date of the transaction. Any monetary assets and liabilities arising from these transactions are translated into the functional currency at exchange rates in effect at the balance sheet date or on settlement. Revenues, expenses and cash flows are translated at the weighted-average rates of exchanges for the reporting period. The resulting currency translation adjustments are not included in the Company’s condensed consolidated statements of operations and comprehensive loss for the reporting period, but rather are accumulated and gains and losses are recorded in foreign exchange (loss) gain, as a component of comprehensive loss, within the condensed consolidated statements of operations and comprehensive loss. |
Stock-Based Compensation | Stock-Based Compensation The Company accounts for all stock-based payments and awards under the fair value-based method. The Company recognizes its stock-based compensation expense using the straight-line method. Compensation cost is not adjusted for estimated forfeitures, but instead is adjusted upon an actual forfeiture of a stock option. The Company accounts for the granting of stock options to employees and non-employees using the fair value method whereby all awards are measured at fair value on the date of the grant. The fair value of all employee-related stock options is expensed over the requisite service period with a corresponding increase to additional paid-in capital. Upon exercise of stock options, the consideration paid by the option holder, together with the amount previously recognized in additional paid-in capital is recorded as an increase to common stock, while the par value of the shares received is reclassified from additional paid in capital. Stock options granted to employees are accounted for as liabilities when they contain conditions or other features that are indexed to other than a market, performance or service condition. In accordance with ASU 2018-07, Improvements to Nonemployee Share-Based Payment Accounting The Company uses the Black-Scholes option pricing model to calculate the fair value of stock options. The use of the Black-Scholes option pricing model requires management to make assumptions with respect to the expected term of the option, the expected volatility of the common stock consistent with the expected term of the option, risk-free interest rates, the value of the common stock and expected dividend yield of the common stock. Changes in these assumptions can materially affect the fair value estimate. Awards of options that provide for an exercise price that is not denominated in: (a) the currency of a market in which a substantial portion of the Company's equity securities trades, (b) the currency in which the employee's pay is denominated, or (c) the Company's functional currency, are required to be classified as liabilities. |
Revenue Recognition | Revenue Recognition In accordance with the FASB’s ASC 606, Revenue from Contracts with Customers (i) identify the contract(s) with a customer; (ii) identify the performance obligations in the contract; (iii) determine the transaction price; (iv) allocate the transaction price to the performance obligations in the contract; and (v) recognize revenue when (or as) the entity satisfies a performance obligation. The Company applies the five-step model to contracts when it determines that it is probable it will collect substantially all of the consideration it is entitled to in exchange for the goods or services it transfers to the customer. At contract inception, once the contract is determined to be within the scope of ASC 606, the Company assesses the goods or services promised within each contract and determines those that are performance obligations and assesses whether each promised good or service is distinct. The Company then recognizes as revenue the amount of the transaction price, after consideration of variability and constraints, if any, that is allocated to the respective performance obligation when the performance obligation is satisfied. Product Sales, net During the first half of 2019, product sales were derived from the sale of the PoNS device and certain support services including services from the use of the NeuroCatch TM Fee Revenue During the three and nine months ended September 30, 2020, the Company recognized $0 and $9 thousand, respectively, of fee revenue related to engaging new neuroplasticity clinics to provide the PoNS Treatment. During the three and nine months ended September 30, 2019, the Company recognized $0 and $49 thousand, respectively, of fee revenue associated with the Company’s agreement with HTC and Heuro that entitled the Company to 50% of the franchise fees collected by Heuro from each executed franchise agreement. As of September 30, 2020 and December 31, 2019, the Company had no contract assets or liabilities on its condensed consolidated balance sheets related to the supply agreements with each clinic. License Revenue The Company did not record any license revenue during the nine months ended September 30, 2019. As described above, the Company modified its arrangement with HTC on October 30, 2019. License revenue will be recognized ratably over the ten-year term as the performance obligation is met in connection with the Co-Promotion Agreement. During the three and nine months ended September 30, 2020, the Company recognized revenues of $7 thousand and $20 thousand, respectively, in license fees associated with the Co-Promotion Agreement. Revenue not yet recognized of $0.2 million is recorded as deferred revenue on the condensed consolidated balance sheet. |
Cost of Sales | Cost of Sales Cost of product sales includes the cost to manufacture the PoNS device, royalty expenses, freight charges, customs duties, wages and salaries of employees involved in the management of the supply chain and logistics of fulfilling the Company’s sales orders and certain support services provided by Heuro on the Company’s behalf. |
Income Taxes | Income Taxes The Company accounts for income taxes using the asset and liability method. The asset and liability method provide that deferred tax assets and liabilities are recognized for the expected future tax consequences of temporary differences between the financial reporting and tax bases of assets and liabilities, and for operating loss and tax credit carryforwards. Deferred tax assets and liabilities are measured using the currently enacted tax rates and laws that will be in effect when the differences are expected to reverse. The Company records a valuation allowance to reduce deferred tax assets to the amount that is believed more likely than not to be realized. The Company has adopted the provisions of ASC 740 Income Taxes On March 27, 2020, President Trump signed into law the Coronavirus Aid, Relief, and Economic Security Act (“CARES Act”). The CARES Act, among other things, includes provisions relating to refundable payroll tax credits, deferment of employer side social security payments, net operating loss carryback periods, alternative minimum tax credit refunds, modifications to the net interest deduction limitations, increased limitations on qualified charitable contributions, and technical corrections to tax depreciation methods for qualified improvement property. We continue to examine the impact that the CARES Act may have on our business. Currently, we do not believe the CARES Act will have a material impact on our accounting for income taxes. |
Research and Development Expenses | Research and Development Expenses Research and development (“R&D”) expenses consist primarily of personnel costs, including salaries, benefits and stock-based compensation, clinical studies performed by contract research organizations, development and manufacturing of clinical trial devices and devices for manufacturing testing and materials and supplies as well as regulatory costs related to post market surveillance, quality assurance complaint handling and adverse event reporting. R&D costs are charged to operations when they are incurred. |
Segment Information | Segment Information Operating segments are defined as components of an enterprise about which separate discrete information is available for evaluation by the chief operating decision maker, or decision-making group, in deciding how to allocate resources and in assessing performance. The Company operates and manages its business within one operating and reportable segment. Accordingly, the Company reports the accompanying condensed consolidated financial statements in the aggregate in one reportable segment. |
Derivative Financial Instruments | Derivative Financial Instruments 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 in accordance with ASC 815, Derivatives and Hedging The classification of derivative financial instruments, including whether such instruments should be recorded as liabilities/assets or as equity, is reassessed at the end of each reporting period. Derivative financial instruments that become subject to reclassification are reclassified at the fair value of the instrument on the reclassification date. Derivative financial instruments will be classified in the condensed consolidated balance sheet as current if the right to exercise or settle the derivative financial instrument lies with the holder. |
Fair Value Measurements | Fair Value Measurements The Company accounts for financial instruments in accordance with ASC 820, Fair Value Measurements and Disclosures Level 1 – Unadjusted quoted prices in active markets that are accessible at the measurement date for identical, unrestricted assets or liabilities; Level 2 – Quoted prices in markets that are not active or financial instruments for which all significant inputs are observable, either directly or indirectly; and Level 3 – Prices or valuations that require inputs that are both significant to the fair value measurement and unobservable. The Company’s financial instruments recorded in its condensed consolidated balance sheets consist primarily of cash, accounts receivable, other current receivables, operating lease ROU asset, accounts payable, accrued liabilities, operating lease liability and derivative financial instruments. The book values of these instruments, with the exception of derivative financial instruments, non-current lease liability, operating lease ROU asset and non-current receivables approximate their fair values due to the immediate or short-term nature of these instruments. The Company’s derivative financial instruments are classified as Level 3 within the fair value hierarchy. Unobservable inputs used in the valuation of these financial instruments include volatility of the underlying share price and the expected term. See Note 3 for the inputs used in the Black-Scholes option pricing model as of September 30, 2020 and December 31, 2019 and the roll forward of the Company’s derivative financial instruments. The Company’s derivative financial instruments are comprised of warrants which are classified as liabilities. Fair Value Level 1 Level 2 Level 3 September 30, 2020 Liabilities: Derivative financial instruments $ — — — $ — December 31, 2019 Liabilities: Derivative financial instruments $ 5 — — $ 5 There were no transfers between any levels for any of the periods presented. In addition to assets and liabilities that are recorded at fair value on a recurring basis, the Company's assets and liabilities are also subject to nonrecurring fair value measurements. Generally, assets are recorded at fair value on a nonrecurring basis as a result of impairment charges. Due to the COVID-19 pandemic and the related risks and uncertainties, the Company’s customer relationship intangible asset incurred an impairment loss during the nine months ended September 30, 2020 of $0.2 million, all of which was recorded during the first quarter of 2020, and has a remaining net book value of $0.1 million as of September 30, 2020. The fair value of this intangible asset was determined based on Level 3 measurements within the fair value hierarchy. Inputs to these fair value measurements included estimates of the amount and timing of the asset’s net future discounted cash flows based on historical data, current trends and market conditions. |
Basic and Diluted Loss per Share | Basic and Diluted Loss per Share Earnings or loss per share (“EPS”) is computed by dividing net income (loss) by the weighted average number of common shares outstanding during the period. Diluted EPS is computed by dividing net income (loss) by the weighted average of all potentially dilutive shares of common stock that were outstanding during the periods presented. The treasury stock method is used in calculating diluted EPS for potentially dilutive stock options and share purchase warrants, which assumes that any proceeds received from the exercise of in-the-money stock options and share purchase warrants, would be used to purchase common shares at the average market price for the period, unless including the effects of these potentially dilutive securities would be anti-dilutive. Three Months Ended Nine Months Ended September 30, September 30, 2020 2019 2020 2019 Basic Numerator: Net loss $ (3,477 ) $ (5,588 ) $ (11,595 ) $ (4,450 ) Denominator: Weighted average common shares outstanding 45,137,995 25,903,544 39,187,370 25,869,039 Basic net loss per share $ (0.08 ) $ (0.22 ) $ (0.30 ) $ (0.17 ) Diluted Numerator: Net loss, basic $ (3,477 ) $ (5,588 ) $ (11,595 ) $ (4,450 ) Effect of dilutive securities — — — — Net loss, diluted $ (3,477 ) $ (5,588 ) $ (11,595 ) $ (4,450 ) Denominator: Weighted average common shares outstanding - basic 45,137,995 25,903,544 39,187,370 25,869,039 Potential common share issuances: Incremental dilutive shares from equity instruments (treasury stock method) — — — — Weighted average common shares outstanding 45,137,995 25,903,544 39,187,370 25,869,039 Diluted net loss per share $ (0.08 ) $ (0.22 ) $ (0.30 ) $ (0.17 ) The following outstanding securities have been excluded from the computation of diluted weighted shares outstanding for the periods noted below, as they would have been anti-dilutive due to the Company’s losses for the three and nine months ended September 30, 2020 and 2019 and because the exercise price of certain of these outstanding securities was greater than the average closing price of the Company’s common stock. Three Months Ended Nine Months Ended September 30, September 30, 2020 2019 2020 2019 Stock options outstanding 3,929,944 3,629,288 3,929,944 3,629,288 RSUs 5,752 — 5,752 — Warrants outstanding 9,295,445 3,043,605 9,295,445 3,043,605 Total 13,231,141 6,672,893 13,231,141 6,672,893 |
Recent Accounting Pronouncements | Recent Accounting Pronouncements In June 2016, the FASB issued ASU 2016-13, Financial Instruments – Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments Financial Instruments – Credit Losses (Topic 326), Derivatives and Hedging (Topic 815) and Leases (Topic 842): Effective Dates In August 2018, the FASB issued ASU 2018-13, Fair Value Measurement (Topic 820): Disclosure Framework-Changes to the Disclosure Requirements for Fair Value Measurement This ASU is effective for interim and annual reporting periods beginning after In November 2018, FASB issued ASU 2018-18, C ollaborative Arrangements (Topic 808): Clarifying the Interaction Between Topic 808 and Topic 606, the adoption did not have a material impact on the Company’s condensed consolidated financial statements |
Summary of Significant Accoun_3
Summary of Significant Accounting Policies (Tables) | 9 Months Ended |
Sep. 30, 2020 | |
Accounting Policies [Abstract] | |
Schedule of Inventory | As of September 30, 2020 and December 31, 2019, inventory consisted of the following (amounts in thousands): As of As of September 30, 2020 December 31, 2019 Raw materials $ 159 $ 144 Work-in-process 446 375 Finished goods 19 129 Inventory $ 624 $ 648 Inventory reserve (52 ) (50 ) Total inventory, net of reserve $ 572 $ 598 |
Summary of Property and Equipment | As of September 30, 2020 and December 31, 2019, property and equipment consisted of the following (amounts in thousands): As of As of September 30, 2020 December 31, 2019 Leasehold improvement $ 64 $ 182 Furniture and fixtures 93 247 Equipment 300 286 Computer software and hardware 182 182 Property and equipment 639 897 Less accumulated depreciation (176 ) (185 ) Property and equipment, net $ 463 $ 712 |
Summary of Recognized Fair Values of Identifiable Assets Acquired and Liabilities Assumed | The following table summarizes the recognized fair values of identifiable assets acquired and liabilities assumed as of October 30, 2019: October 30, 2019 Fair Value Assets: Cash and cash equivalents $ 1 Other receivables 19 Fixed assets 7 Intangibles 1,053 Goodwill 737 Total assets $ 1,817 Liabilities: Accounts payable $ 186 Other current liabilities 9 Total liabilities $ 195 Net assets acquired $ 1,622 |
Summary of Activity for Goodwill | The following is a summary of the activity for the period ended September 30, 2020 for goodwill: Goodwill 2020 Carrying amount at beginning of period $ 1,242 Business acquisition fair value allocation adjustment (454 ) Foreign currency translation (63 ) Carrying amount at end of period $ 725 |
Summary of Intangible Assets | Intangible assets as of September 30, 2020 and December 31, 2019 consist of the following: As of September 30, 2020 As of December 31, 2019 Useful Life Gross Carrying Amount Accumulated Amortization Gross Carrying Amount Accumulated Amortization Customer relationships 1.25 years $ 227 $ (191 ) $ 423 $ (55 ) Acquired proprietary software 5 years 143 (26 ) 148 (5 ) Reacquired rights 3.87 years 480 (113 ) — — Internally developed software 3 years 82 (23 ) 75 (4 ) Total intangible assets $ 932 $ (353 ) $ 646 $ (64 ) |
Summary of Anticipated Amortization Expense | Amortization expense is anticipated to be as follows in future years: For the Year Ending December 31, 2020 (remaining 3 months) $ 73 2021 189 2022 176 2023 117 2024 24 $ 579 |
Summary of Recurring Fair Value Measurements for Derivative Financial Instruments and Stock-Based Compensation Liability | Fair Value Level 1 Level 2 Level 3 September 30, 2020 Liabilities: Derivative financial instruments $ — — — $ — December 31, 2019 Liabilities: Derivative financial instruments $ 5 — — $ 5 |
Summary of Basic and Diluted Loss per Share | Three Months Ended Nine Months Ended September 30, September 30, 2020 2019 2020 2019 Basic Numerator: Net loss $ (3,477 ) $ (5,588 ) $ (11,595 ) $ (4,450 ) Denominator: Weighted average common shares outstanding 45,137,995 25,903,544 39,187,370 25,869,039 Basic net loss per share $ (0.08 ) $ (0.22 ) $ (0.30 ) $ (0.17 ) Diluted Numerator: Net loss, basic $ (3,477 ) $ (5,588 ) $ (11,595 ) $ (4,450 ) Effect of dilutive securities — — — — Net loss, diluted $ (3,477 ) $ (5,588 ) $ (11,595 ) $ (4,450 ) Denominator: Weighted average common shares outstanding - basic 45,137,995 25,903,544 39,187,370 25,869,039 Potential common share issuances: Incremental dilutive shares from equity instruments (treasury stock method) — — — — Weighted average common shares outstanding 45,137,995 25,903,544 39,187,370 25,869,039 Diluted net loss per share $ (0.08 ) $ (0.22 ) $ (0.30 ) $ (0.17 ) |
Summary of Outstanding Securities Excluded from Computation of Diluted Weighted Shares Outstanding | The following outstanding securities have been excluded from the computation of diluted weighted shares outstanding for the periods noted below, as they would have been anti-dilutive due to the Company’s losses for the three and nine months ended September 30, 2020 and 2019 and because the exercise price of certain of these outstanding securities was greater than the average closing price of the Company’s common stock. Three Months Ended Nine Months Ended September 30, September 30, 2020 2019 2020 2019 Stock options outstanding 3,929,944 3,629,288 3,929,944 3,629,288 RSUs 5,752 — 5,752 — Warrants outstanding 9,295,445 3,043,605 9,295,445 3,043,605 Total 13,231,141 6,672,893 13,231,141 6,672,893 |
Common Stock and Warrants (Tabl
Common Stock and Warrants (Tables) | 9 Months Ended |
Sep. 30, 2020 | |
Summary of Weighted Average Assumptions Used in Estimating Fair Value of Warrants | September 30, 2020 December 31, 2019 Stock price CAD$ 0.53 CAD$ 1.23 Exercise price CAD$ 12.25 CAD$ 12.25 Warrant term 0.53 years 1.28 years Expected volatility 107.16 % 72.43 % Risk-free interest rate 0.16 % 1.72 % Dividend rate 0.00 % 0.00 % |
Summary of Warrants Accounted for as Liabilities and Recorded as Derivative Financial Instruments | Nine Months Ended September 30, 2020 2019 Fair value of warrants at beginning of period $ 5 $ 13,769 Exercise of warrants — (35 ) Foreign exchange losses (1 ) 382 Change in fair value of warrants during the period (4 ) (14,033 ) Fair value of warrants at end of period $ — $ 83 |
Summary of Warrant Activity | Number of Warrants Weighted Average Exercise Price CAD US CAD$ USD$ Outstanding as of December 31, 2019 2,392,285 651,320 $ 12.25 $ 12.24 Granted — 6,257,144 — 0.46 Cancelled/Expired — (5,304 ) — 10.75 Exercised — — — — Outstanding as of September 30, 2020 2,392,285 6,903,160 $ 12.25 $ 1.56 |
Warrants Outstanding and Exercisable | The Company’s warrants outstanding and exercisable as of September 30, 2020 were as follows: Number of Warrants Outstanding Exercise Price Expiration Date 270,915 USD$12.25 December 22, 2020 171,020 USD$12.25 December 28, 2020 204,081 USD$12.25 December 29, 2020 2,392,285 CAD$12.25 April 10, 2021 6,257,144 USD$0.46 March 20, 2025 9,295,445 |
April 2018 Offering | |
Summary of Weighted Average Assumptions Used in Estimating Fair Value of Warrants | The following table summarizes the weighted average assumptions used in estimating the fair value of the warrants issued in the April 2018 Offering using the Black-Scholes option pricing model as of the date of the initial closing of the offering and the date of the closing of the over-allotment option and September 30, 2020. September 30, 2020 April 24, 2018 April 13, 2018 Stock price CAD$ 0.53 CAD$ 10.76 CAD$ 9.85 Exercise price CAD$ 12.25 CAD$ 12.25 CAD$ 12.25 Warrant term 0.53 years 3.00 years 3.00 years Expected volatility 107.16 % 64.49 % 64.20 % Risk-free interest rate 0.16 % 2.02 % 1.99 % Dividend rate 0.00 % 0.00 % 0.00 % |
March 2020 Offering | |
Summary of Weighted Average Assumptions Used in Estimating Fair Value of Warrants | The following table summarizes the weighted average assumptions used in estimating the fair value of the warrants granted in the March 2020 Offering using the Black-Scholes option pricing model as of the date of the closing of the offering on March 20, 2020. March 20, 2020 Stock price $ 0.35 Exercise price $ 0.46 Warrant term 5.50 years Expected volatility 82.41 % Risk-free interest rate 0.52 % Dividend rate 0.00 % |
Stock-Based Payments (Tables)
Stock-Based Payments (Tables) | 9 Months Ended |
Sep. 30, 2020 | |
Summary of Company's Stock Option Activity | Weighted Aggregate Number of Average Intrinsic Value Stock Options Exercise Price (in thousands) Outstanding as of December 31, 2019 3,467,292 $ 6.76 $ — Granted 809,590 0.47 — Forfeited/Cancelled (346,938 ) (5.66 ) — Exercised — — — Outstanding as of September 30, 2020 3,929,944 $ 5.56 $ — Exercisable as of September 30, 2020 2,449,829 $ 4.27 $ — |
Summary of Company's Restricted Stock Award Activity | The following is a summary of the Company’s restricted stock award activity for the nine months ended September 30, 2020: Number of Restricted Stock Units Weighted Average Grant Date Fair Value per Unit Outstanding as of December 31, 2019 27,697 $ 0.61 Granted 218,161 0.50 Settled (240,106 ) 0.52 Outstanding as of September 30, 2020 5,752 $ 0.39 |
Summary of Stock-Based Compensation Expense is Classified in Condensed Consolidated Statements of Operations and Comprehensive Loss | Three Months Ended September 30, Nine Months Ended September 30, 2020 2019 2020 2019 Research and development $ 245 $ 233 $ 727 $ 643 Cost of sales — (6 ) (1 ) — Selling, general and administrative 205 1,333 1,295 2,693 Total $ 450 $ 1,560 $ 2,021 $ 3,336 |
Employee and Director Stock Options | |
Estimation Using Black-Scholes Option Pricing Model With Following Weighted Average Assumptions | The weighted average grant date fair value of employee and director stock options granted for the nine months ended September 30, 2020 was $0.30 per option and the grant date fair values of these stock options were estimated using the Black-Scholes option pricing model using the following weighted average assumptions: Nine Months Ended September 30, 2020 Stock price $ 0.47 Exercise price $ 0.47 Expected term 5.26 years Expected volatility 77.35 % Risk-free interest rate 0.58 % Dividend rate 0.00 % |
Accrued Expenses (Tables)
Accrued Expenses (Tables) | 9 Months Ended |
Sep. 30, 2020 | |
Payables And Accruals [Abstract] | |
Schedule of Accrued Expenses | Accrued expenses consisted of the following (amounts in thousands): As of September 30, 2020 December 31, 2019 Employees benefits $ 557 $ 722 Professional services 6 67 Legal fees 163 81 Royalty fees 5 13 Franchise fees 40 28 Severance 550 606 Other 78 2 Total $ 1,399 $ 1,519 |
Commitments and Contingencies (
Commitments and Contingencies (Tables) | 9 Months Ended |
Sep. 30, 2020 | |
Commitments And Contingencies Disclosure [Abstract] | |
Schedule of Future Minimum Lease Payments Related to Non-cancellable Operating Lease Commitments | The following table summarizes the Company’s operating lease information including future minimum lease payments under a non-cancellable lease as of September 30, 2020 (amounts in thousands). For the Nine Months Ended September 30, 2020 Operating lease cost $ 57 Operating lease - operating cash flows $ 189 Weighted average remaining lease term 1.75 years Weighted average discount rate 7.2 % Future minimum lease payments under non-cancellable lease as of September 30, 2020 were as follows: For the Period Ending December 31, 2020 (remaining three months) $ 63 2021 63 2022 32 Total future minimum lease payments 158 Less imputed interest (4 ) Total liability $ 154 Reported as of September 30, 2020 Current operating lease liability 107 Non-current operating lease liability 47 Total $ 154 |
Subsequent Events (Tables)
Subsequent Events (Tables) | 9 Months Ended |
Sep. 30, 2020 | |
Private Placement | |
Schedule of Pro Forma Basis Adjustment on Stockholders' Equity | The following table sets forth the Company’s total stockholders’ equity as reported as of September 30, 2020 and as adjusted on a pro forma basis to reflect the recently completed private placement (amounts in thousands): Total stockholders' equity as of September 30, 2020 $ 3,197 Net proceeds from October 2020 private placement 3,254 Pro forma total stockholders' equity as of September 30, 2020 $ 6,451 |
Description of Business - Addit
Description of Business - Additional Information (Details) - USD ($) $ / shares in Units, $ in Thousands | Oct. 26, 2020 | Apr. 17, 2020 | Mar. 23, 2020 | Sep. 30, 2020 | Sep. 30, 2019 | Sep. 30, 2020 | Sep. 30, 2019 | Dec. 31, 2019 | Nov. 22, 2019 |
Description Of Business [Line Items] | |||||||||
Date of incorporation | Mar. 13, 2014 | ||||||||
Cash | $ 2,680 | $ 2,680 | $ 5,459 | ||||||
Operating loss | 3,660 | $ 5,736 | 11,384 | $ 18,371 | |||||
Accumulated deficit | 116,368 | 116,368 | $ 104,773 | ||||||
Total operating revenue | $ 131 | $ 150 | 470 | $ 1,344 | |||||
Net proceeds received from private placement | $ 3,254 | ||||||||
Number of consecutive business days | 30 days | ||||||||
Common stock per share compliance regain period | 180 days | 180 days | |||||||
Common stock per share | $ 0.35 | ||||||||
Minimum | |||||||||
Description Of Business [Line Items] | |||||||||
Common stock per share | $ 1 | ||||||||
Common stock for ten consecutive business days | $ 1 | ||||||||
Subsequent Event | |||||||||
Description Of Business [Line Items] | |||||||||
Net proceeds received from private placement | $ 3,200 |
Summary of Significant Accoun_4
Summary of Significant Accounting Policies - Additional Information (Details) $ in Thousands | Oct. 30, 2019USD ($)DevicePatient | Oct. 30, 2019CAD ($)DevicePatient | Sep. 30, 2020USD ($)Lease | Jun. 30, 2020USD ($) | Sep. 30, 2019USD ($) | Sep. 30, 2020USD ($)DeviceLeaseSegment | Sep. 30, 2020CAD ($)DeviceSegment | Sep. 30, 2019USD ($) | Dec. 31, 2019USD ($) | Oct. 30, 2019CAD ($) | Jan. 01, 2019USD ($) |
Schedule Of Significant Accounting Policies [Line Items] | |||||||||||
Accounts receivable | $ 80,000 | $ 80,000 | $ 210,000 | ||||||||
Allowance for doubtful accounts | 400,000 | 400,000 | 200,000 | ||||||||
Refunds from research and development tax credits | 21,000 | 21,000 | 200,000 | ||||||||
Inventory markdowns to net realizable value | 0 | $ 0 | 2,000 | $ 0 | |||||||
Depreciation expense | 26,000 | 43,000 | 92,000 | 89,000 | |||||||
Proceeds from sale of property and equipment | 61,000 | ||||||||||
Selling, general and administrative | 2,370,000 | 4,291,000 | 7,625,000 | 12,715,000 | |||||||
Fair value measurement adjustments | 400,000 | ||||||||||
Business acquisition, goodwill not expected tax deductible amount | 700,000 | 700,000 | |||||||||
Revenue | 131,000 | 150,000 | 470,000 | 1,344,000 | |||||||
Amortization expense related to intangible assets | 72,000 | 287,000 | |||||||||
Intangible asset impairment loss | 182,000 | ||||||||||
Operating lease ROU asset | 105,000 | 105,000 | 552,000 | $ 700,000 | |||||||
Operating lease liabilities | $ 154,000 | $ 154,000 | $ 700,000 | ||||||||
Leases, initial term | 12 months | 12 months | |||||||||
Number of operating lease | Lease | 1 | 1 | |||||||||
Number of operating segment | Segment | 1 | 1 | |||||||||
Number of reportable segment | Segment | 1 | 1 | |||||||||
Intangible asset, net | $ 579,000 | $ 579,000 | |||||||||
ASU 2018-13 | |||||||||||
Schedule Of Significant Accounting Policies [Line Items] | |||||||||||
Change in accounting principle, accounting standards update, adopted [true false] | true | true | |||||||||
Change in accounting principle, accounting standards update, adoption date | Jan. 1, 2020 | Jan. 1, 2020 | |||||||||
Change in accounting principle, accounting standards update, immaterial effect [true false] | true | true | |||||||||
ASU 2018-18 | |||||||||||
Schedule Of Significant Accounting Policies [Line Items] | |||||||||||
Change in accounting principle, accounting standards update, adopted [true false] | true | true | |||||||||
Change in accounting principle, accounting standards update, adoption date | Jan. 1, 2020 | Jan. 1, 2020 | |||||||||
Change in accounting principle, accounting standards update, immaterial effect [true false] | true | true | |||||||||
Fee Revenue | |||||||||||
Schedule Of Significant Accounting Policies [Line Items] | |||||||||||
Revenue | $ 9,000 | 49,000 | |||||||||
License Revenue | |||||||||||
Schedule Of Significant Accounting Policies [Line Items] | |||||||||||
Revenue | $ 7,000 | $ 20,000 | 0 | ||||||||
Customer Relationships | |||||||||||
Schedule Of Significant Accounting Policies [Line Items] | |||||||||||
Intangible asset useful life | 1 year 3 months | 1 year 3 months | |||||||||
Intangible asset amortization method | straight-line | straight-line | |||||||||
Customer Relationships | Level 3 | |||||||||||
Schedule Of Significant Accounting Policies [Line Items] | |||||||||||
Intangible asset impairment loss | $ 200,000 | ||||||||||
Intangible asset, net | 100,000 | $ 100,000 | |||||||||
Proprietary Technology | |||||||||||
Schedule Of Significant Accounting Policies [Line Items] | |||||||||||
Intangible asset useful life | 5 years | 5 years | |||||||||
Intangible asset amortization method | straight-line | straight-line | |||||||||
Reacquired Rights | |||||||||||
Schedule Of Significant Accounting Policies [Line Items] | |||||||||||
Intangible asset useful life | 3 years 10 months 13 days | 3 years 10 months 13 days | |||||||||
Intangible asset amortization method | straight-line | straight-line | |||||||||
Heuro Canada Incorporation | |||||||||||
Schedule Of Significant Accounting Policies [Line Items] | |||||||||||
Goodwill impairment loss recognized | $ 0 | ||||||||||
Heuro Canada Incorporation | Selling, General and Administrative Expenses | |||||||||||
Schedule Of Significant Accounting Policies [Line Items] | |||||||||||
Acquisition related costs | 100,000 | ||||||||||
Amortization expense related to intangible assets | 100,000 | 0 | 300,000 | 0 | |||||||
Heuro Canada Incorporation | Selling, General and Administrative Expenses | Customer Relationships | |||||||||||
Schedule Of Significant Accounting Policies [Line Items] | |||||||||||
Intangible asset impairment loss | 200,000 | ||||||||||
HealthTech Connex, Inc. | |||||||||||
Schedule Of Significant Accounting Policies [Line Items] | |||||||||||
Deferred revenue | 300,000 | 300,000 | |||||||||
HealthTech Connex, Inc. | Neurocatch Device | |||||||||||
Schedule Of Significant Accounting Policies [Line Items] | |||||||||||
Cost of goods sold per device | 600,000 | ||||||||||
HealthTech Connex, Inc. | Fee Revenue | Heuro Canada Incorporation | |||||||||||
Schedule Of Significant Accounting Policies [Line Items] | |||||||||||
Revenue | 0 | 0 | $ 9,000 | 49,000 | |||||||
Percentage of franchise fee revenue | 50.00% | 50.00% | |||||||||
HealthTech Connex, Inc. | License Revenue | |||||||||||
Schedule Of Significant Accounting Policies [Line Items] | |||||||||||
Deferred revenue | 200,000 | $ 200,000 | |||||||||
HealthTech Connex, Inc. | Strategic Alliance Agreement | Heuro Canada Incorporation | |||||||||||
Schedule Of Significant Accounting Policies [Line Items] | |||||||||||
Contract assets | 0 | 0 | 0 | ||||||||
Contract liabilities | 0 | 0 | 0 | ||||||||
HealthTech Connex, Inc. | Strategic Alliance Agreement | Neurocatch Device | |||||||||||
Schedule Of Significant Accounting Policies [Line Items] | |||||||||||
Revenue | 100,000 | 200,000 | 400,000 | 1,300,000 | |||||||
HealthTech Connex, Inc. | Strategic Alliance Agreement | Services Performed Using Neurocatch Device | |||||||||||
Schedule Of Significant Accounting Policies [Line Items] | |||||||||||
Revenue | $ 0 | $ 11,000 | |||||||||
HealthTech Connex, Inc. | Clinical Research and Co-Promotion Agreement | |||||||||||
Schedule Of Significant Accounting Policies [Line Items] | |||||||||||
Revenue | 7,000 | $ 20,000 | |||||||||
Number of patients to collect data | Patient | 200 | 200 | |||||||||
Initial term of exclusive right | 10 years | 10 years | |||||||||
Additional renewal term of exclusive right | 10 years | 10 years | |||||||||
Written notice period for additional renewal term | 60 days | 60 days | |||||||||
Acquisition date fair value | $ 360 | ||||||||||
License revenue agreement term | 10 years | 10 years | |||||||||
HealthTech Connex, Inc. | Heuro Canada Incorporation | Share Purchase Agreement | |||||||||||
Schedule Of Significant Accounting Policies [Line Items] | |||||||||||
Total consideration amount | $ 1,600,000 | 2,100 | |||||||||
Cash | 400,000 | $ 500 | |||||||||
HealthTech Connex, Inc. | Heuro Canada Incorporation | Strategic Alliance Agreement | |||||||||||
Schedule Of Significant Accounting Policies [Line Items] | |||||||||||
Potential amount receivable | $ 500,000 | $ 750 | |||||||||
Minimum | |||||||||||
Schedule Of Significant Accounting Policies [Line Items] | |||||||||||
Effective income tax rate | 50.00% | 50.00% | |||||||||
Furniture and Fixtures | |||||||||||
Schedule Of Significant Accounting Policies [Line Items] | |||||||||||
Estimated useful life | 7 years | 7 years | |||||||||
Sale of property with a net book value | $ 118,000 | ||||||||||
Proceeds from sale of property and equipment | 61,000 | ||||||||||
Equipment | |||||||||||
Schedule Of Significant Accounting Policies [Line Items] | |||||||||||
Estimated useful life | 15 years | 15 years | |||||||||
Computer Software and Hardware | Minimum | |||||||||||
Schedule Of Significant Accounting Policies [Line Items] | |||||||||||
Estimated useful life | 3 years | 3 years | |||||||||
Computer Software and Hardware | Maximum | |||||||||||
Schedule Of Significant Accounting Policies [Line Items] | |||||||||||
Estimated useful life | 5 years | 5 years | |||||||||
Leasehold Improvements | |||||||||||
Schedule Of Significant Accounting Policies [Line Items] | |||||||||||
Estimated useful life | 5 years | 5 years | |||||||||
Sale of property with a net book value | 53,000 | ||||||||||
Furniture and Fixtures and Leasehold Improvements | |||||||||||
Schedule Of Significant Accounting Policies [Line Items] | |||||||||||
Selling, general and administrative | $ 110,000 | ||||||||||
PoNS | |||||||||||
Schedule Of Significant Accounting Policies [Line Items] | |||||||||||
Number of devices resulting in recognition of revenue | Device | 11 | 11 | |||||||||
Number of devices recorded as deferred revenue | Device | 44 | 44 | |||||||||
PoNS | Heuro Canada Incorporation | |||||||||||
Schedule Of Significant Accounting Policies [Line Items] | |||||||||||
Revenue | $ 100,000 | ||||||||||
Number of devices resulting in recognition of revenue | Device | 11 | 11 | |||||||||
PoNS | HealthTech Connex, Inc. | |||||||||||
Schedule Of Significant Accounting Policies [Line Items] | |||||||||||
Number of devices recorded as deferred revenue | Device | 44 | 44 | |||||||||
PoNS | HealthTech Connex, Inc. | Share Purchase Agreement | |||||||||||
Schedule Of Significant Accounting Policies [Line Items] | |||||||||||
Number of devices | Device | 55 | 55 | |||||||||
Revenue | $ 500 | ||||||||||
PoNS | HealthTech Connex, Inc. | Heuro Canada Incorporation | Share Purchase Agreement | |||||||||||
Schedule Of Significant Accounting Policies [Line Items] | |||||||||||
Number of devices | Device | 55 | 55 | |||||||||
Fair value of PoNS | $ 400,000 | 500 | |||||||||
Quebec | |||||||||||
Schedule Of Significant Accounting Policies [Line Items] | |||||||||||
Other receivables refunds related to goods, services and sales tax | 100,000 | $ 100,000 | 100,000 | ||||||||
Quebec | PoNS | HealthTech Connex, Inc. | Heuro Canada Incorporation | Co-Promotion Agreement | |||||||||||
Schedule Of Significant Accounting Policies [Line Items] | |||||||||||
Fair value of PoNS | $ 300,000 | $ 400 | |||||||||
Revenue from Product Sales | |||||||||||
Schedule Of Significant Accounting Policies [Line Items] | |||||||||||
Accounts receivable | $ 100,000 | 100,000 | $ 200,000 | ||||||||
Revenue from Product Sales | Heuro Canada Incorporation | |||||||||||
Schedule Of Significant Accounting Policies [Line Items] | |||||||||||
Revenue | $ 400,000 |
Summary of Significant Accoun_5
Summary of Significant Accounting Policies - Schedule of Inventory (Details) - USD ($) $ in Thousands | Sep. 30, 2020 | Dec. 31, 2019 |
Accounting Policies [Abstract] | ||
Raw materials | $ 159 | $ 144 |
Work-in-process | 446 | 375 |
Finished goods | 19 | 129 |
Inventory | 624 | 648 |
Inventory reserve | (52) | (50) |
Total inventory, net of reserve | $ 572 | $ 598 |
Summary of Significant Accoun_6
Summary of Significant Accounting Policies - Summary of Property and Equipment (Details) - USD ($) $ in Thousands | Sep. 30, 2020 | Dec. 31, 2019 |
Property Plant And Equipment [Line Items] | ||
Property and equipment | $ 639 | $ 897 |
Less accumulated depreciation | (176) | (185) |
Property and equipment, net | 463 | 712 |
Leasehold Improvements | ||
Property Plant And Equipment [Line Items] | ||
Property and equipment | 64 | 182 |
Furniture and Fixtures | ||
Property Plant And Equipment [Line Items] | ||
Property and equipment | 93 | 247 |
Equipment | ||
Property Plant And Equipment [Line Items] | ||
Property and equipment | 300 | 286 |
Computer Software and Hardware | ||
Property Plant And Equipment [Line Items] | ||
Property and equipment | $ 182 | $ 182 |
Summary of Significant Accoun_7
Summary of Significant Accounting Policies - Summary of Recognized Fair Values of Identifiable Assets Acquired and Liabilities Assumed (Details) - USD ($) $ in Thousands | Sep. 30, 2020 | Dec. 31, 2019 | Oct. 30, 2019 |
Assets: | |||
Cash and cash equivalents | $ 1 | ||
Other receivables | 19 | ||
Fixed assets | 7 | ||
Intangibles | 1,053 | ||
Goodwill | $ 725 | $ 1,242 | 737 |
Total assets | 1,817 | ||
Liabilities: | |||
Accounts payable | 186 | ||
Other current liabilities | 9 | ||
Total liabilities | 195 | ||
Net assets acquired | $ 1,622 |
Summary of Significant Accoun_8
Summary of Significant Accounting Policies - Summary of Activity for Goodwill (Details) $ in Thousands | 9 Months Ended |
Sep. 30, 2020USD ($) | |
Accounting Policies [Abstract] | |
Carrying amount at beginning of period | $ 1,242 |
Business acquisition fair value allocation adjustment | (454) |
Foreign currency translation | (63) |
Carrying amount at end of period | $ 725 |
Summary of Significant Accoun_9
Summary of Significant Accounting Policies - Summary of Intangible Assets (Details) - USD ($) $ in Thousands | 9 Months Ended | |
Sep. 30, 2020 | Dec. 31, 2019 | |
Finite Lived Intangible Assets [Line Items] | ||
Intangible assets, Gross Carrying Amount | $ 932 | $ 646 |
Intangible assets, Accumulated Amortization | $ (353) | (64) |
Customer Relationships | ||
Finite Lived Intangible Assets [Line Items] | ||
Intangible assets, Useful Life | 1 year 3 months | |
Intangible assets, Gross Carrying Amount | $ 227 | 423 |
Intangible assets, Accumulated Amortization | $ (191) | (55) |
Acquired Proprietary Software | ||
Finite Lived Intangible Assets [Line Items] | ||
Intangible assets, Useful Life | 5 years | |
Intangible assets, Gross Carrying Amount | $ 143 | 148 |
Intangible assets, Accumulated Amortization | $ (26) | (5) |
Reacquired Rights | ||
Finite Lived Intangible Assets [Line Items] | ||
Intangible assets, Useful Life | 3 years 10 months 13 days | |
Intangible assets, Gross Carrying Amount | $ 480 | |
Intangible assets, Accumulated Amortization | $ (113) | |
Internally Developed Software | ||
Finite Lived Intangible Assets [Line Items] | ||
Intangible assets, Useful Life | 3 years | |
Intangible assets, Gross Carrying Amount | $ 82 | 75 |
Intangible assets, Accumulated Amortization | $ (23) | $ (4) |
Summary of Significant Accou_10
Summary of Significant Accounting Policies - Summary of Anticipated Amortization Expense (Details) $ in Thousands | Sep. 30, 2020USD ($) |
Accounting Policies [Abstract] | |
2020 (remaining 3 months) | $ 73 |
2021 | 189 |
2022 | 176 |
2023 | 117 |
2024 | 24 |
Total | $ 579 |
Summary of Significant Accou_11
Summary of Significant Accounting Policies - Summary of Recurring Fair Value Measurements for Derivative Financial Instruments and Stock-Based Compensation Liability (Details) - Fair Value, Measurements, Recurring - Black Scholes Model - Derivative Financial Instruments $ in Thousands | Dec. 31, 2019USD ($) |
Liabilities: | |
Fair value, liabilities | $ 5 |
Level 3 | |
Liabilities: | |
Fair value, liabilities | $ 5 |
Summary of Significant Accou_12
Summary of Significant Accounting Policies - Summary of Basic and Diluted Loss per Share (Details) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2020 | Sep. 30, 2019 | Sep. 30, 2020 | Sep. 30, 2019 | |
Numerator: | ||||
Net loss | $ (3,477) | $ (5,588) | $ (11,595) | $ (4,450) |
Denominator: | ||||
Weighted average common shares outstanding - basic | 45,137,995 | 25,903,544 | 39,187,370 | 25,869,039 |
Basic net loss per share | $ (0.08) | $ (0.22) | $ (0.30) | $ (0.17) |
Numerator: | ||||
Net loss, basic | $ (3,477) | $ (5,588) | $ (11,595) | $ (4,450) |
Net loss, diluted | $ (3,477) | $ (5,588) | $ (11,595) | $ (4,450) |
Denominator: | ||||
Weighted average common shares outstanding - basic | 45,137,995 | 25,903,544 | 39,187,370 | 25,869,039 |
Potential common share issuances: | ||||
Weighted average common shares outstanding | 45,137,995 | 25,903,544 | 39,187,370 | 25,869,039 |
Diluted net loss per share | $ (0.08) | $ (0.22) | $ (0.30) | $ (0.17) |
Summary of Significant Accou_13
Summary of Significant Accounting Policies - Summary of Outstanding Securities Excluded from Computation of Diluted Weighted Shares Outstanding (Details) - shares | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2020 | Sep. 30, 2019 | Sep. 30, 2020 | Sep. 30, 2019 | |
Antidilutive Securities Excluded from Computation of Earnings per Share [Line Items] | ||||
Anti-dilutive securities excluded from calculation of diluted loss per share | 13,231,141 | 6,672,893 | 13,231,141 | 6,672,893 |
Stock Options Outstanding | ||||
Antidilutive Securities Excluded from Computation of Earnings per Share [Line Items] | ||||
Anti-dilutive securities excluded from calculation of diluted loss per share | 3,929,944 | 3,629,288 | 3,929,944 | 3,629,288 |
RSUs | ||||
Antidilutive Securities Excluded from Computation of Earnings per Share [Line Items] | ||||
Anti-dilutive securities excluded from calculation of diluted loss per share | 5,752 | 5,752 | ||
Warrants Outstanding | ||||
Antidilutive Securities Excluded from Computation of Earnings per Share [Line Items] | ||||
Anti-dilutive securities excluded from calculation of diluted loss per share | 9,295,445 | 3,043,605 | 9,295,445 | 3,043,605 |
Common Stock and Warrants - Add
Common Stock and Warrants - Additional Information (Details) $ / shares in Units, $ / shares in Units, $ in Millions | Sep. 30, 2020CAD ($)shares | Mar. 20, 2020USD ($)$ / sharesshares | Jan. 27, 2020USD ($) | Nov. 22, 2019USD ($)$ / sharesshares | Apr. 24, 2018USD ($)shares | Apr. 24, 2018shares | Apr. 13, 2018USD ($)$ / sharesshares | Mar. 31, 2020USD ($) | Sep. 30, 2020USD ($)$ / sharesshares | Dec. 31, 2019$ / sharesshares | Apr. 13, 2018$ / sharesshares |
Schedule Of Stockholders Equity [Line Items] | |||||||||||
Common stock, shares authorized | 150,000,000 | 150,000,000 | |||||||||
Common stock, par value | $ / shares | $ 0.001 | $ 0.001 | |||||||||
Preferred stock, shares authorized | 10,000,000 | 10,000,000 | |||||||||
Preferred stock, par value | $ / shares | $ 0.001 | $ 0.001 | |||||||||
Common share, voting rights | one vote per share | ||||||||||
Common share, dividends declared | $ | $ 0 | ||||||||||
Price per share | $ / shares | $ 0.35 | ||||||||||
Net proceeds from offering | $ | $ 1,100,000 | ||||||||||
Class of warrants exercised | 70,900 | ||||||||||
Proceeds received from exercise of outstanding warrants | $ | $ 0.9 | ||||||||||
Gross proceeds from issuance of common stock | $ | $ 7,233,000 | ||||||||||
Common Stock | |||||||||||
Schedule Of Stockholders Equity [Line Items] | |||||||||||
Issuance of common stock in public offering | 4,815,010 | ||||||||||
April 2018 Offering | |||||||||||
Schedule Of Stockholders Equity [Line Items] | |||||||||||
Warrants to purchase number of common stock, shares | 2,141,900 | 2,141,900 | |||||||||
Price per share | $ / shares | $ 7.47 | ||||||||||
Net proceeds from offering | $ | $ 16,300,000 | ||||||||||
Fair value of warrants at issuance | $ | $ 7,400,000 | ||||||||||
Warrant exercisable price per share | $ / shares | $ 12.25 | ||||||||||
Warrants expiration date | Apr. 10, 2021 | ||||||||||
Number of common stock converted by each warrant | 1 | 1 | |||||||||
April 2018 Offering | Common Stock | |||||||||||
Schedule Of Stockholders Equity [Line Items] | |||||||||||
Issuance of common stock in public offering | 2,141,900 | ||||||||||
Over-Allotment Option | |||||||||||
Schedule Of Stockholders Equity [Line Items] | |||||||||||
Warrants to purchase number of common stock, shares | 321,285 | 321,285 | |||||||||
Over-Allotment Option | Common Stock | |||||||||||
Schedule Of Stockholders Equity [Line Items] | |||||||||||
Issuance of common stock in public offering | 321,285 | ||||||||||
2020 ATM | |||||||||||
Schedule Of Stockholders Equity [Line Items] | |||||||||||
Price per share | $ / shares | $ 0.62 | ||||||||||
Gross proceeds from issuance of common stock | $ | $ 5,000,000 | ||||||||||
Offering expenses incurred | $ | $ 181,000 | ||||||||||
2020 ATM | Form S3 Shelf Registration | |||||||||||
Schedule Of Stockholders Equity [Line Items] | |||||||||||
Aggregate offering amount | $ | $ 11,340,000 | $ 9,150,000 | |||||||||
2020 ATM | Common Stock | |||||||||||
Schedule Of Stockholders Equity [Line Items] | |||||||||||
Issuance of common stock in public offering | 8,138,808 | ||||||||||
March 2020 Offering | |||||||||||
Schedule Of Stockholders Equity [Line Items] | |||||||||||
Warrants to purchase number of common stock, shares | 6,257,144 | ||||||||||
Price per share | $ / shares | $ 0.35 | ||||||||||
Fair value of warrants at issuance | $ | $ 800,000 | ||||||||||
Warrant exercisable price per share | $ / shares | $ 0.46 | ||||||||||
Warrants expiration date | Mar. 20, 2025 | ||||||||||
Number of common stock converted by each warrant | 1 | ||||||||||
Gross proceeds from issuance of common stock | $ | $ 2,200,000 | ||||||||||
Underwriting discounts and commissions paid | $ | $ 300,000 | ||||||||||
March 2020 Offering | Common Stock | |||||||||||
Schedule Of Stockholders Equity [Line Items] | |||||||||||
Issuance of common stock in public offering | 6,257,144 |
Common Stock and Warrants - Sum
Common Stock and Warrants - Summary of Weighted Average Assumptions Used in Estimating Fair Value of Warrants (Details) | Sep. 30, 2020$ / shares | Mar. 20, 2020$ / shares | Dec. 31, 2019$ / shares | Apr. 24, 2018$ / shares | Apr. 13, 2018$ / shares |
Warrants | Derivative Financial Instruments Liabilities | |||||
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis Valuation Techniques [Line Items] | |||||
Stock price | $ 0.53 | $ 1.23 | |||
Exercise price | $ 12.25 | $ 12.25 | |||
Warrants and Rights Outstanding, Type [Extensible List] | hsdt:BlackScholesOptionPricingModelMember | hsdt:BlackScholesOptionPricingModelMember | |||
April 2018 Offering | |||||
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis Valuation Techniques [Line Items] | |||||
Exercise price | $ 12.25 | ||||
April 2018 Offering | Warrants Granted | |||||
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis Valuation Techniques [Line Items] | |||||
Stock price | $ 0.53 | $ 10.76 | 9.85 | ||
Exercise price | $ 12.25 | $ 12.25 | $ 12.25 | ||
Warrants and Rights Outstanding, Type [Extensible List] | hsdt:BlackScholesOptionPricingModelMember | hsdt:BlackScholesOptionPricingModelMember | hsdt:BlackScholesOptionPricingModelMember | ||
March 2020 Offering | Warrants Granted | |||||
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis Valuation Techniques [Line Items] | |||||
Stock price | $ 0.35 | ||||
Exercise price | $ 0.46 | ||||
Warrants and Rights Outstanding, Type [Extensible List] | hsdt:BlackScholesOptionPricingModelMember | ||||
Warrant Term | Warrants | Derivative Financial Instruments Liabilities | |||||
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis Valuation Techniques [Line Items] | |||||
Weighted average assumptions, term | 6 months 10 days | 1 year 3 months 10 days | |||
Warrant Term | April 2018 Offering | Warrants Granted | |||||
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis Valuation Techniques [Line Items] | |||||
Weighted average assumptions, term | 6 months 10 days | 3 years | 3 years | ||
Warrant Term | March 2020 Offering | Warrants Granted | |||||
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis Valuation Techniques [Line Items] | |||||
Weighted average assumptions, term | 5 years 6 months | ||||
Expected Volatility | Warrants | Derivative Financial Instruments Liabilities | |||||
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis Valuation Techniques [Line Items] | |||||
Weighted average assumptions, measurement input | 107.16 | 72.43 | |||
Expected Volatility | April 2018 Offering | Warrants Granted | |||||
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis Valuation Techniques [Line Items] | |||||
Weighted average assumptions, measurement input | 107.16 | 64.49 | 64.20 | ||
Expected Volatility | March 2020 Offering | Warrants Granted | |||||
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis Valuation Techniques [Line Items] | |||||
Weighted average assumptions, measurement input | 82.41 | ||||
Risk-Free Interest Rate | Warrants | Derivative Financial Instruments Liabilities | |||||
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis Valuation Techniques [Line Items] | |||||
Weighted average assumptions, measurement input | 0.16 | 1.72 | |||
Risk-Free Interest Rate | April 2018 Offering | Warrants Granted | |||||
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis Valuation Techniques [Line Items] | |||||
Weighted average assumptions, measurement input | 0.16 | 2.02 | 1.99 | ||
Risk-Free Interest Rate | March 2020 Offering | Warrants Granted | |||||
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis Valuation Techniques [Line Items] | |||||
Weighted average assumptions, measurement input | 0.52 | ||||
Dividend Rate | Warrants | Derivative Financial Instruments Liabilities | |||||
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis Valuation Techniques [Line Items] | |||||
Weighted average assumptions, measurement input | 0 | 0 | |||
Dividend Rate | April 2018 Offering | Warrants Granted | |||||
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis Valuation Techniques [Line Items] | |||||
Weighted average assumptions, measurement input | 0 | 0 | 0 | ||
Dividend Rate | March 2020 Offering | Warrants Granted | |||||
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis Valuation Techniques [Line Items] | |||||
Weighted average assumptions, measurement input | 0 |
Common Stock and Warrants - S_2
Common Stock and Warrants - Summary of Warrants Accounted for as Liabilities and Recorded as Derivative Financial Instruments (Details) - USD ($) $ in Thousands | 9 Months Ended | |
Sep. 30, 2020 | Sep. 30, 2019 | |
Fair Value Disclosures [Abstract] | ||
Fair value of warrants at beginning of period | $ 5 | $ 13,769 |
Exercise of warrants | (35) | |
Foreign exchange losses | (1) | 382 |
Change in fair value of warrants during the period | $ (4) | (14,033) |
Fair value of warrants at end of period | $ 83 |
Common Stock and Warrants - S_3
Common Stock and Warrants - Summary of Warrant Activity (Details) | Sep. 30, 2020$ / sharesshares | Sep. 30, 2020$ / sharesshares | Sep. 30, 2020$ / sharesshares | Sep. 30, 2020$ / sharesshares |
Class Of Warrant Or Right [Line Items] | ||||
Number of Warrants, Exercised | (70,900) | (70,900) | ||
Number of Warrants, Outstanding, ending balance | 9,295,445 | 9,295,445 | 9,295,445 | 9,295,445 |
CAD | ||||
Class Of Warrant Or Right [Line Items] | ||||
Number of Warrants, Outstanding, beginning balance | 2,392,285 | 2,392,285 | ||
Number of Warrants, Outstanding, ending balance | 2,392,285 | 2,392,285 | 2,392,285 | 2,392,285 |
Weighted Average Exercise Price, Outstanding, beginning balance | $ / shares | $ 12.25 | |||
Weighted Average Exercise Price, Outstanding, ending balance | $ / shares | $ 12.25 | $ 12.25 | ||
USD | ||||
Class Of Warrant Or Right [Line Items] | ||||
Number of Warrants, Outstanding, beginning balance | 651,320 | 651,320 | ||
Number of Warrants, Granted | 6,257,144 | 6,257,144 | ||
Number of Warrants, Cancelled/Expired | (5,304) | (5,304) | ||
Number of Warrants, Outstanding, ending balance | 6,903,160 | 6,903,160 | 6,903,160 | 6,903,160 |
Weighted Average Exercise Price, Outstanding, beginning balance | $ / shares | $ 12.24 | |||
Weighted Average Exercise Price, Granted | $ / shares | 0.46 | |||
Weighted Average Exercise Price, Cancelled/Expired | $ / shares | 10.75 | |||
Weighted Average Exercise Price, Outstanding, ending balance | $ / shares | $ 1.56 | $ 1.56 |
Common Stock and Warrants - War
Common Stock and Warrants - Warrants Outstanding and Exercisable (Details) | 9 Months Ended | |
Sep. 30, 2020$ / sharesshares | Sep. 30, 2020$ / sharesshares | |
Class Of Warrant Or Right [Line Items] | ||
Number of Warrants Outstanding | 9,295,445 | 9,295,445 |
Warrants Expiration Date, December 22, 2020 | ||
Class Of Warrant Or Right [Line Items] | ||
Number of Warrants Outstanding | 270,915 | 270,915 |
Exercise price | $ / shares | $ 12.25 | |
Expiration Date | Dec. 22, 2020 | |
Warrants Expiration Date, December 28, 2020 | ||
Class Of Warrant Or Right [Line Items] | ||
Number of Warrants Outstanding | 171,020 | 171,020 |
Exercise price | $ / shares | $ 12.25 | |
Expiration Date | Dec. 28, 2020 | |
Warrants Expiration Date, December 29, 2020 | ||
Class Of Warrant Or Right [Line Items] | ||
Number of Warrants Outstanding | 204,081 | 204,081 |
Exercise price | $ / shares | $ 12.25 | |
Expiration Date | Dec. 29, 2020 | |
Warrants Expiration Date, April 10, 2021 | ||
Class Of Warrant Or Right [Line Items] | ||
Number of Warrants Outstanding | 2,392,285 | 2,392,285 |
Exercise price | $ / shares | $ 12.25 | |
Expiration Date | Apr. 10, 2021 | |
Warrants Expiration Date, March 20, 2025 | ||
Class Of Warrant Or Right [Line Items] | ||
Number of Warrants Outstanding | 6,257,144 | 6,257,144 |
Exercise price | $ / shares | $ 0.46 | |
Expiration Date | Mar. 20, 2025 |
Stock-Based Payments - Addition
Stock-Based Payments - Additional Information (Details) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | 9 Months Ended | |
Sep. 30, 2020 | Sep. 30, 2020 | May 15, 2018 | |
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | |||
Number of stock option issued | 809,590 | ||
Stock based compensation expense reversal | $ 125 | $ 125 | |
Employee and Director Stock Options | |||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | |||
Number of stock option issued | 809,590 | ||
Unrecognized compensation cost related to non-vested stock options outstanding | 4,100 | $ 4,100 | |
Weighted-average remaining vesting period | 2 years 9 months 18 days | ||
Weighted average grant date fair value | $ 0.30 | ||
Consultants Stock Options | |||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | |||
Number of stock option issued | 0 | ||
Non-employee Stock Options | |||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | |||
Unrecognized compensation cost related to non-vested stock options outstanding | $ 15 | $ 15 | |
Weighted-average remaining vesting period | 10 months 24 days | ||
2018 Omnibus Incentive Plan | |||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | |||
Common stock shares authorized and approved to issue under plan | 5,356,114 | ||
Common stock shares available for issuance | 3,000,000 | ||
Common stock remaining available for grant | 3,387,958 | 3,387,958 | |
2016 Omnibus Incentive Plan | |||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | |||
Common stock shares available for issuance | 2,356,114 |
Stock-Based Payments - Summary
Stock-Based Payments - Summary of Company's Stock Option Activity (Details) | 9 Months Ended |
Sep. 30, 2020$ / sharesshares | |
Disclosure Of Compensation Related Costs Sharebased Payments [Abstract] | |
Number of Stock Options, Beginning balance outstanding | shares | 3,467,292 |
Number of Stock Options, Granted | shares | 809,590 |
Number of Stock Options Forfeited/Cancelled | shares | (346,938) |
Number of Stock Options, Ending balance outstanding | shares | 3,929,944 |
Number of Stock Options, Exercisable | shares | 2,449,829 |
Weighted Average Exercise Price, Beginning balance outstanding | $ / shares | $ 6.76 |
Weighted Average Exercise Price, Granted | $ / shares | 0.47 |
Weighted Average Exercise Price, Forfeited/Cancelled | $ / shares | (5.66) |
Weighted Average Exercise Price, Ending balance outstanding | $ / shares | 5.56 |
Weighted Average Exercise Price, Exercisable | $ / shares | $ 4.27 |
Stock-Based Payments - Schedule
Stock-Based Payments - Schedule of Fair Value of Employee and Director Stock Options Granted Estimated Using Black-Scholes Option Pricing Model With Following Weighted Average Assumptions (Details) - Employee and Director Stock Options | 9 Months Ended |
Sep. 30, 2020$ / shares | |
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | |
Stock price | $ 0.47 |
Exercise price | $ 0.47 |
Expected term | 5 years 3 months 3 days |
Expected volatility | 77.35% |
Risk-free interest rate | 0.58% |
Dividend rate | 0.00% |
Stock-Based Payments - Summar_2
Stock-Based Payments - Summary of Company's Restricted Stock Award Activity (Details) - Restricted Stock Units | 9 Months Ended |
Sep. 30, 2020$ / sharesshares | |
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | |
Number of Restricted Stock Units, Beginning balance outstanding | shares | 27,697 |
Number of Restricted Stock Units, Granted | shares | 218,161 |
Number of Restricted Stock Units, Settled | shares | (240,106) |
Number of Restricted Stock Units, Ending balance outstanding | shares | 5,752 |
Weighted Average Grant Date Fair Value per Unit, Beginning balance outstanding | $ / shares | $ 0.61 |
Weighted Average Grant Date Fair Value per Unit, Granted | $ / shares | 0.50 |
Weighted Average Grant Date Fair Value per Unit, Settled | $ / shares | 0.52 |
Weighted Average Grant Date Fair Value per Unit, Ending balance outstanding | $ / shares | $ 0.39 |
Stock-Based Payments - Summar_3
Stock-Based Payments - Summary of Stock-Based Compensation Expense is Classified in Condensed Consolidated Statements of Operations and Comprehensive Loss (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2020 | Sep. 30, 2019 | Sep. 30, 2020 | Sep. 30, 2019 | |
Employee Service Share Based Compensation Allocation Of Recognized Period Costs [Line Items] | ||||
Share-based compensation expense | $ 450 | $ 1,560 | $ 2,021 | $ 3,336 |
Research and Development Expense | ||||
Employee Service Share Based Compensation Allocation Of Recognized Period Costs [Line Items] | ||||
Share-based compensation expense | 245 | 233 | 727 | 643 |
Cost of Sales | ||||
Employee Service Share Based Compensation Allocation Of Recognized Period Costs [Line Items] | ||||
Share-based compensation expense | (6) | (1) | ||
Selling, General and Administrative Expense | ||||
Employee Service Share Based Compensation Allocation Of Recognized Period Costs [Line Items] | ||||
Share-based compensation expense | $ 205 | $ 1,333 | $ 1,295 | $ 2,693 |
Accrued Expenses - Schedule of
Accrued Expenses - Schedule of Accrued Expenses (Details) - USD ($) $ in Thousands | Sep. 30, 2020 | Dec. 31, 2019 |
Payables And Accruals [Abstract] | ||
Employees benefits | $ 557 | $ 722 |
Professional services | 6 | 67 |
Legal fees | 163 | 81 |
Royalty fees | 5 | 13 |
Franchise fees | 40 | 28 |
Severance | 550 | 606 |
Other | 78 | 2 |
Total | $ 1,399 | $ 1,519 |
Accrued Expenses - Additional I
Accrued Expenses - Additional Information (Details) $ in Millions | Sep. 30, 2020USD ($) |
Chief Executive Officer | |
Deferred Compensation Arrangement with Individual Share Based Payments [Line Items] | |
Accrued severance costs | $ 0.5 |
Commitments and Contingencies -
Commitments and Contingencies - Additional Information (Details) - USD ($) | Sep. 30, 2020 | Jun. 01, 2020 | Apr. 13, 2020 | Dec. 29, 2017 | Jan. 22, 2013 | May 31, 2020 | Jul. 31, 2017 | Mar. 31, 2017 | Sep. 30, 2020 | Sep. 30, 2019 | Sep. 30, 2020 | Sep. 30, 2019 | Oct. 30, 2017 |
Commitments And Contingencies [Line Items] | |||||||||||||
Lease commencement date | Jul. 1, 2020 | Jul. 17, 2017 | Jul. 1, 2017 | ||||||||||
Lease termination date | Jun. 30, 2021 | Jan. 16, 2023 | Dec. 31, 2022 | ||||||||||
Lease option to extend termination year | 2027 | ||||||||||||
Lease option to extend termination date | Jan. 31, 2028 | ||||||||||||
Lease option to extend lease term | 6 months | ||||||||||||
Lease monthly rent plus utilities | $ 5,000 | $ 20,000 | |||||||||||
Lease monthly rent plus utilities beginning date | Jan. 31, 2021 | Jan. 31, 2018 | |||||||||||
Lease annual increase in rental percentage | 3.00% | 3.00% | |||||||||||
Decrease in operating lease right of use asset, partial termination | $ 400,000 | ||||||||||||
Decrease in operating lease liability | $ 400,000 | ||||||||||||
PPP Loan | |||||||||||||
Commitments And Contingencies [Line Items] | |||||||||||||
Loan proceeds received, amount | $ 323,000 | ||||||||||||
Other Income | |||||||||||||
Commitments And Contingencies [Line Items] | |||||||||||||
Gain on termination of lease | $ 100,000 | $ 100,000 | |||||||||||
Advanced NeuroRehabilitation, LLC | License Agreement for Exclusive Right on Patent Pending Technology | |||||||||||||
Commitments And Contingencies [Line Items] | |||||||||||||
Issuance of common stock for license agreement | 3,207,005 | ||||||||||||
Percentage of royalty on net revenue | 4.00% | ||||||||||||
Royalty expense | $ 5,000 | $ 6,000 | $ 15,000 | $ 52,000 | |||||||||
A&B Company Limited | Asset Purchase Agreement | |||||||||||||
Commitments And Contingencies [Line Items] | |||||||||||||
Contract penalty payable on failure to obtain FDA clearance | $ 2,000,000 | ||||||||||||
Key Tronic Corporation | Manufacturing and Supply Agreement | |||||||||||||
Commitments And Contingencies [Line Items] | |||||||||||||
Agreement description | On December 29, 2017, HMI (formerly known as NeuroHabilitation Corporation) entered into a Manufacturing and Supply Agreement (“MSA”) with Key Tronic Corporation (“Key Tronic”), for the manufacture and supply of the Company’s PoNS device based upon the Company’s product specifications as set forth in the MSA. Per the agreement, the Company shall provide to Key Tronic a rolling forecast for the procurement of parts and material and within normal lead times based on estimated delivery dates for the manufacture of the PoNS device. The term of the agreement is for three years and will automatically renew for additional consecutive terms of one year, unless cancelled by either party upon 180-day written notice to the other party prior to the end of the then current term. On June 1, 2020, HMI extended the existing manufacturing agreement with Key Tronic for a second three year term from December 29, 2020 until December 31, 2023. As of September 30, 2020, the Company did not have any outstanding commitments to Key Tronic to complete the Company’s forecasts for the procurement of materials necessary for the delivery of PoNS devices. | ||||||||||||
Agreement term | 3 years | ||||||||||||
Agreement auto renewal period | 1 year | ||||||||||||
Notice period to cancel the renewal of agreement | 180 days | ||||||||||||
Outstanding commitments | $ 0 | ||||||||||||
Extended manufacturing agreement term | 3 years |
Commitments and Contingencies_2
Commitments and Contingencies - Schedule of Future Minimum Lease Payments Related to Non-cancellable Operating Lease Commitments (Details) - USD ($) $ in Thousands | 9 Months Ended | ||
Sep. 30, 2020 | Dec. 31, 2019 | Jan. 01, 2019 | |
Operating Leases Future Minimum Payments Due [Abstract] | |||
Operating lease cost | $ 57 | ||
Operating lease - operating cash flows | $ 189 | ||
Weighted average remaining lease term | 1 year 9 months | ||
Weighted average discount rate | 7.20% | ||
2020 (remaining three months) | $ 63 | ||
2021 | 63 | ||
2022 | 32 | ||
Total future minimum lease payments | 158 | ||
Less imputed interest | (4) | ||
Total liability | 154 | $ 700 | |
Current operating lease liability | 107 | $ 172 | |
Non-current operating lease liability | 47 | $ 465 | |
Total | $ 154 | $ 700 |
Related Party Transactions - Ad
Related Party Transactions - Additional Information (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2020 | Sep. 30, 2019 | Sep. 30, 2020 | Sep. 30, 2019 | Dec. 31, 2019 | |
Related Party Transaction [Line Items] | |||||
Accrued liabilities for consulting fees | $ 1,399 | $ 1,399 | $ 1,519 | ||
Directors | |||||
Related Party Transaction [Line Items] | |||||
Consulting fees paid | 0 | $ 2 | 5 | $ 25 | |
Accrued liabilities for consulting fees | $ 0 | $ 0 |
Subsequent Events - Additional
Subsequent Events - Additional Information (Details) - USD ($) | Oct. 26, 2020 | Nov. 22, 2019 | Sep. 30, 2020 | Mar. 23, 2020 |
Subsequent Event [Line Items] | ||||
Common stock per share | $ 0.35 | |||
Proceeds from the issuances of common stock and warrants | $ 7,233,000 | |||
Minimum | ||||
Subsequent Event [Line Items] | ||||
Common stock per share | $ 1 | |||
Subsequent Event | Private Placement | ||||
Subsequent Event [Line Items] | ||||
Proceeds from the issuance of common stock, Shares | 6,567,868 | |||
Warrants to purchase number of common stock, shares | 3,283,936 | |||
Common stock per share | $ 0.52 | |||
Proceeds from the issuances of common stock and warrants | $ 3,400,000 | |||
Share issuance cost including placement agent fees | $ 200,000 | |||
Warrant exercisable price per share | $ 0.452 | |||
Warrants expiration period | 3 years | |||
Percentage of right to participate subsequent financing | 30.00% | |||
Subsequent Event | Private Placement | Minimum | ||||
Subsequent Event [Line Items] | ||||
Subscription to participate subsequent financing | $ 250,000 | |||
Subsequent Event | Private Placement | Officer, Affiliates of an Officer and Director | ||||
Subsequent Event [Line Items] | ||||
Common stock per share | $ 0.5244 | |||
Warrant exercisable price per share | $ 0.4619 | |||
Subsequent Event | Private Placement | Placement Agent | ||||
Subsequent Event [Line Items] | ||||
Proceeds from the issuance of common stock, Shares | 33,654 | |||
Common stock per share | $ 0.565 | |||
Common Stock | ||||
Subsequent Event [Line Items] | ||||
Proceeds from the issuance of common stock, Shares | 4,815,010 | |||
Common Stock | Subsequent Event | Private Placement | ||||
Subsequent Event [Line Items] | ||||
Number of warrant to purchase of each stock | 0.50 |
Subsequent Events - Schedule of
Subsequent Events - Schedule of Pro Forma Basis Adjustment on Stockholders' Equity (Details) - USD ($) $ in Thousands | 9 Months Ended | |||||
Sep. 30, 2020 | Jun. 30, 2020 | Dec. 31, 2019 | Sep. 30, 2019 | Jun. 30, 2019 | Dec. 31, 2018 | |
Subsequent Event [Line Items] | ||||||
Total stockholders' equity as of September 30, 2020 | $ 3,197 | $ 6,396 | $ 5,835 | $ 8,822 | $ 12,782 | $ 9,854 |
Net proceeds from October 2020 private placement | 3,254 | |||||
Private Placement | Pro Forma | ||||||
Subsequent Event [Line Items] | ||||||
Total stockholders' equity as of September 30, 2020 | $ 6,451 |