Good day, and thank you for standing by. Welcome to the Helius Medical Technologies Fourth Quarter and Year-End 2022 Earnings Conference Call. [Operator Instructions] As a reminder, today's conference may be recorded. I'd now like to hand the call over to your speaker, Michelle Bilski, Investor Relations. Please go ahead.

Thank you, operator. Welcome to the fourth quarter and year-end 2022 Earnings Conference Call for Helius Medical Technologies. This is Michelle Bilski of In-Site Communications, Investor Relations for Helius. With me on today's call are Dane Andreeff, Helius Medical's President and Chief Executive Officer; and Jeff Mathiesen, Chief Financial Officer. Also on the call today is Dr. Antonella Favit-Van Pelt, Helius Medical's Chief Medical Officer, who will be available as needed during Q&A. At this time, all participants have been placed in a listen-only mode. Please note that this call is being recorded, and access to the webcast can be obtained through the Investors section of Helius website at www.heliusmedical.com. Before we begin, I would like to remind everyone that our remarks and responses to your questions today may contain forward-looking statements that are based on the current expectations of management. These forward-looking statements involve inherent risks and uncertainties that could cause actual results to differ materially from those indicated, including those identified in the Risk Factors section of our most recent annual report on Form 10-K and quarterly reports on Form 10-Q. Such factors may be updated from time to time in our other filings with the SEC, which are available on our website. All statements made during this call are as of March 9, 2023. We undertake no obligation to publicly update or revise our forward-looking statements as a result of new information, future events or otherwise, except as required by law. I would now like to turn the call over to Dane Andreeff, President and Chief Executive Officer of Helius.

Thank you, Michelle, and welcome, everyone. It was another strong quarter for Helius and our Portable Neuromodulation Stimulator or PoNS device, which is indicated in North America for treatment of gait deficit due to mild-to-moderate symptoms of MS when used in conjunction with a supervised therapeutic exercise program. PoNS is also authorized in Canada for the treatment of chronic balance deficit due to mild-to-moderate traumatic brain injury or TBI and just announced this morning for stroke. In the U.S., PoNS also has an FDA breakthrough designation for stroke in addition to the breakthrough designation for MS, which we believe will be a significant benefit as we seek reimbursement in the United States. During the fourth quarter, the benefits of PoNS therapy continued to resonate with health care providers, physical therapists and patients in the U.S., as we add prescribers and train PTs because PoNS is the only available portable and readily accessible neurostimulation therapy with the potential to generate neuroplasticity, essentially rewiring parts of the brain. It is a potential game changer for people suffering from gait and balance in MS. Our mission is to make this important and innovative technology available to as many qualified patients as possible and we are working to improve the access on multiple fronts. Physical therapists play a key role in PoNS treatment and training them quickly enough to meet demand was a bottleneck we faced early in the U.S. To standardize the process and reduce training time, we introduced an online training module, which allows practitioners who wish to treat MS-related balance and gait deficit to learn remotely at their own pace in 3 hours or less, instead of through an in-person multi-day course. It has quickly become the primary for training therapists, which means faster relief for patients. Another way we've improved…

Thanks, Dane. It is a pleasure to be with you today. Total revenue was $282,000 for the fourth quarter of 2022 compared to $258,000 in the fourth quarter of last year, an increase of 9% comprised primarily of product sales in both periods. Full year 2022 revenue was $787,000, an increase of 51% over 2021, reflecting the impact of the U.S. commercial launch of PoNS for MS in April 2022, partially offset by a small decrease in revenue in Canada that resulted from exchange rate changes. For the fourth quarter of 2022, our gross profit was $132,000 compared to $129,000 in the prior year. Operating expenses for the fourth quarter of 2022 were $2.8 million compared to $4.2 million in the fourth quarter of 2021, a decrease of $1.4 million. The decrease was primarily the result of lower product development and clinical trial activity following the U.S. commercial launch of PoNS. Operating loss for the fourth quarter of 2022 was $2.7 million compared to a loss of $4.1 million for the prior year period. The public warrants we issued in connection with the August 2022 financing are accounted for as a derivative liability instrument on the balance sheet. The increase in the valuation of these derivative instruments from the date of the offering to the quarter or year-end resulted in an expense of $2.5 million during the quarter. The warrants will require revaluation in future quarters tied to our share price, resulting in noncash income or expense for each reporting period. We reported a net loss for the fourth quarter of 2022 of $4.9 million or a loss of $0.17 per share compared to a net loss of $4.1 million or a loss of $1.31 per share for the same period last year. Our cash burn from operations for the…

[Operator Instructions] Our first question comes from Jonathan Aschoff with ROTH MKM.

Congrats on the progress. And I'm curious, the PTAP extension, is that driven overwhelmingly by the price, the cash price being prohibitive, let's say?

Jonathan, it's Dane. The answer is yes, first and foremost, as it is cash pay and we're implementing our reimbursement strategy. But we also want to have -- we want to share the adoption and increase awareness to the PTs that we're training up to the neurologists so that they all get more and more experienced with PoNS therapy.

Okay. And how about the TEP traction? What can you tell me about people in TEP?

So currently, we are enrolling into our 5 sites at the moment. So we're pleased with the 5 sites that have signed up so far. We're looking to hopefully get to the 10 to 12 level by year-end.

Okay. And how's about trial enrollment for stroke?

At this time, we have not rolled into our stroke trial.

Okay. And then lastly, when do you think -- it's obviously taking some estimation and I'm not going to hold you to it, but when do you think you might have data ready to submit or to talk about, that would be the data you'd want to underpin insurance reimbursement.

Well, if you recall, there is two ways that we're approaching our reimbursement in the United States for MS and gait deficit. First and foremost, we're looking through CMS right now and looking to meet with them over the next three to six months regarding our codings first and foremost. And then second, also remember that the TCET program will go live, and that's for emerging technology. What we understand right now, the law will come down. The rule making will come down in April. There will be a 60-day notice period of questioning regarding that TCET emerging technology program. And what we understand right now, it's already scheduled for the White House in September. So if you look at the programs that we're implementing, one, to generate evidence for insurance would be our PoNSTEP program, which we just spoke to, but also our registry under -- what under MS right now. So we are collecting data, medical records and so forth under our registry. And Antonella, would you like to just add to that as well?

Yes, absolutely. Thank you, Dane. Right now, we have, as I mentioned, the program -- the concept program, which aims to provide data regarding the utilization, the real-world utilization of PoNS and the ability of PoNS therapy to be effective under different conditions of adherence to physical therapy. The other program is the registry program, which aims to collect not only information about therapeutic outcomes of PoNS, but most importantly, therapeutic outcomes as it relates to the management of MS patients. Therefore, we have what we call soft outcomes that we are prepared to collect and present it to both CMS and the insurance partners to show cost effectiveness in management of patients with MS.

Okay. And PTAP is still $3,895 and the cash is still around $17,000, $18,000?

This is Jeff. The PTAP is $3,895. The cash pay pricing is around $14.5 million.

Our next question comes from Jeffrey Cohen with Ladenburg Thalmann.

This is actually Destiny on for Jeff. I just have a couple around -- well, a couple around a bunch of the things you talked about. So can we start with how many PTs you've trained today to date through your online training program?

We haven't announced that, but it's well over 100 right now. And if you look at just the [ATPA] follow-ups, which we have well over 200 follow-ups with PTs, with neuro, PT centers and some of the bigger national chains like ATI, like PT solutions and also physical balance centers.

Got it. Okay. And I'm wondering around PTAP. You said it was extended until June 2023. So what kind of access strategy are for patients that -- are you thinking about implementing or leveraging beyond June 2023? Is there the opportunity for it to be extended again? Or would you have something a little different? Just high level, what are you thinking in terms of that?

At the moment, we have -- Okay. Go ahead, Jeff.

Yes, sorry. Yes. So I think at the end of the day, we're going to be focused on making sure that there's access to PoNS therapy. We're also very much interested in making sure that we're gathering data that will allow us for reimbursement. And so I think that we will continue to look at ways to make sure that there's access to PoNS, but also pushing towards getting reimbursement because ultimately, reimbursement is going to be key. So I think we've announced until June 30 and as June 30 approaches to see what makes sense on a go-forward basis at that point.

Okay. Perfect. Yes, I know you guys have been very diligent in trying to make this accessible. So awesome. Last 1 for us. You mentioned about 200 leads that you're going to follow up with. Can you just walk us through what that follow-up process looks like? And can you assign any like timing to any of those leads? Or is it still a bit too early to tell?

We've actually had a number of PT's access or PoNS therapy online training already. Before the conference, we actually did a teach-in our Director of Physical Therapy at Helius. Whitney did a great job. So she actually trained PT's live right there and then at our booth after hours. So we're getting actually a great response. But really definitely a bigger movement would be going after the super regional PT clinics like physical, like ATI, like PT solutions and a few others that we would like to be able to just roll it out at a national or a corporate level the PoNS training because it's so easy, it's free to the PT and to the clinic. They could do it in 3 hours or less at their own time. They could break it up. It's actually a wonderful resource for them, but also for the patient.

[Operator Instructions] Our next question comes from Anthony Vendetti with Maxim Group.

Good to see you, Dane, out at the PT conference in San Diego.

No. That was a wonderful meeting. Thank you, Anthony, for spending time with me.

Absolutely. Most of my questions were answered, but can you talk a little bit about your operations in Australia? I know it's approved they're authorized for sale for short-term use. Is that still early stages? Or just an update on what the status there?

Well, sure. So again, just to remind everyone on this call, our investor base, the TGA, which is the regulatory body approved Helius for balance and gait deficit with no indication. So if you think about that, it really puts the PoNS device -- PoNS therapy back into the practitioner's hand. So if they have a stroke patient in one corner with gait deficit or an MS patient with gait deficit or a TBI across the room who sound deficit, they're able to treat the patients. So that is a very exciting potential for us. We are talking to consultants and looking at distribution partners for Australia, but no news yet at the moment.

Okay. Okay. But that broad sort of indication seems like a significant market opportunity potentially in Australia?

Very much so. Even though it's a smaller country than Canada's 40 million people, I think, Australia has 26 million. Like you said, PoNS therapy or PoNS device to be treated for any of their balance and gait deficits across any neurological indication or traumatic brain injury.

Okay. Great. Great. Just remind us, you mentioned that there's another conference upcoming a neurology conference, you're going to be attending. When is that? What's the goal when you attend that?

Yes. So that's the -- in April, it's going to be in Boston the American Academy of Neurology, and that's for general neurologists. So remember, all neurologists and prescribers can prescribe for MS -- for gait deficit due to MS. So we definitely want to be there. We have a booth there and really provide our clinical data, our real-world data and MS, but also talk to them about our platform right now in the U.S., how easy it is for any rehab hospital or clinic for their PTs to get trained up and really educate them so that they understand that PoNS is an effective treatment for gait deficit due to MS. And then the one in Denver is the MS Centers of Excellence that CMSC, and that is solely focused on MS neurology. So remember, we have 3 stakeholders that we have to educate; the patients, the neurologists, both general and the MS specialists in the physical therapists and/or the rehab hospital.

Okay. Great. And then maybe more for Jeff. I guess the guidance of revenues to exceed what they were in '22 in '23. But at this stage, obviously, there could be a lot of quarterly fluctuation. Should we expect that fluctuation to be similar to -- or trend according to the cadence that it was in '21 and '22? Or literally, it could be up and down every quarter just because of the stage of growth you're at?

I think it's more of the latter. It's just -- we're doing a number of things getting the rollout happening here in the U.S. So I think that there's going to just be fluctuations and how things -- the uptake occurs here in the U.S. Having said that, there always is in the Canada side, third quarter is always a soft quarter in Canada. And that's because with the weather, that's what people are vacationing. And so that's typically the softest quarter there. But really, the biggest factor for us is we don't really have any history yet to really understand what the trends are going to be like. And so I don't want to be committing to anything until we see things play out here for a bit.

There are no further questions at this time. I'd like to turn the call back over to Dane Andreeff for closing remarks.

Great. Thank you, everyone. We, at Helius, continue to be gratified by the marketplaces reception to PoNS and are very proud of the foundation we've built. PoNS is an important therapy that has the potential to improve the lives of millions, and we remain committed to bringing this innovative technology to all those who can benefit. Thank you for your time and interest in Helius Medical Technologies, and we'll speak again next quarter. Thank you.

This concludes today's conference. Thank you for participating. You may now disconnect. Everyone, have a great day.