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What changed in Solana Co's 10-K — 2023 vs 2024

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Paragraph-level year-over-year comparison of Solana Co's 2023 and 2024 10-K annual filings, covering the Business, Risk Factors, Legal Proceedings, Cybersecurity, MD&A and Market Risk sections. Every new, removed and edited paragraph is highlighted side-by-side so you can see exactly what management changed in the 2024 report.

+318 added−264 removedSource: 10-K (2025-03-25) vs 10-K (2024-03-28)

Top changes in Solana Co's 2024 10-K

318 paragraphs added · 264 removed · 201 edited across 8 sections

Item 1. Business

Business — how the company describes what it does

107 edited+37 added−22 removed207 unchanged
Biggest changeThird-party payors are increasingly challenging the prices charged for, examining the medical necessity, safety, and efficacy of, and assessing the cost-effectiveness of medical products. The U.S. government and state legislatures have shown significant interest in implementing cost containment programs to limit the growth of government-paid health care costs, including price controls and restrictions on reimbursement.
Biggest changeThe U.S. government and state legislatures have shown significant interest in implementing cost containment programs to limit the growth of government-paid health care costs, including price controls and restrictions on reimbursement. Any such downward pressure on the reimbursement for our products could limit our ability to realize an appropriate return on our investment in product development.
In both PoNS studies, participants entered the trial with an average SOT composite score of 40 (1-100 range) indicative of compromised functional balance and were randomized to treatment with PoNS devices that delivered either a high-frequency pulse, or HFP, (25.7 million pulses per 20 minute treatment) or a low-frequency pulse, or LFP, (13,728 pulses per 20 minute treatment).
In both PoNS studies, participants entered the trial with an average SOT composite score of 40 (1-100 range), indicative of compromised functional balance, and were randomized to treatment with PoNS devices that delivered either a high-frequency pulse ( HFP) (25.7 million pulses per 20 minute treatment) or a low-frequency pulse (LFP) (13,728 pulses per 20-minute treatment).
We supplemented our submission with additional data based on questions supplied to date and provided responses to additional questions during the third quarter of 2020. In November 2021, we received market authorization from the TGA for the sale of PoNS as a Class IIa medical device.
We supplemented our submission with additional data based on questions supplied to date and provided responses to additional questions during the third quarter of 2020. In November 2021, we received market authorization from the TGA for the sale of PoNS as a Class IIa medical device.
CMS has indicated that it is developing a program that would provide a pathway for expedited transitional coverage of emerging technologies under the Medicare program, though that rule has yet to be released. While we will continue to monitor this, we will also remain focused on building out our reimbursement strategy for both commercial and government payers.
CMS has indicated that it is developing a program that would provide a pathway for expedited transitional coverage of emerging technologies under the Medicare program, though that rule has yet to be released. While we continue to monitor this, we will also remain focused on building out our reimbursement strategy for both commercial and government payers.
These include: ● establishment, registration and device listing with the FDA; ● QSR requirements, which require manufacturers, including third-party manufacturers, to follow stringent design, testing, control, documentation and other quality assurance procedures during all aspects of the design and manufacturing process; ● labeling regulations and FDA prohibitions against the promotion of investigational products, or ‘‘off-label’’ uses of cleared or approved products; ● requirements related to promotional activities; ● clearance or approval of product modifications to 510(k)-cleared devices that could significantly affect safety or effectiveness or that would constitute a major change in intended use of one of our cleared devices; ● medical device reporting regulations, which require that a manufacturer report to the FDA if a device it markets may have caused or contributed to a death or serious injury, or has malfunctioned and the device or a similar 25 Table of Contents device that it markets would be likely to cause or contribute to a death or serious injury, if the malfunction were to recur; ● correction, removal and recall reporting regulations, which require that manufacturers report to the FDA field corrections and product recalls or removals if undertaken to reduce a risk to health posed by the device or to remedy a violation of the FDCA that may present a risk to health; ● the FDA’s recall authority, whereby the agency can order device manufacturers to recall from the market a product that is in violation of governing laws and regulations; and ● post-market surveillance activities and regulations, which apply when deemed by the FDA to be necessary to protect the public health or to provide additional safety and effectiveness data for the device.
These include: ● establishment, registration and device listing with the FDA; 30 Table of Contents ● QSR requirements, which require manufacturers, including third-party manufacturers, to follow stringent design, testing, control, documentation and other quality assurance procedures during all aspects of the design and manufacturing process; ● labeling regulations and FDA prohibitions against the promotion of investigational products, or ‘‘off-label’’ uses of cleared or approved products; ● requirements related to promotional activities; ● clearance or approval of product modifications to 510(k)-cleared devices that could significantly affect safety or effectiveness or that would constitute a major change in intended use of one of our cleared devices; ● medical device reporting regulations, which require that a manufacturer report to the FDA if a device it markets may have caused or contributed to a death or serious injury, or has malfunctioned and the device or a similar device that it markets would be likely to cause or contribute to a death or serious injury, if the malfunction were to recur; ● correction, removal and recall reporting regulations, which require that manufacturers report to the FDA field corrections and product recalls or removals if undertaken to reduce a risk to health posed by the device or to remedy a violation of the FDCA that may present a risk to health; ● the FDA’s recall authority, whereby the agency can order device manufacturers to recall from the market a product that is in violation of governing laws and regulations; and ● post-market surveillance activities and regulations, which apply when deemed by the FDA to be necessary to protect the public health or to provide additional safety and effectiveness data for the device.
HMI maintains a compliant quality management system certified to ISO 13485:2016 and compliant with MDSAP requirements for the U.S., Canada and Australia. During 2021, we contracted with Healthlink International Inc. (“Healthlink”) to provide third party logistics for domestic and Canadian shipment and order fulfillment, and to provide warehousing services for finished goods.
HMI maintains a compliant quality management system certified to ISO 13485:2016 and is compliant with MDSAP requirements for the U.S., Canada and Australia. During 2021, we contracted with Healthlink International Inc. (“Healthlink”) to provide third party logistics for domestic and Canadian shipment and order fulfillment, and to provide warehousing services for finished goods.
Army, enrolled 22 mild-to-moderate subjects with gait deficit. ● The primary efficacy endpoint, although similar to the registrational study, did not show a separation on the composite SOT score improvement between the HFP and LFP groups, confirmed the trend of a higher response rate in the HFP group. ● The secondary endpoint showed a 29.8-point improvement of the composite SOT score from baseline in the HFP-treated group at the end of 14 weeks of treatment. ● At the end of the 12-week washout period, the participants maintained, on average, the same SOT composite score achieved over the 14 weeks of PoNS Therapy. ● The study confirmed the favorable safety profile shown in the registrational study.
Army, enrolled 44 mild-to-moderate subjects with gait deficit. ● The primary efficacy endpoint, although similar to the registrational study, did not show a separation on the composite SOT score improvement between the HFP and LFP groups, confirmed the trend of a higher response rate in the HFP group. ● The secondary endpoint showed a 29.8-point improvement of the composite SOT score from baseline in the HFP-treated group at the end of 14 weeks of treatment. ● At the end of the 12-week washout period, the participants maintained, on average, the same SOT composite score achieved over the 14 weeks of PoNS Therapy. ● The study confirmed the favorable safety profile shown in the registrational study.
In order to address CMS’s request for additional information to “further understand the PoNS device indication for use”, we decided to monitor real-world utilization of PoNS Therapy and collect additional clinical evidence through our ongoing PoNSTEP study and our registry program.
In order to address CMS’s request for additional information to “further understand the PoNS device indication for use”, we decided to monitor real-world utilization of PoNS Therapy and collect additional clinical evidence through the PoNSTEP study and our registry program.
If the FDA determines that a company has failed to comply with applicable regulatory requirements, it can take a variety of compliance or enforcement actions, which may result in any of the following sanctions: ● untitled letters, warning letters, fines, injunctions, consent decrees and civil penalties; ● unanticipated expenditures to address or defend such actions ● customer notifications for repair, replacement, refunds; ● recall, detention or seizure of our products; ● operating restrictions or partial suspension or total shutdown of production; ● refusing or delaying our requests for 510(k) clearance or PMA approval of new products or modified products; ● operating restrictions; ● withdrawing 510(k) clearances or PMA approvals that have already been granted; 27 Table of Contents ● refusal to grant export approval for our products; or ● criminal prosecution.
If the FDA determines that a company has failed to comply with applicable regulatory requirements, it can take a variety of compliance or enforcement actions, which may result in any of the following sanctions: ● untitled letters, warning letters, fines, injunctions, consent decrees and civil penalties; ● unanticipated expenditures to address or defend such actions ● customer notifications for repair, replacement, refunds; ● recall, detention or seizure of our products; ● operating restrictions or partial suspension or total shutdown of production; ● refusing or delaying our requests for 510(k) clearance or PMA approval of new products or modified products; ● operating restrictions; ● withdrawing 510(k) clearances or PMA approvals that have already been granted; ● refusal to grant export approval for our products; or ● criminal prosecution.
Army Medical Research and Materiel Command, or the USAMRMC and conducted at seven sites in the U.S. and Canada, evaluated 122 randomized subjects. ● The primary efficacy endpoint, although failing to demonstrate a between-group difference (p ● The key secondary efficacy endpoints demonstrated a statistically significant increase (p ● The primary safety endpoint demonstrated a decrease in the frequency of falls as determined by daily event(s) during the in-clinic phase of the study (week two). ● The secondary safety endpoint demonstrated a decrease in the frequency and severity of headaches (by the Headache Disability Index) from baseline to end of treatment (at week 5). ● No device-related serious adverse events were observed.
Army Medical Research and Materiel Command, or the USAMRMC and conducted at seven sites in the U.S. and Canada, evaluated 122 randomized subjects. ● The primary efficacy endpoint, although failing to demonstrate a between-group difference (p ● The key secondary efficacy endpoints demonstrated a statistically significant increase (p ● The primary safety endpoint demonstrated a decrease in the frequency of falls as determined by daily event(s) during the in-clinic phase of the study (week two). 11 Table of Contents ● The secondary safety endpoint demonstrated a decrease in the frequency and severity of headaches (by the Headache Disability Index) from baseline to end of treatment (at week 5). ● No device-related serious adverse events were observed.
Once the PoNS device is placed into the EU market, post market requirements apply including but not limited to: ● ensuring that the labeling promotes only intended use(s) of the device which have been certified; ● assessment of product modifications for significant changes may require license amendments; 28 Table of Contents ● post-market surveillance including vigilance reporting, which requires manufacturers report to authorities if our PoNS device caused or contributed to a death or serious injury, or malfunctioned in a way that would likely cause or contribute to a death or serious injury if it were to recur; and ● other post-approval restrictions or conditions.
Once the PoNS device is placed into the EU market, post market requirements apply including but not limited to: ● ensuring that the labeling promotes only intended use(s) of the device which have been certified; ● assessment of product modifications for significant changes may require license amendments; ● post-market surveillance including vigilance reporting, which requires manufacturers report to authorities if our PoNS device caused or contributed to a death or serious injury, or malfunctioned in a way that would likely cause or contribute to a death or serious injury if it were to recur; and ● other post-approval restrictions or conditions.
As part of our commercial treatment program in Canada, we will collect both outcomes and return to work data, which we plan to utilize with life and health, provincial workers compensation insurance programs, and property and casualty insurers to demonstrate both the clinical and economic value associated with the PoNS Therapy. U.S.
As part of our commercial treatment program in Canada, we will collect both outcomes and return to work data, which we plan to utilize with life and health, provincial workers compensation insurance programs, and property and casualty insurers to demonstrate both the clinical and economic value associated with the PoNS Therapy.
Conduct that violates the False Claims Act also may implicate various federal criminal statutes. Various states have adopted laws similar to the False Claims Act, and many of these state laws are broader in scope and apply to all payors, and therefore, are not limited to only those claims submitted to the federal government.
Conduct that violates the False Claims Act also may implicate various federal criminal statutes. Various states have adopted laws similar to the False Claims Act, and many of these state laws are broader in scope and apply to all payers, and therefore, are not limited to only those claims submitted to the federal government.
Filing Date ​ Status Patent No. ​ Issue Date ​ Subject Matter 12/348,301 1/4/2009 Issued 8,849,407 9/30/2014 Non-invasive neurostimulation of the skin combined with simultaneous physical therapy to provide neurorehabilitation of a patient to treat various maladies including, e.g., TBI, stroke and Alzheimer’s disease 14/340,144 7/24/2014 Issued 8,909,345 12/9/2014 Non-invasive neurostimulation within a patient’s mouth combined with physical therapy to provide neurorehabilitation of a patient to treat various maladies including, e.g., TBI, stroke, and Alzheimer’s disease 14/341,141 7/25/2014 Issued 9,020,612 4/28/2015 Non-invasive neurostimulation within a patient's mouth combined with cognitive therapy to provide neurorehabilitation of a patient resulting in improved reading comprehension and increased attention span as well as the treatment various maladies including, but not limited to, TBI, stroke, and Alzheimer's disease 14/615,766 2/6/2015 Issued 9,656,078 5/23/2017 Non-invasive neurostimulation within a patient’s mouth combined with stimulation of the patient’s vision, hearing, vestibular systems, or somatosensory systems for the treatment of tinnitus 14/689,462 4/17/2015 Issued 9,597,501 3/21/2017 Non-invasive neurostimulation of a patient’s skin combined with cognitive therapy to provide neurorehabilitation of a patient resulting in improved reading comprehension and increased attention span as well as the treatment various maladies including, e.g., TBI, stroke, and Alzheimer’s disease 14/815,171 7/31/2015 Issued 9,597,504 3/21/2017 Non-invasive neurostimulation of a patient’s mouth combined with therapy to provide neurorehabilitation of a patient, with a focus on features of a neurostimulation device 15/207,029 7/11/2016 Issued 9,656,069 5/23/2017 Non-invasive neurostimulation of a subject’s oral cavity while the subject engages in an exercise in order to enhance the subject’s proficiency in the exercise 15/283,894 10/3/2016 Issued 10,293,163 5/21/2019 Non-invasive neurostimulation of a subject’s oral cavity or skin while the subject engages in a physical or cognitive exercise in order to enhance the subject’s proficiency in the exercise 15/602,060 5/22/2017 Issued 10,328,263 6/25/2019 Non-invasive neurostimulation within a patient’s mouth or on a patient’s skin combined with an exercise for treatment of a disorder affecting sleep patterns 16/376,595 4/5/2019 Issued 11,185,696 11/30/2021 Non-invasive neurostimulation of a subject's oral cavity or skin while the subject engages in a physical or cognitive exercise in order to enhance a subject's proficiency in the exercise 16/450,915 6/24/2019 Issued 11,285,325 3/29/2022 Non-invasive neurostimulation of a subject's oral cavity or skin while the subject engages in a physical or cognitive exercise in order to enhance the subject's proficiency in the exercise 17/704,051 ​ 3/25/2022 ​ Pending ​ N/A N/A ​ Non-invasive neurostimulation of a subject’s oral cavity or skin while the subject engages in a physical or cognitive exercise in order to enhance the subject’s proficiency in the exercise 61/019,061 1/4/2008 Expired N/A N/A N/A (Provisional) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ 61/020,265 1/10/2008 Expired N/A N/A N/A (Provisional) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ U.S.
Filing Date ​ Status Patent No. ​ Issue Date ​ Subject Matter 12/348,301 1/4/2009 Issued 8,849,407 9/30/2014 Non-invasive neurostimulation of the skin combined with simultaneous physical therapy to provide neurorehabilitation of a patient to treat various maladies including, e.g., TBI, stroke and Alzheimer’s disease 14/340,144 7/24/2014 Issued 8,909,345 12/9/2014 Non-invasive neurostimulation within a patient’s mouth combined with physical therapy to provide neurorehabilitation of a patient to treat various maladies including, e.g., TBI, stroke, and Alzheimer’s disease 14/341,141 7/25/2014 Issued 9,020,612 4/28/2015 Non-invasive neurostimulation within a patient's mouth combined with cognitive therapy to provide neurorehabilitation of a patient resulting in improved reading comprehension and increased attention span as well as the treatment various maladies including, but not limited to, TBI, stroke, and Alzheimer's disease 14/615,766 2/6/2015 Issued 9,656,078 5/23/2017 Non-invasive neurostimulation within a patient’s mouth combined with stimulation of the patient’s vision, hearing, vestibular systems, or somatosensory systems for the treatment of tinnitus 14/689,462 4/17/2015 Issued 9,597,501 3/21/2017 Non-invasive neurostimulation of a patient’s skin combined with cognitive therapy to provide neurorehabilitation of a patient resulting in improved reading comprehension and increased attention span as well as the treatment various maladies including, e.g., TBI, stroke, and Alzheimer’s disease 14/815,171 7/31/2015 Issued 9,597,504 3/21/2017 Non-invasive neurostimulation of a patient’s mouth combined with therapy to provide neurorehabilitation of a patient, with a focus on features of a neurostimulation device 15/207,029 7/11/2016 Issued 9,656,069 5/23/2017 Non-invasive neurostimulation of a subject’s oral cavity while the subject engages in an exercise in order to enhance the subject’s proficiency in the exercise 15/283,894 10/3/2016 Issued 10,293,163 5/21/2019 Non-invasive neurostimulation of a subject’s oral cavity or skin while the subject engages in a physical or cognitive exercise in order to enhance the subject’s proficiency in the exercise 15/602,060 5/22/2017 Issued 10,328,263 6/25/2019 Non-invasive neurostimulation within a patient’s mouth or on a patient’s skin combined with an exercise for treatment of a disorder affecting sleep patterns 16/376,595 4/5/2019 Issued 11,185,696 11/30/2021 Non-invasive neurostimulation of a subject's oral cavity or skin while the subject engages in a physical or cognitive exercise in order to enhance a subject's proficiency in the exercise 16/450,915 6/24/2019 Issued 11,285,325 3/29/2022 Non-invasive neurostimulation of a subject's oral cavity or skin while the subject engages in a physical or cognitive exercise in order to enhance the subject's proficiency in the exercise 17/704,051 ​ 3/25/2022 ​ Issued ​ 12,064,629 8/20/2024 ​ Non-invasive neurostimulation of a subject’s oral cavity or skin while the subject engages in a physical or cognitive exercise in order to enhance the subject’s proficiency in the exercise 18/773,984 ​ 7/16/2024 ​ Pending ​ N/A N/A ​ Non-invasive neurostimulation of a subject’s oral cavity or skin while the subject engages in a physical or cognitive exercise and while the patient is not engaged in the exercise in order to enhance the subject’s proficiency in the exercise 61/019,061 1/4/2008 Expired N/A N/A N/A (Provisional) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ 61/020,265 1/10/2008 Expired N/A N/A N/A (Provisional) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ U.S.
This usage data in combination with the detail of the completed treatment assessments gives the clinician and the patient a unique and powerful method to assess treatment progress. The patient initiates their PoNS Therapy sessions with the PoNS device initially under the supervision of the clinicians, then through regular check-ins.
This usage data in combination with details of completed treatment assessments gives the clinician and the patient a unique and powerful method to assess treatment progress. The patient initiates their PoNS Therapy sessions with the PoNS device initially under the supervision of the clinicians, then through regular check-ins.
This a critical feature of how PoNS therapeutic effect is mediated since, similarly to the way most of the pharmacological agents act, translingual stimulation allows direct activation of neural targets that mediate signal transmission to the spinal cord and resulting therapeutic effect. ● Scientific studies suggest that the trigeminal cranial nerves offer a high-bandwidth pathway for impulses to directly affect the central nervous system.
This a critical feature of how PoNS therapeutic effect is mediated since, similarly to the way most of the pharmacological agents act, translingual stimulation allows direct activation of neural targets that mediate signal transmission to the spinal cord and resulting therapeutic effect. 20 Table of Contents ● Scientific studies suggest that the trigeminal cranial nerves offer a high-bandwidth pathway for impulses to directly affect the central nervous system.
Class I devices are those for which safety and effectiveness can be assured by adherence to FDA’s “general controls” for medical devices, which include compliance with the applicable portions of the FDA’s Quality System Regulation, or 22 Table of Contents QSR, facility registration and product listing, reporting of adverse medical events, and appropriate, truthful and non-misleading labeling, advertising, and promotional materials.
Class I devices are those for which safety and effectiveness can be assured by adherence to FDA’s “general controls” for medical devices, which include compliance with the applicable portions of the FDA’s Quality System Regulation, or QSR, facility registration and product listing, reporting of adverse medical events, and appropriate, truthful and non-misleading labeling, advertising, and promotional materials.
A device is substantially equivalent if, with respect to the predicate device, it has the same intended use and has either (i) the same technological characteristics, or (ii) different technological characteristics, but the information provided in the 510(k) submission demonstrates that the device does not raise new questions of safety and effectiveness and is at least as safe and effective as the predicate device.
A device is substantially equivalent if, with respect to the predicate device, it has the same intended use and has either (i) the same technological characteristics, or (ii) different technological characteristics, but the information provided in the 510(k) submission demonstrates that the 28 Table of Contents device does not raise new questions of safety and effectiveness and is at least as safe and effective as the predicate device.
Violations of this law are punishable by up to ten years in prison, criminal fines, administrative civil money penalties, damages, disgorgement and exclusion from participation in federal healthcare programs. In addition, a person or entity does not need to have actual knowledge of the statute or specific intent to violate it.
Violations of this law are 31 Table of Contents punishable by up to ten years in prison, criminal fines, administrative civil money penalties, damages, disgorgement and exclusion from participation in federal healthcare programs. In addition, a person or entity does not need to have actual knowledge of the statute or specific intent to violate it.
Summary of the results of the 26-week long-term treatment study (2019) in people with mmTBI: ● The study, performed to evaluate the durability of response to the PoNS Therapy over a 26-week period (14-week therapy followed by 12-week washout period) conducted at the Tactile Communication Neurorehabilitation Laboratory at the University of Wisconsin-Madison and sponsored by the U.S.
Summary of the results of the 26-week long-term treatment study (Tyler et al, 2019) in people with mmTBI: ● The study, performed to evaluate the durability of response to the PoNS Therapy over a 26-week period (14-week therapy followed by 12-week washout period) conducted at the Tactile Communication & Neurorehabilitation Laboratory at the University of Wisconsin-Madison and sponsored by the U.S.
Various states have adopted laws similar to the Anti-Kickback Statute, and some of these state laws may be broader in scope in that some of these state laws extend to all payors and may not contain safe harbors.
Various states have adopted laws similar to the Anti-Kickback Statute, and some of these state laws may be broader in scope in that some of these state laws extend to all payers and may not contain safe harbors.
Ltd.) and 0995162 30 Table of Contents B.C. Ltd. to reorganize the business structure of such three entities in such a manner which would allow Boomerang Oil, Inc. to spin us out to become an independent entity that is a reporting issuer in Canada and for us to complete a reverse take-over of 0995162 B.C. Ltd.
Ltd.) and 0995162 B.C. Ltd. to reorganize the business structure of such three entities in such a manner which would allow Boomerang Oil, Inc. to spin us out to become an independent entity that is a reporting issuer in Canada and for us to complete a reverse take-over of 0995162 B.C. Ltd.
An applicant must submit the requested information before the FDA will proceed with additional review of the submission. Once the 510(k) submission is accepted for review, by regulation, the FDA has 90 days to review and issue a determination. As a practical matter, 23 Table of Contents clearance often takes longer.
An applicant must submit the requested information before the FDA will proceed with additional review of the submission. Once the 510(k) submission is accepted for review, by regulation, the FDA has 90 days to review and issue a determination. As a practical matter, clearance often takes longer.
In August 2019, we withdrew our application to be CE certified due to uncertainty in Europe caused by the switch from the Medical Device Directive, or MDD, to the Medical Device Regulation, or MDR, Brexit, and the withdrawal of Lloyd’s Register Quality Assurance, our notified body, from the EU 14 Table of Contents notified body business.
In August 2019, we withdrew our application to be CE certified due to uncertainty in Europe caused by the switch from the Medical Device Directive, or MDD, to the Medical Device Regulation, or MDR, Brexit, and the withdrawal of Lloyd’s Register Quality Assurance, our notified body, from the EU notified body business.
We believe this scientific dissemination may begin to pave the way to establishing the PoNS Therapy as the standard of care for the treatment of MS-related gait deficit. 16 Table of Contents We began accepting prescriptions for PoNS in the U.S. in the first quarter of 2022, and our first commercial sales began in April 2022.
We believe this scientific dissemination may begin to pave the way to establishing the PoNS Therapy as the standard of care for the treatment of MS-related gait deficit. We began accepting prescriptions for PoNS in the U.S. in the first quarter of 2022, and our first commercial sales began in April 2022.
As previously described, in August 2019, we withdrew our application to be EU certified and will revisit our UK and EU commercialization plans as terms of CE/UKCA certification become clearer under the new regulations. We submitted an application to the TGA in Australia during the third quarter of 2019.
As previously described, in August 2019, we withdrew our application to be EU certified and will revisit our UK and EU commercialization plans as terms of CE/UKCA certification become clearer under the new regulations. 18 Table of Contents We submitted an application to the TGA in Australia during the third quarter of 2019.
In the U.S., approximately 650,000 people survive a new stroke each year and an estimated 7 million Americans live with ongoing complications of stroke.
In the U.S., approximately 650,000 people survive a new stroke each year and an estimated 7 million Americans live with ongoing complications of stroke (Dobkin, 2013).
The current standard of care to address balance issues following a TBI is supervised therapeutic exercise. While supervised therapeutic exercise can help to 8 Table of Contents promote balance recovery, individuals are often unable to return to their full function and are left living with a balance deficit.
The current standard of care to address balance issues following a TBI is supervised therapeutic exercise. While supervised therapeutic exercise can help to promote balance recovery, individuals are often unable to return to their full function and are left living with a balance deficit.
Coverage and Reimbursement Canadian Reimbursement We believe that traditional life and health payers may be among the earliest to provide coverage and reimbursement for the PoNS Therapy, and therefore, we are focusing on gaining coverage for the PoNS Therapy through them. Life and health encompass long- and short-term disability claims.
Coverage and Reimbursement Canadian Reimbursement We believe that traditional life and health payers may be among the most relevant to provide coverage and reimbursement for the PoNS Therapy, and therefore, we are focusing on gaining coverage for the PoNS Therapy through them. Life and health encompass long- and short-term disability claims.
Throughout 2019, we made important progress in advancing and refining our commercialization strategy in Canada building access, awareness and credibility for the PoNS Therapy, including the acquisition of the Heuro Canada, Inc. (“Heuro”) operating entity of 15 Table of Contents HTC.
Throughout 2019, we made important progress in advancing and refining our commercialization strategy in Canada building access, awareness and credibility for the PoNS Therapy, including the acquisition of the Heuro Canada, Inc. (“Heuro”) operating entity of HTC.
In February 2024, CMS assigned HCPCS Level II codes A4593, “Neuromodulation stimulator system, adjunct to rehabilitation therapy regime” to describe the PoNS controller and A4594, “Neuromodulation stimulator system, adjunct to rehabilitation therapy regime, mouthpiece each” to describe the PoNS mouthpiece. The new HCPCS codes will be effective April 1, 2024.
In February 2024, CMS assigned HCPCS Level II codes A4593, “Neuromodulation stimulator system, adjunct to rehabilitation therapy regime” to describe the PoNS controller and A4594, “Neuromodulation stimulator system, adjunct to rehabilitation therapy regime, mouthpiece each” to describe the PoNS mouthpiece. The new HCPCS codes became effective April 1, 2024.
The statistical 10 Table of Contents plans also provided for a key secondary efficacy endpoint that established the treatment response (> 15 points on SOT composite score) from baseline in the pooled HFP and LFP groups at endpoint(s), should the primary measure failed to establish a significant difference between the HFP and LFP treatment groups.
The statistical plans also provided for a key secondary efficacy endpoint that established the treatment response (> 15 points on SOT composite score) from baseline in the pooled HFP and LFP groups at endpoint(s), should the primary measure failed to establish a significant difference between the HFP and LFP treatment groups.
Failure to comply with the CCPA may result in, among other things, significant civil penalties and injunctive relief, or statutory or actual damages. In addition to the CCPA, numerous other states’ legislatures are 29 Table of Contents considering similar laws that will require ongoing compliance efforts and investment.
Failure to comply with the CCPA may result in, among other things, significant civil penalties and injunctive relief, or statutory or actual damages. In addition to the CCPA, numerous other states’ legislatures are considering similar laws that will require ongoing compliance efforts and investment.
The FTC has the power to enforce promises as it interprets them, and events that we cannot fully control, such as data breaches, may be result in FTC enforcement. Enforcement by the FTC under the FTC Act can result in civil penalties or enforcement actions.
The FTC has the power to enforce promises as it interprets them, and events that we cannot fully control, such as data breaches, may be 34 Table of Contents result in FTC enforcement. Enforcement by the FTC under the FTC Act can result in civil penalties or enforcement actions.
Talent Acquisition, Development and Retention Hiring, developing, and retaining high-performing employees is important to our operations and we are focused on creating experiences that foster growth, performance and retention. Retaining and acquiring the right talent in this competitive environment, particularly at speed and scale, will continue to be a priority.
Talent Acquisition, Development and Retention Hiring, developing, and retaining high-performing employees is important to our operations and we are focused on creating experiences that foster growth, performance and retention. Retaining and acquiring the right talent in this competitive environment, particularly at speed and scale, will continue to be a priority. Our workforce reflects talent from diverse perspectives.
Further, the European/UK data protection laws (including laws on data transfers) may also be updated/revised, accompanied by new guidance and/or judicial/regulatory interpretations, which could entail further impacts on our compliance efforts and increased cost.
Further, the European/UK data protection laws (including laws on data transfers) may also be updated/revised, 35 Table of Contents accompanied by new guidance and/or judicial/regulatory interpretations, which could entail further impacts on our compliance efforts and increased cost.
In Australia, PoNS is authorized as a non-implantable neurostimulator intended for short term used by 17 Table of Contents healthcare professionals as an adjunct to a therapeutic exercise program to improve balance and gait. PoNS is not intended to be used alone without an exercise program.
In Australia, PoNS is authorized as a non-implantable neurostimulator intended for short term used by healthcare professionals as an adjunct to a therapeutic exercise program to improve balance and gait. PoNS is not intended to be used alone without an exercise program.
Penalties for a False Claims Act 26 Table of Contents violation include three times the actual damages sustained by the government, plus significant mandatory civil penalties for each separate false claim and the potential for exclusion from participation in federal healthcare programs.
Penalties for a False Claims Act violation include three times the actual damages sustained by the government, plus significant mandatory civil penalties for each separate false claim and the potential for exclusion from participation in federal healthcare programs.
Multiple Sclerosis Journal Experimental, Translational and Clinical January-March 2017: 19 DOI: 10.1177/ 2055217317690561 Summary results of the Tyler study in 20 subjects with mild and moderate MS: ● The study was designed as a between-group comparison of the Dynamic Gait Index (DGI) score improvement in10 subjects treated with active PoNS, in conjunction with two weeks of treatment in clinic under supervision of a registered PoNS trainer, and, individually, at home over12-weeks, as compared to 10 subjects treated with placebo PoNS and the same physical therapy regimen, after a total of 14 weeks of treatment. ● The primary endpoint demonstrated a statistically significant improvement greater that 4 points in the DGI score from baseline in the active PoNS group as compared to placebo at endpoint (Week 14) (p ● The DGI improvement was already clinically meaningful at 2 weeks of treatment and continued to increase over the following 8 weeks of therapy with an average improvement of 7,7 point, which was then maintained (slightly increased) through week 14. 9 Table of Contents Summary results from the Leonard study in 14 patients treated with mild and moderate MS: ● A statistically significant improvement in the NeuroCom Sensory Organization Test (SOT), a test of subject’s ability to balance, from baseline to week 14 of treatment in 7 subjects treated with active PoNS as compared to the 7 subjects in placebo PoNS group (p=0.001). ● Functional MRI data showed an increased blood oxygen dependent level (BOLD) signal in specific brain cortical areas, suggesting that sustained PoNS neuromodulation-induced activation of these cortical areas is likely to trigger a series of adaptive changes (neuroplasticity), expected to rehabilitate existing pathways as well as engage new mechanisms to deliver functional signals to the spinal cord, that may correlate with PoNS therapeutic outcomes observed in the Tyler study.
Summary results of the Tyler study in 20 subjects with mild and moderate MS: ● The study was designed as a between-group comparison of the Dynamic Gait Index (DGI) score improvement in 10 subjects treated with active PoNS, in conjunction with two weeks of treatment in clinic under supervision of a registered PoNS trainer, and, individually, at home over 12 weeks, as compared to 10 subjects treated with placebo PoNS and the same physical therapy regimen, after a total of 14 weeks of treatment. ● The primary endpoint demonstrated a statistically significant improvement greater than 4 points in the DGI score from baseline in the active PoNS group as compared to placebo at endpoint (Week 14) (p ● The DGI improvement was already clinically meaningful at 2 weeks of treatment and continued to increase over the following 8 weeks of therapy with an average improvement of 7.7 points, which was then maintained (slightly increased) through week 14. 9 Table of Contents Summary results from the Leonard study in 14 patients treated with mild and moderate MS: ● A statistically significant improvement in the NeuroCom Sensory Organization Test (SOT), a test of subject’s ability to balance, from baseline to week 14 of treatment in 7 subjects treated with active PoNS as compared to the 7 subjects in placebo PoNS group (p=0.001). ● Functional MRI data showed an increased blood oxygen dependent level (BOLD) signal in specific brain cortical areas, suggesting that sustained PoNS neuromodulation-induced activation of these cortical areas is likely to trigger a series of adaptive changes (neuroplasticity), expected to rehabilitate existing pathways as well as engage new mechanisms to deliver functional signals to the spinal cord, that may correlate with PoNS therapeutic outcomes observed in the Tyler study.
If the device presents a “significant risk,” as defined by the FDA, to human health, the FDA requires the device sponsor to submit an IDE application to the FDA, which must 24 Table of Contents become effective prior to commencing human clinical trials.
If the device presents a “significant risk,” as defined by the FDA, to human health, the FDA requires the device sponsor to submit an IDE application to the FDA, which must become effective prior to commencing human clinical trials.
We are not including the information on our website as a part of, nor incorporating it by reference into this Form 10-K. Additionally, the SEC maintains a website that contains annual, quarterly, and current reports, proxy statements, and other information that issuers (including us) file electronically with the SEC. The SEC’s website address is http://www.sec.gov.
We are not including the information on our website as a part of, nor incorporating it by reference into this Form 10-K. Additionally, the SEC maintains a website that contains annual, quarterly, and current reports, proxy statements, and other information that issuers (including us) file electronically with the SEC.
In 2019, the total economic burden attributed to MS in the U.S was $85.4 billion and the average annual cost of living with MS was $88.5 thousand. Since the exact cause of MS is still unknown, there is no known prevention.
In 2019, the total economic burden attributed to MS in the U.S was $85.4 billion and the average annual cost of living with MS was $88 thousand (Bebo et al, 2022). Since the exact cause of MS is still unknown, there is no known prevention.
Overview of Stroke and Current Available Treatments According to the World Health Organization, there are more than 101 million people across the globe who have experienced a stroke, and over 12 million new strokes occur each year.
Overview of Stroke and Current Available Treatments According to the World Stroke Organization, there are more than 101 million people across the globe who have experienced a stroke, and over 12 million new strokes occur each year (Feigin et al, 2022).
Both Minnetronix and Key Tronic are registered as medical device manufacturers in good standing with the FDA and along with Cambridge Consultants, our design services supplier, are certified in accordance with International Organization for Standardization, or ISO, 13485, a comprehensive quality management system for the design and manufacture of medical devices.
Minnetronix is registered as a medical device manufacturer in good standing with the FDA and along with Cambridge Consultants, our design services supplier, are certified in accordance with International Organization for Standardization, or ISO, 13485, a comprehensive quality management system for the design and manufacture of medical devices.
As of December 31, 2023, we had 22 full-time employees, of which 20 are located in the United States and 2 are located in Canada. None of our employees were covered by collective bargaining agreements. We have not experienced any interruptions of operations due to disputes with our employees.
As of December 31, 2024, we had 21 full-time employees, of which 19 are located in the United States and 2 are located in Canada. None of our employees were covered by collective bargaining agreements. We have not experienced any interruptions of operations due to disputes with our employees.
This condition often has a significant impact on one’s quality of life, negatively affecting independence, employability, productivity, mental health and participation in the community. Rehabilitation is often required following a TBI for resulting motor, cognitive and behavioral impairments. Approximately 80% of individuals who sustain a TBI report balance impairment.
This condition often has a significant impact on one’s quality of life, negatively affecting independence, employability, 8 Table of Contents productivity, mental health and participation in the community. Rehabilitation is often required following a TBI for resulting motor, cognitive and behavioral impairments. Approximately 80% of individuals who sustain a TBI report balance impairment (Dever et al, 2022).
Corporate Information Our principal executive offices are located at 642 Newtown Yardley Road, Suite 100, Newtown, PA 18940 and our telephone number is 215-944-6100. We maintain a corporate webs ite at www.helius medical.com.
Corporate Information Our principal executive offices are located at 642 Newtown Yardley Road, Suite 100, Newtown, PA 18940 and our telephone number is 215-944-6100. We maintain a corporate website at www.heliusmedical.com.
The study was conducted in an in-patient rehabilitation setting on 10 patients who were in the subacute stroke phase and with therapy intensity higher than in most stroke rehabilitation settings. 11 Table of Contents The following is a summary of the real-world evidence (“RWE “) database analysis of stroke patients treated with PoNS in Australia: ● The combined intervention with PoNS was significantly more effective than high intensity physiotherapy alone for the rehabilitation of balance in stroke survivors. ● After two weeks of therapy, the median score on the Mini-BEST was 22.0 in the PoNS-treated group, compared to 13 in the control group, providing a clinically significant and meaningful therapeutic outcome, especially when considering that a cut-off score of 17.5 has been shown to discriminate between fallers and non-fallers with chronic stroke (> 6 months).
The following is a summary of the real-world evidence (“RWE “) database analysis of stroke patients treated with PoNS in Australia: ● The combined intervention with PoNS was significantly more effective than high intensity physiotherapy alone for the rehabilitation of balance in stroke survivors. ● After two weeks of therapy, the median score on the Mini-BEST was 22.0 in the PoNS-treated group, compared to 13 in the control group, providing a clinically significant and meaningful therapeutic outcome, especially when considering that a cut-off score of 17.5 has been shown to discriminate between fallers and non-fallers with chronic stroke (> 6 months).
Patent Nos. 8,909,345; 9,020,612; 9,656,078; 9,597,501; 9,597,504; 9,656,069; 10,293,163; 10,328,263; 11,185,696; and 11,285,325, and U.S. Application No. 17/704,051 claim priority to U.S. Patent No. 8,849,407. 20 Table of Contents A U.S. provisional patent application provides the means to establish an early effective filing date for a later filed nonprovisional patent application.
Patent Nos. 8,909,345; 9,020,612; 9,656,078; 9,597,501; 9,597,504; 9,656,069; 10,293,163; 10,328,263; 11,185,696; 11,285,325; and 12,064,629 and U.S. Application No. 18/773,984 claim priority to U.S. Patent No. 8,849,407. 22 Table of Contents A U.S. provisional patent application provides the means to establish an early effective filing date for a later filed nonprovisional patent application.
We are the owner of the trademark registrations for the Helius and PoNS Therapy marks in the U.S. as well as the trademark registration for the Helius mark in Canada and the trademark registrations for the PoNS mark in Europe, Israel, and New Zealand.
We are the owner of the trademark registrations for the Helius, Helius Medical, PoNS, and PoNS Therapy marks in the U.S. as well as the trademark registrations for the PoNS mark in Australia, Europe, Israel, New Zealand, and Russia.
Health Canada After a medical device has been approved for commercial use in Canada, there are a number of Health Canada requirements that must be adhered to including but not limited to the following: ● annual license renewals; ● labeling regulations, which prohibit “misbranded” devices from entering the market, as well as prohibit on the promotion of products for unapproved or “off-label” use and impose other restrictions on labeling including truthfulness and accuracy; ● assessment of product modifications for significant changes that would require license amendments; ● post-market surveillance including medical device reporting, which requires manufacturers report to Health Canada if their device may have caused or contributed to a death or serious injury, or malfunctioned in a way that would likely cause or contribute to a death or serious injury if it were to recur; and ● other post-approval restrictions or conditions.
Health Canada After a medical device has been approved for commercial use in Canada, there are a number of Health Canada requirements that must be adhered to including but not limited to the following: ● annual license renewals; ● labeling regulations, which prohibit “misbranded” devices from entering the market, as well as prohibit on the promotion of products for unapproved or “off-label” use and impose other restrictions on labeling including truthfulness and accuracy; ● assessment of product modifications for significant changes that would require license amendments; ● post-market surveillance including medical device reporting, which requires manufacturers report to Health Canada if their device may have caused or contributed to a death or serious injury, or malfunctioned in a way that would likely cause or contribute to a death or serious injury if it were to recur; and ● other post-approval restrictions or conditions. 33 Table of Contents European Union We submitted an application for a CE certification of the PoNS device with our UK based notified body in December 2018.
A 2016 economic analysis of MS found the total lifetime costs per person with MS to be $4.1 million, with average yearly healthcare costs ranging from $30 thousand to $100 thousand based on the severity of the disease, and averaging $65 thousand more in yearly healthcare costs than that of someone without MS.
A 2016 economic analysis of MS found the total lifetime costs per person with MS to be $4.1 million (Owens, 2016), with average yearly healthcare costs ranging from $57 thousand to $93 thousand based on the severity of the disease, and averaging $65 thousand more in yearly healthcare costs than that of someone without MS (Bebo et al, 2022).
The discovery of previously unknown problems with any of our products, including unanticipated adverse events or adverse events of increasing severity or frequency, whether resulting from the use of the device within the scope of its clearance or off-label by a physician in the practice of medicine, could result in restrictions on the device, including the removal of the product from the market or voluntary or mandatory device recalls.
The discovery of previously unknown problems with any of our products, including unanticipated adverse events or adverse events of increasing severity or frequency, whether resulting from the use of the device within the scope of its clearance or off-label by a physician in the practice of medicine, could result in restrictions on the device, including the removal of the product from the market or voluntary or mandatory device recalls. 32 Table of Contents The FDA has broad regulatory compliance and enforcement powers.
Findings from a National MS Society study estimate that nearly 1 million people in the U.S. are living with MS of which approximately 25-30% are on Medicare and 93,000 people in Canada are living with MS. The National MS Society estimates that 2.9 million people live with MS globally.
Findings from a 2019 National MS Society study (Wallin et al, 2019) estimate that nearly 1 million people in the U.S. are living with MS of which approximately 25-30% are on Medicare. The National MS Society estimates that 2.9 million people live with MS globally.
Intellectual Property Licensed Intellectual Property Pursuant to the Second Amended and Restated Patent Sub-License, or the Sublicense Agreement, dated June 6, 2014 entered into between Advanced NeuroRehabilitation LLC, or ANR, and HMI, ANR has granted HMI a worldwide, exclusive license to make, have made, use, lease and sell devices utilizing certain patent applications, which are collectively referred to as the “Patent Pending Rights.” The Patent Pending Rights relate to the PoNS device and include the following patents and patent applications, which cover a device that noninvasively delivers neurostimulation through the skin or intra-orally to the brain stem via various nerves including the trigeminal and facial nerves: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ U.S.
This allows for the concomitant utilization of portable neurostimulation with a wide range of pharmacological therapies and non-pharmacological interventions previously unexplored for neurological rehabilitation. 21 Table of Contents Intellectual Property Licensed Intellectual Property Pursuant to the Second Amended and Restated Patent Sub-License, or the Sublicense Agreement, dated June 6, 2014 entered into between Advanced NeuroRehabilitation LLC, or ANR, and HMI, ANR has granted HMI a worldwide, exclusive license to make, have made, use, lease and sell devices utilizing certain patent applications, which are collectively referred to as the “Patent Pending Rights.” The Patent Pending Rights relate to the PoNS device and include the following patents and patent applications, which cover a device that noninvasively delivers neurostimulation through the skin or intra-orally to the brain stem via various nerves including the trigeminal and facial nerves: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ U.S.
Regulatory Status Worldwide Canadian Regulatory Status: mmTBI, MS and Stroke On October 17, 2018, we received our Canadian marketing authorization from Health Canada allowing us to commercialize the PoNS device in Canada for use as a short-term treatment (14 weeks) of balance deficit due to mmTBI. 12 Table of Contents On March 18, 2020, we received marketing authorization from Health Canada allowing us to commercialize the PoNS device in Canada for the treatment of gait deficit in patients with mild and moderate MS symptoms.
Regulatory Status Worldwide Canadian Regulatory Status: mmTBI, MS and Stroke On October 17, 2018, we received our Canadian marketing authorization from Health Canada allowing us to commercialize the PoNS device in Canada for use as a short-term treatment (14 weeks) of balance deficit due to mmTBI.
Human Capital Resources As a neurotechnology company focused on neurological wellness through the development, licensing or acquisition of non-implantable technologies targeted at reducing symptoms of neurological disease or trauma, our human capital is important to the long-term success of our company.
The SEC’s website address is http://www.sec.gov. 36 Table of Contents Human Capital Resources As a neurotechnology company focused on neurological wellness through the development, licensing or acquisition of non-implantable technologies targeted at reducing symptoms of neurological disease or trauma, our human capital is important to the long-term success of our company.
In general, we anticipate that it will take at least 24 months to obtain broad coverage and reimbursement among government and private payers once HCPCS codes become effective.
In general, we anticipate that it will take at least 24 months to obtain broad coverage and reimbursement among government and private payers. U.S.
During the third quarter of 2023, the Company began implementing the transition of the manufacturing of PoNS device controllers and mouthpieces from Key Tronic to Minnetronix, Inc in St. Paul, MN. The Company expects this transition to be fully completed by mid-2024.
During the third quarter of 2023, the Company began implementing the transition of the manufacturing of PoNS device controllers and mouthpieces from Key Tronic to Minnetronix, Inc (“Minnetronix”) in St. Paul, MN. The Company has completed the transition during the fourth quarter of 2024.
Rehabilitation is required following a stroke for resulting motor, cognitive and behavioral impairments. Most province public health systems in Canada offers stroke rehabilitation services along with private establishments. The potential for commercial opportunity for PoNS in order to support all these public and private establishments is wide.
In addition, more than 80% of the survivors have gait impairment (Carmen, 2020). Rehabilitation is required following a stroke for resulting motor, cognitive and behavioral impairments. Most province public health systems in Canada offers stroke rehabilitation services along with private establishments. The potential for commercial opportunity for PoNS to support all these public and private establishments is wide.
Company Owned Intellectual Property As of February 14, 2024, we have filed 36 U.S. patent applications related to various technical and ornamental aspects of the PoNS device: 15 non-provisional patent applications that describe various technical features in the current version device and 21 design patent applications describing various ornamental designs.
Company Owned Intellectual Property As of February 23, 2025, we have been granted 36 U.S. patent applications related to various technical and ornamental aspects of the PoNS device: 15 patents that cover various technical features in the current version device and 21 design patents describing various ornamental designs.
Patent Nos. 8,909,345; 9,020,612; 9,656,078; 9,597,501; 9,597,504; 9,656,069; 10,293,163; 10,328,263; 11,185,696 and 11,285,325, and U.S. Application No. 17/704,051 claim priority through such provisional application as well as through Provisional Application 61/020,265.
Patent Application No. 12/348,301 or Provisional Application No. 61/019,061, which U.S. Patent Nos. 8,909,345; 9,020,612; 9,656,078; 9,597,501; 9,597,504; 9,656,069; 10,293,163; 10,328,263; 11,185,696; 11,285,325; and 12,064,629, and U.S. Application No. 18/773,984 claim priority through such provisional application as well as through Provisional Application 61/020,265.
FDA granted de novo classification for the PoNS device for gait deficit in MS, which resulted in Class II classification. In order to be placed in Class II, the FDA required reasonable assurance of safety and effectiveness of the PoNS device. Under Class II, general controls (e.g., premarket notification) and special controls (e.g., specific performance testing) are applicable.
In order to be placed in Class II, the FDA required reasonable assurance of safety and effectiveness of the PoNS device. 29 Table of Contents Under Class II, general controls (e.g., premarket notification) and special controls (e.g., specific performance testing) are applicable.
About 878,500 Canadian adults aged 20+ have experienced a stroke (2018-2019) and with the population aging, more and more Canadians are at risk. This condition often has a significant impact on the ability on one’s functionality, negatively affecting independence, employability, productivity, mental health and participation in the community. In addition, more than 80% of the survivors have a gait impairment.
About 878,000 Canadian adults aged 20+ have experienced a stroke (Heran et al, 2022) and with the population aging, more and more Canadians are at risk. This condition often has a significant impact on one’s functional ability, negatively affecting independence, employability, productivity, mental health and participation in the community.
The PoNS device has been used in clinical rehabilitation settings with over 480 patients since March 4, 2019 to treat balance and gait disorders with more than 180,000 patient sessions recorded.
The PoNS device has been used in clinical rehabilitation settings with over 798 patients since March 4, 2019 to treat balance and gait disorders with more than 247,000 patient sessions recorded, no serious device-related events have been recorded along with zero reported adverse events.
Our market authorization application comprised objective statistical evidence as well as independently reviewed clinical research analysis. This label expansion expanded our addressable market in Canada to include a patient population seeking treatment options that may resolve or delay the progression of MS gait deficit symptoms.
This label expansion expanded our addressable market in Canada to include a patient population seeking treatment options that may resolve or delay the progression of MS gait deficit symptoms.
Our workforce reflects talent from diverse perspectives. 31 Table of Contents Compensation, Benefits, Safety and Wellness In addition to offering market competitive salaries and wages, we offer comprehensive health benefits to eligible employees. ​ 32 Table of Contents
Compensation, Benefits, Safety and Wellness In addition to offering market competitive salaries and wages, we offer comprehensive health benefits to eligible employees. ​ 37 Table of Contents
In April 2019, we announced that the FDA had completed its review and had denied our request for de novo classification and clearance of the PoNS device for the treatment of balance deficit due to mmTBI.
This request was supported by data from two of our clinical trials in mmTBI, including our registrational trial, TBI-001. In April 2019, we announced that the FDA had completed its review and had denied our request for de novo classification and clearance of the PoNS device for the treatment of balance deficit due to mmTBI.
Therefore, though the two provisional applications have expired, they establish a priority date for U.S. Patent Nos. 8,909,345; 9,020,612; 9,656,078; 9,597,501; 9,597,504; 9,656,069; 10,293,163; 10,328,263; 11,185,696; and 11,285,325, U.S. Application No. 17/704,041, and any future filings that claim priority. We intend to file additional continuation applications in the United States Patent and Trademark Office, or USPTO, claiming priority to U.S.
Therefore, though the two provisional applications have expired, they establish a priority date for U.S. Patent Nos. 8,909,345; 9,020,612; 9,656,078; 9,597,501; 9,597,504; 9,656,069; 10,293,163; 10,328,263; 11,185,696; 11,285,325; and 12,064,629, and U.S. Application No. 18/773,984, and any future filings that claim priority.
There is also a well-established advocacy framework. Mobility disability and walking impairment are among the most debilitating consequences of MS with approximately 85% of individuals diagnosed with MS reporting gait impairment as a major limitation in their daily lives.
Mobility disability and walking impairment are among the most debilitating consequences of MS with approximately 72% of individuals diagnosed with MS reporting gait impairment as a major limitation in their daily lives (Williams et al, 2014).
Breakthrough Device Designation does not change the requirements for approval of an application for a marketing authorization.
Manufacturers can also expect prioritized review of their submission. Breakthrough Device Designation does not change the requirements for approval of an application for a marketing authorization.
Product Development, Manufacturing and Logistics Services The commercial design of the PoNS device is currently manufactured and assembled by Key Tronic Corporation (“Key Tronic”), our contract manufacturing partner since 2017, at its facility located in Oakdale, Minnesota. Key Tronic manufactures devices for engineering and design verification testing and for our FDA submission as well as commercial devices for launch inventory.
Product Development, Manufacturing and Logistics Services The commercial design of the PoNS device was originally manufactured and assembled by Key Tronic Corporation (“Key Tronic”), our contract manufacturing partner since 2017, at its facility located in Oakdale, Minnesota.
The FDA Review, Clearance and Approval Processes Unless an exemption applies, each medical device commercially distributed in the U.S. requires either FDA clearance of a 510(k) premarket notification, approval of a premarket approval, or PMA, or approval of a de novo application.
These include the Food, Drug, and Cosmetic, or FD&C Act and the FDA’s implementation of regulations, among others. 27 Table of Contents The FDA Review, Clearance and Approval Processes Unless an exemption applies, each medical device commercially distributed in the U.S. requires either FDA clearance of a 510(k) premarket notification, approval of a premarket approval, or PMA, or approval of a de novo application.
Based on the receipt of the FDA’s final minutes from the pre-submission meeting, we are assessing the feasibility of a clinical program to advance the development of a study aimed to obtain clearance for gait and balance deficits in mmTBI if nondilutive financing to fund the program becomes available.
In its feedback, the FDA provided post-meeting notes with specific recommendations regarding the trial design that were not discussed in the October 2019 pre-submission meeting. 14 Table of Contents Based on the receipt of the FDA’s final minutes from the pre-submission meeting, we are assessing the feasibility of a clinical program to advance the development of a study aimed to obtain clearance for gait and balance deficits in mmTBI if nondilutive financing to fund the program becomes available.
On July 20, 2018, we reincorporated from the state of Wyoming to the state of Delaware. Acquisitions On June 13, 2014, we acquired NeuroHabilitation Corporation (“NHC”) and on December 21, 2018, NHC changed its name to Helius Medical, Inc. HMI is our operating subsidiary in the United States.
Acquisitions, Mergers and Dissolutions On June 13, 2014, we acquired NeuroHabilitation Corporation (“NHC”) and on December 21, 2018, NHC changed its name to Helius Medical, Inc. HMI is our operating subsidiary in the United States. On October 30, 2019, we acquired Heuro, a company incorporated under the federal laws of Canada.
The goal of the Breakthrough Devices Program is to provide patients and health care providers with timely access to these medical devices by speeding up their development, assessment, and review, while preserving the statutory standards for premarket approval, 510(k) clearance, and de novo classification and clearance, consistent with FDA’s mission to protect and promote public health.
The goal of the Breakthrough Devices Program is to provide patients and health care providers with timely access to these medical devices by speeding up their development, assessment, and review, while preserving the statutory standards for premarket approval, 510(k) clearance, and de novo classification and clearance, consistent with FDA’s mission to protect and promote public health. 13 Table of Contents The Breakthrough Devices Program offers manufacturers an opportunity to interact with the FDA to efficiently address topics as they arise during the premarket review phase, which can help manufacturers receive feedback from the FDA and identify areas of agreement in a timely way.
On February 29, 2024, we received Healthcare Common Procedure Coding System (HCPCS) codes for the PoNS controller and for the PONS mouthpiece, which will become effective on April 1, 2024.
On February 29, 2024, we received Healthcare Common Procedure Coding System (HCPCS) codes for the PoNS controller and for the PONS mouthpiece, which became effective on April 1, 2024. We also intend to provide broad access and reimbursement for the PoNS Therapy over time through commercial insurers.
Commercialization Canadian Commercialization Efforts In March 2019, we commenced the commercialization of our PoNS Therapy in Canada, where PoNS became the first and only device authorized by Health Canada for the treatment of balance deficit due to mmTBI.
In general, we anticipate that it will take at least 24 months to obtain broad coverage and reimbursement among government and private payers. 17 Table of Contents Canadian Commercialization Efforts In March 2019, we commenced the commercialization of our PoNS Therapy in Canada, where PoNS became the first and only device authorized by Health Canada for the treatment of balance deficit due to mmTBI.
During the year ended December 31, 2023, we authorized 22 new clinical locations to have 81 clinic locations across Canada as of December 31, 2023. In addition to continuing to increase the number of clinic locations, we have shifted our focus to driving patient throughput to these clinics.
In addition to continuing to increase the number of clinic locations, we have shifted our focus to driving patient throughput to these clinics.
In the U.S., numerous laws and regulations govern all the processes by which medical devices are brought to market and marketed. These include the Food, Drug, and Cosmetic, or FD&C Act and the FDA’s implementation of regulations, among others.
In the U.S., numerous laws and regulations govern all the processes by which medical devices are brought to market and marketed.

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Item 1A. Risk Factors

Risk Factors — what could go wrong, per management

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Biggest changeIf the FDA requires us to go through a lengthier, more rigorous examination for the PoNS device for any of these indications or any other indications we may pursue, as it has for the PoNS device in the indication for mmTBI, introducing the product could be delayed or canceled, which would cause our launch to be delayed or cancelled.
Biggest changeMoreover, in addition to continuing our pursuit of an indication for stroke and mmTBI with the FDA, we are currently considering the development of the PoNS device for other potential indications, including cerebral palsy, Parkinson’s disease, baby boomers balance, and neurological wellness, as well as expanding the label of our current indications. 43 Table of Contents If the FDA requires us to go through a lengthier, more rigorous examination for the PoNS device for any of these indications or any other indications we may pursue, as it has for the PoNS device in the indication for mmTBI, introducing the product could be delayed or canceled, which would cause our launch to be delayed or cancelled.
Similar to the federal healthcare Anti-Kickback Statute, a person or entity does not need to have actual knowledge of the statute or specific intent to violate it to have committed a violation. ● The federal Physician Payment Sunshine Act, implemented as the Open Payments Program, requires certain manufacturers of drugs, devices, biologics, and medical supplies for which payment is available under Medicare, Medicaid or the Children’s Health Insurance Program (with certain exceptions) to report annually to the Centers for Medicare and Medicaid Services information related to payments and other transfers of value, directly or indirectly, to physicians, physician assistants, nurse practitioners, clinical nurse specialists, certified nurse anesthetists, and certified nurse midwives, and teaching hospitals, as well as ownership and investment interests held by physicians and their immediate family members. ● Analogous state laws and regulations, such as state anti-kickback and false claims laws, may apply to sales or marketing arrangements and claims involving healthcare items or services reimbursed by any third-party payors, including private insurers or patients.
Similar to the federal healthcare Anti-Kickback Statute, a person or entity does not need to have actual knowledge of the statute or specific intent to violate it to have committed a violation. ● The federal Physician Payment Sunshine Act, implemented as the Open Payments Program, requires certain manufacturers of drugs, devices, biologics, and medical supplies for which payment is available under Medicare, Medicaid or the Children’s Health Insurance Program (with certain exceptions) to report annually to the Centers for Medicare and Medicaid Services information related to payments and other transfers of value, directly or indirectly, to physicians, physician assistants, nurse practitioners, clinical nurse specialists, certified nurse anesthetists, and certified nurse midwives, and teaching hospitals, as well as ownership and investment interests held by physicians and their immediate family members. ● Analogous state laws and regulations, such as state anti-kickback and false claims laws, may apply to sales or marketing arrangements and claims involving healthcare items or services reimbursed by any third-party payers, including private insurers or patients.
Penalties for violations of the Anti-Kickback Statute include, but are not limited to, criminal, civil and/or administrative penalties, damages, fines, disgorgement, individual imprisonment, possible exclusion from Medicare, Medicaid and other federal healthcare programs, and the curtailment or restructuring of operations. ● The federal civil False Claims Act prohibits, among other things, knowingly presenting, or causing to be presented, claims for payment of government funds that are false or fraudulent, or knowingly making, or using or causing to be made or used, a false record or statement material to an obligation to pay money to the 42 Table of Contents government, or false or fraudulent claim to knowingly and improperly avoiding, decreasing, or concealing an obligation to pay money to the federal government.
Penalties for violations of the Anti-Kickback Statute include, but are not limited to, criminal, civil and/or administrative penalties, damages, fines, disgorgement, individual imprisonment, possible exclusion from Medicare, Medicaid and other federal healthcare programs, and the curtailment or restructuring of operations. ● The federal civil False Claims Act prohibits, among other things, knowingly presenting, or causing to be presented, claims for payment of government funds that are false or fraudulent, or knowingly making, or using or causing to be made or used, a false record or statement material to an obligation to pay money to the 48 Table of Contents government, or false or fraudulent claim to knowingly and improperly avoiding, decreasing, or concealing an obligation to pay money to the federal government.
Criminal penalties, including imprisonment and criminal fines, are also possible for making or presenting a false, fictitious or fraudulent claim to the federal government. ● HIPAA, among other things, imposes criminal and civil liability for knowingly and willfully executing a scheme to defraud any healthcare benefit program, including private third party payors, knowingly and willfully falsifying, concealing or covering up a material fact or making any materially false, fictitious or fraudulent statement or representation, or making or using any false writing or document knowing the same to contain any materially false fictitious or fraudulent statement or entry in connection with the delivery of or payment for healthcare benefits, items or services.
Criminal penalties, including imprisonment and criminal fines, are also possible for making or presenting a false, fictitious or fraudulent claim to the federal government. ● HIPAA, among other things, imposes criminal and civil liability for knowingly and willfully executing a scheme to defraud any healthcare benefit program, including private third party payers, knowingly and willfully falsifying, concealing or covering up a material fact or making any materially false, fictitious or fraudulent statement or representation, or making or using any false writing or document knowing the same to contain any materially false fictitious or fraudulent statement or entry in connection with the delivery of or payment for healthcare benefits, items or services.
In addition, if our common stock is delisted from the Nasdaq Capital Market and the trading price remains below $5.00 per share, trading in our common stock might also become subject to the requirements of certain rules promulgated under the Exchange Act, which require additional disclosure by broker-dealers in connection with any trade involving a stock defined as a “penny stock” (generally, any equity security not listed on a national securities exchange or quoted on Nasdaq that has a market price of less than $5.00 per share, subject to certain exceptions).
In addition, if our common stock is delisted from the Nasdaq Capital Market and the trading price remains below $5.00 per share, trading in our common stock might also become subject to the requirements of certain rules promulgated under the Exchange Act, which require additional disclosure by broker-dealers in connection with any trade involving a stock defined as a “penny stock” (generally, any equity security not listed on a national securities exchange that has a market price of less than $5.00 per share, subject to certain exceptions).
In addition, our manufacturers have experienced and could continue to experience difficulties in securing long-lead time components, achieving volume production, quality control and quality assurance or suffer shortages of qualified personnel, or fail to follow and remain in compliance with the FDA-mandated Quality System Regulations, or QSR, compliance which is required for all medical devices, or fail to document their compliance to the QSR, any of which could result in their inability to manufacture sufficient quantities of our commercially available product to meet market demand or lead to significant delays in the availability of materials for our product and/or FDA enforcement actions against them and/or us.
In addition, our manufacturers have experienced and could continue to experience difficulties in securing long-lead time components, achieving volume production, quality control and quality assurance or suffer shortages of qualified personnel, or fail to follow and remain in compliance with the FDA-mandated Quality System Regulations, or QSR, compliance which is required for all medical devices, or fail to document their compliance to the QSR, any of which could result in their inability to manufacture sufficient quantities of our commercially available 41 Table of Contents product to meet market demand or lead to significant delays in the availability of materials for our product and/or FDA enforcement actions against them and/or us.
We may be subject to liability based on the actions of individual employees and third-party contractors carrying out activities on our behalf. 43 Table of Contents Even after marketing authorization and/or certification for our product is obtained, we are subject to extensive post-market regulation by the FDA and equivalent foreign competent authorities.
We may be subject to liability based on the actions of individual employees and third-party contractors carrying out activities on our behalf. 49 Table of Contents Even after marketing authorization and/or certification for our product is obtained, we are subject to extensive post-market regulation by the FDA and equivalent foreign competent authorities.
In Europe, we are developing the PoNS device for use in the 34 Table of Contents neuromodulation market, but we cannot begin marketing and selling the device in Europe until we obtain applicable CE certificate of conformity from a notified body in the EU after successful completion of a conformity assessment procedure.
In Europe, we are developing the PoNS device for use in the neuromodulation market, but we cannot begin marketing and selling the device in Europe until we obtain applicable CE 39 Table of Contents certificate of conformity from a notified body in the EU after successful completion of a conformity assessment procedure.
Until we can generate significant revenue from product sales, if ever, we expect to finance our operations through the sale of equity, debt financings, or other capital sources, including 33 Table of Contents potential collaborations with other companies or other strategic transactions.
Until we can generate significant revenue from product sales, if ever, we expect to finance our operations through the sale of equity, debt financings, or other capital sources, including 38 Table of Contents potential collaborations with other companies or other strategic transactions.
We cannot be certain that, upon inspection, such regulatory authorities will determine that any of our clinical trials comply with the cGCP 40 Table of Contents regulations. In addition, our clinical trials may be required to be conducted with a large number of test patients.
We cannot be certain that, upon inspection, such regulatory authorities will determine that any of our clinical trials comply with the cGCP 46 Table of Contents regulations. In addition, our clinical trials may be required to be conducted with a large number of test patients.
The FDA and foreign regulatory bodies have the authority to require the recall of commercialized products in the event of material deficiencies or defects in design or manufacture of a product or in the event that a product poses an 44 Table of Contents unacceptable risk to health.
The FDA and foreign regulatory bodies have the authority to require the recall of commercialized products in the event of material deficiencies or defects in design or manufacture of a product or in the event that a product poses an 50 Table of Contents unacceptable risk to health.
If any analyst who may cover us were to cease coverage of our company or fail to regularly publish reports on us, we could lose visibility in the financial markets, which in turn could cause our stock price or trading volume to decline. General Risks We have not paid any dividends and do not foresee paying dividends in the future.
If any analyst who may cover us were to cease coverage of our company or fail to regularly publish reports on us, we could lose visibility in the financial markets, which in turn could cause our stock price or trading volume to decline. 57 Table of Contents General Risks We have not paid any dividends and do not foresee paying dividends in the future.
Unfavorable coverage or reimbursement 41 Table of Contents decisions by government programs or private payers underscore the uncertainty that our products face in the market and could have a material adverse effect on our business.
Unfavorable coverage or reimbursement 47 Table of Contents decisions by government programs or private payers underscore the uncertainty that our products face in the market and could have a material adverse effect on our business.
In addition, if the neuromodulation market 35 Table of Contents fails to become more integrated in neurological therapy, it could have a materially adverse effect on our business and financial position.
In addition, if the neuromodulation market 40 Table of Contents fails to become more integrated in neurological therapy, it could have a materially adverse effect on our business and financial position.
In connection with our management’s assessment, our report from our independent registered public accounting firm for the fiscal year ended December 31, 2023 includes an explanatory paragraph stating that our recurring losses from operations and net capital deficiency raise substantial doubt about our ability to continue as a going concern.
In connection with our management’s assessment, our report from our independent registered public accounting firm for the year ended December 31, 2024 includes an explanatory paragraph stating that our recurring losses from operations and net capital deficiency raise substantial doubt about our ability to continue as a going concern.
The existence of one or more material weaknesses could affect the accuracy and timing of our financial reporting. Investors could lose confidence in our financial reports, and the value of our common stock may be harmed, if our internal controls over financial reporting are found not to be effective by management or by our independent registered public accounting firm.
The existence of one or more material weaknesses could affect the accuracy and timing of our financial reporting. 53 Table of Contents Investors could lose confidence in our financial reports, and the value of our common stock may be harmed, if our internal controls over financial reporting are found not to be effective by management or by our independent registered public accounting firm.
There can be no assurance that we will be able to maintain compliance or, if we fall out of compliance, regain compliance with any deficiency, or if we implement an option that regains our compliance, maintain compliance thereafter. An active trading market for our common stock on The Nasdaq Capital Market may not continue to develop or be sustained.
There can be no assurance that we will be able to maintain compliance or, if we fall out of compliance, regain compliance with any deficiency, or if we implement an option that regains our compliance, maintain compliance thereafter. 55 Table of Contents An active trading market for our common stock on The Nasdaq Capital Market may not continue to develop or be sustained.
If we do not control our operating expenses, then we will have fewer funds with which to carry out our plan of operations with the result that our business may fail. Our ability to use net operating losses to offset future taxable income may be subject to certain limitations.
If we do not control our operating expenses, then we will have fewer funds with which to carry out our plan of operations with the result that our business may fail. 52 Table of Contents Our ability to use net operating losses to offset future taxable income may be subject to certain limitations.
The price of our common stock may increase or decrease in response to a number of events and factors, including: changes in financial estimates; our acquisitions and financings; quarterly 49 Table of Contents variations in our operating results; the operating and share price performance of other companies that investors may deem comparable; and purchase or sale of blocks of our common stock.
The price of our common stock may increase or decrease in response to a number of events and factors, including: changes in financial estimates; our acquisitions and financings; quarterly variations in our operating results; the operating and share price performance of other companies that investors may deem comparable; and purchase or sale of blocks of our common stock.
Such changes could result in an increase in the effective tax rate applicable to all or a portion of our income, impose new limitations on deductions, credits or other tax benefits or make other changes that may adversely affect our business, cash flows or financial performance.
Such changes could result in an increase in the effective tax rate applicable to all or a portion of our income, impose new limitations on deductions, credits or other tax benefits or make other changes that may adversely affect our business, 54 Table of Contents cash flows or financial performance.
For example, if the FDA disagrees with our determination that the de novo classification procedures 38 Table of Contents are the appropriate path to obtain marketing authorization for the PoNS device, the FDA may require us to submit a PMA application, which is generally more costly and more burdensome and can take several years from the time the application is submitted to the FDA until an approval is obtained.
For example, if the FDA disagrees with our determination that the de novo classification procedures are the appropriate path to obtain marketing authorization for the PoNS device, the FDA may require us to submit a PMA application, which is generally more costly and more burdensome and can take several years from the time the application is submitted to the FDA until an approval is obtained.
Our success is dependent upon the ability, expertise and judgment of our senior management. While employment agreements are customarily used as a primary method of retaining the services 51 Table of Contents of key employees, these agreements cannot assure the continued services of such employees.
Our success is dependent upon the ability, expertise and judgment of our senior management. While employment agreements are customarily used as a primary method of retaining the services of key employees, these agreements cannot assure the continued services of such employees.
We will require additional financing to carry out our plan of operations and if we are unable to obtain such financing, our business may fail. During the year ended December 31, 2023, we generated approximately $0.6 million in revenue from the commercial sales of products in the United States and Canada.
We will require additional financing to carry out our plan of operations and if we are unable to obtain such financing, our business may fail. During the year ended December 31, 2024, we generated approximately $0.5 million in revenue from the commercial sales of products in the United States and Canada.
For example, stockholders who do bring a claim in the Court of Chancery could face 50 Table of Contents additional litigation costs in pursuing any such claim, particularly if they do not reside in or near the State of Delaware.
For example, stockholders who do bring a claim in the Court of Chancery could face additional litigation costs in pursuing any such claim, particularly if they do not reside in or near the State of Delaware.
We believe our existing capital resources will be sufficient to fund our operations through the second quarter of 2024. We also expect our expenses to increase as we continue to conduct trials of PoNS Therapy® and as we pursue further regulatory approvals, and maintain, expand and protect our intellectual property portfolio.
We believe our existing capital resources will be sufficient to fund our operations into the second quarter of 2025. We also expect our expenses to increase as we continue to conduct trials of PoNS Therapy® and as we pursue further regulatory approvals, and maintain, expand and protect our intellectual property portfolio.
We do not know if any future patent application will be issued with the scope of the claims we seek, if at all or whether any patents we receive will be challenged or invalidated.
We may seek additional patents in the future. We do not know if any future patent application will be issued with the scope of the claims we seek, if at all or whether any patents we receive will be challenged or invalidated.
While we had $5.2 million of cash as of December 31, 2023, we do not currently have sufficient resources to accomplish all of the above conditions necessary for us to generate sufficient revenues to achieve profitability, and we will require additional financing to fund our operations beyond the second quarter of 2024.
We had $1.1 million of cash as of December 31, 2024, and we do not currently have sufficient resources to accomplish all of the above conditions necessary for us to generate sufficient revenues to achieve profitability, and we will require additional financing to fund our operations beyond the second quarter of 2025.
Global economic conditions in recent years have been volatile and disruptive due a number of factors such as geopolitical conflicts including those in Ukraine and in the Middle East, disruptions in the banking system and financial markets, supply chain disruptions, labor shortages, increased inflation and sustained high interest rates.
Global economic conditions in recent years have been volatile and disruptive due a number of factors such as geopolitical conflicts including those in Ukraine and in the Middle East, disruptions in the banking system and financial markets, supply chain disruptions, labor shortages, increased inflation, sustained high interest rates and unpredictable trade policies, including tariffs, customs regulations and other trade restrictions.
Any changes in the laws or regulations that govern the clearance and approval processes relating to our current, planned and future products could make it more difficult and costly to obtain clearance or approval for new products or to 45 Table of Contents produce, market and distribute existing products.
Any change in the laws or regulations that govern the clearance and approval processes relating to our current and future products could make it more difficult and costly to obtain clearance or approval for new products, or to produce, market and distribute existing products.
The cumulative impact of these and other changes in tax law is uncertain and our business and financial condition could be adversely affected.
The cumulative impact of these and other changes in tax law is uncertain and our business and financial condition could be adversely affected. The impact of these changes on holders of our securities is also uncertain and could be adverse.
If our facilities or those of our manufacturers or suppliers are found to be in violation of applicable laws and regulations, or if we or our manufacturers or suppliers fail to take satisfactory corrective action in response to an adverse inspection, the regulatory authority could take enforcement action, including any of the following sanctions: ● untitled letters, warning letters, fines, injunctions, consent decrees and civil penalties; ● customer notifications of repair, replacement, refunds, detention or seizure of our products; ● product recalls; ● operating restrictions or partial suspension or total shutdown of production; ● refusing or delaying requests for marketing authorization of new products or modified products; ● withdrawing marketing authorizations that have already been granted; ● refusing to provide Certificates for Foreign Government; ● refusing to grant export approval for our products; or ● pursuing criminal prosecution.
If our facilities or those of our manufacturers or suppliers are found to be in violation of applicable laws and regulations, or if we or our manufacturers or suppliers fail to take satisfactory corrective action in response to an adverse inspection, the regulatory authority could take enforcement action, including any of the following sanctions: ● untitled letters, warning letters, fines, injunctions, consent decrees and civil penalties; ● customer notifications of repair, replacement, refunds, detention or seizure of our products; ● product recalls; ● operating restrictions or partial suspension or total shutdown of production; ● refusing or delaying requests for marketing authorization of new products or modified products; ● withdrawing marketing authorizations that have already been granted; ● refusing to provide Certificates for Foreign Government; ● refusing to grant export approval for our products; or ● pursuing criminal prosecution. 44 Table of Contents Regulatory enforcement or inquiries, or other increased scrutiny on us, could affect the perceived safety and efficacy of our product candidate and dissuade our customers from using our product candidate, if and when it is authorized for marketing.
Additionally, we depend on a different third-party distribution partner to warehouse and ship our products to customers. Our reliance on a third-party manufacturer and a distribution provider to supply us with our PoNS device and to provide such other distribution services exposes us to risks that could delay our sales or result in higher costs or lost product revenues.
Our reliance on a third-party manufacturer and a distribution provider to supply us with our PoNS device and to provide such other distribution services exposes us to risks that could delay our sales or result in higher costs or lost product revenues.
For the years ended December 31, 2023 and 2022, we incurred a net loss of $8.9 million and $14.1 million, respectively, and used cash in operating activities of $10.4 million and $14.3 million, respectively. We have an accumulated deficit of $160.0 million as of December 31, 2023.
For the years ended December 31, 2024 and 2023, we incurred a net loss of $11.7 million and $8.9 million, respectively, and used cash in operating activities of $11.1 million and $10.4 million, respectively. We have an accumulated deficit of $171.7 million as of December 31, 2024.
Generally, global macroeconomic conditions remain uncertain, largely due to the effects of geopolitical conflicts in the Ukraine and in the Middle East, disruptions in the banking system and financial markets, increased inflation and sustained high interest rates.
Generally, global macroeconomic conditions remain uncertain, largely due to the effects of geopolitical conflicts in the Ukraine and in the Middle East, disruptions in the banking system and financial markets, increased inflation, sustained high interest rates and unpredictable trade policies, including tariffs, customs regulations and other trade restrictions.
If we determine that an ownership change has occurred, the limitations on the use of our NOLs could increase our U.S. federal and state tax liability and reduce the amount of cash available for distribution to shareholders or otherwise adversely affect the value of an investment in our common stock or warrants. 46 Table of Contents As a result of the use of our product in clinical trials, and through the sale of our products, we may be liable for product liability claims and we may not carry sufficient product liability insurance.
If we determine that an ownership change has occurred, the limitations on the use of our NOLs could increase our U.S. federal and state tax liability and reduce the amount of cash available for distribution to shareholders or otherwise adversely affect the value of an investment in our common stock or warrants.
An adverse outcome in any such litigation or proceeding could subject us to significant liabilities, require us to cease using the subject technology or require us to license the subject technology from the third party, all of which could have a material adverse effect on our business. 37 Table of Contents There are risks to our intellectual property based on our international business operations.
Any potential litigation could result in substantial costs to, and diversion of, our resources and could have a material and adverse impact on us. 42 Table of Contents An adverse outcome in any such litigation or proceeding could subject us to significant liabilities, require us to cease using the subject technology or require us to license the subject technology from the third party, all of which could have a material adverse effect on our business.
Our charter documents also contain other provisions that could have an anti-takeover effect, including: ● stockholders are not entitled to remove directors other than by a 66 2 ⁄ 3 % vote and only for cause; ● stockholders are not be permitted to take actions by written consent; ● stockholders cannot call a special meeting of stockholders; and ● stockholders must give advance notice to nominate directors or submit proposals for consideration at stockholder meetings.
Our charter documents also contain other provisions that could have an anti-takeover effect, including: ● stockholders are not entitled to remove directors other than by a 66 2 ⁄ 3 % vote and only for cause; ● stockholders are not be permitted to take actions by written consent; ● stockholders cannot call a special meeting of stockholders; and ● stockholders must give advance notice to nominate directors or submit proposals for consideration at stockholder meetings. 56 Table of Contents In addition, we are subject to the anti-takeover provisions of Section 203 of the Delaware General Corporation Law, which regulates corporate acquisitions by prohibiting Delaware corporations from engaging in specified business combinations with particular stockholders of those companies.
Additionally, technologies developed by our competitors may render the PoNS device uneconomical or obsolete. Risks Related to our Reliance on Third Parties We are, and will continue to be, dependent in significant part on outside scientists and third-party research institutions for our research and development in order to be able to commercialize our product.
Risks Related to our Reliance on Third Parties We are, and will continue to be, dependent in significant part on outside scientists and third-party research institutions for our research and development in order to be able to commercialize our product. We rely, and will continue to rely, on third-party research institutions, collaborators and consultants.
We rely, and will continue to rely, on third-party research institutions, collaborators and consultants. Such third-party research institutions, collaborators and consultants may determine to cease providing services to us at any time, which would delay our product development and commercialization efforts.
Such third-party research institutions, collaborators and consultants may determine to cease providing services to us at any time, which would delay our product development and commercialization efforts. We depend on third parties for the manufacture and distribution of our product and the loss of our third-party manufacturer and distributor could harm our business.
In some cases, litigation or other proceedings may be necessary to defend against or assert claims of infringement or to determine the scope and validity of the proprietary rights of third parties. Any potential litigation could result in substantial costs to, and diversion of, our resources and could have a material and adverse impact on us.
In some cases, litigation or other proceedings may be necessary to defend against or assert claims of infringement or to determine the scope and validity of the proprietary rights of third parties.
They could also have the effect of discouraging others from making tender offers for our common stock, including transactions that may be in your best interests. These provisions may also prevent changes in our management or limit the price that investors are willing to pay for our stock.
These provisions could discourage potential acquisition proposals and could delay or prevent a change of control transaction. They could also have the effect of discouraging others from making tender offers for our common stock, including transactions that may be in your best interests.
Our common stock is listed on the Nasdaq Capital Market under the symbol “HSDT”. In order to maintain that listing, we must satisfy minimum financial and other requirements including, without limitation, the minimum stockholders equity requirement and the minimum bid price requirement.
In order to maintain that listing, we must satisfy minimum financial and other requirements including, without limitation, the minimum stockholders’ equity requirement and the minimum bid price requirement.
If we are unable to obtain adequate supplies of our product that meet our specifications and quality standards, it will be difficult for us to compete effectively. While we have supply and quality agreements in place with our manufacturer, they may change the terms of our future orders or choose not to supply us with products in the future.
While we have supply and quality agreements in place with our manufacturer, they may change the terms of our future orders or choose not to supply us with products in the future.
Despite our precautions, unauthorized third parties may copy certain portions of our devices or products or reverse engineer or obtain and use information that we regard as proprietary. We may seek additional patents in the future.
We regard our intended and future intellectual property as important to our success, and we intend to rely on patent law to protect our proprietary rights. Despite our precautions, unauthorized third parties may copy certain portions of our devices or products or reverse engineer or obtain and use information that we regard as proprietary.
The impact of these changes on holders of our securities is also uncertain and could be adverse. 48 Table of Contents Risks Related to Our Common Stock We could be delisted from The Nasdaq Capital Market, which could seriously harm the liquidity of our stock and our ability to raise capital.
Risks Related to Our Common Stock We could be delisted from The Nasdaq Capital Market, which could seriously harm the liquidity of our stock and our ability to raise capital or complete a strategic transaction. Our common stock is listed on the Nasdaq Capital Market under the symbol “HSDT”.
Risks Related to our Business Operations Worldwide economic and social instability could adversely affect our revenue, financial condition, or results of operations. The health of the global economy as well as the stability of the social fabric of our society affects our business and operating results.
The health of the global economy as well as the stability of the social fabric of our society affects our business and operating results.
Regulatory enforcement or inquiries, or other increased scrutiny on us, could affect the perceived safety and efficacy of our product candidate and dissuade our customers from using our product candidate, if and when it is authorized for marketing. 39 Table of Contents We have in the past and may be required to conduct clinical trials to support a de novo submission or PMA application for the PoNS device with respect to one or more indications and we expect to be required to conduct clinical trials to support regulatory marketing authorization for future product candidates.
Such funding cuts may also delay the development and approval of new indications for PoNS. ​ 45 Table of Contents We have in the past and may be required to conduct clinical trials to support a de novo submission or PMA application for the PoNS device with respect to one or more indications and we expect to be required to conduct clinical trials to support regulatory marketing authorization for future product candidates.
We depend on third parties for the manufacture and distribution of our product and the loss of our third-party manufacturer and distributor could harm our business. We depend on our third-party contract manufacturing partner to manufacture and supply our PoNS device for clinical and commercial purposes.
We depend on our third-party contract manufacturing partner to manufacture and supply our PoNS device for clinical and commercial purposes. Additionally, we depend on a different third-party distribution partner to warehouse and ship our products to customers.
Because of these relationships, some of the persons who provide services to us may be subject to conflicts of interest.
Because of these relationships, some of the persons who provide services to us may be subject to conflicts of interest. Such conflicts may include deciding how much time to devote to our affairs, as well as what business opportunities should be presented to us.
Such conflicts may include deciding how much time to devote to our affairs, as well as what business opportunities should be presented to us. 47 Table of Contents Our business and operations would suffer in the event of computer system failures, cyber-attacks or a deficiency in our cyber-security.
Our business and operations would suffer in the event of computer system failures, cyber-attacks or a deficiency in our cyber-security.
The delays associated with the verification of a new manufacturer or the reverification of an existing manufacturer could negatively affect our ability to produce and distribute our product in a timely manner. 36 Table of Contents We are currently in the process of transitioning our manufacturing functions to a new contract manufacturer and any delays in the manufacturing process as a result of this transition could harm our business.
The delays associated with the verification of a new manufacturer or the reverification of an existing manufacturer could negatively affect our ability to produce and distribute our product in a timely manner. Risks Related to Intellectual Property If our intellectual property protection is inadequate, competitors may gain access to our technology and undermine our competitive position.
Removed
During the third quarter of 2023, the Company began implementing the transition of the manufacturing of PoNS device controllers and mouthpieces from its third-party contract manufacturing partner, Key Tronic Corporation, to Minnetronix, Inc.
Added
Additionally, technologies developed by our competitors may render the PoNS device uneconomical or obsolete. Our product is currently made available to authorized users of the Department of Veterans Affairs Federal Supply Schedule and if we were no longer eligible to sell our products through such channel, our business may be adversely affected.
Removed
The Company expects this transition to be fully completed by mid-2024, but it is possible that completing the transition could create delays or disruptions in the manufacturing process, or could affect the performance specifications of our PoNS device. Any delays or disruptions in the manufacturing of our PoNS device during the completion of this transition could negatively impact our business.
Added
Our PoNS device is eligible for reimbursement by the Department of Veterans Affairs and included on the Federal Supply Schedule pricing program. We must comply with additional laws and requirements applicable to our operations and manufacturing processes in order to remain eligible for this program. Our PoNS device is available for purchase by the Department of Veterans Affairs off contract.
Removed
The occurrence of any delay, assurance of quality standards and applicable regulatory requirements and any terms that our new contract manufacturer may require us, could harm our ability to meet the demand for our products in a timely and cost-effective manner, which could have a material adverse effect on our business, financial condition and results of operations.
Added
If we were to lose eligibility for reimbursement by the Department of Veterans Affairs, our business, financial condition and results of operations could be adversely affected. Additionally, in February 2025, large layoffs were conducted in the Department of Veterans Affairs, which could significantly delay and impede our interactions with the Department of Veterans Affairs.
Removed
Risks Related to Intellectual Property If our intellectual property protection is inadequate, competitors may gain access to our technology and undermine our competitive position. We regard our intended and future intellectual property as important to our success, and we intend to rely on patent law to protect our proprietary rights.
Added
Production of therapeutic products may require raw materials for which the sources and amount of supply are limited or may be hindered by quality or scheduling issues in respect of the third-party suppliers over which the Company has limited control.
Removed
Moreover, in addition to continuing our pursuit of an indication for stroke and mmTBI with the FDA, we are currently considering the development of the PoNS device for other potential indications, including cerebral palsy, Parkinson’s disease, baby boomers balance, and neurological wellness, as well as expanding the label of our current indications.
Added
An inability to obtain adequate supplies of raw materials could significantly delay the development, regulatory approval and sales and marketing of a product. If we are unable to obtain adequate supplies of our product that meet our specifications and quality standards, it will be difficult for us to compete effectively.
Removed
In addition, we are subject to the anti-takeover provisions of Section 203 of the Delaware General Corporation Law, which regulates corporate acquisitions by prohibiting Delaware corporations from engaging in specified business combinations with particular stockholders of those companies. These provisions could discourage potential acquisition proposals and could delay or prevent a change of control transaction.
Added
There are risks to our intellectual property based on our international business operations.
Added
Once commercialized, modifications to our marketed products may require new 510(k) clearances or approval of PMA supplements or may require us to cease marketing or recall the modified products until clearances or regulatory approvals are obtained.
Added
Modifications to any of our products once they are commercialized may require new regulatory approvals or clearances, including 510(k) clearances or approval of PMAs or PMA supplements, or require us to recall or cease marketing the modified systems until these clearances or approvals are obtained.
Added
The FDA requires device manufacturers to initially make and document a determination of whether or not a modification requires a new approval, supplement or clearance. A manufacturer may determine that a modification could not affect safety or efficacy and does not represent a major change in its intended use, so that no new clearance or approval is necessary.
Added
However, the FDA can review a manufacturer’s decision and may disagree. The FDA may also on its own initiative determine that a new clearance or approval of a PMA supplement is required. We may make modifications in the future that we believe do not or will not require additional clearances or approvals.
Added
If the FDA disagrees and requires new clearances or approvals for the modifications, we may be required to recall and to stop marketing our products as modified, which could require us to redesign our products and/or seek new marketing authorizations and harm our operating results. In these circumstances, we may be subject to significant enforcement actions.
Added
The transition to the new presidential administration could hinder the FDA’s ability to perform normal business functions on which our business may rely, which could negatively impact our business.
Added
The ability of the FDA to review and approve new products, provide feedback on clinical trials and development programs, meet with sponsors and otherwise review regulatory submissions can be affected by a variety of factors, including government budget and funding levels; ability to hire and retain key personnel and accept the payment of user fees; and statutory, regulatory, and policy changes, among other factors.
Added
Average review times at the agency may fluctuate as a result. In addition, government funding of other government agencies on which our operations may rely is subject to the political process, which is inherently fluid and unpredictable.
Added
Disruptions at the FDA may also increase the time necessary for market authorization submissions for additional indications for our product to be reviewed and/or approved by the FDA, which would adversely affect our business.
Added
For example, the Trump Administration has discussed several changes to the reach and oversight of the FDA, which could affect its relationship with the medical device industry and transparency in decision making.
Added
Additionally, over the last several years, the U.S. government has shut down multiple times and certain regulatory agencies, such as the FDA, have had to furlough critical FDA and other government employees and stop critical activities.
Added
If funding for the FDA is reduced, FDA priorities change, or a prolonged government shutdown occurs, it could significantly impact the ability of the FDA to timely review and process our regulatory submissions, which could have a material adverse effect on our business.
Added
Additionally, recent actions by the United States federal government have caused concern in the industry that this may occur. For example, beginning on February 13, 2025, the Department of Health and Human Services began firing a large number of its probationary employees, a category that includes new federal employees and employees recently promoted or transferred to new positions or agencies.
Added
Larger layoffs may follow, according to a memorandum issued by the Office of Personnel Management on February 26, 2025. These terminations, if they withstand legal challenges, may significantly delay and impede our interactions with FDA.
Added
Similar results may stem from the recent confirmed resignations of some senior FDA employees with responsibility for regulation of drugs and biologics, as well as possible future layoffs and resignations. There are also reports that the United States federal government intends to request Congress to reduce FDA funding in upcoming budgets.
Added
For example, In January of 2024, FDA issued a final rule to replace the QSR with the adoption of ISO 13485, known as the Quality Management System Regulation, or QMSR.
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The new rule comes into effect in February if 2026. 51 Table of Contents Any changes in the laws or regulations that govern the clearance and approval processes relating to our current, planned and future products could make it more difficult and costly to obtain clearance or approval for new products or to produce, market and distribute existing products.

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Item 1C. Cybersecurity

Cybersecurity — threats and controls disclosure

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Biggest changeThe Board receives reports and engages in regular discussions with management regarding the Company’s significant risk exposures resulting from material cybersecurity threats and the measures implemented to monitor and reasonably manage these risks. 52 Table of Contents Our Director of Information Technology leads our information security organization and reports to our Chief Executive Officer and Chief Financial Officer on matters related to cybersecurity who then in turn report to the Board of Directors any material information regarding such cybersecurity matters.
Biggest changeOur Director of Information Technology leads our information security organization and reports to our Chief Executive Officer and Chief Financial Officer on matters related to cybersecurity who then in turn report to the Board of Directors any material information regarding such cybersecurity matters.
We seek to engage reliable, reputable service providers and vendors that maintain cybersecurity programs, and we implement a vetting process to ensure that all third-party service providers and venders comply with our cybersecurity program requirements.
We seek to engage reliable, reputable service providers and vendors that maintain cybersecurity programs, and we implement a vetting process to ensure that all third-party service providers and vendors comply with our cybersecurity program requirements.
Depending on the environment, we implement and maintain various technical, physical, and organizational measures, processes, standards, and/or policies designed to manage and mitigate material risks from cybersecurity threats to our information systems and data, including risk assessments, incident detection and response, vulnerability management, disaster recovery and business continuity plans, internal controls within our accounting and financial reporting functions, encryption of data, network security controls, access controls, physical security, asset management, systems monitoring, vendor risk management program and employee training.
Depending on the environment, we implement and maintain various technical, physical, and organizational measures, processes, standards, and/or policies designed to manage and mitigate material risks from cybersecurity threats to our 58 Table of Contents information systems and data, including risk assessments, incident detection and response, vulnerability management, disaster recovery and business continuity plans, internal controls within our accounting and financial reporting functions, encryption of data, network security controls, access controls, physical security, asset management, systems monitoring, vendor risk management program and employee training.
Added
The Board receives reports and engages in regular discussions with management regarding the Company’s significant risk exposures resulting from material cybersecurity threats and the measures implemented to monitor and reasonably manage these risks.

Item 2. Properties

Properties — owned and leased real estate

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Biggest changeITEM 2. PROPERTIES The Company leases corporate office space in Newtown, Pennsylvania under an operating lease that expires in March 2025. The lease does not contain any options to extend. We believe our current facility is adequate for our needs.
Biggest changeITEM 2. PROPERTIES The Company leases corporate office space in Newtown, Pennsylvania under an operating lease. In January 2025, the Company entered into an agreement with the landlord to extend the term of such lease to expire in March 2026. The lease does not contain any options to extend. We believe our current facility is adequate for our needs.

Item 3. Legal Proceedings

Legal Proceedings — active lawsuits and investigations

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Biggest changeRegardless of the outcome, litigation can have an adverse impact on us because of defense and settlement costs, diversion of management resources and other factors. ITEM 4. MINE SAFETY DISCLOSURES Not applicable. ​ 53 Table of Contents PART II
Biggest changeRegardless of the outcome, litigation can have an adverse impact on us because of defense and settlement costs, diversion of management resources and other factors. ITEM 4. MINE SAFETY DISCLOSURES Not applicable. ​ 59 Table of Contents PART II

Item 4. Mine Safety Disclosures

Mine Safety Disclosures — required of mining issuers

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Biggest changeITEM 4. ​ MINE SAFETY DISCLOSURES ​ 53 ​ ​ ​ ​ ​ ​ ​ PART II ​ 54 ​ ​ ​ ​ ​ ITEM 5. ​ MARKET FOR REGISTRANT’S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES ​ 54
Biggest changeITEM 4. ​ MINE SAFETY DISCLOSURES ​ 59 ​ ​ ​ ​ ​ ​ ​ PART II ​ 60 ​ ​ ​ ​ ​ ITEM 5. ​ MARKET FOR REGISTRANT’S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES ​ 60

Item 5. Market for Registrant's Common Equity

Market for Common Equity — stock, dividends, buybacks

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Biggest changeITEM 5. MARKET FOR REGISTRANT’S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES Market Information Our common stock is traded on the Nasdaq under the symbol “HSDT”. Holders As of March 21, 2024, there were approximately 38 holders of record of our common stock.
Biggest changeITEM 5. MARKET FOR REGISTRANT’S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES Market Information Our common stock is traded on the Nasdaq Capital Market under the symbol “HSDT”. Holders As of March 18, 2025, there were approximately 37 holders of record of our common stock.
Dividend Policy We have never paid any cash dividends on our common stock and have no current plans to pay any cash dividends. Our current policy is to retain any future earnings for use in our business. Recent Sales of Unregistered Securities. None. ITEM 6. [Reserved] ​ ​ 54 Table of Contents
Dividend Policy We have never paid any cash dividends on our common stock and have no current plans to pay any cash dividends. Our current policy is to retain any future earnings for use in our business. Recent Sales of Unregistered Securities. None. ITEM 6. [Reserved] ​ ​ 60 Table of Contents

Item 7. Management's Discussion & Analysis

Management's Discussion & Analysis (MD&A) — revenue / margin commentary

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Biggest changeWe expect the transition to be fully completed by mid-2024. 57 Table of Contents Results of Operations The following table summarizes our results of operations for the years ended December 31, 2023 and 2022 (in thousands): ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Years Ended December 31, ​ ​ ​ 2023 2022 Change Revenue: ​ ​ ​ ​ Product sales, net: ​ ​ ​ ​ ​ ​ ​ ​ ​ United States ​ $ 324 ​ $ 318 ​ $ 6 Canada ​ ​ 281 ​ ​ 460 ​ ​ (179) Total product sales, net ​ ​ 605 ​ ​ 778 ​ ​ (173) Other revenue ​ 39 ​ 9 ​ 30 Total revenue ​ 644 ​ 787 ​ (143) Cost of revenue ​ 583 ​ 463 ​ 120 Gross profit ​ 61 ​ 324 ​ (263) Operating expenses: ​ ​ ​ Selling, general and administrative expenses ​ 9,271 ​ 10,640 ​ (1,369) Research and development expenses ​ 2,942 ​ 4,262 ​ (1,320) Amortization expense ​ 117 ​ 181 ​ (64) Goodwill and fixed asset impairment ​ ​ 159 ​ ​ 757 ​ ​ (598) Total operating expenses ​ 12,489 ​ 15,840 ​ (3,351) Loss from operations ​ (12,428) ​ (15,516) ​ 3,088 Nonoperating income (expense) ​ ​ ​ Interest income (expense), net ​ ​ 257 ​ ​ (834) ​ ​ 1,091 Change in fair value of derivative liability ​ 2,966 ​ 3,027 ​ (61) Foreign exchange (loss) gain ​ 275 ​ (756) ​ 1,031 Other income (expense), net ​ 80 ​ 7 ​ 73 Nonoperating income (expense), net ​ 3,578 ​ 1,444 ​ 2,134 Loss before provision for income taxes ​ ​ (8,850) ​ ​ (14,072) ​ ​ 5,222 Provision for income taxes ​ ​ — ​ ​ — ​ ​ — Net loss ​ $ (8,850) ​ $ (14,072) ​ $ 5,222 Year Ended December 31, 2023 Compared to Year Ended December 31, 2022 Revenue The decrease in total net product sales was primarily attributable to lower Canada product sales.
Biggest changeResults of Operations The following table summarizes our results of operations for the years ended December 31, 2024 and 2023 (in thousands): ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Years Ended December 31, ​ ​ ​ 2024 2023 Change Revenue: ​ ​ ​ ​ Product sales, net: ​ ​ ​ ​ ​ ​ ​ ​ ​ United States ​ $ 181 ​ $ 324 ​ $ (143) Canada ​ ​ 295 ​ ​ 281 ​ ​ 14 Total product sales, net ​ ​ 476 ​ ​ 605 ​ ​ (129) Other revenue ​ 44 ​ 39 ​ 5 Total revenue ​ 520 ​ 644 ​ (124) Cost of revenue ​ 582 ​ 583 ​ (1) Gross (loss) profit ​ (62) ​ 61 ​ (123) Operating expenses: ​ ​ ​ Selling, general and administrative expenses ​ 10,118 ​ 9,271 ​ 847 Research and development expenses ​ 3,659 ​ 2,942 ​ 717 Amortization expense ​ 24 ​ 117 ​ (93) Fixed asset impairment ​ ​ 40 ​ ​ 159 ​ ​ (119) Total operating expenses ​ 13,841 ​ 12,489 ​ 1,352 Loss from operations ​ (13,903) ​ (12,428) ​ (1,475) Nonoperating income ​ ​ ​ Interest (expense) income, net ​ ​ (17) ​ ​ 257 ​ ​ (274) Change in fair value of derivative liability ​ 2,981 ​ ​ 2,966 ​ 15 Foreign exchange (loss) gain ​ (1,006) ​ ​ 275 ​ (1,281) Other income, net ​ 203 ​ ​ 80 ​ 123 Nonoperating income, net ​ 2,161 ​ 3,578 ​ (1,417) Loss before provision for income taxes ​ ​ (11,742) ​ ​ (8,850) ​ ​ (2,892) Provision for income taxes ​ ​ — ​ ​ — ​ ​ — Net loss ​ $ (11,742) ​ $ (8,850) ​ $ (2,892) Year Ended December 31, 2024 Compared to Year Ended December 31, 2023 Revenue The decrease in total net product sales was primarily attributable to a decrease in unit volumes for U.S. sales of PoNS systems due to the termination of our Patient Therapy Access Program (“PTAP”) on June 30, 2023 as well as the termination of the previously offered temporary cash pay pricing in May 2024. 65 Table of Contents Cost of Revenue The cost of revenue for 2024 as compared to the same period in the prior year remained relatively flat year to year due to decreased unit volumes sold offset by increases in certain inventory reserve adjustments, warranty and fixed employee costs.
The general economic and capital market conditions both in the U.S. and worldwide, have been volatile in recent years and at times have adversely affected our access to capital and have increased the cost of capital. The capital and credit markets may not be available to support future capital raising activity 56 Table of Contents on favorable terms.
The general economic and capital market conditions both in the U.S. and worldwide, have been volatile in recent years and at times have adversely affected our access to capital and have increased the cost of capital. The capital and credit markets may not be available to support future capital raising activity on favorable terms.
Going Concern Because we have generated limited revenues from commercialization, our operations to date have been principally financed through public and private offerings of our common stock and convertible debt and exercises of options and warrants.
Going Concern Because we have generated limited revenues from commercialization, our operations to date have been principally financed through public and private offerings of our common stock and convertible debt and exercises of options and 69 Table of Contents warrants.
FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA The information required by this item is included in this Form 10-K beginning on page F-1 and is incorporated herein by reference. ​ ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE None. ​ 63 Table of Contents
FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA The information required by this item is included in this Form 10-K beginning on page F-1 and is incorporated herein by reference. ​ ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE None. ​
While we had $5.2 million of cash as of December 31, 2023, we do not currently have sufficient resources to accomplish all of the above conditions necessary for us to generate sufficient revenues to achieve profitability, and we expect that we will require additional financing to continue to fund our operations.
While we had $1.1 million of cash as of December 31, 2024, we do not currently have sufficient resources to accomplish all of the above conditions necessary for us to generate sufficient revenues to achieve profitability, and we expect that we will require additional financing to continue to fund our operations.
The change in fair value of derivative liability for the year ended December 31, 2023 of $3.0 million is the result of the decrease in our stock price offset partially by reduced outstanding warrant exposure due to warrant exercises during the year. 59 Table of Contents Foreign Exchange (Loss) Gain The foreign exchange gain for the year ended December 31, 2023 was primarily due to lower Canadian to U.S. dollar exchange rates in 2023.
The change in fair value of derivative liability for the year ended December 31, 2024 of $3.0 million is the result of the decrease in our stock price offset partially by reduced outstanding warrant exposure due to warrant exercises during the year. 66 Table of Contents Foreign Exchange (Loss) Gain The foreign exchange loss for the year ended December 31, 2024 was primarily due to higher Canadian to U.S. dollar exchange rates in 2024.
ITEM 7. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS The following discussion and analysis of our financial condition and results of operations should be read in conjunction with our consolidated financial statements and related notes included elsewhere in this Form 10-K.
ITEM 7. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS The following discussion and analysis of our financial condition and results of operations should be read in conjunction with our consolidated financial statements and related notes included elsewhere in this Form 10-K (collectively referred to as the "consolidated financial statements").
If determined to be classified as equity, the fair value of the warrants will be measured as of the date of issuance and will not be subject to remeasurement at each balance sheet date.
If determined to be classified as a liability, we will remeasure the fair value of the warrants at each balance sheet date. If determined to be classified as equity, the fair value of the warrants will be measured as of the date of issuance and will not be subject to remeasurement at each balance sheet date.
Liquidity and Capital Resources The following table summarizes our cash and cash equivalents and working capital as of December 31, 2023 and 2022 (in thousands): ​ ​ ​ ​ ​ ​ ​ ​ December 31, ​ December 31, ​ ​ 2023 ​ 2022 Cash and cash equivalents ​ $ 5,182 ​ $ 14,549 Working capital ​ ​ 5,559 ​ ​ 14,709 Our available capital resources have been primarily used to expand our U.S. commercialization efforts, fund manufacturing activities for the PoNS device, conduct clinical trials and for working capital and general corporate purposes.
Liquidity and Capital Resources The following table summarizes our cash and cash equivalents and working capital as of December 31, 2024 and 2023 (in thousands): ​ ​ ​ ​ ​ ​ ​ ​ December 31, ​ December 31, ​ ​ 2024 ​ 2023 Cash and cash equivalents ​ $ 1,088 ​ $ 5,182 Working capital ​ ​ 1,261 ​ ​ 5,559 Our available capital resources have been primarily used to expand our U.S. commercialization efforts, fund manufacturing activities for the PoNS device, conduct clinical trials and for working capital and general corporate purposes.
We believe that our existing capital resources, including the $1.3 million of additional net proceeds from the ATM in 2024 through the date of this filing, will be sufficient to fund our operations through the second quarter of 2024, but we will be required to seek additional funding through the sale of equity or debt financing to continue to fund our operations thereafter.
We believe that our existing capital resources, including the $0.1 million of additional net proceeds from the ATM and $3.4 million in net proceeds from warrant inducements in 2025 through the date of this filing, will be sufficient to fund our operations into the second quarter of 2025, but we will be required to seek additional funding through the sale of equity or debt financing to continue to fund our operations thereafter.
During the year ended December 31, 2023 the Company issued and sold shares with gross proceeds of $0.5 million under the ATM. In addition, the Company received gross proceeds of $0.6 million from the issuance of shares upon the exercise of warrants for the year ended December 31, 2023.
During the year ended December 31, 2024, the Company issued and sold shares with gross proceeds of $1.3 million under the ATM. In addition, the Company received gross proceeds of $0.2 million from the issuance of shares upon the exercise of warrants for the year ended December 31, 2024.
Cash Requirements Our ability to generate product revenues sufficient to achieve profitability will depend heavily on the successful commercialization of PoNS Therapy in the U.S. Our net loss was $8.9 million and $14.1 million for the year ended December 31, 2023 and 2022, respectively. As of December 31, 2023, we had an accumulated deficit of $160.0 million.
Cash Requirements Our ability to generate product revenues sufficient to achieve profitability will depend heavily on the successful commercialization of PoNS Therapy in the U.S. Our net loss was $11.7 million and $8.9 million for the years ended December 31, 2024 and 2023, respectively. As of December 31, 2024, we had an accumulated deficit of $171.7 million.
Our primary sources of cash and cash equivalents have been proceeds from public and private offerings of our common stock which most recently included $16.3 million in net proceeds we received from a public offering of our common stock and warrants completed in August 2022 (“August 2022 Public Offering”) as discussed in more detail in Note 8 to our Consolidated Financial Statements included our 2022 Annual Report on Form 10-K.
Our primary sources of cash and cash equivalents have been proceeds from public and private offerings of our common stock which most recently included $5.5 million in net proceeds we received from a public offering of our common stock and warrants completed in May 2024 (“May 2024 Public Offering”) as discussed in more detail in Note 8 to our consolidated financial statements.
Changes in these assumptions can materially affect the fair value estimate. Derivative Financial Instruments We evaluate our 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.
We evaluate our 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.
Amortization Expense Amortization expense is primarily comprised of the amortization of acquired finite-lived intangible assets. The decrease in amortization expense is primarily due to certain intangible assets becoming fully amortized during the year ended December 31, 2023. Refer to Note 6 to our Consolidated Financial Statements for additional information about the composition of intangible assets.
Refer to Note 9 to our consolidated financial statements for detailed information about stock-based compensation. Amortization Expense Amortization expense is primarily comprised of the amortization of acquired finite-lived intangible assets. The decrease in amortization expense is primarily due to the remaining unamortized intangible assets becoming fully amortized during the year ended December 31, 2024.
We will need additional funding for our planned clinical trial for stroke.
We will need additional funding for our ongoing clinical trials for stroke.
Statement of Cash Flows The following table summarizes our cash flows for the year ended December 31, 2023 and 2022 (in thousands): ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Years Ended December 31, ​ ​ ​ ​ 2023 2022 Change Net cash used in operating activities ​ $ (10,416) ​ $ (14,310) ​ $ 3,894 Net cash used in investing activities ​ (29) ​ (11) ​ (18) Net cash provided by financing activities ​ 1,077 ​ 17,869 ​ (16,792) Effect of foreign exchange rate changes on cash ​ 1 ​ (4) ​ 5 Net increase (decrease) in cash and cash equivalents ​ $ (9,367) ​ $ 3,544 ​ $ (12,911) Net Cash used in Operating Activities The lower level of cash used in operating activities in 2023 primarily resulted from decreases in selling, general and administrative expenses and research and development expenses as compared to 2022.
Statement of Cash Flows The following table summarizes our cash flows for the years ended December 31, 2024 and 2023 (in thousands): ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Years Ended December 31, ​ ​ ​ ​ 2024 2023 Change Net cash used in operating activities ​ $ (11,041) ​ $ (10,416) ​ $ (625) Net cash used in investing activities ​ (5) ​ (29) ​ 24 Net cash provided by financing activities ​ 6,954 ​ 1,077 ​ 5,877 Effect of foreign exchange rate changes on cash ​ (2) ​ 1 ​ (3) Net decrease in cash and cash equivalents ​ $ (4,094) ​ $ (9,367) ​ $ 5,273 Net Cash used in Operating Activities The higher level of cash used in operating activities in 2024 primarily resulted from increases in selling, general and administrative expenses and research and development expenses as compared to 2023. 67 Table of Contents Net Cash Used in Investing Activities Our investing activities are primarily related to the purchase of property and equipment.
During the year ended December 31, 2022, we received net proceeds of $17.9 million from the sale of shares primarily from our August 60 Table of Contents 2022 public offering and to a lesser extent from the sale of shares to Lincoln Park Capital Fund, LLC, as described in Note 8 to our Consolidated Financial Statements.
During the year ended December 31, 2024, we received net proceeds of $5.5 million from the sale of shares primarily from our May 2024 Public Offering, as described in Note 8 to our consolidated financial statements.
Net Cash Used in Investing Activities Our investing activities are primarily related to the purchase of property and equipment. Net Cash Provided by Financing Activities During the year ended December 31, 2023, we received net proceeds of $0.4 million from the issuance and sale of shares under the ATM.
Net Cash Provided by Financing Activities During the year ended December 31, 2024, we received net proceeds of $1.3 million from the issuance and sale of shares under the ATM. In addition, we received $0.2 million in net proceeds from the exercise of warrants.
Although we may take measures to mitigate these impacts, if these measures are not effective, our business, financial condition, results of operations, and liquidity could be materially adversely affected. Other Trends and Uncertainties To successfully commercialize, we need to continue to build infrastructure necessary to grow our business including adding headcount and implementing or upgrading business systems.
Although we may take measures to 64 Table of Contents mitigate these impacts, if these measures are not effective, our business, financial condition, results of operations, and liquidity could be materially adversely affected.
The PTAP was not renewed and terminated on June 30, 2023. Material Trends and Uncertainties Global Economic Conditions Generally, worldwide economic conditions remain uncertain, in part due to supply chain disruptions, labor shortages, global conflicts and increased inflation.
Material Trends and Uncertainties Global Economic Conditions Generally, worldwide economic conditions remain uncertain, in part due to supply chain disruptions, labor shortages, global conflicts, increased inflation and unpredictable trade policies, including tariffs, customs regulations and other trade restriction.
Actual results could differ from those estimates made by management. While there are a number of significant accounting policies affecting our financial statements, we believe the critical accounting policies involving the most complex, difficult and subjective estimates and judgments are: revenue recognition, stock-based compensation, derivative financial instruments and accounting for warrants.
While there are a number of significant accounting policies affecting our financial statements, we believe the critical accounting policies involving the most complex, difficult and subjective estimates and judgments are: revenue recognition, stock-based compensation, derivative financial instruments and accounting for warrants. 68 Table of Contents Revenue Recognition The Company generates nearly all of its revenue from product sales directly to patients, its e-commerce partner in the United States and to clinics in Canada.
In general, we anticipate that it will take at least 24 months to obtain broad coverage and reimbursement among government and private payers once the HCPCS codes become effective. Our Patient Therapy Access Program (“PTAP”), launched in June 2022 and effective through June 2023, provided qualifying patients access to PoNS Therapy at a significantly reduced price.
In general, we anticipate that it will take at least 24 months to obtain broad coverage and reimbursement among government and private payers from the date that the HCPCS codes became effective.
Competition for talent in today’s labor market may impact our ability to add headcount and to recruit talent with the expertise we need to develop our commercial infrastructure. In response to the aforementioned challenges and trends, we have supplemented our personnel including quality resources at our contract manufacturer.
Other Trends and Uncertainties To successfully commercialize, we need to continue to build infrastructure necessary to grow our business including adding headcount and implementing or upgrading business systems. Competition for talent in today’s labor market may impact our ability to add headcount and to recruit talent with the expertise we need to develop our commercial infrastructure.
We account for such warrants in accordance with ASC 480 Distinguishing Liabilities from Equity, which identifies three categories of freestanding financial instruments that are required to be accounted for as a liability. If determined to be classified as a liability, we will remeasure the fair value of the warrants at each balance sheet date.
Accounting and Valuation of Warrants We have issued and may continue to issue warrants to purchase shares of common stock through our public and private offerings. We account for such warrants in accordance with ASC 480 Distinguishing Liabilities from Equity, which identifies three categories of freestanding financial instruments that are required to be accounted for as a liability.
We expect to support the cost of the PoNS Therapy by offering a cash pay discount, collaborating with third parties to provide self-pay patients with financing options as well as working with advocacy groups and charitable organizations to help self-pay patients access our technology.
Prior to broad commercial payer coverage, we anticipate the primary source of sales will be self-pay and VA patients. We expect to support the cost of the PoNS Therapy by working with advocacy groups and charitable organizations to help self-pay patients access our technology.
Revenue Recognition The Company generates nearly all of its revenue from product sales directly to patients, its e-commerce partner in the United States and to clinics in Canada. Revenue from product sales is recognized at a point in time as the performance obligation is satisfied and when the customer obtains control at the established transaction price.
Revenue from product sales is recognized at a point in time as the performance obligation is satisfied and when the customer obtains control at the established transaction price. Taxes that the Company collects concurrent with revenue-producing activities are excluded from revenue.
Refer to Note 3 to our Consolidated Financial Statements for additional information. Nonoperating Income (Expense) Interest Income (Expense), Net Net interest income for the year ended December 31, 2023 was primarily attributable to interest income earned on investments of excess cash in an unrestricted money market savings account, money market mutual funds, treasury bills and a certificate of deposit.
Nonoperating Income Interest (Expense) Income, Net Net interest expense for the year ended December 31, 2024 was primarily attributable to interest expense related to the Company’s insurance premium financing and lower interest income earned on investments of excess cash in an unrestricted money market savings account year to year due to lower current year cash balances and a shift to excess cash being primarily invested in money market mutual funds earning dividend income in the current year, versus interest bearing securities in the prior year.
As of December 31, 2023, our derivative financial instruments accounted for in accordance with ASC 815 were comprised of warrants issued in connection with August 2022 Public Offering. Accounting for Warrants We have issued and may continue to issue warrants to purchase shares of common stock through our public and private offerings.
As of December 31, 2024, our derivative financial instruments accounted for in accordance with ASC 815 were comprised of warrants issued in connection with our August 2022 public offering as discussed in more detail in Note 8 to our Consolidated Financial Statements. Income Taxes We account for income taxes using the asset and liability method.
Additionally, during the third quarter of 2023, we began implementing the transition of the manufacturing of PoNS device controllers and mouthpieces to Minnetronix, Inc. from our previous contract manufacturer, Key Tronic Corporation.
During the fourth quarter of 2024, the Company completed the transition of the manufacturing of PoNS device controllers and mouthpieces to Minnetronix, Inc. from its previous contract manufacturer, Key Tronic Corporation. We also intend to provide broad access and reimbursement for the PoNS Therapy over time through commercial insurers.
Refer to Note 9 to our consolidated financial statements for detailed information about stock-based compensation. Research and Development Expenses The decrease in research and development expenses was driven primarily by decreases in product development expenses and clinical trial activities as we transitioned our focus from product development and clinical trials to U.S. commercialization activities beginning in 2022.
Refer to Note 9 to our consolidated financial statements for detailed information about stock-based compensation. Research and Development Expenses The increase in research and development expenses was primarily from increases in clinical trial related costs of $0.4 million, an increase in non-cash employee stock compensation expense of $0.2 million and product development costs of $0.1 million.
On August 31, 2023, following a reverse stock split of the Company’s common stock as described below, the Company received formal notification from Nasdaq confirming that is had regained compliance, and that the Company satisfied all other applicable criteria for continued listing on the Nasdaq Stock Market. As a result of the determination, the listing matter is closed.
On May 31, 2024, the Company received formal notification from Nasdaq confirming that, following the consummation of a registered public offering on May 9, 2024, the Company regained compliance with the minimum stockholders’ equity requirement, and that the Company satisfied all other applicable criteria for continued listing on Nasdaq.
Taxes that the Company collects concurrent with revenue-producing activities are excluded from revenue. The Company requires some customers in the United States to prepay the full product selling price, net of cash discount, prior to shipment.
The Company requires some customers in the United States to prepay the full product selling price, net of cash discount, prior to shipment. The Company records a contract liability for any customer prepayment received for which delivery had not yet occurred as of the end of the period.
Selling, General and Administrative Expenses The decrease in selling, general and administrative expenses was primarily from a $0.6 million decrease in stock-based compensation and a $0.6 million decrease in payroll taxes including the $0.5 million Employee Retention Credit claims we filed for the prior eligible periods.
Selling, General and Administrative Expenses The increase in selling, general and administrative expenses was primarily from a $0.7 million increase in non-cash stock-based compensation expense, a $0.3 million in increased legal costs partially offset by a $0.2 million decrease in insurance costs and a $0.1 million decrease in franchise taxes.
In February 2024, CMS assigned HCPCS Level II codes A4593, “Neuromodulation stimulator system, adjunct to rehabilitation therapy regime” to describe the PoNS controller and A4594, “Neuromodulation stimulator system, adjunct to rehabilitation therapy regime, mouthpiece each” to describe the PoNS mouthpiece. The new HCPCS codes will be effective April 1, 2024.
We are pursuing commercial insurance coverage for PoNS within the Durable Medical Equipment benefit category. On February 29, 2024, CMS assigned HCPCS Level II codes to the PoNS controller and PoNS mouthpiece, effective April 1, 2024.
Removed
It has been commercially available in Canada since March 2019. PoNS is authorized for sale as a Class IIa medical device in Australia and we have been seeking a business partner to commercialize and distribute PoNS in Australia.
Added
It has been commercially available in Canada since March 2019.
Removed
Recent Developments Corporate Updates On September 28, 2023, the Company announced that Wolters Kluwer Health – Medi-Span® assigned universal product code numbers to the Company’s PoNS device controller and mouthpiece. The NDC/UPC/HRI codes for the PoNS device controller is 64288-00046 at $25,700 and the PoNS mouthpiece is 64288-00043 at $7,900.
Added
PoNS is authorized for sale as a Class IIa medical device in Australia and we have been seeking a business partner to commercialize and distribute PoNS in Australia. 61 Table of Contents Recent Developments Corporate Updates On August 9, 2024, we received written notice (the “Notification Letter”) from The Nasdaq Stock Market LLC (“Nasdaq”) notifying us that the Company was not in compliance with the minimum bid price requirements set forth in Nasdaq Listing Rule 5550(a)(2) for continued listing on the Nasdaq Capital Market.
Removed
In February 2024, the Company confirmed that the PoNS device and mouthpiece are also listed on the First Data Bank (“FDB”) Prizm® database.
Added
Nasdaq Listing Rule 5550(a)(2) requires listed securities maintain a minimum closing bid price of $1.00 per share, and Nasdaq Listing Rule 5810(c)(3)(A) provides that a failure to meet the minimum closing bid price requirement exists if the deficiency continues for a period of 30 consecutive business days.
Removed
Previously, on September 19, 2022, the Company received notice from the Listing Qualifications Staff (the “Staff”) of The Nasdaq Stock Market LLC (“Nasdaq”) that the bid price for the Company’s Class A Common Stock (“common stock”) had closed below $1.00 per share for the prior 30-consecutive business day period and that the Company had been granted a 180-day grace period, through March 20, 2023, to regain compliance with Nasdaq Marketplace Rule 5550(a)(2) (the "Minimum Bid Price Rule").
Added
Based on the closing bid price of the Company’s Class A common stock (“Common Stock”) for the 30 consecutive business days prior to the date of the Notification Letter, the Company did not meet the minimum closing bid price requirement.
Removed
Subsequently, on March 21, 2023, the Company was granted a second 180-day grace period through September 18, 2023.
Added
To regain compliance, the closing bid price of the Company’s Common Stock must be at least $1.00 per share for a minimum of 10 consecutive business days at any time prior to February 5, 2025. There can be no assurance that we will be able to regain compliance with the minimum bid price requirement and other Nasdaq listing criteria.
Removed
At the annual meeting of stockholders on May 24, 2023, the Company’s stockholders voted to approve a reverse stock split of the Company’s outstanding common stock at a ratio in the range of 1-for-10 to 1-for-80 to be determined at the 55 Table of Contents discretion of the Company’s Board of Directors (the “Board”).
Added
If we fail to meet the applicable continued listing requirements for the Nasdaq Capital Market, Nasdaq may delist our Common Stock. If such delisting should occur, it would likely have a negative effect on the price of our Common Stock and would impair an investor’s ability to sell or purchase our Common Stock when desired.
Removed
On August 11, 2023, the Board approved a 1-for-50 reverse stock split of the Company’s issued and outstanding shares of common stock (the “Reverse Stock Split”) and on August 15, 2023, the Company filed with the Secretary of State of the State of Delaware a Certificate of Amendment to its Certificate of Incorporation to effect the Reverse Stock Split.
Added
In the event of a delisting, we can provide no assurance that any action taken by us to restore compliance with listing requirements would allow our Common Stock to become listed again, stabilize the market price or improve the liquidity of our Common Stock, prevent our Common Stock from dropping below the Nasdaq minimum bid price requirement, or prevent future non-compliance with Nasdaq’s listing requirements.
Removed
The Reverse Stock Split became effective as of 5:00 p.m. Eastern Time on August 16, 2023, and the Company’s common stock began trading on a split-adjusted basis when the Nasdaq Stock Market opened on August 17, 2023. All share and per share amounts in this Report have been reflected on a post-split basis.
Added
Additionally, Nasdaq rules allow an expedited delisting of securities of companies that have had one or more reverse stock splits with a cumulative ratio of one for 250 or more shares over the prior two-year period.
Removed
During the third quarter of 2023, the Company began implementing the transition of the manufacturing of PoNS device controllers and mouthpieces to Minnetronix, Inc. from its previous contract manufacturer, Key Tronic Corporation. The majority of this transition was completed by the end of 2023, and the Company expects the transition to be fully completed by mid-2024.
Added
Under these rules, if a company falls out of compliance with the $1.00 minimum bid price after completing reverse stock splits over the immediately preceding two years that cumulatively result in a ratio one for 250 shares, the company will not be able to avail itself of any compliance periods and Nasdaq will instead require the issuance of a Staff delisting determination, which is appealable to a hearings panel.
Removed
Presently, PoNS Therapy is not covered by Center for Medicare and Medicaid (“CMS”) or reimbursed by any third-party payers in the U.S. We are pursuing commercial insurance coverage and Medicare reimbursement for PoNS within the Durable Medical Equipment, or DME, benefit category. We initially applied for unique Healthcare Common Procedure Coding System (“HCPCS”) codes during the third quarter of 2021.
Added
Our ability to remain listed on Nasdaq may be negatively impacted by this Nasdaq rule. On February 7, 2025, we received a determination letter from Nasdaq notifying us that because we did not comply with the $5 million minimum stockholders’ equity initial listing requirement for The Nasdaq Capital Market, we were not eligible for a second 180-day period.
Removed
In order to address CMS’s request for additional information to “further understand the PoNS device indication for use”, we decided to monitor real-world utilization of PoNS Therapy and collect additional clinical evidence through our ongoing PoNSTEP study and our registry program.
Added
On February 14, 2025, we requested an appeal of this determination and will submit a plan to regain compliance. The Company had a hearing with the Nasdaq Hearing Panel on March 18, 2025.
Removed
Based on consistent reports of positive therapeutic benefits experienced by MS patients through our commercial programs, we reapplied for HCPCS codes in the second quarter of 2023 leveraging new information addressing their questions and providing further support in favor of obtaining unique HCPCS codes for PoNS.
Added
At the hearing, we presented our plan for regaining compliance with the Minimum Bid Price Requirement and requested a further extension so that we may complete the execution of our plan.
Removed
We expect to interact again with CMS in the second half of 2024 – to seek Medicare final payment determinations for both codes to be effective at the next scheduled date of October 1, 2024.
Added
Although we believe our plan will be sufficient to enable us to regain compliance, no assurance can be provided that Nasdaq will ultimately accept our plan or that we will ultimately regain compliance with the Minimum Bid Price Requirement. As of the date of this report, we have not received a determination from the hearings panel.
Removed
We will continue to monitor the development of CMS’s new pathway for coverage of innovative new devices, Transitional Coverage of Emerging Technology (“TCET”), which is replacing the repealed Medicare Coverage of Innovative Technologies rule. CMS is expected to provide additional information about TCET to the public for comments in 2024.
Added
Our common stock will remain listed and eligible for trading on Nasdaq pending the ultimate conclusion of the hearing process.
Removed
As we follow the evolution of TCET, we will continue to assess our evidence generation strategy to reach the greatest potential to gain CMS reimbursement benefits as a result of our Breakthrough designation in MS. We also intend to provide broad access and reimbursement for the PoNS Therapy over time through commercial insurers.
Added
On March 11, 2025, we established Revelation Neuro to pursue the development of a new gold standard of care for personalized neurorehabilitation using a non-implantable AI powered brain computer interface combining our newly developed intellectual property with Helius’ existing intellectual property.
Removed
Prior to the initiation of CMS or broad commercial payer coverage, we anticipate the primary source of sales will be self-pay patients.
Added
On January 21, 2025, the Company entered into warrant exercise inducement offer letters with certain holders of existing Series A warrants and Series B warrants generating gross proceeds of $3.7 million as discussed further in Note 15 in our consolidated financial statements. 62 Table of Contents Presently, PoNS Therapy is not reimbursed under contract by any third-party payers in the U.S.
Removed
The decrease in Canada product sales resulted primarily from the inclusion of approximately $120 thousand of revenue recognized in connection with the delivery of the remaining 16 PoNS devices that had been included as noncash consideration in the Company’s acquisition of Heuro in the prior year sales.
Added
On May 2, 2024, CMS published a proposed fee schedule payment rates for the PoNS controller and PoNS mouthpiece to be discussed at CMS' bi-annual Healthcare Common Procedure Coding System (“HCPCS”) public meeting to be held on May 29, 2024.
Removed
Other revenue for the years ended December 31, 2023 and 2022 was related to the amortization of the up-front payment we received in connection with agreements that contained an exclusive distribution right.
Added
For the PoNS Controller (HCPCS Code A4593), CMS preliminarily set pricing by mapping reimbursement to existing code E0745, (Neuromuscular stimulator, electronic shock unit), resulting in a capped fee of $1,206.53. For the PoNS Mouthpiece (HCPCS code A4594), CMS based pricing on the previously offered, temporary, cash pay price of $4,500, resulting in a total capped payment of $3,075.53.
Removed
Cost of Revenue The increase in cost of revenue was primarily attributable to fixed overhead costs, including salaries and benefits of employees involved in management of the supply chain and certain production costs. 58 Table of Contents Gross Profit Gross profit for the year ended December 31, 2023 was $61 thousand compared to gross profit of $324 thousand for the same period in the prior year.
Added
The Company subsequently provided CMS additional information to support reimbursement economics and presented that information at the public meeting with CMS on May 29, 2024 for consideration by CMS for determination of the final reimbursement amount for each of the PoNS controller and mouthpiece.
Removed
Reduced absorption of fixed overhead costs across the lower unit volume of PoNS device sales in 2023 as compared to the prior year was the primary reason for this decrease.
Added
On October 7, 2024, CMS posted the final payment rate for the PoNS Mouthpiece (HCPCS code A4594) at $2,963.30, which will be effective January 1, 2025 and deferred final national determination of the payment rate for the PoNS Controller (HCPCS Code A4593) to the next payment cycle.
Removed
Goodwill and Fixed Asset Impairment During the third quarter of 2023, we recorded an impairment of $0.2 million for certain machinery used in the production of our inventory. During the third quarter of 2022, we recorded a goodwill impairment charge of $0.8 million, reducing the goodwill balance to zero.
Added
At the Company’s request, Company management subsequently met with CMS in December 2024 prior to PoNS Mouthpiece pricing taking effect on January 1, 2025 to request that they revisit the starting point for the gap filling process to more appropriately use the market pricing established through negotiation with the VA and an insurance carrier.
Removed
We recorded $0.9 million of non-cash interest expense for the year ended December 31, 2022 in connection with the derivative liability classification of warrants issued in connection with the August 2022 Public Offering. Refer to Note 8 to our Consolidated Financial Statements for additional information.
Added
On October 8, 2024, CMS published the preliminary rate for the PoNS Controller (HCPCS Code A4593) at the capped total payment of $519.80, based on its view that the product is comparable to devices reported with HCPCS code E0730 (transcutaneous electrical nerve stimulation (TENS) device, four or more leads, for multiple nerve stimulation) to be effective April 1, 2025.
Removed
The interest expense for the year ended December 31, 2022 was offset by $0.1 million of interest income earned on investments of excess cash in an unrestricted money market savings account and a certificate of deposit.

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