Helius Medical Technologies Mackie Initiation June 2016

Andr Uddin, Ph.D. 416.860.
8675
auddin@mackieresearch.com
J un e 2 3 , 2 0 1 6
HELIUS MEDICAL TECHNOLOGIES SPECULATIVE BUY

HSM-T
$1.22
TARGET (C$):
$3.00
PROJ. RETURN:
A Brain Machine - A New Frontier In Medicine

ACTION Initiating Coverage with a SPECULATIVE BUY Rating
146%
VALUATION:
Discounted
We are initiating coverage of Helius Medical Technologies (Helius) with a

SPECULATIVE BUY recommendation and a 12-month target price of $3.00/share. The
key catalyst is the outcome of their ongoing clinical trials for PoNS, with the hope of
obtaining FDA approval for the only treatment of traumatic brain injury (TBI).
2018 EV/Sales
Share Data
Basic Shares O/S (mm)
77.8
Fully Diluted (mm)
101.9
Market Cap (basic) ($mm)
95.0
Enterprise Value ($mm)
84.6
Debt ($mm)
DETAILS A Potentially Disruptive Device to Amplify Brains Ability to Heal

Itself
Potential First-in-Class, Best-in Class, Disruptive, Neuromodulation Device: Helius
is developing its portable, non-invasive neuromodulation stimulator (PoNS) device,
which delivers specially-patterned nerve impulses to a patient's brain through a
device placed on the tongue. The PoNS device is being developed to treat chronic
neurological symptoms associated with CNS diseases such as post-traumatic brain
injury (TBI) and multiple sclerosis (MS). The total market opportunity for TBI and MS
represents a multi-billion dollar opportunity.
0.0
Next Reporting Date
August
Thomson Chart 1 Year
Reputable Management/High Inside Ownership: The Helius team is well rounded

with a CEO who has an excellent marketing and commercialization background,
having 28 years of leadership experience in the healthcare and pharmaceutical
industries, a CFO & COO that was the CAO of Endo, a top tier specialty pharma
company as well as CFO/COO of MediMedia a marketing services company, a CMO
who helped innovative Inuitive Surgicals (ISRG-NASDAQ) famous da Vinci surgical
robotic system and a Vice President of Strategic Development who has extensive
capital markets experience. Also, 39% of ownership comes from management,
representing high confidence and commitment to company goals.
Corporate Profile
Helius Medical Inc. is a medical device
development
company
focusing
on
neuromodulation to treat TBI and MS. Helius
is developing and commercializing an oral
device (PoNS) delivering specially-patterned
nerve impulses to a patient's brain through
an electrode covered appliance placed on the
tongue.
Risky Business: The potential lofty reward doesnt come without risk. Helius success
depends on FDA-approval of approval of PoNS for two complex diseases: traumatic
brain injury and multiple sclerosis. Helius has not yet completed a large clinical trial
to truly assess PoNS. Neuromodulation is a relatively new field of medicine and, as
such, medical adoption could take longer.
Corporate Profile
IMPACT A Run Up is Expected
- PoNS pivotal TBI results in CY Q4

2016/Q1 2017
- Filing for FDA approval in CY Q4 2016/
Q1 2017
- FDA approval CY Q2/Q3 2017
We expect Helius to have a run into its TBI pivotal trial expected in calendar Q3/Q4
2016. We are applying a conservative 70% discount rate to our estimated FY2018
sales (first full year of estimated PoNS sales) in our valuation, and using a 4.5x
EV/sales multiple to come up with our 12-month target price of $3.00.
FYE Mar 31
FY14A FYQ1/15A FYQ2/15A FYQ3/15A FYQ4/15E FY15E FYQ1/16E FYQ2/16E FYQ3/16E FYQ4/16E FY16E FY17E FY18E
Revenue
US$ million
f.d. EPS
US$/sh
($0.17)
$0.0
($0.04)
$0.0
$0.03
$0.0
($0.04)
$0.0
$0.0
$0.0
CFPS
US$/sh
$0.01
$0.01
($0.01)
$0.06
P/Sales
multiple
NMF
N/A
N/A
N/A
N/A
NMF
N/A
P/EPS
multiple
-5.3x
N/A
N/A
N/A
N/A
-11.6x
P/CFPS
multiple
129.6x
N/A
N/A
N/A
N/A
34.7x
($0.03) ($0.08)
($0.03)
$0.03
$0.0
$0.0
$0.0
$0.0
$0.0
$13.9
$89.1
($0.03)
($0.04)
($0.03)
($0.03) ($0.13) ($0.17) $0.24
$0.11
($0.04)
($0.02)
N/A
N/A
N/A
NMF
4.3x
0.7x
N/A
N/A
N/A
N/A
-6.9x
-5.5x
3.9x
N/A
N/A
N/A
N/A
6.3x
-6.0x
3.0x
$0.09
$0.14
($0.15) $0.30
This report has been created by analysts who are employed by Mackie Research Capital Corporation, a Canadian Investment Dealer. For further disclosures, please see last page of this report.
www.mackieresearch.com
Initiating Coverage Helius Medical Technologies Inc.
Page 2
HEALTHCARE MEDICAL DEVICE
HELIUS MEDICAL TECHNOLOGIES

TA B LE O F C O NT E N TS
INVESTMENT HIGHLIGHTS ............................................................................................................................................................................. 1
EXECUTIVE SUMMARY ....................................................................................................................................................................................... 3
COMPANY BACKGROUND ................................................................................................................................................................................ 4
PRODUCTS .............................................................................................................................................................................................................. 6
Traumatic Brain Injury........................................................................................................................................................................................ 9
Multiple Sclerosis (MS) ................................................................................................................................................................................... 10
Pilot Studies ........................................................................................................................................................................................................ 11
PoNS Strategy ........................................................................................................................................................................................................ 23
Expected Future Milestones ................................................................................................................................................................................ 25
MARKET OVERVIEW ......................................................................................................................................................................................... 28
FINANCIAL FORECAST .................................................................................................................................................................................... 36
VALUATION ......................................................................................................................................................................................................... 40
MANAGEMENT TEAM ...................................................................................................................................................................................... 41
Board of Directors .............................................................................................................................................................................................. 43
RISKS ...................................................................................................................................................................................................................... 45
IMPORTANT DISCLOSURES ........................................................................................................................................................................... 48
ANALYST CERTIFICATION ............................................................................................................................................................................. 48
Note: All financial figures in this report are in Canadian dollars, unless stated otherwise. Report pricing date: 20-06-16
Page 3
MEDICAL DEVICE
HELIUS MEDICAL TECHNOLOGIES

INC.
EX EC U TI V E SU M M A R Y
CO M P ANY B AC K G RO UN D & HI ST O RY
Founded on January 22, 2013 as NeuroHabilitation Corporation (NHC), a Delaware company that was 100% acquired on June 13,
2014, pursuant to a plan of merger, whereby the wholly owned subsidiary was merged with and into NeuroHabilitation Corporation.
All of the common shares in the capital of NHC were cancelled in consideration for 35.3M class A common shares of Helius. In
January 2013, NeuroHabilitation Corporation entered into an exclusive rights agreement, whereby Advanced Neuro-Rehabilitation
LLC (ANR) granted NHC exclusive worldwide rights to ANRs trade secrets, knowhow and patent pending technology for a noninvasive means for delivering neurostimulation through the oral cavity, in exchange for 50% equity in NeuroHabilitation Corporation
and a 4% royalty of NHCs revenue collected from (a) the sale of products covered by any claim of the patent pending rights to end
users and (b) services related to the therapy or use of such products in therapy services. NHC is a wholly owned subsidiary of Helius.
Prior to the transaction with NHC, Helius had no active business. Helius is incorporated in the state of Wyoming with offices located
in Newtown, Pennsylvania and Vancouver, British Columbia.
PO N S P O T ENT I AL F IR ST - IN- CL AS S & B E ST - IN- C L AS S NE UR O M O DUL AT IO N
T ARG ET I NG A L AR G E M AR K ET T H AT H AS AN UNM ET M EDI C AL N E ED
DE VI C E
Helius is developing its portable, non-invasive neuromodulation stimulator (PoNS) device which delivers specially-patterned nerve
impulses to a patient's brain through a device placed on the tongue. The PoNS device is being developed to treat chronic
neurological symptoms associated with CNS diseases such as post-traumatic brain injury (TBI) and multiple sclerosis (MS). TBI and
MS represents a multi-billion dollar market opportunity.
HIG H IN S ID E O W N E R SH I P M AN AG EM EN T T E AM VE RY W E L L E X P ER I EN C ED
The Helius team is well rounded with a CEO who has an excellent marketing and commercialization background, having 28 years
of leadership experience in the healthcare and pharmaceutical industries, a CFO & COO that was the CAO of Endo, a top tier
specialty pharma company as well as CFO/COO of MediMedia a marketing services company, a CMO who helped
innovative Inuitive Surgicals (ISRG-NASDAQ) famous da Vinci surgical robotic system and a Vice President of Strategic
Development who has extensive capital markets experience. Also, 39% of ownership comes from management, representing high
confidence and commitment to company goals.
RE AD Y F O R T H E R U NU P? A V E RY H IG H RI S K, PO T E NT I AL H I G H R EW AR D
Any late-stage trial has risk, particularly if it is in high risk CNS diseases like TBI and MS. However, based on all the safety data of
PoNS and clinical results to date, we expect the device has a decent shot at obtaining FDA approval. Helius is not a diversified
entity, their success will hinge upon their ongoing pivotal TBI trials.
RE CO M M END AT IO N AN D T ARG ET
We are initiating coverage of Helius Medical Technologies Inc. with a SPECULATIVE BUY recommendation and a 12-month target
price of C$3.00/share.
Page 4
COMPANY BACKGROUND
Company Overview
Helius Medical Technolgies (Helius) is a Pennsylvania-based medical device company focused on
neurological wellness. The company seeks to develop, license or acquire unique and non-invasive platform
technologies that help patients affected by neurological symptoms caused by central nervous system
(CNS) disease or trauma. Helius core technology platform is its Portable Neuromodulation Stimulator
(PoNS) device designed to stimulate the brains innate ability to achieve neuroplastic change. When
combined with physiotherapy or adjunctive rehabilitation, the goal is to aid persons with neurological,
cognitive, sensory, and motor disorders. PoNS is currently being tested in mild-to-moderate traumatic
brain injury (TBI) patients with balance disorders and multiple sclerosis (MS)-related gait and balance
disorders.
Helius had its beginnings in the Tactile Communication and Neurorehabilitation Laboratory (TCNL) at
the University of Wisconsin-Madison. In the late 2000s, TCNL developed and built the 1st generation PoNS
device and the laboratory principals formed Advanced NeuroRehabilitation, LLC (ANR). In 2013, ANR
and MPJ Healthcare formed joint venture called NeuroHabilitation Corporation (NHC), which later
signed a Collaborative Research and Development Agreement (CRADA) with the US Department of
Defense. Pursuant to the CRADA, the U.S. army laboratories agreed to cooperate with NHC on research
for the ongoing design and development to determine if the PoNS device could be developed for
commercial use in assisting physical therapy in the treatment of soldiers and others with military relevant
neurological manifestations of TBI, including but not limited to Tinnitus, post-traumatic stress disorder
(PTSD), pain, sleep and any subsequent indications. However, the U.S. army has no obligation to
purchase PoNS devices if approved and later commercialized. To conduct clinical development for the
treatment of TBI, in July 2015, Helius signed a sole source contract with the US Army. In 2014, Helius
acquired NHC as a wholly owned subsidiary in a reverse merger and subsequently became a publicly
traded company on the Canadian Stock Exchange in Toronto (CSE: HSM). Helius is also traded on OTCQB
marketplace (OTCQB: HSDT). The company is now listed on the Toronto Stock Exchange (TSE:HSM).
Figure 1: Corporate Structure
Source: Helius prospectus March 2016
Page 5
Figure 2: Financing/Share Issuance History of Helius

Type of Security
Date of Issuance/Grant Number of Securities Issued Issue/Exercise Price Value (Million)
Common Shares
Common Share Purchase Warrants
Common Shares
Employee Stock Options
Common Shares
Common Shares
Common Shares
Common Shares
Finder's Warrants
Common Shares
Finder's Warrants
Common Shares
Finder's Warrants
Common Share Balance as of Mar. 31, 2015
Options O/S as of Mar. 31, 2015
Warrants O/S as of Mar. 31, 2015
Apr. 18, 2016

Apr. 18, 2016
Jan. 7, 2016
Jan. 7, 2016
Dec. 31, 2015
Nov. 10, 2015
Nov. 10, 2015
Oct. 28, 2015
Oct. 28, 2015
Oct. 21, 2015
Sep. 28, 2015
Aug. 15, 2015
Jul. 17, 2015
Jul. 17, 2015
Jul. 17, 2015
Jun. 26, 2015
Jun. 26, 2015
Jun. 26, 2015
Apr. 30, 2015
Apr. 30, 2015
Apr. 30, 2015
Pre-Mar.31, 2015
Pre-Mar.31, 2015
Pre-Mar.31, 2015
Total*
9,200,000
4,600,000
5,555,556
2,777,778
100,000
2,083,333
1,041,667
30,000
950,000
750,000
94,640
50,000
125,756
62,878
7,545
335,463
167,731
18,978
849,273
424,636
27,396
63,104,788
4,920,000
4,222,200
101,499,618
C$1.00
C$1.50
US$0.90
US$1.35
C$1.24
US$0.96
US$1.44
US$0.80
C$0.84
C$0.87
C$0.6
C$0.98
C$2.63 (US$2.15)
C$3.67 (US$3.00)
C$2.63 (US$2.15)
C$2.61 (US$2.15)
C$3.62 (US$3.00)
C$2.61 (US$2.15)
C$2.60 (US$2.15)
C$3.62 (US$3.00)
C$3.62 (US$3.00)
US$0.26
C$1.14
C$1.00
C9.2M
C$6.9M
US$5.0M
US$3.8M
C$0.1M
US$2.0M
US$1.5M
US$0.0M
C$0.8M
C$0.7M
C$0.1M
C$0.0M
C$0.3M
C$0.2M
C$0.0M
C$0.9M
C$0.6M
C$0.0M
C$2.2M
C$1.5M
C$0.1M
US$16.4M
C$5.6M
C$4.2M
US$55.0M
Source: Helius SEC filings
Core Technology: Electroceuticals-Neuromodulation

Electroceuticals is a new term for bioelectronics medicine that utilises electrical stimulation to affect and
modify biological functions of the body through neuromodulation. Neuromodulation is the use of external
stimulation to intentionally change and regulate the electrochemical environment of the nervous system by
changing electrical impulses. Electrical impulses (action potential) is the language used by nervous
system, transmitted around the body. Virtually all organs and functions are regulated through circuits
made of neurons communicating through such impulses. Two features make these circuits excellent
targets for therapeutic intervention. First, they comprise discrete components interconnected cells, fibre
tracts and nerve bundles allowing for pinpoint intervention. Second, their control is conveyed by the
patterns of action potentials, which can be altered for treatment. PoNS is a bioelectronic device designed to
electrically stimulate the tongue. The electrical impulses are translated by the nerve endings in the tongue
into impulses that travel through the trigeminal and facial nerves to induce brain plasticity. The
stimulation is combined with physical or cognitive exercises designed to overcome the neurological
symptoms such as balance disorders.
Page 6
Figure 3: Potential Pathway for An Electroceutical (Neuromodulation) Device
Source: Nature. 2013 Apr 11; 496(7444): 159161.
PRODUCTS
Portable Neuromodulation Stimulator (PoNS) Traumatic Brain Injury-related Balance Disorders and
Multiple Sclerosis-related Gait and Balance Disorders Pivotal Clinical Trial Stage
The Design of PoNS Device
Traditional neurological rehabilitation interventions have typically involved medication and various forms
of therapies, including physical therapy. Helius PoNS device (PoNS) is being developed as a
neurological rehabilitation device to enable the first non-invasive means for delivering neurostimulation
through the oral cavity. With respect to many neurologic diseases and disorders such as Multiple Sclerosis
(MS), Huntingtons, Muscular Dystrophy, Spina Bifida, Parkinson's and Alzheimer's diseases, Stroke,
Epilepsy, and Traumatic Brain Injury (TBI), current scientific studies suggest that many such diseases
may benefit from neurostimulation. PoNS, which is placed into and held in the mouth of patients,
stimulates the trigeminal and facial nerves that innervate the anterior two-thirds of the human tongue
using a sequenced pattern of superficial electrical stimulation. This stimulation excites a natural flow of
neural impulses to the brainstem and cerebellum that is designed to effect changes in the function of these
targeted brain structures. At present, Helius is developing PoNS in clinical trial stage to improve balance
disorders in TBI patients in the U.S. The company also recently completed a pilot study on gait and
balance for MS patients in Canada the next indication to be developed is for MS.
Page 7
Figure 4: PoNS 4.0 Device
Source: Helius Medical
The PoNS is held lightly in place by the lips and teeth around the neck of the tab that goes into the mouth
and rests on the anterior, superior part of the tongue. The paddle-shaped tab of the device has a
hexagonally patterned array of 143 gold-plated circular electrodes. Those electrodes generate low-level
electrical current to stimulate the lingual branch projections of at least two cranial nerves in the anterior
tongue. The device function is controlled by four buttons: On, Off, Intensity Up, and Intensity Down.
While the voltage and pulse timing to each electrode are programmed into the device and cannot be
altered, the stimulus intensity can be adjusted with a pair of buttons. The sensation produced by the
electrodes is similar to the feeling of drinking a carbonated beverage. The biphasic waveform is specifically
designed to ensure zero net DC current to minimize the potential for tissue irritation. Upon the beginning
of the stimulation, subjects in clinical trials are instructed to press the Up intensity button and hold it for
approximately 4-5 seconds to reach sensation threshold. Those subjects frequently notice that the sensation
intensity decreases 2-4 minutes after stimulation onset. Subjects are then instructed to simply increase the
sensation level to return to the predetermined perceptual midpoint of their individual perceptual dynamic
range.
Figure 5: Use of the PoNS device is done in conjunction with Physiotherapy
Page 8
Figure 6: Proposed Mechanism of Action of PoNS
Source: Tactile Communication and Neurohabilation Laboratory University of Wisconsin Madison
The History of PoNS Development

The original PoNS 1.0 experimental device was developed in 2007 in the Tactile Communication and
Neurorehabilitation Laboratory (TCNL) at the University of Wisconsin-Madison. In 2010, the PoNS 2.2
device was released. Current PoNS used in clinical trials is the fourth generation (PoNS 4.0). This version
has better product design with enhanced user experiences including better patient comfort, more hygienic
(a replaceable mouthpiece) and is more technologically advanced (data logging function).
How Does PoNS work?
As described above, PoNS is placed on the anterior, superior part of the users tongues to generate
electrotactile stimulation. Electrotactile stimulation is the process of using a small stimulation electrode to
pass a small electric current through the skin, producing controlled, localized touch sensations. This
generates an electric field in subcutaneous tissue, which directly excites the afferent nerve fibers (those that
direct impulses toward the CNS) responsible for normal, mechanical touch sensations. The stimulation is
perceived as tingling, pressure, vibration or a pinprick, depending on the electrode and stimulation
waveform properties. Depending on the characteristics of the stimulation and the afferent nerves,
electrotactile stimulation may directly or indirectly induce neuromodulation. Neuromodulation is the use
of external stimulation to intentionally change and regulate the electrochemical environment of the brain.
PoNS induces neuromodulation through stimulation to two cranial nerves in users tongues: the trigeminal
nerve responsible for sensations in the face, biting and chewing; and the facial nerve responsible for motor
control of most of the muscles of facial expression. This rehabilitation therapy is called Cranial Nerve Noninvasive neuromodulation, or CN-NINM. Other contemporary forms of neurostimulation aimed at
inducing neuromodulation are costly and invasive, with the potential for adverse effects. For example,
deep brain stimulation, which uses implanted pacemaker-like electrical devices to decrease tremors in
Parkinsons, carries surgical risks. Neuromodulation enhances neuroplasticity, the brains ability to
restructure or relearn in response to new experiences, sensory input and functional demands. The process
of neuroplasticity underlies all cerebral learning, training and rehabilitation. Through the application of
CN-NINM, Helius is hoping PoNS can help TBI and MS patients benefit from their own brains
neuroplasticity to regain the ability to keep balance and normal gait during rehabilitation treatment.
Page 9
Traumatic Brain Injury Looking at the US

Of the 1.7 million who sustain a TBI each year in the United States: 52,000 die; 275,000 are hospitalized; and
1.365 million are treated and released from an emergency department (Source: Faul et al Traumatic Brain
Injury in the United States: Emergency Department Visits, Hospitalizations and Deaths 20022006 Centers for
Disease Control and Prevention, National Center for Injury Prevention and Control; 2010). The leading
causes of TBI are: falls (35.2%); motor vehicle-traffic crashes (17.3%); struck by/against events (16.5%);
assaults (10%); and unknown/other (21%). Blasts are a leading cause of TBI for active duty military
personnel in war zones. Direct medical costs and indirect costs such as lost productivity of TBI totaled an
estimated $60 billion in the United States in 2000.
The number of people with TBI who are not seen in an emergency department or who receive no care is
unknown (Source: Finkelstein et al The Incidence and Economic Burden of Injuries in the United States.
New York: Oxford University Press, 2006).
Traumatic Brain Injury (TBI) Clinical Background
A traumatic brain injury (TBI) is defined as a blow or jolt to the head or a penetrating head injury that
disrupts the function of the brain. Not all blows or jolts to the head result in a TBI. The severity of such an
injury may range from "mild," i.e., a brief change in mental status or consciousness to "severe," i.e., an
extended period of unconsciousness or amnesia after the injury. A TBI can result in short or long-term
problems with independent function.
There are many types of brain injuries. The most typical are:
Concussion: The most minor and the most common type of TBI, involving possible brief loss of consciousness in response to a head injury, but in common language the term has come to mean any
minor injury to the head or brain.
Contusion: An area of swollen brain tissue mixed with blood released from a broken vascular system.
Contrecoup: A contusion that occurs in response to the shaking of the brain back and forth within the
confines of the skull. This injury often occurs in car accidents after high-speed stops, and in shaken
baby syndrome.
Diffuse axonal injury (shearing): Involves damage to individual nerve cells (neurons) and loss of
connections among neurons. This damage causes a series of reactions that eventually leads to swelling
of the axon and disconnection from the cell body of the neuron. This form of neurotrauma is
frequently associated with exposure to explosive blasts.
Hematoma: Heavy bleeding into or around the brain tissue.
Anoxia: A condition in which there is an absence of oxygen supply to an organs tissues, even if there
is adequate blood flow to the tissue. Without oxygen, the cells of the brain die within several minutes.
This type of injury is often seen in near-drowning victims, in heart attack victims, or in people who
suffer significant blood loss from other injuries that decrease blood flow to the brain.
Neurotoxicity: Occurs when the neurons that communicate with other neurons degenerate and release
toxic levels of neurotransmitters into the synapse, damaging neighboring neurons through a secondary neuroexcitatory cascade.
Brain injuries do not heal like other injuries. Since our brain defines who we are, the consequences of a
brain injury can affect all aspects of our lives, including our personality. TBI patients commonly report
problems with balance. Below are common causes of balance disorders after TBI:
Medications: A number of commonly used medications in TBI can cause dizziness, light headedness
and decreased balance. These include some blood pressure medications, antibiotics, tranquilizers,
heart medications, and anti-seizure medications.
Problems with eyesight (vision impairments): Eyesight is one of the key senses to keep balance.
Eyesight problems after TBI such as double vision, visual instability, partial loss of vision, and
problems with depth perception can make balance worse.
Page 10
Inner ear problems (vestibular impairments): Inner ear contains many tiny organs that help keeping
balance. If the inner ear (vestibular system) is damaged from a head injury, one may have problems
with balance, dizziness, or a sudden sensation of spinning.
Problems with ability to sense things (sensory impairments): For example, nerves in ones feet send
messages to the brain that help keep balance. If it is damaged, the brain may not correctly process the
messages.
Brainstem injury: A traumatic injury to the brainstem and cerebellum (parts of the brain that control
movement) can make it hard to walk and maintain balance.
Figure 7: Common causes of TBI in military and civilian people
Multiple Sclerosis (MS) Clinical Background

Multiple sclerosis, often referred to MS, is a condition of the central nervous system (CNS). In MS, the
coating around nerve fibres, called myelin, is damaged, causing a range of symptoms including gait and
balance disorientation. Myelin protects the nerve fibres in the CNS, which helps messages travel quickly
and smoothly between the brain and the rest of the body. In MS, the immune system, which normally
helps to fight off infections, mistakes myelin for a foreign body and attacks it. This damages the myelin
and strips it off the nerve fibres, either partially or completely, leaving scars known as lesions or plaques.
This damage disrupts messages travelling along nerve fibres. As well as myelin loss, there can also
sometimes be damage to the actual nerve fibres. It is this nerve damage that causes the increase in
disability that can occur in MS. Common causes to gait and balance disorders in MS patients are
summarized below:
Vision: Visual problems, such as blurring or double vision, can give confusing information to the brain
when it tries to work out where the body is moving relative to the world around it.
The inner ear problems: If MS has affected the message pathways between your inner ear and the
brain, the information may be disrupted or missing, which can add to balance problems.
Sensory changes: Changes in sensation, such as numbness or tingling, might mean the brain may not
be receiving the accurate information it needs to balance your body properly.
Balance information problems: The way that brains process balance information is complex. MS nerve
damage in the cerebellum or brainstem can cause problems with vertigo (disorientation), sometimes
accompanied with nausea.
Meanwhile, MS can cause a wide range of symptoms that can have an effect on balance, including
difficulties with coordination, tremor and muscle weakness, stiffness or spasms.
Page 11
Figure 8: Multiple Sclerosis
Source: Mayo clinic
Collaboration Agreements with U.S. Army

Helius subsidiary, NHC, has a CRADA in place between the inventors of PoNS and the Army
Laboratories. A cooperative research and development agreement (CRADA) is an agreement between a
government agency and a private company or university to work together on research and development.
Pursuant to the CRADA, the Army Laboratories agree to cooperate with NHC on research for the ongoing
design and development to determine if the PoNS device can be developed for commercial use in assisting
physical therapy in the treatment of soldiers and others with military relevant neurological disorders,
including but not limited to Tinnitus, post-traumatic stress disorder, or PTSD, pain and any subsequent
indications identified by the parties. Helius is solely responsible to fund and oversee clinical studies for the
PoNS device and seek FDA clearance and approval of the PoNS device.
On July 7, 2015, Helius announced that NHC entered into an agreement (a contract) with the United States
Army Medical Research and Materiel Command (USAMRMC) to support the clinical trial completion of
the PoNS registration trial for treatment of balance disorder associated with mild to moderate TBI. The
Army Laboratories also agreed in the January 12, 2015 amendment to our CRADA to be responsible to
support the execution of clinical studies for the PoNS device as a treatment for mutually agreed upon
military relevant neurological disorders, which could include but not be limited to Tinnitus, PTSD, and
pain, sleep and any subsequent indications identified by the parties. The amount of such support, if any,
and the terms of such responsibility to support such clinical studies are not yet negotiated and we have no
assurance that we can ultimately reach agreement with the Army Laboratories on such amount or terms of
support, and there can be no assurance that the Army Laboratories will not otherwise attempt to
renegotiate its responsibilities under the CRADA.
Previous CN-NINM Experience in Human Subjects with Balance Disorders

Pilot Study 1: CN-NINM Application to Balance Disorders
Five patients (1 traumatic brain injury, 1 spinocerebellar ataxia, 3 vestibular dysfunction) with moderate
balance, gait, and visual tracking deficits participated in this study. Each had participated in a variety of
unsuccessful treatments for problems with balance, gait, vertigo, and nausea. Assessments of balance, gait,
posture and eye movements were quantified using a number of mechanisms to measure the effects of the
CN-NINM training regimen:
Page 12
Standardized self-assessment surveys of perceived dizziness and loss of stability via the Dizziness
Handicap Inventory (DHI) and Activity-specific Balance Confidence scale (ABC).
Digital head-based postural stabilography (HPS - similar to standardized force platform

posturography) to assess changes in posture.
Functional magnetic resonance imaging (fMRI) to observe potential changes in the cerebral cortex,
cerebellum, pons varolli and brainstem.
After each subject completed baseline testing, they received CN-NINM (Cranial-nerve Non-invasive
Neuromodulation) stimulation while simultaneously performing progressively challenging postural
control training. Subjects also received physical exercise training to develop improved motor coordination
and mobility as part of the CN-NINM training. Subjects participated in CN-NINM training for 5
consecutive days and were retested. The results of these tests are shown in the table below. All subjects
exhibited improved scores on the self-assessment measures, indicating that they perceived themselves as
being more stable and less 'dizzy' after CN-NINM training. Stabilography scores indicate that subjects
were more stable. The results showed that while individual differences varied widely, and are dependent
on both the subjects initial condition and unique symptoms, all 5 subjects improved their postural control.
The fMRI images showed increased activity in the visual associative area on the brains of the 5 subjects.
Figure 9: Summary of Results from Pilot Study 1 (% Improvement Greater than 5% Were Considered Clinical Significant)
Pilot Study 2: CN-NINM Application to TBI

Four TBI patients were enrolled to participate a 5-day period of CN-NINM intervention. Functional testing
using dynamic gait index (DGI) and sensory organization test (SOT) was applied before and after CNNINM intervention. The DGI is a clinician-scored index of 8 facets of gait. Scores range from 0 (worst) to 24
(normal). A score change of 3.0 is generally considered clinically significant. The SOT is an objective,
automated measure of sensory-motor integration that evaluates the functional contribution of the
somatosensory, visual, and vestibular components of balance. A composite score is calculated and
compared with a database normalized for age and height. Changes greater than 5 points are considered
clinically significant improvement. The DGI scores indicated significant improvements in stability and gait
that were retained for as much as 6 hours after completion of CN-NINM in the day. SOT scores also
showed significant improvement after CN-NINM intervention. Results of DGI and SOT scores were
shown in Fig. 10 and Fig. 11.
Page 13
Figure 10: Summary of DGI Scores from Pilot Study 2 (Changes greater than 3 points Were Considered Clinical
Significant)
Figure 11: Summary of SOT Scores from Pilot Study 2 (Changes greater than 5 points Were Considered Clinical
Significant)
Other Clinical Trials Involving PoNS device

There have been several small trials involving the PoNS device in conjunction with physical therapy
produced statistically significant better outcome in patients with resistant neurological conditions
secondary to disease or trauma.
Page 14
Figure 12: Optum Third-party Retrospective Analysis Conditions
Source: United Health Group Optum
The Dynamic Gait Index (DGI) is a clinical tool to assess gait. A change greater than 3 points is
considered clinically significant.
The Multiple Sclerosis Impact Scale (MSIS-29) is a 29-item self-report rating scale for measuring the
physical and psychological impact of multiple sclerosis (MS).
The Sensory Organization Test (SOT) is a composite score calculated and normalized for age and
gender. A composite change of 5 points or greater is considered statistically significant.
Multiple Sclerosis (MS) Pilot Study

An MS pilot study involved evaluating the PoNS device in 14 subjects 7 of which were controls and
received no stimulation and 7 patients were active receiving neural stimulation with PoNS and
concomitant physiotherapy. This MS pilot trial was conducted independently at the Montreal Neurological
Institute and Hospital, and at Concordia Universitys PERFORM Center. The trial objectives involved
exploring the putative beneficial effects of PoNS device stimulation. Data from this trial is to be used for
the design of future registration studies. This trial used functional MRI (fMRI) of the brain to differentiate
between the study groups.
Functional magnetic resonance imaging based on blood-oxygenation-level-dependent (BOLD) signal
variations is clinically used to investigate the impact of neurological disorders on brain function. Such
disorders effect not only the localization but also the amplitude and extent of the BOLD signal. VOI
(volume of interest) and independently quantifies the mean BOLD signal and extent of the activated
volume.
Page 15
Figure 13: fMRI Changes vs Healthy Controls
rostral anterior cingulate cortex (rACC) The ACC appears to play a role in a wide variety of
autonomic functions, such as regulating blood pressure and heart rate. It is also involved in
certain higher-level functions, such as reward anticipation, decision-making, impulse control, and
emotion.
dorsolateral prefrontal cortex (DLPFC) An important function of the DLPFC is the executive
functions, such as working memory, cognitive flexibility, planning, inhibition, and abstract
reasoning. All complex mental activity requires the additional cortical and subcortical circuits
with which the DLPFC is connected. The DLPFC is also the highest cortical area that is involved in
motor planning, organization and regulation.
Noninvasive Neuromodulation for Treatment of Symptoms Due to Mild or Moderate Tramatic Brain
Injury (TBI) (NCT02158494)
It should be note that the inventors of the PoNS technology are conducting this TBi trial at the Tactile
Communication and Neurohabilation Laboratory at the University of Wisconsin Madison. Forty-four TBI
patients are being recruited for 2 weeks of intensive in-lab balance and gait training followed by 12 weeks
of intensive home training with weekly in-lab check sessions. Half of the subjects will use CN-NINM (by
PoNS) in conjunction with the exercise. Half of the subjects will use very low level stimulation in
conjunction with the exercise, and will serve as a control group
Page 16
Figure 14: TBI Trial Study Design

Figure: Training Schedule for Phase 1 of the TBI trial
Note: BAT refers to breathing and awareness training
The primary endpoint is the NeuroCom Computerized Dynamic Posturography Sensory Organization
Test (SOT) which is to be measure the change from baseline at 2, 5, 8, 11, 14, 17, 20, 23 and 26 weeks. This
test measures standing dynamic balance.
Page 17
Figure 15: Primary Outcome Measure
Source: NeuroCom International Inc.
Other Outcome Measures:
Neurobehavioral Symptom Inventory is to measured as a change from baseline at 2, 14, and 26 weeks.
This endpoint is a subjective inventory of TBI symptoms
6-Minute Walk Test (6MWT) is an endpoint that measures the change from baseline at 2, 5, 8, 11, 14,
17, 20, 23, and 26 weeks. This test measures walking speed over ground.
Dynamic Gait Index (DGI) is measured via the change from baseline at 2, 5, 8, 11, 14, 17, 20, 23, and 26
weeks. The DGI assesses walking, walking with head turns, over and around obstacles, and stairs.
Physiologic Stress Test is measured via the change from baseline at 2, 14, and 26 weeks. The
physiologic stress test measures resting & post exercise heart rate, respiration, skin conductance, and
skin temperature.
California Verbal Learning Test (CVLT) is measured via a change from baseline at 2, 14, and 26 weeks.
The CVLT assesses short- and long-term verbal memory.
Brief Symptom Inventory 18 (BSI 18) is measured via a change from baseline at 2, 14, and 26 weeks.
The BSI 18 assesses anxiety symptoms.
Wechsler Adult Intelligence Scale - Symbol Search and Coding (WAIS-IV) is measured via a change
from baseline at 2, 14, and 26 weeks. The WAIS-IV assesses visual spatial abilities.
Pittsburgh Sleep Quality Index (PSQI) is measured via a change from baseline at 2, 14, and 26 weeks.
PSQI is a subjective inventory of sleep habits, duration and quality.
Headache Disability Index (HDI) is measured via a change from baseline at 2, 14, and 26 weeks. The
HDI assesses frequency & severity of headaches.
Electromyography (EMG) is measured via a change from baseline at 2, 14, and 26 weeks. The EMG
measures muscle activation patterns during gait.
Computerized video nystagmography (VNG) is measured via a change from baseline at 2, 14, and 26
weeks. The VNG measures eye movement control.
Page 18
Pivotal Trial for Mild to Moderate TBI (NCT02429167) being conducted by Helius
Helius launched a pivotal trial of PoNS in mild-to-moderate traumatic brain injury (TBI) patients on
August 11, 2015. This on-going trial is a multi-center, double-blind, randomized, sham-controlled study to
evaluate the effectiveness of PoNS in cranial nerve non-invasive neuromodulation (CN-NINM) training on
balance. Safety of the device is also being evaluated. The company plans to enrol a total of 120 TBI patients
with 60 on the active arm (PoNS with normal stimulation) and 60 on the sham control arm (PoNS with
low, perceivable stimulation that is intended to be ineffective). The study is designed to consist of two
stages: an in-lab training program (2 weeks) and an at-home training program (3 weeks). During both
stages of the study, subjects (patients) would complete three sessions per day, morning, afternoon and
evening, plus one weekend session using the active or sham control PoNS.
The primary endpoint is the proportion of responders at the end of 5 weeks of training. A responder is
defined as a subject who has a clinically significant increase of at least 15 points in post-training sensory
organization test (SOT) score from pre-training SOT score at the end of 5 weeks. SOT is a form of
posturography which is designed to assess quantitatively an individual`s ability to use visual,
proprioceptive and vestibular cues to maintain postural stability in stance. Secondary endpoints include
increase in SOT score from pre-training SOT score at the end of 2 weeks in lab training and increase in SOT
score from pre-training SOT score at the end of 5 weeks that includes 2 weeks in lab training followed by
the same training for 3 weeks at home.
The safety of PoNS is evaluated by frequency of falls, as determined by daily event recording on the
subject data case report form. Fall is defined as an episode where a subject lost his or her balance and fell
or would have fallen, were it not for another intervention, such as stabilization on the back of a chair or the
wall. Frequency of headache, as measured by the Headache Disability Index (HDI) at baseline and at the
end of treatment (5 weeks) would also be assessed. Adverse events and unanticipated adverse device
effects would be assessed and recorded at each study center visit. Additionally, the tongue and oral cavity
would be carefully examined for any abnormalities at the completion of the first and second phases of the
study and comparison drawn with the examination conducted at screening.
Patient enrollment for the TBI pivotal trial has accrued slowly due to the strict patient criteria. We expect
clinical results in calendar year Q4 2016 or Q1 2017.
We believe one of the biggest risks of this trial is that there may be a high placebo rate due to the lower
level of stimulation (1/2500th the power of the active trial) provided in the placebo arm. This risk could
result in the TBI trial not reaching statistical significance, as it is not currently known if the lower power of
the device being used in the placebo arm stimulates any brain activity.
Regulatory Background of Medical Device and Helius Regulatory Strategy
There are three conventional routes by which a medical device can be approved by FDA depending on its
classification: a PMA (pre-market approval) application, a 510(k) application, or as an Exempt Device. The
medical device classification is based on the devices safety and effectiveness:
Class I devices: These devices are on the bottom of the scale in terms of development risk and potential
to harm their users. Most Class I devices are subject only to general controls and are exempt from
PMA and 510(k) regulation.
Class II devices: These devices are those for which general manufacturing controls are insufficient to
assure safety and effectiveness. Most Class II devices are typically regulated under the 510(k)
application.
Class III devices: These devices are usually those that support or sustain human life, are of substantial
importance in preventing impairment of human health, or which present a potential, unreasonable
risk of illness or injury. The Class III device must receive a PMA from FDA (similar to NDA or BLA for
drugs) prior to commercialization.
510(k) Pre-market notification route: If the medical device manufacturers can demonstrate to FDA that
the device is substantially equivalent to a device already marketed (called predicate device), it may receive
a 510(k) clearance to commercialize the product, thereby avoiding lengthy and costly clinical trials. A
Page 19
510(k) requires demonstration of substantial equivalence (SE), which means the new device is as safe and
effective as the predicate device.
PMA route: Some Class II and all Class III medical devices need PMA clearance for commercialization.
Unlike 510(k), PMA typically requires both pre-clinical results and data from a well-controlled clinical
trials (usually one Phase III is sufficient) to demonstrate efficacy and safety profile. The PMA pathway is
more complex than that of 510(k): The first step is to file an Investigational Device Exemption (IDE) to
FDA, which must include pre-clinical data to demonstrate safety for human use. If IDE is accepted by
FDA, the human trial may begin. After successful completion of the clinical trial, a PMA application is filed
to FDA. Once FDA approves the PMA, the medical device can be commercialized.
De novo pathway: According to FDA, entirely new devices are automatically considered to be Class III,
which means strict Phase III clinical trials are required before approval. However, many new medical
devices are not high risk. In order to facilitate the review process of those novel devices with low risk, the
de novo pathway was created by the Congress under the Food and Drug Administration Modernization
Act of 1997 (FDAMA) as an intermediate pathway between 510(k) and PMA. The purpose was to foster the
development and clearance of innovative products by reducing the regulatory burden. Investors should
note that the efficacy of those devices still needs to be demonstrated in human trials but in a less stringent
manner than that in trials for PMA submission. With the purpose of reducing regulatory burden, however,
during the first 15 years after enactment, the de novo process was used infrequently by applicants, with
only 76 completed submissions from 1997 until July 2012, compared to over 500 PMA applications and
40,000 traditional 510(k) applications over the same time period. One of the main reasons to this low rate of
application was that the original de novo pathway required applicants to first submit a 510(k) then, in a
second step, file a de novo petition after the 510(k) was found not substantially equivalent (which means
no predicate device had been approved yet). Therefore, in July 2012, Congress enacted reforms to de novo
process as part of the Food and Drug Administration Safety and Innovation Act (FDASIA) in an effort to
streamline and improve this pathway. One of the key reforms was the creation of a direct de novo
pathway which did not require the applicants to submit 510(k) before filing de novo application anymore.
This change was designed to reduce the review time by FDA.
Figure 16: Number of de novo Submission annually
Source: Med Device Online
Page 20
De novo vs. 510(k) and PMA FDA review time: One of main factors the manufactures consider when
choosing the most appropriate regulatory pathway is the review time by FDA. Shorter review time means
earlier entry to the market, gaining more market share. FDA has target time of 90 days, 90 days, and 180
days for de novo, 510(k), and PMA routes, respectively. However, the agency does not always meet its
deadline. We find the recent actual review time by FDA for de novo, 510(k), and PMA routes is over 350
days, 172 days, and 150 days, respectively, as shown in Fig.17 and Fig 18. The mean de novo review time
for the direct de novo submissions only, all of which have been filed post-FDASIA (from July 2012 through
2015), is 295 days (median 274 days). Investors should note that, prior to FDASIA (before July 2012), de
novo review time in Fig. 17 did not include the time that could be spent on 510(k) review prior to a not
substantially equivalent decision and therefore the figure may significantly understate the total FDA
review time. For example, prior to FDASIA, if an applicant submitted a 510(k) notice that was under
review for two years, followed by a de novo submission that was under review for 60 days, only the 60day review would be reflected in Fig.17. For the direct de novo submissions, the mean review time for
diagnostic devices is approximately half that of de novo submissions for therapeutic devices (PoNS is
considered as therapeutic device): 174 days vs. 350 days. In addition, over half of the direct de novo
submissions for therapeutic devices required over a year of review, compared to only one diagnostic
device. When comparing de novo and PMA process, it is interesting to note that PMA has shorter review
time (Fig. 19) than de novo.
Figure 17: Actual de novo Review Time by FDA
Figure 18: Actual 510(k) Review Time by FDA in 2015
Source: Emergo
Page 21
Figure 19: Actual PMA Review Time by FDA
Source: Pharm Source
De novo vs. 510(k) and PMA the amount of clinical data required: As stated above, 510(k) application
does not require clinical trials which are required in PMA and de novo routes. A frequent question
regarding the de novo process is what amount of clinical data is required to demonstrate efficacy to
support approval of de novo application. The range of answers to this question is very broad and highly
dependent on the type of product and the level of risk, even sometimes the amount of data required in a
de novo filing is comparable to a PMA. Looking at only those de novo submissions since enactment of
FDASIA in July 2012, the range of data requirements for both therapeutic and diagnostic devices is
illustrated in the scatter plot in Fig.20. Investors should note that for diagnostic de novo submissions, a
large number of samples may often be tested to support clearance; thus, the majority of the highest
numbers are from diagnostic submissions, which in some cases have required testing of 500-1000 samples
or more. For most therapeutic products, the number of patients included in clinical studies has more
typically been less than 200. Approximately 40 percent of the submissions were cleared based on studies of
100 patients or less.
Page 22
Figure 20: Number of Human Subjects Included in de novo Application (July 2012 to 2015)
Key benefits of a de novo Submission over PMA

Even if review time and the amount of clinical data required to support a de novo submission are not
significantly reduced compared to a PMA application, the process does offers some other advantages
that reduce regulatory burden. For example, very few de novo submissions have ever undergone
advisory panel review, while first-of-a-kind PMAs may often require panel input. A de novo
submission also does not require submission of detailed manufacturing information in most cases, nor
is a preapproval inspection of the companys manufacturing facility generally necessary. A de novo
submission also does not require payment of a user fee. Following FDA approval, de novo submissions
also do not require annual reporting, nor are post-market approval studies generally required. Device
modifications following de novo clearance also are subject to the framework for assessing 510(k) device
modifications, compared to the more stringent PMA supplement requirements. These differences may
provide significant cost savings over the life of the product.
The PoNS product is classified as a class 2 De novo device, according to historical review times (see Figure
21) 23% of class 2 devices were reviewed in 90 days and 33% were reviewed in 120 days.
Page 23
Figure 21: Historical FDA Review Times for Class 2 De novo devices
Device Trade/Proprietary Name
Requester
EEVA 2.0
AUXOGYN INC.
Date
Decision Date
Timeframe
De Novo
Received
Number
8/24/2012
6/6/2014
-651 DEN120015
X-RAY ATTENUATING CREAM
BLOXR CORPORATION
11/7/2012
5/9/2013
-183 DEN120022
GIVEN PILLCAM COLON 2 CAPSULE ENDOSCOPY SYSTEM
GIVEN IMAGING LTD.
11/29/2012
1/29/2014
-426 DEN120023
STX-MED SPRL
12/13/2012
3/11/2014
-453 DEN120019
Medtronic DUET External Drainage and Monitoring System
MEDTRONIC NEUROSURGERY
12/21/2012
8/22/2014
-609 DEN120017
FERRISCAN R2-MRI ANALYSIS SYSTEM
CEFALY
1/2/2013
1/23/2013
-21 DEN130012
VITEK MS
RESONANCE HEALTH ANALYSIS

SERVICES PTYINC.
LTD
BIOMERIEUX
-231 DEN130013
XTAG GASTROINTESTINAL PATHOGEN PANEL (GPP) XTAG DATA

ANALYSIS
SOFTWARE FOR GPP (TDAS)
XSTAT
LUMINEX MOLECULAR DIAGNOSTICS

INC.
REVMEDX INC.
1/2/2013
8/21/2013
1/11/2013
1/14/2013
-3 DEN130003
1/30/2013
4/3/2014
-428 DEN130016
PIXEL 3 SYSTEM
GAUSS SURGICAL INC.
2/4/2013
5/9/2014
AXIOS STENT AND DELIVERY SYSTEM
XLUMENA INC
2/19/2013
12/18/2013
-302 DEN130007
ZANZA-CLICK
TECNIMED S.R.L.
2/28/2013
11/7/2014
-617 DEN130019
NEURALIEVE CERENA TRANSCRANIAL MAGNETIC STIMULATOR
ENEURA THERAPEUTICS
3/5/2013
12/13/2013
-283 DEN130022
-190 DEN130023
UROLIFT SYSTEM
NEOTRACT INC.
TINA-QUANT HBA1C GEN. 2 TEST SYSTEM
Roche Diagnostics
VYSIS EGR1 FISH PROBE KIT - SC (SPECIMEN CHARACTERIZATION)
ABBOTT MOLECULAR INC.
-459 DEN130015
3/7/2013
9/13/2013
3/25/2013
5/23/2013
-59 DEN130002
4/9/2013
7/29/2013
-111 DEN130010
5/6/2013
12/18/2014
MOERAE SURGICAL MARKING PEN
MOERAE MATRIX INC.
QUANTITATION OF ORGANOPHOSPHATE METABOLITES IN URINE BY

LC/MS/MS
NEPHROCHECK TEST SYSTEM
CENTERS FOR DISEASE CONTROL AND

PREVENTION
ASTUTE MEDICAL INC
XPERT MTB/RIF ASSAY
CEPHEID
6/11/2013
7/25/2013
-44 DEN130032
COGNIVUE
CEREBRAL ASSESSMENT SYSTEMS INC
6/12/2013
6/5/2015
-723 DEN130033
REWALK
ARGO MEDICAL TECHNOLOGIES INC.
6/17/2013
6/26/2014
-374 DEN130034
PROSTATE IMMOBILIZER RECTAL BALLOON
RADIADYNE
7/15/2013
1/28/2014
-197 DEN130036
BRAINPORT V100 DEVICE
WICAB INC
8/7/2013
6/18/2015
-680 DEN130039
IOGYN SYSTEM
IOGYN INC.
8/30/2013
3/28/2014
-210 DEN130040
ILLUMINA MISEQDX PLATFORM
ILLUMINA INC.
MISEQDX UNIVERSAL KIT 1.0
ILLUMINA INC.
INFLOW INTRAURETHRAL VALVE-PUMP
VESIFLO INC.
HEARTFLOW FFRCT
8/8/2013
-72 DEN130005
6/5/2013
9/5/2014
-457 DEN130031
9/23/2013
11/19/2013
-57 DEN130011
10/4/2013
11/19/2013
-46 DEN130042
10/25/2013
10/14/2014
-354 DEN130044
11/4/2013
11/26/2014
-387 DEN130045
REZA BAND(TM) UPPER ESOPHAGEAL (UES) SPHINCTER ASSIST DEVICE SOMNA THERAPEUTICS LLC
11/14/2013
3/6/2015
-477 DEN130046
PROLONG
ERGON MEDICAL LTD.
11/18/2013
3/20/2015
-487 DEN130047
3/21/2014
-116 DEN130049
SIMPLEXA HSV 1&2 DIRECT
HEARTFLOW
-591 DEN130004
5/28/2013
FOCUS DIAGNOSTICS
11/25/2013
CYTOSCAN(R) DX
Affymetrix Inc.
12/18/2013
1/17/2014
AMIGO REMOTE CATHETER SYSTEM
CATHETER ROBOTICS INC
2/18/2014
12/18/2014
-303 DEN140009
PERKINELMER ENLITE NEONATAL TREC TEST SYSTEM
WALLAC OY
2/19/2014
12/15/2014
-299 DEN140010
QUIDEL MOLECULAR DIRECT HSV 1 +2/VZV ASSAY
DIAGNOSTIC HYBRIDS INC.
2/21/2014
5/13/2014
-81 DEN140004
LYRA DIRECT STREP ASSAY
QUIDEL CORPORATION
3/25/2014
4/16/2014
-22 DEN140005
EUROIMMUN ANTI-PLA2R IFA
EUROIMMUN US
3/28/2014
5/29/2014
STUDIO ON THE CLOUD DATA MANAGEMENT SOFTWARE
DEXCOM INC.
4/22/2014
8/19/2014
-119 DEN140016
SENSIMED TRIGGERFISH
SENSIMED AG
5/6/2014
3/4/2016
-668 DEN140017
ESOPHAGEAL COOLING DEVICE
ADVANCED COOLING THERAPY LLC
5/9/2014
6/23/2015
-410 DEN140018
T2CANDIDA AND T2DX INSTRUMENT
T2 BIOSYSTEMS INC
5/27/2014
9/22/2014
-118 DEN140019
23ANDME PERSONAL GENOME SERVICE (HEREINAFTER KNOWN AS

PGS)
ZINC TRANSPORTER 8 ANTIBODY (ZNT8AB) ELISA ASSAY KIT
-30 DEN130018
-62 DEN140002
23andMe
5/29/2014
2/19/2015
6/16/2014
8/20/2014
-65 DEN140001
ECLIPSE SYSTEM
KRONUS MARKET DEVELOPMENT

ASSOCIATES
PELVALON INC.
6/24/2014
2/12/2015
-233 DEN140020
-266 DEN140044
GLAUCOMA COMPANION
INNOVATEX INC.
7/18/2014
4/20/2016
-642 DEN140022
cNEP Airway
Sommetrics
8/18/2014
12/23/2015
-492 DEN140024
BrainScope Ahead 100
BRAINSCOPE COMPANY INC
8/20/2014
11/17/2014
-89 DEN140025
SpaceOAR System
AUGMENIX INC.
10/1/2014
4/1/2015
-182 DEN140030
Dexcom Share Direct Secondary Displays
DEXCOM INC.
12/15/2014
1/23/2015
-39 DEN140038
NOVA View Automated Fluorescense Microscope
INOVA DIAGNOSTICS INC.
12/15/2014
EarLens Contact Hearing Device
EARLENS CORPORATION
1/2/2015
9/29/2015
-270 DEN150002
RELIZORB
ALCRESTA INC.
1/2/2015
11/20/2015
-322 DEN150001
Newa Skin Therapy System
EndyMed Medical Ltd.
1/16/2015
12/18/2015
-336 DEN150005
INVOcell
INVO BIOSCIENCE
2/23/2015
11/2/2015
-252 DEN150008
B.R.A.H.M.S PCT sensitive KRYPTOR
B.R.A.H.M.S GMBH
3/4/2015
2/20/2016
-353 DEN150009
Dignitana AB DigniCap System
DIGNITANA AB
3/6/2015
12/8/2015
-277 DEN150010
Sonablate 450
SonaCare Medical LLC.
3/23/2015
10/9/2015
-200 DEN150011
FilmArray Meningitis/Encephalitis(ME) Panel
BioFire Diagnostics LLC
4/9/2015
PneumoLiner
ADVANCED SURGICAL CONCEPTS LTD.
KRONUS Aquaporin-4 Autoantibody (AQP4Ab) ELISA Assay
KRONUS INC.
Amplichek II Negative and Amplichek II Negative MiniPak Amplichek II

Level 1 and Amplichek II Level 1 MiniPak Amplichek II Level 2 and
Bio-Rad Laboratories
4/9/2015
-115 DEN140039
10/8/2015
-182 DEN150013
6/19/2015
4/7/2016
-293 DEN150028
7/2/2015
4/25/2016
-298 DEN150030
12/16/2015
3/28/2016
-103 DEN150058
Source: http://www.accessdata.fda.gov/scripts/cdrh/cfdocs/cfPMN/denovo.cfm
PoNS Regulatory Strategy: Helius management has indicated that they are seeking a de novo clearance
for PoNS in TBI and MS associated gait and balance disorders. The FDA has deemed that PoNS is a nonsignificant risk device which does not pose any significant risk to human subjects. We expect the de novo
filing for the TBI and MS indications in the fourth quarter of 2016/first quarter of 2017 and fourth quarter
of 2017, respectively (see Fig.23). Management is confident that the review to their de novo application by
FDA can be completed within the FDA target time of 90 days this is due to the U.S. armys medical and
regulatory staff being involved with this TBI trial. For the PoNS device, to be conservative, we assume a
calendar year Q2/Q3 2017 FDA approval and a calendar year Q4 2017 launch.
PoNS Reimbursement Strategy: We believe it is best to conservatively assume that government
reimbursement could take up to twelve to eighteen months to obtain. We would expect Helius to submit
an application to the U.S. Department of Health and Human Services for an International Classification of
Disease 10 reimbursement code so that the device is covered under Medicare and Medicaid after FDA
approval. The company would like seek coverage for the PoNS device under the Medicare part B durable
Page 24
medical equipment benefit. The company would also have to submit an application request to CMS to
revise the Healthcare Common Procedure Coding System, or HCPCS, level II national code set so that the
PoNS device becomes eligible to be covered and reimbursed, not only by Medicare, but by other public
and private payers. The HCPCS Level II Code Set is a standardized coding set used for claims submitted to
public and private payers that identifies particular products, supplies and services. At present, the
company does not believe that the PoNS device would fit easily within an existing HCPCS code. Thus,
Helius is considering submitting a request to CMS for a new HCPCS code. An applicant can request that
(1) a new permanent code be added to the HCPCS level II national code set; (2) the language used to
describe an existing code be modified; or (3) an existing code be deleted. However, prior to submitting its
coding request application, the company must satisfy several criteria, including but not limited to
receiving documentation of the FDAs approval of the device and having sufficient claims activity or
volume in the United States (evidenced by 3 months of marketing activity). The national codes are updated
annually. Coding requests must be received by January 3 of the current year to be considered for the
January update of the following year. Based on this information and the companys timelines, we have
assumed Helius would not have access to a HCPCS code for government (Medicaid/Medicare)
reimbursement until calendar 2019. We have assumed that there would be an initial cash pay once the
device is in place. The company is expected to have private insurance companies reimburse the device
near approval or shortly thereafter.
Commercialization Strategy
Helius CEO has considerable experience in commercializing all types of healthcare products. Helius
intends on setting up a national framework of PoNS-trained Physical Therapists (PTs). The company has
developed a training certification program where PTs can become trained PoNS therapists. There should
be a strong financial incentive for the PT community to partner with Helius as the PoNS training offers
substantial opportunity for growth for the PTs. It would be expected that PTs should be able to use
existing reimbursement codes for the physical therapy portion of the therapy.
Page 25
Figure 22: Helius Commercialization Strategy
Cycle continues until physician

is satisfied patient has
sufficiently recovered
Patient
Physician
Accredited
Physical
Therapy
Center
Self identified based on direct to consumer promotion

Healthcare provider identified
Patient purchases PoNS device though cash or private insurance reimbursement from the
Accredited Physical Therapy Center/Therapist
Prescribes PoNSTM device

Prescribes Certified Physical Therapy Center/Therapist accredited in PoNS training
Prescribes course of 14 weeks of therapy
Orders PoNS device from Helius and direct shipped from OEM to the patient at first visit
Performs training for patient based on diagnosis and needs
Obtains reimbursement for services from private and public insurance
Discharges patient to home therapy
Monitors the patient daily for the first two weeks of at home therapy through phone or video interface
Monitors the patient on a weekly basis for 3-14 weeks to ensure compliance and adherence to
Physical
treatment protocol
Therapy
Directs the patient back to the physician for assessment when 14 weeks of therapy are over
Phone Center
Source: Helius Medical Inc.
Strategic Agreement with A&B and A&B Credit Facility

On October 13, 2015, Helius via its wholly owned subsidiary NHC, licensed the PoNS development and
commercialization rights to A&B for China, Hong Kong, Macau, Taiwan and Singapore. A&B is an
investment and development company owned by Dr. Kong Lam and based in Hong Kong. A&B has
assumed all development, patent (both application and defense), future manufacturing, clinical trial, and
regulatory clearance costs for the Asian region. In connection with the licensing deal, A&B agreed to
provide a credit facility to Helius.
On November 10, 2015, the Company announced that it had issued a convertible promissory note (the
Note) to A&B in connection with the drawdown of US$2.0 million under Helius US$7.0 million credit
facility with A&B (the A&B Credit Facility). Helius elected to immediately satisfy the terms of the Note
by issuing to A&B: (i) 2,083,333 shares of common stock at a deemed price of US$0.96 per share; and (ii)
1,041,667 common share purchase warrants, with each warrant entitling A&B to purchase an additional
common share at a price of US$1.44 for a period of three years expiring on November 10, 2018.
On December 29, 2015, the Company drew down the remaining US$5.0 million from the A&B Credit
Facility in exchange for the issuance to A&B of 5,555,556 shares of common stock at a price of US$0.90 per
share and warrants to purchase 2,777,778 shares for a period of three years having an exercise price of
US$1.35 per common share. A&B nominated Dr. Peng and the Board appointed Dr. Peng to the Board on
December 29, 2016. The common shares and warrants issued to A&B, and the common shares underlying
such warrants, were subject to a four-month statutory hold period.
Page 26
Future Expected Milestones

Please see the information below:
Figure 23: Key Events Expected for PoNS for TBI Indication
PoNS for Traumatic Brain Injury (TBI) - U.S. Market

Event
Calendar Date (Fiscal Date)
Clinical Trial Initiation

Aug. 11, 2015
Q4 CY16E (Q3 FY16E)/Q1 CY17E (Q4 FY16E)
Trial Completion
FDA Filing
Q1 CY17E (Q4 FY16E)
FDA Approval
Q3 CY17E (Q2 FY17)
Commercialization
Q4 CY17E (Q3 FY17)
FYE on Mar. 31
Source: MRCC estimates
Manufacturing
The PoNS device is manufactured by Ximedica based in Rhode Island, the company was founded in 1985.
Ximaedica is exclusively focused on the development and manufacturing of medical devices. The
company needs to have its PoNS assembly line built and production has to be scaled up this would likely
occur before the expected FDA approval.
Patents
Pursuant to the Second Amended and Restated Sublicense Agreement dated as of June 6, 2014 entered into
between Advanced Neurorehabilitation, LLC (ANR) and NHC, a wholly owned subsidiary of Helius,
(the Sublicense Agreement), ANR has granted NHC 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 PoNSTM 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 the trigeminal nerve, the facial
nerve or both:
Page 27
Figure 24: Helius U.S. Licensed Intellectual Property

Figure 25: Helius U.S. In-house Intellectual Property
Source: Helius Medical Inc.
Wicab Intellectual Property Litigation

On January 5, 2015, Wicab sued Helius, its subsidiary NeuroHabilitation Corporation (NHC), Mitch
Tyler, a director of Helius and Yuri Danilov, a former director of Helius and a director of NHC, and
Advanced NeuroRehabilitation, LLC (ANR), in the U.S. District Court for the Western District of
Wisconsin. ANR is the licensor to Helius of three issued patents (U.S. Patent Nos. 8,849,407 and 8,909,345
and 9,020,612) and other patents pending related to neurostimulation methods and devices. The complaint
contained various state and common law claims arising from Messrs. Danilovs and Tylers prior
employment with Wicab and relating to ownership of two of the issued patents (U.S. Patent Nos. 8,849,407
and 8,909,345). U.S. Patent No. 9,020,612 was not included in the Wicab complaint. The complaint alleged,
among other things, that following their departure from Wicab, Danilov and Tyler knowingly filed patent
applications for and used ideas and inventions developed at Wicab in violation of various non-competition
and confidentiality agreements, and that the two issued patents are therefore rightfully the property of
Wicab. The complaint sought an unspecified amount of monetary damages, an injunction preventing NHC
from using the ideas and inventions in the two patents, an order transferring ownership of the patents
from ANR to Wicab, and recovery of costs and attorneys fees. Helius conducted an internal investigation
Page 28
and determined that Wicab expressly waived all rights in the two issued patents and, additionally, that
Wicabs claims were barred by the six year statute of limitations in Wisconsin. On January 14, 2015, the
Company informed Wicab of its belief that the claims were barred due to the express waiver and the
statute of limitations. On the same day, Wicab dismissed the complaint without prejudice.
On October 12, 2015, the Company received a letter from Wicab alleging that the two issued patents were
invalid in view of prior art cited in the letter, including scientific publications and patent applications, and
that Paul Bach-y-Rita, Wicabs founder, should have been named as an inventor on these two issued
patents. Wicab indicated in the letter that it may file reexamination or inter partes review proceedings with
the U.S. Patent Office to attempt to invalidate the claims in the two issued patents. Wicab also stated that it
would consider an unspecified business solution to resolve this matter. On December 10, 2015,
representatives of each of the Company and Wicab met to discuss the parameters of a potential settlement.
These discussions are ongoing and there can be no guarantee that a settlement will be reached. In the event
that a settlement with Wicab is not reached, Wicab may file reexamination or inter partes review
proceedings with the U.S. Patent Office to challenge the validity of the two issued patents. If the Company
receives an adverse decision from the U.S. Patent Office in connection with these proceedings, some or all
of the claims in the two patents may be invalidated or otherwise impaired, which could prevent Helius
from bringing an infringement suit against a future competitor for making use of the PoNS technology for
neurorehabilitation, and could have a material adverse effect on the Companys business, operating results
and financial condition. Wicab may also take other actions against the Company, its assets, intellectual
property rights, officers, directors, employees, agents or other persons or entities which may also have a
material on business, operating results and financial condition. However, we do not expect Wicab to
impede the launch or sales of the PoNS device.
What is an inter partes review?
An inter partes review is a trial proceeding conducted at the U.S. Patent Trial and Appeal Board to review
the patentability of one or more claims in a patent only on a ground that could be raised only on the basis
of prior art consisting of patents or printed publications. For first-inventor-to-file patents, inter partes
review process begins with a third party (a person who is not the owner of the patent) filing a petition after
the later of either: (1) 9 months after the grant of the patent or issuance of a reissue patent; or (2) if a post
grant review is instituted, the termination of the post grant review. These deadlines do not apply to firstto-invent patents. The patent owner may file a preliminary response to the petition. An inter partes review
may be instituted upon a showing that there is a reasonable likelihood that the petitioner would prevail
with respect to at least one claim challenged. If the proceeding is instituted and not dismissed, a final
determination by the Board will be issued within 1 year (extendable for good cause by 6 months). The
procedure for conducting inter partes review took effect on September 16, 2012, and applies to any patent
issued before, on, or after September 16, 2012.
MARKET OVERVIEW
Helius has no commercialized products, and PoNS is the only product in its pipeline.
TBI & MS Total U.S. Patient Estimates
U.S. TBI Market
According to the U.S. CDC, in 2001 and 2010 the number of emergency department visit and
hospitalization due to TBI was 503.3 and 807.4 per 100,000 U.S. population, respectively. We have
calculated the compound annual increase rate of TBI at 5.39%. We assume 50% of annual TBI cases are
mild-to-moderate with balance disorders. Based on U.S. population projection from 2016 to 2024, we
estimate the annual number of mild-to-moderate TBI patients with balance disorders from FY16 to FY23 is
1.8M, 1.9M, 2.0M, 2.1M, 2.3M, 2.4M, 2.6M, and 2.7M. Investors should note that our estimates include both
civilian and military numbers.
Page 29
U.S. MS Market
According to the U.S. Cleveland Clinic, the prevalence of MS in U.S. is 90 per 100,000 U.S. population. A
study conducted by Hemmett group (Hemmett L, et. al. QJM. 2004) indicated that over 90% of MS patients
had difficulty walking. By using projected U.S. population, we have calculated the number of MS patients
with gait and balance disorders from FY16 to FY23 at 262k, 264k, 266k, 268k, 270k, 272k, 275k, and 277k,
respectively.
Pharmaceutical Competitive Landscape
Current treatment to TBI or MS-related balance disorders mainly relies on physiotherapy. We believe
PoNS could be the first approved medical device to target these disorders. Treatment option by
conventional drugs is rare. Acordas Ampyra is the first and the only product indicated to improve
walking in MS patients. No conventional drugs have been approved to treat TBI-related balance disorders.
Ampyra Acorda (NASDAQ: ACOR)
Ampyra, dalfampridine, is a potassium channel blocker indicated (FDA approved) as a treatment to
improve walking in MS patients. It is available in a 10 mg tablet strength. Each tablet contains 10 mg
dalfampridine, formulated as an extended release tablet for twice-daily oral administration. The
mechanism by which Ampyra exerts its therapeutic effect has not been fully elucidated. In animal
studies, dalfampridine has been shown to increase conduction of action potentials in demyelinated
axons through inhibition of potassium channels.
The effectiveness of Ampyra in improving walking in MS patients was evaluated in two adequate and
well controlled trials involving 540 patients. Patients in these two clinical trials had a mean disease
duration of 13 years and a mean Kurtzke Expanded Disability Status Scale (EDSS) score of 6. Trial 1
was a randomized, placebo-controlled, parallel group, 21-week study (one week post screening, twoweek, single-blind placebo run-in, 14-week double-blind treatment, and 4-week no treatment followup). A total of 283 patients (212 Ampyra and 71 placebo) completed all study visits. Trial 2 was a
randomized, placebo-controlled, parallel group, 14-week study (one week post-screening, two weeks
of single-blind, placebo run-in, nine weeks of double-blind treatment, and two weeks of no-treatment
follow-up). A total of 227 patients (113 AMPYRA and 114 placebo) completed all study visits. The
primary endpoint in both trials was walking speed (in feet per second) as measured by the Timed 25foot Walk (T25FW), using a responder analysis. A responder was defined as a patient who showed
faster walking speed for at least three visits out of a possible four during the double-blind period than
the maximum value achieved in the five non-double-blind no treatment visits (four before the doubleblind period and one after). A significantly greater proportion of patients taking Ampyra 10 mg twice
daily were responders, compared to patients taking placebo, as measured by the T25FW (Trial 1: 34.8%
vs. 8.3%; Trial 2: 42.9% vs. 9.3%).
Figure 26: Average Walking Speed Change (%) from Baseline during the Doubt-blind Phase of Trial 1 (Left) and Trial 2 (Right)
Source: Ampyra Label, FDA
Page 30
Neuromodulation Competitive Landscape

Although there are no commercially available neuromodulation devices indicated for TBI and MS related
balance disorders, neuromodulation devices for other uses are still available. These neuromodulation
devices are for either recreational (do not need FDA approval) or medical uses (need FDA approval) in
U.S. market. At this time, we dont view them as direct competitors to PoNS, however, these
neuromodulation devices could become new entrants to TBI and/or MS markets after being further
developed and approved. Most of the FDA approved neuromodulation devices are implantable based on
the competitive landscape we believe PoNS could be a first-in-class and best-in-class product. We
summarize selective neuromodulation devices that have been developed or in development by other
companies below:
Vibe - Thync (private)
Vibe is a small wearable device designed to boost body energy and relax bodies from stress. It applies
Thyncs proprietary neurosignaling technology that changes signals to the brain through neural pathways.
These neural pathways regulate the balance between sympathetic and parasympathetic nervous systems.
The sympathetic system is associated with a fight or flight response to help regulate your reaction to
stress (energy boost). The parasympathetic system counteracts stress to help you enter a relaxed rest and
digest mode (stress release). By changing neural signals in these pathways, Vibe balances the feeling of
energy and relaxation. Vibe changes neural signals by using both transcranial direct-current stimulation
(tDCS) and transcutaneous electrical nerve stimulation (TEN) techniques. Both methods use pulsed low
current. Although the company claims that several clinical trials have been done with Vibe, this device is
not approved by FDA for any medical use.
Fig 27: Thyncs Vibe device
Source: Thync website
Halo Sport - Halo Neuroscience (private)

Halo Sport applies Halos proprietary technologies to enhance the performance by physical training via a
special headband. Neural signals sent from the brain to muscles are often transmitted with submaximal
organization and strength, especially when an athlete is fatigued. The headband utilizes tDCS method
which involves priming or inhibiting brain cells firing patterns by sending low levels of electricity
through electrodes in certain scalp areas. The electricity improves the brains response to training, enabling
the motor cortex to send stronger, more synchronous signals to muscles. Improved neuromuscular
signaling means athletes get more from each rep and acquire new athletic skills faster. Halo Sport is not
approved by FDA for any medical uses.
Page 31
Fig 28: Halo Sport Device for Athletics
Source: Halo Neuroscience Website
Cefaly - Cefaly Technology (private)

Cefaly, indicated to treat migraine pain, is a small, portable, battery-powered, prescription device that
resembles a plastic headband worn across the forehead and atop the ears. Most headaches and migraines
involve the trigeminal nerve. Its superior branch ends at the exit of the eye socket, underneath the skin of
the forehead. Cefaly connects to an adhesive electrode positioned on the forehead through the electrode.
Cefaly generates precise micro-impulses in order to stimulate the nerve endings of the trigeminal nerve.
The neurostimulation of the trigeminal nerve produces a relaxing effect. Regular repetition of this relaxing
effect helps reduce the number of attacks of headache and migraine.
FDA approved Cefyla to prevent migraine headaches in March 2014. Cefyla is the first FDA-approved
medical device for such an indication. The approval was based on a 67-person study which showed that
those who used Cefaly experienced significantly fewer days with migraines per month and used less
migraine attack medication than those who used a placebo device. The device did not completely prevent
migraines and did not reduce the intensity of migraines that did occur.
Fig 29: Cefaly Technologys Cefaly device
Source: Cefaly Technology Website
Page 32
Deep Brain Stimulation Products - St. Jude Medical (Subsidiary of Abbott (ABT-NYSE))
St. Jude Medical owns a portfolio of neuromodulation products: Deep brain stimulation products,
Radiofrequency therapy, and Spinal cord stimulation products. We view the deep brain stimulation series
as the most potential competitors. However, unlike PoNS which is wearable, these deep brain stimulation
products are implantable and is thus invasive. St. Jude Medicals brain products are commercially
available for use in select international markets. They are not approved by FDA. In October 2005, St. Jude
Medical agreed to acquire Advanced Neuromodulation Systems (spinal cord stimulation devices) for
US$1.3 billion in cash. On April 28, 2016, Abbott announced a definitive agreement to acquire St. Jude
Medical for US$25 billion ($43.93 in cash and 0.8708 shares of Abbott common stock for each of St. Jude
Medicals shares).
Fig 30: St. Jude Medicals Deep Brain Stimulation Products
Source: St. Jude Medical Website
Senza SCS System - Nevro Corp. (NVRO-NASDAQ)

Nevro is a medical device company based in Redwood City, California. Nevro developed HF10 therapy,
an innovative, evidence-based neuromodulation platform for the treatment of chronic pain. The Nevro
Senza SCS System received CE mark in 2010, TGA approval in 2011, FDA approval in 2015, and is
commercially available in Europe, Australia, and the United States. Nevro conducted a twelve month
pivotal trial for treating chronic pain (SENZARCT), the results were published in Anesthesiology and
showed that novel 10 KHz high frequency therapy (HF10 Therapy) is superior to traditional low frequency
spinal cord stimulation for the treatment of chronic back and leg pain. The implant procedure for both the
trial and the permanent device is fairly quick and minimally invasive, so it may not require a hospital stay.
HF10 therapy can be switched OFF and ON with the remote control at any time. If necessary, the system
can be removed.
Figure 31: Pivotal Chronic Pain Trial Conducted by Nevro
Source: Nevro
Figure 32: Excellent Clinical Responses for Pain Management with Nevros
Source: Nevro
Page 33
Page 34
Figure 33: Pain Reduction with HF10 Therapy and the Senza Device
Source: Nevro
Figure 34: Nevros Implantable Senza device
Source: Nevro
Functional Neuromodulation Ltd. (private)

Functional Neuromodulation is focused on using deep brain stimulation (DBS) therapies to treat
Alzheimers disease and other memory and cognitive disorders. The company, the use of DBS of the fornix
(DBSf) to drive neural activity and modulate the brains memory circuit.
Functional Neuromodulation reported mixed clinical results on November 6, 2015 for the treatment of
mild Alzheimers disease. ADvance was a randomized, double blind, controlled trial of 42 patients age 45
to 85 with mild Alzheimers disease to evaluate the potential clinical benefit and safety of DBS of the
fornix, a major inflow and output pathway in the brains memory circuit. All patients were implanted
with DBS systems and randomized to receive stimulation or sham stimulation for 12 months.
The effect of DBS was measured using ADAS-cog-13, CDR-SB, and brain glucose metabolism as measured
by FDG-PET with SPM analysis method. On glucose metabolism, patients in the DBSf treatment arm
increased in five pre-specified brain regions of interest at 12 months whereas patients in the placebo group
Page 35
declined. Treated patients increased between 20.4% and 22.5% in the five regions, while the placebo group
declined by 0.2% to 1.4%. This change was statistically significant at 6 months (p = 0.03), and the
metabolism increase observed in the treatment group was maintained at 12 months. On the ADAS Cog-13,
patients in the placebo group worsened by an average of 7.8 at one year, whereas the worsening was 3.7 in
the DBSf treatment arm. The trend toward slowing of clinical decline was not statistically significant (p =
0.12). On the CDR-SB, patients in the placebo group worsened by an average of 3.5 at one year. In
comparison, the worsening was 2.1 in the DBSf treatment arm. The trend toward slowing of clinical
decline was not statistically significant (p = 0.17). DBSf demonstrated an acceptable safety and tolerability
profile in the ADvance study analysis.
Medtronic Deep Brain Stimulation (DBS) system - Medtronic (MDT-NYSE)

The Medtronic Deep Brain Stimulation (DBS) system uses an implantable neurostimulator to deliver
electrical stimulation. The system consists of a neurostimulator, a lead, and an extension that connects the
lead to the neurostimulator.
Figure 35: Medtronic DBS system
Source: Medtronic
Medtronic DBS Therapy for Parkinsons Disease is a generic name for a medical treatment developed by
Medtronic in collaboration with medical researchers for suppressing some of the symptoms of levodoparesponsive Parkinsons disease. The therapy uses an implantable medical device to deliver electrical
stimulation to the internal globus pallidus or subthalamic nucleus of the brain.
Medtronic DBS Therapy for TremorGeneric name for a medical treatment developed by Medtronic in
collaboration with medical researchers for both the treatment of unilateral Essential and Parkinsonian
tremor. The therapy uses an implantable medical device to deliver mild electrical stimulation to the
thalamus of the brain.
Endostim IPG - Endostim Inc. (private)
EndoStim, Inc., a medical device company that has developed neurostimulation therapy for
gastroesophageal reflux disease (GERD). The EndoStim IPG device delivers electrical stimulation therapy
to the lower esophageal sphincter (LES) using proprietary stimulation algorithms. The device battery is
Page 36
non-rechargeable, with estimated longevity of about 10 years under typical use. The IPG is programmable,
i.e., its parameters and algorithms can be set by the attending medical personnel to suit the patients needs
via wireless communication with the EndoStim Programmer.
Other Neuromodulation Products
Investors should note that besides the products summarized above there are other neuromodulation
products that are not used on cranial/facial sites (some are not approved by FDA). It is possible for those
products to be further developed in the future to target the indications for which PoNS is indicated.
FINANCIAL FORECASTS
Revenue Estimates
To be conservative, we expect Helius to market PoNS for TBI related balance disorders indication in Q3
FY17 (calendar Q4 2017) if approved by FDA. Revenue consists of two parts: PoNS unit sales and electrode
replacement fees. To model the unit sales, we estimate the number of new customers each year (PoNS
would be sold to each customer once only). By using our estimated U.S. market size (see Market Size
Estimates section above), we have calculated the annual number of new customers (patients) from FY17
to FY23 at 5.2k, 20.6k, 37.6k, 72.9k, 88.3k, 106.6k, and 124.1k, respectively. We assume each unit price at
US$2,500. Thus, our PoNS unit sales estimates from FY17 to FY23 are US$13.1M, US$51.5M, US$93.9M,
US$182.3M, US$220.8M, US$266.5M, and US$310.3M, respectively. To model the electrode replacement
fees, we assume each PoNS unit needs two electrode replacements per year and the price of each
replacement at $100. Thus, our estimates of replacement fees from FY17 to FY23 are US$0.4M, US$3.1M,
US$7.5M, US$14.6M, US$17.7M, US$21.3M, and US$24.8M, respectively. Total sales relating to TBI
indication (unit sales plus electrode replacement fees) from FY16 to FY17 are US$13.5M, US$54.6M,
US$101.4M, US$196.9M, US$238.4M, US$287.9M, and US$335.1M, respectively. Investors should note that
our sales estimates have reflected potential sales to U.S. army.
The same method is applied to estimate PoNS sales relating to MS indication. We conservatively assume
U.S. commercialization in Q2 FY18 if approved. By using our estimated MS market size, we have
calculated the annual number of new customers from FY18 to FY23 at 12.0k, 26.8k, 32.5k, 38.2k, 43.9k, and
47.0k, respectively. Our sales estimates (unit sales PLUS electrode replacement fees) from FY18 to FY23 are
US$30.6M, US$72.5M, US$94.1M, US$110.6M, US$127.4M, and US$136.3M, respectively.
We assume Helius to start marketing PoNS in Canadian market in Q4 FY17. Our sales estimates are
US$0.4M, US$3.9M, US$5.4M, US$7.3M, US$9.3M, US$9.3M, and US$9.3M from FY17 to FY23,
respectively.
By adding PoNS sales estimates from U.S. and Canadian markets together, we have calculated Heliuss
total revenue from FY16 to FY23 at US$13.9M, US$89.1M, US$179.2M, US$298.3M, US$358.4M, US$424.5M,
and US$480.7M, respectively.
Page 37
Figure 36: PoNS Revenue Estimates for U.S. and Canada

$500,000
$450,000
$400,000
MS Indication
$350,000
TBI Indication
$300,000
$250,000
$200,000
$150,000
$100,000
$50,000
$0
US
Canada
FY16E
US
Canada
FY17E
US
Canada
FY18E
US
Canada
FY19E
US
Canada
FY20E
US
Canada
FY21E
US
Canada
FY22E
US
Canada
FY23E
Source: MRCC estimates
Operating Expenses and Earnings Estimates

In terms of R&D, our estimates from FY16 to FY20 are US$6.8M, US$7.7M, US$8.5M, US$9.3M, US$10.2M,
US$11.2M, and US$12.4M, respectively. SG&A from FY16 to FY20 are estimated at US$3.4M, US$15.5M,
US$20.2M, US$21.2M, US$22.2M, US$23.3M, and US$24.5M, respectively.
We estimate net income (loss) from FY16 to FY20 at (US$10.5M), (US$14.1M), US$26.2M, US$59.4M,
US$114.5M, US$147.9M, and US$183.1M, respectively. Basic and fully diluted EPS estimates from FY16 to
FY20 are (US$0.13)/(US$0.13), (US$0.17)/(US$0.17), US$0.31/US$0.24, US$0.71/US$0.54,
US$1.37/US$1.03, US$1.76/US$1.33, and US$2.18/US$1.65, respectively.
Page 38
Figure 37: Quarterly Income Statement FY2015-2017 (Actual & Estimates)

Quarterly Income Statement (US$, '000)
(FYE March 31)
Revenue
COGS
Gross Profit
Q1 FY15A
Q2 FY15A
Q3 FY15A
Q4 FY15E
FY 2015E
Q1 FY16E
Q2 FY16E
Q3 FY16E
Q4 FY16E
FY 2016E
Q1 FY17E
Q2 FY17E
Q3 FY17E
Q4 FY17E
FY 2017E
Jun. 30/2015 Sep. 30/2015 Dec. 31/2015 Mar. 31/2016 Mar. 31/2016 Jun. 30/2016 Sep. 30/2016 Dec. 31/2016 Mar. 31/2017 Mar. 31/2017 Jun. 30/2017 Sep. 30/2017 Dec. 31/2017 Mar. 31/2018 Mar. 31/2018
$0
$0
$0
$0
$0
$0
$0
$0
$0
$0
$0
$0
$0
$0
$0
$0
$0
$0
$0
$0
$0
$0
$0
$0
$0
$0
$0
$0
$0
$0
$0
$0
$0
$0
$0
$0
$3,567
$1,213
$2,354
$10,323
$3,510
$6,813
$13,890
$4,723
$9,167
$5,500
$80
$100
$1,500
$0
$7,180
$15,500
$320
$600
$7,700
$0
$24,120
Operating Expenses
SG&A*
Consulting fees
Legal fees
R&D
Transfer agent & regulatory
Total Operating Expenses
$1,033
$106
$294
$1,371
$33
$2,836
$527
($25)
$205
$2
$16
$726
$692
$60
$762
$1,292
$36
$2,841
$750
$80
$200
$1,300
$0
$2,330
$3,002
$220
$1,461
$3,964
$85
$8,732
$800
$80
$200
$1,500
$0
$2,580
$830
$80
$200
$2,000
$0
$3,110
$860
$80
$200
$1,600
$0
$2,740
$890
$80
$200
$1,650
$0
$2,820
$3,380
$320
$800
$6,750
$0
$11,250
$2,000
$80
$200
$2,500
$0
$4,780
$3,500
$80
$200
$1,700
$0
$5,480
$4,500
$80
$100
$2,000
$0
$6,680
Operating Income (Loss)
($2,836)
($726)
($2,841)
($2,330)
($8,732)
($2,580)
($3,110)
($2,740)
($2,820)
($11,250)
($4,780)
($5,480)
($4,326)
Other Items
Interest and accretion expense
Interest and other income
Change in fair value of derivative liability
Foreign exchange gain (loss)
Gain on extinguishment of debt
Total other items
Net income (loss) for the period
$0
$131
$0
$0
$0
$131
($26)
$280
$2,113
$845
$268
$3,481
$0
$65
$0
$0
$0
$65
$0
$312
$0
$0
$0
$312
$0
$229
$0
$0
$0
$229
$0
$174
$0
$0
$0
$174
$0
$780
$0
$0
$0
$780
$0
$410
$0
$0
$0
$410
$0
$299
$0
$0
$0
$299
$0
$143
$0
$0
$0
$143
($367)
$0
$25
$0
$0
$0
$25
($14,953)
($0)
$0
$513
($81)
$0
$431
$0
$28
$1,894
$589
$0
$2,511
($26)
$122
($294)
$338
$268
$408
$0
$877
$0
$0
$0
$877
($2,404)
$1,785
($2,432)
($2,199)
($5,251)
($2,515)
($2,798)
($2,511)
($2,646)
($10,470)
($4,370)
($5,181)
($4,183)
($342)
($14,076)
Other Comprehensive Income

Translation adjustments
Comprehensive income (loss) for the period
$41
(2,364)
($568)
1,218
($364)
(2,796)
$0
(2,199)
($891)
(6,142)
$0
(2,515)
$0
(2,798)
$0
(2,511)
$0
(2,646)
$0
(10,470)
$0
(4,370)
$0
(5,181)
$0
(4,183)
$0
(342)
$0
(14,076)
EPS-Basic
EPS-Diluted
($0.04)
($0.04)
$0.03
$0.03
($0.04)
($0.04)
($0.03)
($0.03)
($0.08)
($0.08)
($0.03)
($0.03)
($0.04)
($0.04)
($0.03)
($0.03)
($0.03)
($0.03)
($0.13)
($0.13)
($0.05)
($0.05)
($0.06)
($0.06)
($0.05)
($0.05)
($0.00)
($0.00)
($0.17)
($0.17)
Weighted avg. number of common shares

Basic
Diluted
63,722
71,576
64,409
66,544
64,958
84,592
72,193
91,827
66,321
78,635
77,841
101,938
77,841
101,938
77,841
101,938
83,841
110,938
79,341
104,188
83,841
110,938
83,841
110,938
83,841
110,938
83,841
110,938
83,841
110,938
Q1 FY15A
NMF
NMF
NMF
NMF
NMF
Q2 FY15A
NMF
NMF
NMF
NMF
NMF
Q3 FY15A
NMF
NMF
NMF
NMF
NMF
Q4 FY15E
NMF
NMF
NMF
NMF
NMF
FY 2015E
NMF
NMF
NMF
NMF
NMF
Q1 FY16E
NMF
NMF
NMF
NMF
NMF
Q2 FY16E
NMF
NMF
NMF
NMF
NMF
Q3 FY16E
NMF
NMF
NMF
NMF
NMF
Q4 FY16E
NMF
NMF
NMF
NMF
NMF
FY 2016E
NMF
NMF
NMF
NMF
NMF
Q1 FY17E
NMF
NMF
NMF
NMF
NMF
Q2 FY17E
NMF
NMF
NMF
NMF
NMF
Q3 FY17E
66%
126%
56%
-121%
-117%
Q4 FY17E
66%
53%
15%
-4%
-3%
FY 2017E
66%
112%
55%
-108%
-101%
Margin Analysis
Gross Margin
% of SG&A as Revenue
% of R&D as Revenue
Operating Margin
Net Margin
Source: Mackie Research, Company Reports
Page 39
Figure 37: Annual Income Statement FY2014-2022 (Actual & Estimates)

Annual Income Statement (US$, '000)
(FYE March 31)
FY 2014A
FY 2015E
FY 2016E
FY 2017E
FY 2018E
FY2019E
FY2020E
FY2021E
FY2022E
Mar. 31/2015 Mar. 31/2016 Mar. 31/2017 Mar. 31/2018 Mar. 31/2019 Mar. 31/2020 Mar. 31/2021 Mar. 31/2022 Mar. 31/2023
Revenue
COGS
Gross Profit
$0
$0
$0
$0
$0
$0
$0
$0
$0
$13,890
$4,723
$9,167
$89,123
$30,302
$58,821
$179,216
$60,933
$118,282
$298,270
$101,412
$196,858
$358,352
$121,840
$236,512
$424,513
$144,334
$280,179
Operating Expenses
SG&A*
Consulting fees
Legal fees
R&D
Transfer agent & regulatory
Total Operating Expenses
$2,367
$1,358
$1,479
$4,500
$104
$9,808
$3,002
$220
$1,461
$3,964
$85
$8,732
$3,380
$320
$800
$6,750
$0
$11,250
$15,500
$320
$600
$7,700
$0
$24,120
$20,150
$320
$600
$8,470
$0
$29,540
$21,158
$320
$600
$9,317
$0
$31,395
$22,215
$320
$600
$10,249
$0
$33,384
$23,326
$320
$600
$11,274
$1
$35,521
$24,492
$320
$600
$12,401
$2
$37,815
Operating Income (Loss)
($9,808)
($8,732)
($11,250)
($14,953)
$29,281
$86,888
$163,474
$200,992
$242,363
($176)
$20
($739)
$866
$0
($30)
($26)
$280
$2,113
$845
$268
$3,481
$0
$99
$0
$0
$0
$99
$0
$3,149
$0
$0
$0
$3,149
$0
$10,023
$0
$0
$0
$10,023
$0
$23,167
$0
$0
$0
$23,167
$0
$35,000
$0
$0
$0
$35,000
EBT
Income tax (34%)
($9,838)
$0
($5,251)
$0
($10,470)
$0
($14,076)
$0
$29,380
$3,189
$90,037
$30,612
$173,498
$58,989
$224,158
$76,214
$277,363
$94,304
($9,838)
($5,251)
($10,470)
($14,076)
$26,191
$59,424
$114,509
$147,945
$183,060
($972)
($10,810)
($891)
($6,142)
$0
($10,470)
$0
($14,076)
$0
$26,191
$0
$59,424
$0
$114,509
$1
$147,946
$2
$183,062
EPS-Basic
EPS-Diluted
($0.17)
($0.17)
($0.08)
($0.08)
($0.13)
($0.13)
($0.17)
($0.17)
$0.31
$0.24
$0.71
$0.54
$1.37
$1.03
$1.76
$1.33
$2.18
$1.65
Weighted avg. number of common shares

Basic
Diluted
57,048
66,191
66,321
78,635
79,341
104,188
83,841
110,938
83,841
110,938
83,841
110,938
83,841
110,938
83,841
110,938
83,841
110,938
Margin Analysis
Gross Margin
% of SG&A as Revenue
% of R&D as Revenue
Operating Margin
Net Margin
FY 2014A
NMF
NMF
NMF
NMF
NMF
FY 2015E
NMF
NMF
NMF
NMF
NMF
FY 2016E
NMF
NMF
NMF
NMF
NMF
FY 2017E
66%
112%
55%
-108%
-101%
FY 2018E
66%
23%
10%
33%
29%
FY2019E
66%
12%
5%
48%
33%
FY2020E
66%
7%
3%
55%
38%
FY2021E
66%
7%
3%
56%
41%
FY2022E
66%
6%
3%
57%
43%
Year-over-Year (YoY) Analysis

Revenue
SG&A
R&D
Net Income
FY 2014A
NMF
FY 2015E
NMF
27%
-12%
NMF
FY 2016E
NMF
13%
70%
NMF
FY 2017E
NMF
359%
14%
NMF
FY 2018E
542%
30%
10%
NMF
FY2019E
101%
5%
10%
127%
FY2020E
66%
5%
10%
93%
FY2021E
20%
5%
10%
29%
FY2022E
18%
5%
10%
24%
Other Items
Interest and accretion expense
Interest and other income
Foreign exchange gain (loss)
Gain on extinguishment of debt
Total other items
Other Comprehensive Income

Translation adjustments
Comprehensive income (loss) for the period
NMF
$0
$780
$0
$0
$0
$780
$0
$877
$0
$0
$0
$877
Page 40
Figure 38: Quarterly & Annual Cash Flow/Selected Balance Sheets FY2014-2020 (Actual & Estimates)
Q1 FY15A
Q2 FY15A
Q3 FY15A
Q4 FY15E
Q1 FY16E
Q2 FY16E
Q3 FY16E
Q4 FY16E
FY 2014A
FY 2015E
FY 2016 E
FY 2017E
FY 2018E
FY 2019E
FY 2020E
Mar. 31/2015 Jun. 30/2015 Sep. 30/2015 Dec. 31/2015 Mar. 31/2016 Mar. 31/2016 Jun. 30/2016 Sep. 30/2016 Dec. 31/2016 Mar. 31/2017 Mar. 31/2017 Mar. 31/2018 Mar. 31/2019 Mar. 31/2020 Mar. 31/2021
Cash Flow Statement (US$, '000)

(FYE March 31)
Cash flows from operating activities
Accretion
Stock-based compensation
Loss (gain) on extinguishment of debt
Changes in non-cash working capital items:
Net cash used in operating activities
($9,838)
$739
$176
$2,341
$0
$260
($6,321)
Cash flow from investing activities

Short term investment
Net cash provided by investing activities
Cash flows from financing activities
Proceed from share issuance
Share issue costs
Proceeds from option and warrant exercise
Bridge loan proceeds
Proceeds from debt issuance (Convertible debenture, promissory
note)
Others
Net cash provided by financing activites
($2,404)
($405)
$0
$310
$0
$461
($2,039)
($378)
($378)
$378
$378
$7,017
($380)
$0
$150
$2,520
($125)
$0
$0
$1,785
($1,484)
$0
($210)
$0
($929)
($838)
$0
$0
$352
($16)
$0
$0
($2,199)
$0
$0
$330
$0
($314)
($2,183)
($5,251)
($2,113)
$24
$762
($268)
($1,591)
($8,438)
$0
$0
$0
$0
$378
$378
$0
$0
$0
$0
$0
$0
$0
$0
$2,872
($141)
$0
$0
($2,515)
$0
$0
$330
$0
$364
($1,821)
($2,798)
$0
$0
$330
$0
($308)
($2,776)
$0
$0
$9,200
($552)
$1,410
$0
($2,511)
$0
$0
$330
$0
$342
($1,839)
$0
$0
$0
$0
$0
$0
$0
$0
$0
$0
$0
$0
($2,646)
$0
$0
$330
$0
($358)
($2,674)
($10,470)
$0
$0
$1,320
$0
$40
($9,111)
$0
$0
$11,280
($733)
$0
$0
($14,076)
$0
$0
$1,320
$0
($83)
($12,839)
$0
$0
$20,480
($1,285)
$1,410
$0
$26,191
$0
$0
$330
$0
($1,103)
$25,418
$59,424
$0
$0
$330
$0
($2,465)
$57,289
$114,509
$0
$0
$330
$0
($5,311)
$109,528
$0
$0
$0
$0
$0
$0
$0
$0
$0
$0
$0
$0
$0
$0
$0
$0
$0
$0
$0
$0
$0
$0
$0
$0
$632
$0
$200
$6,800
$0
$7,000
$0
$0
$0
$0
$0
$0
$0
$0
$0
$63
$7,483
$0
$2,395
$0
$536
$0
$6,800
$0
$0
$0
$9,731
$0
$10,058
$0
$0
$0
$0
$0
$10,547
$0
$20,605
$0
$0
$0
$0
$0
$0
$0
$0
Effect of foreign exchange rate changes on cash
($381)
Net Change in Cash and cash equivalents

CFPS
$403
$0.01
($74)
$660
$0.01
($68)
$219
($369)
($0.01)
$3,641
$0.06
Q1 FY15A
Q2 FY15A
FY 2014A
$797
$972
$192
$0
$0
$200
($1,563)
($1,999)
($1,105)
NM
NM
NM
NM
NM
NM
($0.03)
($0.03)
($0.02)
NM
NM
NM
Selected Balance Sheet

Cash and cash equivalents (including short-term invest.)
Debt (convertible debenture, promissory note)
Total equity
Debt/Equity ratio (D/E)
Debt/Total capital
Book value/share
ROE
($2,432)
($224)
$24
$331
($268)
($809)
($3,378)
Q3 FY15A
$4,350
$5,000
($2,056)
NM
NM
($0.03)
NM
$0
($2,183)
($0.03)
Q4 FY15E
$2,167
$0
($4,256)
NM
NM
($0.06)
NM
$77
$0
$1,748
$0.03
$8,237
$0.11
FY 2015E
$2,167
$0
($4,256)
NM
NM
($0.06)
NM
Q1 FY16E
$10,404
$0
$2,429
0%
0%
$0.03
-104%
$0
$0
($2,776)
($0.04)
($1,839)
($0.02)
Q2 FY16E
$7,628
$0
($369)
NM
NM
($0.00)
NM
Q3 FY16E
$5,789
$0
($2,880)
NM
NM
($0.04)
NM
$0
$0
$7,872
$0.09
$11,494
$0.14
Q4 FY16E
$13,661
$0
$5,754
NM
NM
$0.07
NM
FY 2016 E
$13,661
$0
$5,754
NM
NM
$0.07
NM
$0
($12,839)
($0.15)
FY 2017E
$822
$0
($8,322)
NM
NM
($0.10)
NM
$0
$0
$0
$25,418
$0.30
$57,289
$0.68
$109,528
$1.31
FY 2018E
$26,240
$0
$17,868
0%
0%
$0.21
147%
FY 2019E
$83,529
$0
$77,293
0%
0%
$0.92
77%
FY 2020E
$193,057
$0
$191,801
0%
0%
$2.29
60%
VALUATION
We have assumed the PoNS device is launched in FY 2017 and that there is a fully year of sales in FY 2018.
We have used our fiscal 2018 Helius estimates for our valuation. As comparables, we have used fast
growing small cap medical device stocks (Figure 39). The group of comparables are trading at a 4.5x 2017
EV/sales. We have applied this EV/Sales multiple to our FY 2018 sales estimate and discounted back by
70% to derive our C$3.00 target price. We used a high discount rate to account for the lack of large clinical
trial data to truly assess the clinical merit of the PoNS device.
Figure 39: US Small Cap (Fast Growth) Medical Device Comparables
Name
Ticker
Stock Market Enterprise 2014 2015E 2016E 2017E 2014

Price
SharesCap
Out
Value A EPS
EPS
EPS
EPS Sales
($)
($M)
($M)
($)
($)
($)
($)
($)
2015
Sales
($)
2016
Sales
($)
2017
Sales
($)
2015A 2016E 2017E

P/E
P/E
P/E
(x)
(x)
(x)
83.6x 78.5x 61.8x
2015A 2016E 2017E

P/S
P/S
P/S
(x)
(x)
(x)
EV/Sales EV/Sales EV/Sales EV/Sales

2014
2015
2016
2017
(x)
(x)
(x)
(x)
US Sm all Cap (Fast Growth) Medical Device Com panies

INOGEN INC
INGN US
$46.84
$1,197
$847 $0.30
$0.76
$113
$159
$190
$224
7.5x
6.3x
5.4x
7.5x
5.3x
4.5x
3.8x
LDR HOLDING CORP
LDRH US
$37.37
$1,401
$996 -$0.43 -$0.57 -$0.84 -$0.42
$141
$164
$188
$218
N/A
N/A
N/A
8.5x
7.5x
6.4x
7.1x
6.1x
5.3x
4.6x
NEVRO CORP
NVRO US
$71.40
$2,594
$1,879 -$6.94 -$2.54 -$1.79 -$0.97
$33
$70
$187
$267
N/A
N/A
N/A
37.3x
13.9x
9.7x
57.7x
27.0x
10.1x
7.0x
ATRICURE INC
ATRC US
$14.79
$628
$481 -$0.61 -$0.97 -$1.19 -$0.94
$107
$130
$161
$187
N/A
N/A
N/A
4.8x
3.9x
3.4x
4.5x
3.7x
3.0x
2.6x
INSULET CORP
PODD US
$28.90
$2,119
$289
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
6.0x
N/A
N/A
N/A
83.6x 78.5x 61.8x
14.5x
7.9x
6.2x
16.5x
10.5x
5.7x
4.5x
Small Cap Medical Device (avg)
Source: Bloomberg, June 20, 2016
$1,718
N/A
$0.56
N/A
$0.60
N/A
N/A
Page 41
MANAGEMENT TEAM
The management team at Helius Medical Inc. boasts a wealth of experience in the healthcare,
pharmaceutical, medical device and investment industry.
The Helius team is well rounded with a CEO who has an excellent marketing and commercialization
background, having 28 years of leadership experience in the healthcare and pharmaceutical industries, a
CFO & COO that was the CAO of Endo, a top tier specialty pharma company as well as CFO/COO of
MediMedia a marketing services company, and a CMO who helped innovative Inuitive Surgicals (ISRGNASDAQ) famous da Vinci surgical robotic system. Additionally, Helius has a Vice President of Strategic
Development who has extensive capital markets experience. Helius executive team has an abundance of
valuable pharmaceutical, medical device, healthcare and business experience, including marketing and
capital markets. 39% percent of ownership is occupied by the board and management.
Management Team
Phil Deschamps - President, CEO and Chairman of the Board of Directors
Phil joined Helius Medical Technologies in 2013. He has more than 28 years of experience in
pharmaceutical and healthcare commercialization gained at Bristol Myers Squibb (BMS) and as CEO of
GSW Worldwide and, later, at MediMedia Health.
Before joining Helius, Phil led MediMedia Health Marketing Services, where he was responsible for
strategic development, nurturing the companys clients and developing non-personal products and
services in the healthcare industry.
As GSWs president and CEO, Phil was responsible for worldwide operations in 15 major global markets
and a turnover of $160 million with 700 employees globally. His primary work included global marketing,
commercialization and new business model development for pharmaceutical, device and diagnostics
companies.
Phils role as director of neuroscience marketing at BMS saw him serve as a member of several prelaunch
global marketing teams in the neuroscience and pain therapeutic areas. He also held marketing positions
in the neuroscience, pain, and metabolic therapeutic areas.
He is a leader in developing new global business models for the healthcare industry, including
outsourcing solutions that seek to increase commercialization effectiveness and increase resource flexibility
while reducing risk and driving efficiency and cost reduction. His experience as a global healthcare
commercialization expert will guide Helius in its development and acquisition of noninvasive treatments
designed to help patients affected by neurological symptoms caused by disease or trauma.
Phil graduated from the University of Ottawa with a degree in Chemistry. He is fluent in French and
English.
Jonathan Sackier, MBChB, FRCS, FACS - Chief Medical Officer and Chairman of the Advisory Board
Dr. Sackier joined the Company in December of 2014 as Chief Medical Officer and brings to his role
extensive experience in new technologies and treatment methodologies gained over more than 30 years in
the healthcare industry. He is widely recognized as one of the leaders of the laparoscopic surgery
revolution. A trained surgeon, Jonathan Sackier has collaborated with pharmaceutical and medical device
technology partners including ConvaTec, Pfizer, Karl Storz, Applied Medical, Stryker, Siemens, Bayer and
Novartis. He helped build several companies including medical technology, research and product-design
and medical contract sales organizations. In addition to his role as CMO, Dr. Sackier has been a Visiting
Page 42
Professor of Surgery at the Nuffield Department of Surgical Sciences at Oxford University since 2014.
From 2005 to 2014, Dr. Sackier was a Visiting Professor of Surgery at University of Virginia and prior to
that a Clinical Professor at George Washington University in Washington, DC. from 1995 to 1999 when he
ceased clinical affiliation but retained his academic affiliation. Dr. Sackier founded and funded the
Washington Institute of Surgical Endoscopy, a center for education, research, innovation and technology
transfer in 1995. Prior, he worked to develop and market the AESOP robot with Computer Motion from
1992 to 1998 when that company went through a successful IPO in 1997.
Dr. Sackier currently sits on the board of directors of Kypha (since 2014 and was Chairman of that board
from 2014-2016), Clinvue (since 2010), and Brandon Medical (since 2009), is a Trustee of First Star and
previously chaired The Larry King Cardiac Foundation Board of Governors. Dr. Sackier was also Director
for Hemoshear from 2008 to 2015 and served as Chairman of Adenosine Therapeutics which became part
of Clinical Data and then Forest Laboratories from 2002 to 2008. He has also served as a board member of
The American College of Surgeons Foundation, The Surgical Fellowship Foundation and Rex Bionics,
winner of Londons 2014 Aim Award for outstanding achievement for most successful growth market.
Joyce LaViscount - Chief Financial Officer and Chief Operations Officer.
Ms. LaViscount has served on Helius Board of Directors since March 2, 2015. Ms. LaViscount was at MM
Health Solutions (formerly MediMedia Health) from July 2012 until August 2015 where she served as
Chief Operating Officer and CFO for the marketing services company. Concurrent with her role at
MediMedia Health, Ms. LaViscount also served as the CFO for MediMedia Pharmaceutical Solutions from
January 2014 until February 2015. Prior to joining MM Health Solutions, Ms. LaViscount was Executive
Director/Group Controller North America for Aptalis Pharmaceuticals (2010 to 2012). From 2004 to 2009
Ms. LaViscount worked for Endo Pharmaceuticals in a variety of roles, including Chief Accounting Officer,
VP-Investor Relations and Corporate Communications, and VP Finance Operations, as well as operational
roles in Sales Operations and Training and Corporate Strategy Development. Ms. LaViscounts
pharmaceutical industry experience also includes more than 15 years in finance at Bristol-Myers Squibb
and Pharmacia. Ms. LaViscount began her career with Ernst & Young and is a New Jersey Certified Public
Accountant and has Bachelor of Arts in Business with a concentration in Accounting from Franklin and
Marshall College.
Brian Bapty, Ph D - Vice President, Strategy and Business Development
Dr. Brian Bapty has more than 14-years in capital markets, banking, sales and as an analyst covering
biotechnology, drug development, healthcare and medical device sectors. Dr. Bapty served as Chief
Executive Officer of NCP Northland Capital Partners Inc since 2009 and as President of Confederation
Minerals Ltd. from March 16, 2012 to November 21, 2014. Prior to NCP, he served as Director of Research
at Galileo Global Equity Advisors Inc and from April 2000 to February 2009, Dr. Bapty served as a
Research Analyst at Raymond James Ltd., Research Division.
Dr. Bapty has served as an independent Bio-Medical Technology Consultant and has held positions as an
Officer of several publicly traded companies. He has been an Independent Director of Eagle Graphite
Incorporated since December 23, 2014. He has earned a Ph.D. in Experimental Medicine-Nephrology from
the University of British Columbia. Dr. Bapty holds a B.Sc. degree in Cell and Developmental Biology from
the University of British Columbia.
Page 43
Board of Directors
Blane Walter - Member, Board of Directors, Member, Audit Committee
Blane is a Partner at Talisman Capital Partners, a private investment partnership located in Columbus,
Ohio.
Blane was the founder of inChord Communications, Inc., which he built into the largest independentlyowned, healthcare communications company in the world. In 2005, inChord was acquired by Ventiv
Health, the largest provider of outsourced sales and clinical services serving the pharmaceutical industry
to create inVentiv Health. In 2008, Blane became CEO of the combined public company. Through organic
growth and more than 20 acquisitions, inVentiv Health became the leading provider of outsourced
product development and commercialization services to the global pharmaceutical and life sciences
industries. inVentivs client roster consists of more than 350 leading pharmaceutical, biotech, life sciences
and healthcare payer companies. In 2010, Mr. Walter led the successful $1.2 billion buyout of inVentiv
Health by Thomas H. Lee Partners. Blane presently serves as Vice Chairman of inVentiv Health and also
serves as Chairman of the Governor of Ohios Executive Workforce Board.
Prior to joining inChord, Mr. Walter worked as a Financial Analyst in New York City for Smith Barney in
mergers and acquisitions specialty group. Blane actively pursues and over-sees investments in healthcare,
information technology and marketing/professional services.
Mr. Walter graduated Summa Cum Laude with a Bachelor of Science degree in Marketing and Finance
from Boston College.
Mitchell E. Tyler - Member, Board of Directors
Mitch is a mechanical and biomedical engineer and scientist with over 20 years of experience in research
and development of visual and tactile displays for human-machine interfaces. He has been with TCNL
since 1992 and was cofounder of Wicab, Inc., (with Dr. Paul Bach-y-Rita), and vice president of Research
and Development. He is the lead inventor of the BrainPort Balance device, and codiscoverer of the
retention effect and the neurorehabilitation potential of tongue electrotactile stimulation. He was principal
investigator on NIH SBIR grants developing balance, vision and auditory substitution applications, and on
a DARPA contract for an underwater navigation and orientation system. Mitch received a BS in
mechanical engineering from San Jose State University in California in 1980, and an MS in biomedical
engineering from the University of California, Berkeley, in 1985. He is a researcher in the UW Department
of Orthopedics and Rehabilitation Medicine and a senior lecturer in the UW Department of Biomedical
Engineering, where he teaches biomedical engineering design, biomechanics, bioinstrumentation and
neuromotor control. His research interests include cutaneous and tongue-based electrotactile displays,
human-machine interaction, and in clinical applications of noninvasive neuromodulation for
rehabilitation. He is a Registered Professional Engineer in both California and Wisconsin.
Huaizheng Peng, Ph D - Member, Board of Directors
Dr. Peng is a General Manager of China Medical System Holdings, a specialty pharmaceutical company
listed on the Hong Kong Stock Exchange. He is in charge of international operations for the Company,
including pharmaceutical asset acquisition/product licensing-in/out, international business development,
outbound investment and asset management, among others. Dr. Peng served as an independent Nonexecutive Director of China Medical System Holdings Ltd for three years, and the Company was admitted
to trading on AIM (between 2007 and 2010).
Dr. Peng was a partner of Northland Bancorp, a private equity firm. Before that, he worked as a head of
life sciences and as a director of corporate finance at Seymour Pierce, a London-based investment bank and
Page 44
stockbroker. In addition, he was a Non-executive Director of China Medstar, an AIM listed medical device
company. Earlier in his career, Dr. Peng was a senior portfolio manager, specialising in global life science
and Asian technology investment at Reabourne Technology Investment Management Limited.
Dr. Peng received his Bachelors degree in medicine from Hunan Medical College (now Central South
University Siangya School of Medicine) in Changsha, Hunan Province, China and subsequently he
obtained a Masters degree in medicine from Hunan Medical College. Dr. Peng was awarded his PhD in
molecular pathology from University College London (UCL) Medical School and subsequently practiced
as a clinical lecturer there.
Edward M. Straw - Member, Board of Directors, Member, Audit Committee
Ed is the founder and managing partner of Osprey Venture Partnersa firm that finds investment capital
and assists with business development for startup entrepreneurs. He is the retired president, global
operations of The Estee Lauder Companies, and currently sits on the boards of the following companies:
Performance Equity Management, Odyssey Logistics, Helius Medical Technologies, Capital Teas and
Document Capture Technologies. He is the chairman of Odyssey Logistics.
As president, global operations for Estee Lauder, Ed centralized and led Lauders R&D, package
engineering, acquisition, manufacturing, distribution, inventory management, and information systems
organizations which supported 20 Estee Lauder Companies around the world. In his 5 years at Estee
Lauder, he is credited with directing significant improvements in their global supply chain and driving
major stock price impactful savings to the bottom line.
Prior to joining the Estee Lauder Companies, he was senior vice president, global manufacturing and
supply chain management at the $40 billion Compaq Computer Corporation in Houston.
Before joining Compaq in late 1998, Ed was president of Miami-based Ryder Integrated Logisticsthen
the leading provider of third-party supply chain services in North America.
Prior to joining the private sector, Ed had a distinguished career in the US Navy, retiring as a three-star
admiral in 1996. He culminated his military service from 1992-1996 as the director of the Defense Logistics
Agency, the nations only combat logistics support agency and primary provider of global supply chain
material and services support for Americas armed forces. He reported directly to the under secretary of
defense (AT&L), Dr. Paul Kaminski, and General Colin Powell, chairman, Joint Chiefs of Staff.
He also held numerous operational and policy leadership positions at the Navys major logistics
commandsand was Navys lead for logistics planning and execution of material and ordnance support
to Navy and Marine Corps forces during Operations Desert Shield and Desert Storm in 1990-1991.
Ed received multiple awards throughout his career, including Defense, Navy/Marine Corps and Air Force
Distinguished Service Medals, the Ford Foundations Innovations in American Government Award and
the Society of Logistics Engineers Founders Medal. He is a distinguished graduate of the United States
Navy Supply Corps School and recipient of the Navy Supply Corps Lifetime Achievement Award.
Ed holds an MBA from The George Washington University and a BS from the US Naval Academy, and is a
graduate of the National War College.
In addition to the boards listed above, he is a Trustee of the US Naval Academy Foundation, a member of
the Department of Defense Science Board (with TS/SCI clearance,) and has served on the Board of
Directors of Eddie Bauer, MeadWestvaco, Panther Expedited Services, the Navy Federal Credit Union, the
US Chamber of Commerce, and the Boy Scouts of America. He has also served in an advisory role to the
IBM Federal Group and PWC/PRTM Management Consultants.
Page 45
Ed is currently working with a group of patriots to regain medical benefits for Blue Water Viet Nam
veterans suffering from Agent Orange-related diseases.
Savio Chiu - Member, Board of Directors
Savio is currently senior manager, Corporate Finance at Baron Global Financial Canada Ltd. He is
experienced in capital markets and has held senior management positions for multiple companies listed on
the Toronto Stock Exchange Venture and the Canadian Securities Exchange. He is experienced in financial
reporting, corporate governance and structuring corporate transactions.
Savio is a chartered accountant and holds a bachelor of commerce degree in accounting from the
University of British Columbia.
Figure 40: Scientific Advisory Board
Source: Helius
RISKS
Helius Medical Inc. and our estimates for the company are subject to a number of risks, including:
FDA Approval (Regulatory) Risk: Our estimates and expectations surround an FDA approval for
PoNS to be distributed and used to treat TBI and MS in the U.S. Delays in drug approvals or
failing to obtain regulatory approval would have a material and negative impact on our estimates.
Clinical, Development Risk: Clinical device treatment development is not without risks. Clinical
trials may fail to meet endpoints for a number of reasons, which may include: not having enough
patients in a trial (study is underpowered), the trial is not properly designed, trial costs, time to
trial completion, quality of clinical data, regulatory issues, efficacy and safety concerns. There is
also risk that the TBI trial may have a high placebo rate due to the lower level of stimulation
(1/2500th the power of the active trial) provided in the placebo arm of the TBI trial this could
result in the TBI trial not reaching statistical significance.
Page 46
Financing Risk: Helius may be required, from time to time, to raise additional funds for its
clinical development activities and operations. The inability to raise capital on a timely basis, or
under appropriate terms, could have a material adverse impact on the operations of Helius.
Patent Protection and Infringement: The medical device industry is heavily reliant on patented
technology which brings about certain risks. The extent to which discoveries and related products
and processes can be effectively protected by patents and be enforceable is uncertain and subject
to interpretation of the courts. Likewise, the processes, products, and technologies of Helius may
be subject to claims of infringement upon the patents of others, which could materially affect their
business.
Manufacturing Risk: Helius must meet FDA standards in manufacturing processes; or else plans
for commercialization could be materially adversely affected.
Share Price Volatility: The medical device/biotech sector can experience large share price
moves, particularly if clinical trials fail, regulatory issues occur and/or litigation happens.
Competition: Helius competes with other entities that develop and produce products aimed
at diagnosing similar conditions to those addressed by Helius products, including early-stage
companies, established pharmaceutical companies, universities, research institutions,
governmental agencies, and health care providers.
Ownership Concentration: If certain shareholders act together, they may be able to exert a
significant degree of influence over Helius management and affairs and over matters requiring
shareholder approval, including the election of directors and approval of significant corporate
transactions. The concentration of ownership may facilitate or delay or prevent a change in control
of Helius and might affect the market price of shares.
Litigation Risk: As a therapeutic development entity, Helius may become, in the ordinary course
of business, a party to litigation, for a myriad of potential reasons. We have summarized some of
the legal proceedings on page 27.
History of Operating Losses: Helius has incurred losses each year since its inception (an
accumulated deficit of approximately US$22.5M as of Dec. 31, 2015. Unless Helius is able to
generate sufficient revenue, it will continue to incur losses from operations.
Limited Market Awareness: There is limited market awareness of our product and the
neuromodulation market is new and uncertain. Our PoNS technology is a new untested form
of neurostimulation therapy and the medical community tends not to adopt new therapies very
rapidly, which may have a material adverse effect on our business and financial position.
Tight Deadline to Receive FDA Approval: Under the CRADA if Helius fails to obtain FDA
clearance of the PoNS device or otherwise fail to ensure that the PoNS device is available for
purchase by the U.S. Government, in each case by the expiration date under the CRADA of
December 31, 2017, Helius may forfeit the right to pursue commercialization on our own.
Specifically, in either such case, we will be required to (i) transfer possession, ownership and
sponsorship of any regulatory application, and correspondence supporting the PoNS
technology to the USAMRMC and (ii) provide the U.S. Government with a non-exclusive,
irrevocable license to any patent, copyright, data rights, proprietary information and regulatory
information, in order to permit the U.S. Government to pursue commercialization on its own. Any
such loss of our ability to exclusively market and sell the PoNS device would have a material
adverse effect on our business. Additionally, under our Strategic Agreement with A&B if we fail
to obtain FDA clearance for commercialization of or otherwise fail to ensure that the PoNS
Page 47
device is available for purchase by the U.S. Government by December 31, 2017, Helius is subject to
a US$2M contract penalty payable to A&B.
One Product Company: Helius only has one product in development - the PoNS device. Success
of Helius is highly dependent upon the commercialization of the PoNS device failure to do so
could result in the stock trading below cash.
Future Dilution: Helius would be expected to raise additional capital via equity and/or debt
to complete the development for at least one additional indication besides TBI.
Page 48
RISKS
Please see Section Above Titled Risks
RELEVANT DISCLOSURES APPLICABLE TO COMPANIES UNDER COVERAGE

1.
Yue Ma, M.Sc. an Intern Associate of Mackie Research Capital Corporation and Michael Stevens, a former associate of Mackie
Research Capital Corporation, were also involved in the preparation of this research report.
2.
Relevant disclosures required under IIROC Rule 3400 applicable to companies under coverage discussed in this
research report are available on our web site at www.mackieresearch.com.
ANALYST CERTIFICATION
Each analyst of Mackie Research Capital Corporation whose name appears in this report hereby certifies that (i) the
recommendations and opinions expressed in this research report accurately reflect the analysts personal views and (ii) no part
of the research analysts compensation was or will be directly or indirectly related to the specific conclusions or
recommendations expressed in this research report.
Information about Mackie Research Capital Corporations Rating System, the distribution of our research to clients and the percentage of recommendations
which are in each of our rating categories is available on our web site at www.mackieresearch.com.
The information contained in this report has been drawn from sources believed to be reliable but its accuracy or completeness is not guaranteed, nor in
providing it does Mackie Research Capital Corporation assume any responsibility or liability. Mackie Research Capital Corporation, its directors, officers and
other employees may, from time to time, have positions in the securities mentioned herein. Contents of this report cannot be reproduced in whole or in part
without the express permission of Mackie Research Capital Corporation. US Institutional Clients - Mackie Research USA Inc., a wholly owned subsidiary of
Mackie Research Capital Corporation, accepts responsibility for the contents of this report subject to the terms and limitations set out above. US firms or
institutions receiving this report should effect transactions in securities discussed in the report th rough Mackie Research USA Inc., a Broker-Dealer registered
with the Financial Industry Regulatory Authority (FINRA).
Member-Canadian Investor Protection Fund / membre-fonds canadien de protection des pargnants
Toronto 416.860.7600 - Montreal 514.399.1500 - Vancouver 604.662.1800 - Calgary 403.218.6375 - Regina 306.566.7550 - St. Albert 780.460.6460
Page 49
INSTIT UTIO NA L EQ UITY D EPA R TMENT

RE S E AR C H
T O RO NT O
Barry Allan
......................................................... 416.860.7612 ................................................... Vice Chair, Mining Group & Director
Ryan Hanley ......................................................... 416.860.8337 .................................................................................. Analyst, Mining

Russell Stanley ....................................................... 416.860.8636 ......................................... Vice President, Analyst, Special Situations
Andr Uddin, Ph.D.... .............................................. 416.860.8675 ............................................ Managing Director, Healthcare Research
Nikhil Thadani......................................................... 416.860.6784 ...........................................................................Analyst, Technology
Douglas Ibbitson .................................................... 416.860.7618 ................................................................. Analyst, Special Situations
CA LG A R Y
Bill Newman, CFA ................................................... 403.260.2460 ............................................. Senior Analyst, Oil & Gas - International
S AL E S AN D T R AD I N G
T O RO NT O
Pat McCarthy ................................................................ 416.860.7635
Jeff Crane ...................................................................... 416.860.8681
Tim Fisher...................................................................... 416.860.7665
Terry Sugrue ................................................................. 416.860.7747
Matthew Ritzel............................................................... 416.860.6849
Doug Van Peteghem .................................................... 416.860.7755
Mike Morrison................................................................ 416.860.7751
Asha Khosla .................................................................. 416.860.7655

Helius Medical Technologies Mackie Initiation June 2016

Uploaded by

Document Information

Copyright

Available Formats

Share this document

Share or Embed Document

Sharing Options

Did you find this document useful?

Is this content inappropriate?

Copyright:

Available Formats

Helius Medical Technologies Mackie Initiation June 2016

Uploaded by

Copyright:

Available Formats

Andr Uddin, Ph.D. 416.860.

HELIUS MEDICAL TECHNOLOGIES SPECULATIVE BUY

A Brain Machine - A New Frontier In Medicine

We are initiating coverage of Helius Medical Technologies (Helius) with a

Basic Shares O/S (mm)

Fully Diluted (mm)

Market Cap (basic) ($mm)

Enterprise Value ($mm)

DETAILS A Potentially Disruptive Device to Amplify Brains Ability to Heal

Next Reporting Date

Thomson Chart 1 Year

Reputable Management/High Inside Ownership: The Helius team is well rounded

IMPACT A Run Up is Expected

- PoNS pivotal TBI results in CY Q4

($0.03) ($0.13) ($0.17) $0.24

Initiating Coverage Helius Medical Technologies Inc.

HEALTHCARE MEDICAL DEVICE