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Edited Transcript of HSM.TO earnings conference call or presentation 8-Aug-19 8:30pm GMT

Q2 2019 Helius Medical Technologies Inc Earnings Call

NEWTOWN Aug 19, 2019 (Thomson StreetEvents) -- Edited Transcript of Helius Medical Technologies Inc earnings conference call or presentation Thursday, August 8, 2019 at 8:30:00pm GMT

TEXT version of Transcript

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Corporate Participants

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* Joyce N. LaViscount

Helius Medical Technologies, Inc. - CFO & COO

* Philippe Deschamps

Helius Medical Technologies, Inc. - Chairman, CEO & President

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Conference Call Participants

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* Jeff Porter

Porter Capital Management

* Joannes Sebastian van Berkom

Van Berkom and Associates Inc. - President, CEO, CFO, COO, Chief Legal Officer & Chairman

* Marcos Rodrigues

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Presentation

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Operator [1]

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Good afternoon, ladies and gentlemen, and welcome to the Second Quarter of Fiscal Year 2019 Earnings Conference Call for Helius Medical Technologies. (Operator Instructions) Please note that this conference call is being recorded and that the recording will be available on the company's website for replay shortly.

Before we begin, I would like to remind everyone that our remarks and responses to your questions today may contain forward-looking statements that are based on current expectations of management, including statements regarding the potential FDA marketing authorization of the PoNS device, the future commercialization of the PoNS treatment, expected future clinical

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to differ materially from those indicated, including those identified in the risk factor sections of our most recent annual report on Form 10-K filed with the SEC on March 14, 2019, as well as those in the Form 10-Q for the second quarter ended June 30, 2019, which was filed with the SEC this afternoon.

Such factors may be updated from time to time in our filings with the SEC, which are available on our website. All statements made during this call are as of August 8, 2019. We undertake no obligation to publicly update or revise our forward-looking statements as a result of new information, future events or otherwise, expected as required by law.

I would now like to turn the call over to Mr. Phil Deschamps, Helius Medical's Chief Executive Officer. Please go ahead, sir.

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Philippe Deschamps, Helius Medical Technologies, Inc. - Chairman, CEO & President [2]

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Thank you very much, operator. Welcome, everyone, to Helius Medical's Second Quarter of 2019 Earnings Conference Call. I'm joined on the call today by Joyce LaViscount, our Chief Financial Officer and Chief Operating Officer; as well as a very special guest, Marcos Rodrigues, a Physical Therapist from the Neurotherapy Montreal clinic, one of our authorized clinics in Canada.

Let me provide you with a quick agenda of the topics that we intend to cover today. I'll provide you with a brief overview of our second quarter revenue results, along with a discussion of the important operational progress that we made during the quarter. This discussion will include updates on our commercial activities in Canada, including Mr. Rodrigues, giving you some clinical insight about his clinic's direct experience with PoNS treatment in the early phase of our Canadian commercialization. We'll also cover our regulatory strategy in the U.S., Australia and Europe.

Joyce will discuss our financial results for the second quarter ended June 30, 2019, in detail and review our guidance for 2019, which we reaffirmed in our earnings press release this afternoon. I'll then share some additional closing thoughts before Joyce and I open the call for questions.

Since we began our commercialization of PoNS treatment in Canada, we've received a number of questions from investors who've been interested in hearing, well, how's the real world going? What's the experience compared to the results of the clinical trial? And to understand the recent feedback we received from clinicians and patients. So with this in mind, we decided to invite Marcos Rodrigues, a physiotherapist experienced in neurological rehabilitation and the head of Physical Therapy at the neurotherapy clinic in Montréal to provide you with his insights on early treatment and experience in one of our initial Canadian clinics. Marcos?

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Marcos Rodrigues, [3]

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Greetings, everyone. My name is Marcos Rodrigues, I am a licensed Physical Therapist with a Masters in Rehabilitation Sciences from the School of Physical & Occupational Therapy at McGill University. I'm also a certified PoNS rehabilitation specialist. Actually, I am the rehabilitation coordinator at Neurotherapy Montreal in Montréal, Canada. I have been treating patients who suffer from chronic balance and gait issues due to mild to moderate TBI for over 10 years. Physical therapy for these patients does help, but some patients will often plateau where recovery no longer progresses. Therefore, I am excited about being able to offer posttreatment for patients who suffer from chronic balance issues as a result of a mild to moderate TBI.

While it requires commitment and hard work by the patient, I have seen some and -- some make significant gains in the first 2 weeks of treatment. For example, one of the patients at our clinic had suffered a mild TBI from a motor vehicle accident. He's a vascular surgeon who had been active -- an active tennis player. In the 3 to 6 months following his car accident, he begin to notice that his balance was abnormal. His walking was impaired. And in particular, he noticed that his tennis performance was suffering as he began to feel as if he was on stable ground when he was playing. Over the course of the next 1.5 years, his balance and gait began to deteriorate. He tried multiple medical interventions, including prescribed medications but nothing seemed to work. An expert at a leading academic institution told him that balance and gait training would only accentuate his problems. His attempts at playing tennis were futile. He frequently had double vision, could not track the ball and became nauseous. Simple routine tasks were exhausting. Movement accentuated his disability, require him to stop any activity that involved movement.

These are not uncommon symptoms related to a mild or moderate TBI. He came to our clinic based on a referral from a physical therapist who encouraged him to learn more about electrical stimulation of the tongue and neuroplasticity. After just the first week in the program, he reported that he was able to attend the Formula One Grand Prix in Montréal and felt that his balance and gait had improved. He also personally shared with us that he was navigating the crowds without difficulty, going up and down the stairs without help and maintaining a more normal energy level. This was something that he described that he wasn't able to do since his accident. He is now in his week 9 of the program, and he feels he has seen real improvement in his gait and balance. He says that even though he does experience dizziness yet, his brain and body seem to be more functional in the face of that dizziness.

We have another patient in her early 20s who had suffered multiple mild and moderate traumatic brain injuries due to soccer and a few falls. She had chronic balance and gait issues that interfered with her ability to play sports and even attend college. She came to us after multiple rounds of physical therapy and other standard-of-care medical interventions to treat her balance issues. She has completed her PoNS treatment, and we have observed improvements in her functional gait, speed of walking and dizziness. She says that while she does not believe that her balance and gait will ever return to the same levels as before her injuries, these improvements have helped her function.

Like any intervention, there's going to be some variation in the results patients can achieve. As a physical therapist, my main goal is to make sure my patients get back to their lives. I personally have not seen a treatment program or technology like PoNS. The PoNS device and the way it delivers neuromodulation during physical training is a game-changer in my personal opinion. While Neurotherapy Montreal is a state-of-the-art facility that treats a number of neurological conditions, we are most excited about the potential for PoNS treatment to help patients, who are suffering from chronic balance and gait issues due to mild to moderate TBI. Thank you very much.

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Philippe Deschamps, Helius Medical Technologies, Inc. - Chairman, CEO & President [4]

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Thank you very much, Marcos, for sharing your experience. To complete the picture of the Canadian clinical experience, I also wanted to share some very high-level results about the collective experience of the first TBI patients that completed the 14-week program of PoNS treatment. Consistent with what we saw in our 2 randomized clinical trials in MMTBI or mild to moderate TBI, one for 5 weeks and one for 14 weeks duration, patients in Canada are demonstrating the same pattern of positive change with improvements in balance and gait within the first 2 weeks, followed by continued improvement over their course of treatment. The majority of patients show improvements in comfort gait -- and comfortable gait speed, a measure of their ability to walk with a meaningful clinical difference at the end of the treatment. And mean patient compliance is over 90%, which is also consistent with what we experienced in our clinical trials.

While the conclusions we can draw from this saw sample of patients are limited, we're encouraged by the preliminary clinical results we're experiencing and look forward to sharing more comprehensive updates on the clinical experience from our systematically gathered data in Canada on future quarterly earnings calls.

Turning to a recap of our second quarter revenue performance during the second quarter of 2019, we reported a total revenue of $518,000. Our Q2 revenue performance was driven almost exclusively by sales to the first 2 clinics that have been trained and authorized to provide PoNS treatment, Neurotherapy Montreal and Surrey Neurotherapy Clinic, where we continue to see early demand for our PoNS treatment. In addition, we also generated $49,000 of fee revenue related to franchise agreements with Heuro Canada executed with additional Canadian clinics that have been engaged to provide our PoNS treatment. I'll discuss these additional clinics later in my prepared remarks. As a reminder, PoNS represents the first and only indicated treatment of its kind for chronic balance deficit in patients with mild to moderate traumatic brain injury, an underserved patient population.

While we remain in the early days of our commercialization efforts in Canada, we're pleased with our results so far, both from our additional clinics in this market during both the second quarter and the first half of the year. In addition to our sales performance, we continue to make progress in the development and implementation of our commercial strategy in Canada. During the second quarter, we initiated several marketing initiatives with the goal of raising awareness of our novel therapy in the Canadian market. In June 2019, for example, we launched a digital marketing campaign with the objective of increasing awareness of the PoNS treatment among targeted patients, psychiatrists and physical therapy -- therapists in proximity to our PoNS clinics in Surrey and Montréal with the goal of generating referrals.

Our medical affairs specialists also focus on building awareness and support for our treatment among key opinion leaders, including health care practitioners, industry associations and advocacy groups. One way that we're doing this is through the sponsorship and creation of educational programming at key medical events. In late June, for instance, we sponsored and hosted Academic Symposia at RehabWeek 2019 in Toronto, an event that combines 4 international conferences and brings together 6 medical professional societies, focused on the field of rehabilitation technology.

During the quarter, we also continued to make progress in identifying, engaging, training and authorizing additional cleaning -- Canadian clinics in key cities in order to expand our PoNS treatment across Canada. On June 5, we announced that 3 new clinics have been authorized to provide PoNS treatment in Canada: Advantage 4 Athletes, training center and therapy clinic in Markham, Ontario, just outside of Toronto; Synaptic Spinal Cord Injury and Neuro Rehabilitation Center in Calgary, Alberta; and Apollo South Physical Therapy Center in Ottawa, Ontario.

It's important to note that unlike Surrey and Montreal clinics, which participated in our clinical trials, these 3 new Canadian clinics have no prior experience when it comes to implementing our PoNS treatment and integrating it into their clinic operations. We're taking a really measured approach during our in-site, on-site training and authorization process to ensure that they're equipped with the know-how to achieve positive outcomes similar to our 2 more experienced clinics. They in turn are focused on integrating PoNS treatment into their practices. We expect that we'll take some additional time for them to become fully operational and to able to attract a significant population of interested patients.

We intend to expand our sales and marketing to additional markets with authorized PoNS clinics, including in Toronto, Calgary and Ottawa during the third quarter of 2019 and explore further expansion in Q4. While remain -- while we remain in the early days of our commercialization in Canada, we're continuing to develop our reimbursement strategy and build support to secure reimbursement coverage from our initial targeted payers in tandem with our commercial development efforts. As I mentioned earlier, we continue to systematically gather anonymized outcomes and compliance data on the patients treated in the Canadian clinics. In tandem, we validated our systems and approached the data collection in order to utilize the data we're generating to support the pursuit of reimbursement coverage in Canada. We've also begun engaging with regional auto insurers and workers' compensation programs in Canada as part of what we anticipate will be an ongoing effort to obtain reimbursement coverage from these entities.

Ultimately, we believe that our PoNS treatment represents a compelling treatment for patients covered by these payers due to its clinical effectiveness and its potential savings to the health care system from a health economic standpoint. As a reminder, it's important to note that approximately half of all traumatic brain injuries are related to auto accidents, which is one of the primary reasons why we're focused on regional auto insurers in Canada as part of the initial phase of our reimbursement strategy.

Turning to an update on the recent progress we've made with respect to our U.S. regulatory strategy. At the beginning of the quarter, in early April, we received a communication from the Food and Drug Administration that our request for de novo classification had been denied. In this communication, FDA recognized that there were no device-related serious adverse events, in either of our 2 randomized controlled clinical trials. However, FDA stated that additional information was needed in order to determine the individual contribution of the PoNS device and physical therapy and to further characterize clinically meaningful benefit. They also noted that we could generate additional data to address the agency's concern and resubmit our application for regulatory clearance.

After receiving this decision, we took immediate action to reprioritize our spending and reevaluate our regulatory strategy. First, we reduced our workforce by over 30% by scaling back the hired staff to prepare for the post-clearance U.S. commercialization launch. Importantly, we made these reductions while maintaining the necessary distribution, regulatory and quality systems infrastructure to support the commercial launch in Canada. We also placed our U.S. clinical experience program on hold, given that we're now able to gather anonymized health outcomes and compliance data from patients treated in Canada to support our reimbursement strategy. We've then identified and added external resources with specialized clinical and regulatory experience to inform our revised U.S. regulatory strategy and to help us navigate the resubmission process. After discussing the best course of action with our team, we decided to focus on obtaining clarity from FDA with respect to its response to our de novo -- our original de novo request.

In June, we participated in an informational discussion with FDA focused on the issues raised in the April response to our submission. Based on the informational discussion with FDA, we developed our resubmission strategy under the guidance of a regulatory counsel with extensive experience in the de novo application to the Neuromodulation Division at FDA. A statistician who previously worked in a senior position at FDA for many years and several additional prominent clinical advisers. Our strategy, that we came up with together, is to augment the protocol of our registrational clinical trial known as TBI 001 in mild to moderate traumatic brain injury with a new group of patients undergoing physical therapy alone, obviously, without the use of the PoNS treatment, following exactly the same 5-week treatment period and the same inclusion/exclusion criteria as TBI 001 to provide the FDA the additional information regarding the relative contribution of PT alone.

We submitted this strategy as the subject of our pre-submission meeting request to FDA in early August, and we've not yet been given a date for the pre-submission meeting. We'll not be able to finalize the recent mission protocol until after we engage with FDA in this pre-submission meeting. We believe the new de novo submission will at minimum need to include new data from our proposed augmentation of our registrational trial or TBI 001 and in MMTBI, evaluating the effects of physical therapy alone without the use of PoNS device. Additional data or analysis may be required, subject to the input from FDA.

We have also begun a data collection program to address questions regarding the relative contribution to physical therapy outside of this program to be able to augment the information for FDA.

As you can see by our recent progress, Helius maintained -- remains committed to obtain regulatory clearance for our PoNS device in the U.S. for the treatment of chronic balance deficit in patients with MMTBI and we look forward to generating the data required by FDA to resubmit for clearance. As we enter this next phase of our U.S. regulatory strategy, we plan to continue proceeding systematically and strategically and in close consultations with FDA.

In addition to pursuing regulatory clearance in the U.S., we continue to await the receipt of clearance in Australia and Europe. We submitted our application for regulatory clearance to the Australian Therapeutic Goods Administration in early May. We received a series of administrative questions, which we've already responded to, and we await their decision.

On our CE Mark application, we submitted in December 2018, and we're engaged with regulators in Europe to answer their questions. Lastly, in addition to our recent progress, we respect to our -- with respect to our commercial and regulatory strategies, we're really pleased to announce in June the publication of a clinical study that evaluated the effect of tongue stimulation on brain activity.

The study titled Human Translingual Neurostimulation Alters Resting Brain Activity in High-density EEG was published in the peer-reviewed Journal of NeuroEngineering and Rehabilitation. This was a 2-week within-subject-crossover-design study that compared 20 minutes of high or low frequency pulse stimulations in 20 healthy subjects, separate from our 2 randomized clinical trials in MMTBI. In this study, all subjects received both high and low frequency pulse stimulation and their brain activity was measured with high-definition EEG device before and after stimulation. The array EEG measurements showed frequency and spatial activation changes, following both PoNS stimulation in both the high and low frequency groups demonstrating that both iterations of the PoNS device affects brain activity even after a single 20-minute session. These peer-reviewed published clinical data are consistent with what we experienced clinically in our registrational trials that we submitted to FDA. With that, let me now turn the call over to Joyce to walk you through our second quarter financials. Joyce?

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Joyce N. LaViscount, Helius Medical Technologies, Inc. - CFO & COO [5]

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Thanks, Phil. We reported revenue of $518,000 for the second quarter of 2019 compared to no revenue in the prior year period. Our revenue in the second quarter was almost exclusively comprised of sales of our PoNS devices to the Surrey and Montréal clinics in Canada. We also generated $49,000 in fee revenue from franchise agreements that Heuro Canada executed with additional clinics in Canada, which have been engaged to provide PoNS treatment.

Our gross profit for the second quarter of 2019 was $306,000 compared to no gross profit in the prior year period. Operating expenses for the second quarter of 2019 decreased $5.7 million or 48% year-over-year to $6.1 million. The change in operating expenses was primarily driven by a decrease of $5 million or 57% year-over-year in selling, general and administrative expenses. The decrease in selling, general and administrative expenses was primarily due to a $5.2 million reduction in stock-based compensation expense, which was impacted by the change in the company's functional currency.

During the second quarter of 2018, Helius revalued its outstanding stock options in connection with the change in functional currency from the Canadian dollar to the U.S. dollar. Operating loss for the second quarter of 2019 was $5.8 million compared to an operating loss of $11.8 million for the prior year period. Total other income for the second quarter of 2019 was $5.6 million compared to an expense of $6 billion in the second quarter of 2018. The year-over-year increase in total other income was driven primarily by the change in fair value of derivative financial instruments, which was a gain of $5.5 million for the second quarter of 2019 compared to a loss of $6.2 million in the second quarter of 2018.

The change in fair value of the company's derivative financial instruments was primarily attributable to the change in the company's stock price, volatility and the number of derivative financial instruments being measured during the period.

For the second quarter of 2019, we reported a net loss of $186,000 or $0.01 per basic and diluted common share compared to a net loss of $17.8 million or $0.78 per basic and diluted common share for the second quarter of 2018.

Our Form 10-Q for the period ended June 30, 2019, includes a reconciliation between the basic and diluted net income and loss per common share for the second quarters of 2019 and 2018. At June 30, 2019, we had approximately $14.3 million of cash compared to $25.6 million at December 31, 2018, we had no outstanding debt obligations in either period. The decrease in cash during the first 6 months of 2019 was primarily driven by net cash used in operating activities of $11.2 million.

Let me now turn to a review of our 2019 revenue guidance, which we reaffirmed in our earnings release earlier this afternoon. For 2019, we continue to expect total revenue in the range of USD 1.6 million to USD 2 million. For modeling purposes, for the full year 2019, our revenue guidance assumes an exchange rate of CAD 1 to USD 0.75. We expect revenue will be generated primarily from contributions by the 2 founding neuroplasticity clinics that are operational and treating patients in Canada. Lastly, we anticipate generating revenue of approximately CAD 17,000 per device delivered to our Canadian partners in 2019. With that, I'll turn the call back to Phil.

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Philippe Deschamps, Helius Medical Technologies, Inc. - Chairman, CEO & President [6]

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Thank you, Joyce. In summary, we're pleased with the sales performance that we've achieved during the initial month of our commercialization in Canada, and we're reaffirming our fiscal guidance range according until we are better able to gauge the potential contribution of our 3 new clinics in Toronto, Calgary and Ottawa.

I'm proud of the significant progress that we've made so far this year, and especially with the focus and determination that our team has displayed in the months following the FDA's decision in April.

As we enter the second half of 2019, our priorities are clear. We'll continue to develop and execute our commercial strategy in Canada in order to bring our treatment to the more than 350,000 people living with chronic balance deficits due to mild to moderate TBI and the 13,000 people diagnosed each year.

Specifically, we'll focus on training and authorizing Canadian clinics that our partners Heuro Canada has recently entered into relationships with while continuing to identify and partner with new clinics in key locations to increase the availability of our PoNS treatment across Canada. We'll also expand the focus of our marketing initiatives to target patients and caregivers in proximity to the latest PoNS-authorized clinics in order to raise awareness of our innovative therapy and to help facilitate referrals to these clinics and to drive reimbursement activities all throughout the country.

Lastly, and most importantly, we remain committed to obtaining regulatory clearance in the U.S., Australia and Europe in order to provide our innovative PoNS treatment to as many patients as possible. We continue to take a diligent and deliberate approach to pursuing clearance in each market, relying on the guidance of our internal and external advisers.

I'd like to conclude my prepared remarks this afternoon by thanking our employees for their dedication and hard work during the second quarter as well as everyone on tonight's call for their interest in and support for Helius Medical Technologies and its mission to develop acquired -- to develop, acquire or license technologies to provide relief for patients suffering from symptoms of neurological disease and trauma. Before we open tonight's call for questions, I'd like to apologize to call participants in past earnings calls, seems that I was misinformed about the ability for all call participants to ask questions when only sell-side analysts were allowed through to ask questions. I'm very sorry for my mistake. Tonight, Joyce and I are happy to take questions from both our investors and covering sell-side analysts. So over to you, operator.

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Questions and Answers

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Operator [1]

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(Operator Instructions) And your first question comes from the line of Steven Lichtman from Oppenheimer.

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Unidentified Analyst, [2]

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This is [Ameer Burshaw] filling in for Steve. On my first question, I just wanted to touch upon the FDA update on June. So you guys mentioned that in anticipation of required data that Helius initiated a study to generate PT data alone. Would you guys just be able to provide more detail in terms of the number of patients and timing of when the study will be completed by?

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Philippe Deschamps, Helius Medical Technologies, Inc. - Chairman, CEO & President [3]

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Yes. So what we announced back in June, [Ameer] was that essentially, we would start gathering that data immediately. And this is all new information that we knew we would need to supply with FDA. As part of our development, it became very clear that the formal generation of data needs to wait until we have our pre-submission meeting with FDA. That does not stop us from being able to gather new information from Canada in terms of what's going on. There's always a new published papers that is new information for FDA. And of course, reports that come through from various sources as our clinical support team supports where we -- what we want to do. So at this time, we will -- our protocol is all developed. Of course, we submitted it to FDA, and we'll need to wait for their guidance to make sure that we are consistent with their direction to make sure that we answer their questions.

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Unidentified Analyst, [4]

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Got it. Makes sense. And if I could just sneak in one more, just on Canada quickly? I think you guys briefly touched on it on the 14-week program, but I just wanted to know, so have these centers been -- like have been collecting efficacy data essentially? And if so, like would you be able to provide a time line of when we could see that data?

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Philippe Deschamps, Helius Medical Technologies, Inc. - Chairman, CEO & President [5]

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Yes. So I -- yes, I alluded to the data in our call, [Ameer]. That's the conclusions that we could reach today. This -- the data that we're gathering in Canada is sort of a commercial, real-world data. The data, for example, like SOT data, our sensory organization test data, is like a research outcome. And so the correlations are not always exactly the same. So we do look forward to -- on earnings call, especially to be able to share the efficacy data.

So right now, what we -- let me reiterate what we've learned. The pattern of improvement that we saw in Canada that we're seeing in Canada in all patients is very similar to what we observed. Early in the first 2 weeks, people start to improve and continuing to improve as they move forward. Then we also looked at -- to make sure that we looked at one of the endpoints that we have on the commercial side is because balance is one thing but the ability to walk is ultimately affected by your balance. So one of the endpoints that we monitor is a patient's ability to their gait. And we saw improvement in a comfortable gait speed, which is one of the measurements that we have.

And then finally, really, for us, a very comforting data was the compliance data. This is a 14-week program on a pretty intensive physical therapy program, and there was a lot of skeptics around our patients going to want to stick to that level of treatment. And with the compliance rate that we can measure by looking at the data because our device is smart by -- because it records every treatment, we can very accurately say that the patients are sticking to their treatment. And our assumption is that patients are sticking to treatment because they feel they're getting a benefit. Total assumption on our part, but it's exciting to see.

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Operator [6]

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And your next question comes from Jeff Porter from Porter Capital.

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Jeff Porter, Porter Capital Management [7]

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What are we doing tangibly to sort get the word out on the stories of these patients that are having dramatic positive results in terms of patient testimonials? Are you developing a website for that or an infomercial, or what's your thinking about that?

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Philippe Deschamps, Helius Medical Technologies, Inc. - Chairman, CEO & President [8]

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Yes. We -- thanks for the question, Jeff. We do feel very passionately about making sure that these stories get out. The first part was making sure that in order for us to be able to report on these findings, we wanted to make sure that we validated the database. And I know that sounds weird but in order for us to be able to use it in these -- in the kinds of things that you suggested, the database has to be validated, and that's mostly related to privacy laws and privacy rules. So we've done all of that now. And I believe that if not today or tomorrow, very early next week, the first testimonials will start appearing on the website and over the next 2 or 3 weeks, we'll be evolving our website to be able to accommodate more comprehensive stories on how this goes -- on how the patients are performing. The next part, of course, is patients are free to tell their own stories. So they are telling them on their own social media. And the clinics are also posting some of these stories today on their own websites. So it has already begun. And if you visit ponstreatment.ca is where all of that is going to appear as we continue to make sure the -- to make sure that people are able to see this.

Now one point that Joyce just pointed out to me is since we're only approved in Canada the results will only be available to Canadian IP addresses. So it will be Canadians who'll be doing this so that we don't run afoul of any FDA regulations here.

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Jeff Porter, Porter Capital Management [9]

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Okay. Will there be things on the Helius Medical company website in terms of videos of patients and testimonials and things of that nature?

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Philippe Deschamps, Helius Medical Technologies, Inc. - Chairman, CEO & President [10]

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So again, Jeff, on the -- on our corporate website, since it's available all over the world and including in the U.S., that would be considered pre-approval promotion in the U.S. So all of these testimonials and all of these success stories, if I can call them that, will be posted on our ponstreatment.ca website, and then visible to all Canadians, so that they can see what's going on up there.

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Operator [11]

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(Operator Instructions) And the next question comes from Sebastian van Berkom from Van Berkom and Associates.

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Joannes Sebastian van Berkom, Van Berkom and Associates Inc. - President, CEO, CFO, COO, Chief Legal Officer & Chairman [12]

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Philippe, I wanted to ask you 2 questions. Further, with respect to the FDA, you mentioned that you did submit a strategy in August. Let's assume that they accept the strategy in the fall. What is your best guesstimate as to how long that process will take for you to put together all the information that's needed, present the new submission and then get a possible decision by the FDA? Is this a 6-month, 12-month or 18-month process or longer?

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Philippe Deschamps, Helius Medical Technologies, Inc. - Chairman, CEO & President [13]

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Boy, I wish I had that crystal ball, Sebastian. The major issue is that forecast will be much, much easier. And in fact, the only way we could ever make that forecast is after we meet in a submission meeting with FDA. We have a very solid strategy, supported by people that I mentioned. So -- and it's a strategy that sort of looked at what is the highest possibility of success, combined with trying to make it as efficient and effective as possible. And when FDA is able to give us their feedback with respect to size, with respect to those things. We've done all of the statistical forecasts on our own, to say, we think that it's this but ultimately, FDA is going to be the ones that will guide that. And we want to work hand-in-hand with them. So I would certainly suspect that on our third quarter call we will have that information and be able to better forecast that.

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Joannes Sebastian van Berkom, Van Berkom and Associates Inc. - President, CEO, CFO, COO, Chief Legal Officer & Chairman [14]

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Okay. The second question I have is, you did mention that you've opened 3 new clinics in the second quarter, Toronto, Calgary and Ottawa. For the balance of the year, is -- what is the ramp-up in terms of further clinics?

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Philippe Deschamps, Helius Medical Technologies, Inc. - Chairman, CEO & President [15]

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So we feel quite passionately that we're going to continue to aggressively open clinics for the balance of the year. We're now hyper-focused on those 3 to get them fully operational. As I mentioned briefly in the call, these are new clinics to the PoNS treatment. So they don't have the experience. So based on -- but now -- but they actually have to hire staff because these PT clinics are -- operate very efficiently for their existing customers. So they have to build their infrastructure. And so they're just now starting to treat patients. And right now, for us, priming quality is above all else. We want to continue to generate the incomes like -- the outcomes, sorry, like Marcos described in his, and as we're seeing in the overall data that we're reviewing now. And so immediately after those are up to speed, we'll continue to expand. Now it's not a black and white process. Of course, we are -- we've already identified several clients across our several clinics across the country that we want to identify. We just want to make sure that we're deliberate about the quality in terms of getting the outcomes before we open them up.

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Joannes Sebastian van Berkom, Van Berkom and Associates Inc. - President, CEO, CFO, COO, Chief Legal Officer & Chairman [16]

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All right. Can I ask you one other question?

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Philippe Deschamps, Helius Medical Technologies, Inc. - Chairman, CEO & President [17]

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Very quickly.

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Joannes Sebastian van Berkom, Van Berkom and Associates Inc. - President, CEO, CFO, COO, Chief Legal Officer & Chairman [18]

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Australia and Europe timing, roughly?

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Philippe Deschamps, Helius Medical Technologies, Inc. - Chairman, CEO & President [19]

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So what's encouraging in those is we're in active discussions. Neither of those jurisdictions guide, what -- when they come back. And so in Australia, we're -- we've answered their administrative questions. So I can't tell you whether it's a week, a month or 6 months, but it seems that we're engaged in active discussions there. Europe is a little more complicated because of their change to the -- they're making a major change in their regulatory process and Brexit also, it's causing a little bit of havoc on that side. So while we're deeply engaged with the regulators there, it's much harder for me to predict something there that will happen. So obviously, we'll report as soon as we hear. But so far, so good.

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Operator [20]

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