Q2 2020 Helius Medical Technologies Inc Earnings Call
Please standby.
Good evening, ladies and gentlemen, and welcome to the second quarter fiscal year 2020, <unk> earnings conference call for Helios Medical technologies.
This time, all participants have been placed in listen only mode. Please note that this conference call is being recorded and that the recording will be available on the company's website for replay shortly.
Before we begin I would like to remind everyone that our remarks and responses to your questions. Today may contain forward looking statements that are based on the current expectations of management.
Including statements regarding the impact of Cobot 19 pandemic on the company's operations. The success of the company's planned studies and submissions the future commercialization of the pods treatment.
Expected future clinical and regulatory timelines the potential receipt of regulatory clearance of the power device in the United States and projected financial results.
These forward looking statements involve inherent risks and uncertainties that could cause actual results could differ materially from those indicated including those including those identified and the risk factor section of our most recent annual report on form 10-K.
Such factors may be updated from time to time in our filings with the FCC, which are available on our website.
All statements made during this call or as of August 12.
2020.
We undertake no obligation to publicly update or revise our forward looking statements as a result of new information future events or otherwise.
Except as required by law.
I would now like turn the call over to Mr. felt they shop.
He is medical's Chief Executive Officer. Please go ahead Sir.
Thank you very much operator, welcome everyone to Helios medical second quarter of 2020 <unk> earnings Conference call.
I'm joined on the call. This evening as per usual by my partner of choice like out our Chief Financial Officer, and Chief operating Officer.
Before we start let me provide you with a quick agenda for tomorrow to for today's call.
I'll begin by discussing our regulatory strategy in the U.S. and the progress we've made in recent months.
Following this discussion I'll review, our second quarter revenue results and update you on our commercial activities in Canada, including a summary of the disruption that weve seen as a result of the cobot 19 pandemic.
Choice will then discuss our second quarter financial results in detail and expand on the recent progress we've made to secure additional capital and enhance our balance sheet condition.
Following Joyce's remarks, I'll conclude by sharing some thoughts on or near term and longer term outlook before we open the call for questions.
So with that let's get started with a review of our U.S. regulatory strategy and the progress we've made in recent months.
By way of background. During Q1 of this year, we made important strategic decisions to prioritize the pursuit of an indication in multiple sclerosis or not.
As the pathway for obtaining our first U.S. clearance of the ponds device.
The strategic decision was based on the quality of the data that was included in our M.S. submission package to health, Canada for label expansion that led to its clearance there.
Specifically, our health Canada submission included data from two peer reviewed clinical trials, which we have outlined in prior calls and in addition to these two trials. We also generated evidence based on real world data gathered in our validated database in Canada, which showed statistically significant improvements from baseline.
In functional gate assessment.
In aggregate believe the existing clinical data in real world evidence ours are sufficient to demonstrate a favorable risk benefit profile as required by the de novo regulatory pathway in the U.S.
Our decisions to prioritize an indication and I'm asked was also driven by the large patient population that suffers from this disease, which is estimated to be about 1 million individuals in the U.S. alone.
Importantly novel treatments for M.S. are highlighted a specific interest for the FDA has amassed represent a high unmet medical need.
Further a majority of people who suffer from gate, sometimes due to their M.S. already consume physical therapy to try there to keep their symptoms at bay.
Even given these important considerations, we believe that pursuing an indication that math represents our most effective and efficient path to obtain our first U.S. clearance for the bonds device.
Now we set out to pursue this regulatory pathway with the goal of submitting a request for de Novo classification and parents in the second half of this year.
Beginning in the first quarter, we submitted an application to F.D.A. for breakthrough designation for our ponds device for the treatment of symptoms of that mess and throughout the second quarter. Our team worked diligently to prepare the Rick the requisite imports for meeting this goal.
Importantly on May 12, we were excited to announce that on may 7th our ponds device received breakthrough designation. The breakthrough designation, we were speaking as detailed by the FDA.
The breakthrough device program is intended for medical devices that provide.
The potential for more effective treatment of life, threatening or <unk> irreversibly debilitating diseases and conditions.
Its goal is to provide patients and providers with timely access to these devices by speeding up their development.
Last month and review.
While it doesn't change the requirements for FDA clearance. It does offer device manufacturers several different program options to interact with the FDA experts to efficiently address important topics update obtained feedback F.D. feedback more quickly and identify areas of agreement.
Device manufacturers can also expect their submission for regulatory clearance to be received to receive a priority review.
Building on this accomplishment, we continue to aggressively pursue our U.S. regulatory strategy and we're pleased to see that our progress on this front was not significantly impacted by cobot 19 pandemic.
Last week, we announced the submission of our request for de Novo classification and clearance of the ponds device for the treatment of gate deficit due to symptoms from enough to be used as an adjunct to supervise therapeutic exercise programs in patients over 18 years of age.
For these patients are ponds treatment represents a non drug non implantable treatment option with the potential to improve their ability to walk.
After he is currently performing an initial administrative review of the submission and they found except for acceptable. It will proceed into the substantial review phase.
With the achievement of this major milestone of the de Novo submission, we've taken an important step forward on the path to expanding our addressable market to include the U.S. and bringing our ponds treatment to the eight of patients with gate deficit due to a mess symptoms. We certainly look forward to the FDA review of our submission and.
To providing additional details a if I if required on our planned commercial strategy as we progress progressed through the year.
Now, let's turn to our revenue performance for the second quarter.
We reported total revenue of $133000 during the second quarter of 2020 compared to 518000 in the prior year period.
Our revenue in both periods was driven by sales to neuroplasticity clinics in Canada that had been authorized to provide our Ponce treatment.
Like many in our industry, our operational and financial results. During the second quarter were significantly impacted by the disruption caused by the covert 19 pandemic and the restrictions that have been enacted the slow it spread.
I'll now take a minute to discuss this disruption and its impact in greater detail.
As we discussed in our first quarter earnings call in March provincial and territorial governments in Canada implemented policies to restrict performance of non life saving medical treatments and limit the activities of their citizens.
In an effort to comply with these policies the pawns authorized clinics that provide our treatment began to spending new patient treatments with the exception of emergency services for select patients.
By the end of March all of the ponds authorized clinics in Canada, where effectively closed.
We continue to experience this unprecedented level of disruption throughout April and most of May as clinics remained effectively closed.
During the period patients who had completed their two week in clinic portion of a Ponce treatment program. Prior to covert 19 shutdown, we're able to continue with the 12 week at home portion of the treatment with the supported their clinics by a virtual means.
In late May and throughout the month of June we were pleased to see clinics began to reopen after the government policies that had initially impacted them were partially lifted.
We estimate approximately half of the ponds authorized clinics had reopened outside to outside a non emergency patients by the end of May and almost all were reopened by the end of June however, clinics productivity had been impacted by the federal and provincial requirements limiting their capacity to 50% of normal services.
We believe there overall productivity as a was well below this level. It may in May and June to the due to the need to physical distance in clinic and as mandated by the provincial governments for safe reopening.
Clinics also cited challenge is relating to staffing as well as patients willingness to come in the clinic for treatment, especially for patients who from food for whom cold it represents a higher risk due to their age and existing health condition.
With these factors in mind, despite the recent trends in clinic Reopenings. We believe we remain at the very early days of recovery with respect to the patients treatment part.
So with our ability to treat patients significantly curtailed in Q2.
We focused our on engaging with new neuro clinics to increase our access in capacity for one thing to open up we're fully.
As a reminder, we began 2020 with an enhanced commercial strategy to drive awareness credibility and access to our ponds treatment in Canada in our commercial strategy included improving our targeting of targeting criteria for the clinics that we engage an authorized.
This targeting criteria prioritize clinics with large existing commercial focus on neuro rehabilitation.
Catalyst referral networks with public hospital systems for the treatment of patients with neurological conditions.
And significant reimbursement experience and payer relationships related to the new real neuro re about rehabilitation treatments.
Under this commitment enhanced commercial strategy, our internal keen in Canada made impressive progress during the first quarter by doubling our Canadian clinic network from seven to 14 clinical locations.
Since a necessity is the mother of invention and the Canadian team could not visit nucleonic locations. During the pandemic. They reached at virtually the top tier neurological clinics and made the compelling case for clinics to joined the ranks of the ponds authorized Canadian clinics based on the huge opportunity of our new M.S. indication in Canada.
Our team then developed a virtual authorization process. So that we can continue to increase our clinic capacity. Despite the cobot 19 disruption.
As a result <unk> of these efforts during the quarter, we authorized another five clinics for a total of 19 clinics now authorized in Canada.
We believe this expanded clinic network positions us well for the future and will help us continued to increase the pace of adoption of our ponds treatment in Canada has the effect of covert 19 pandemic subside.
So in summary, Q2 was undoubtedly very challenging quarter with respect to revenue.
We did however, achieving important progress and the pursuit of our U.S. regulatory clearance and continued to build access credibility in a warrant awareness for our ponds treatment through our Canadian operations.
We did so while raising additional capital and maintaining strict financial discipline in order to continue to support our pursuit of these activities.
I'll provide you with an update on our near term and longer term outlook later on today's call, but first let me turn it over to Joyce for a detailed review of our second quarter financial results choice.
Thank you Phil we recorded revenue I'm in $33000 for the second quarter 2020, compared to 500 in $18000 Priory urea.
Product sales represented approximately 90% of total revenue in the second quarter of 2020 compared to 91% total revenue in the second quarter of 2019.
Well <unk> product sales in both periods would generate interest sales and the ponds devices and mouthpieces coupons authorized neuroplasticity clinics in Canada.
As Phil mentioned, our operational and financial result in the second quarter were significantly impacted due to the disruption caused by the code that 19 pandemic, including the closure and reduce productivity upon authorize clinic locations across Canada.
During the second quarter 2020, I products sales benefited from at large order from one of our clinics during the month of June along with payments received from existing clinic patients under the revised pricing model that we implemented at the beginning of this year, which is designed to make is upfront patient cost.
Our gross profit for the second quarter, 2020 was $69000 compared to $306000 in the prior year period.
Operating expenses for the second quarter of 2020 decreased 2.3 million was 38% year over year to $3.8 million, reflecting the continued benefits cost reduction initiatives that we implemented during the past year.
My line item the change in operating expenses was driven by selling general and administrative expenses, which decreased 1.5 million or 38% year over year, and research and development expenses, which decreased 1 million or 43% year over year.
The decrease in S. DNA expenses was primarily due to reduced commercial operations expense associated with the U.S. launch planning activities that were terminated following the F.D.A. denial in the second quarter of 2019 and reduced wages and salaries due to lower headcount.
The decrease in research and development expenses, primarily due to lower medical affairs expenses as well as reduced product development cost is the completion of the upon device development in 2019.
Operating loss for the second quarter of 2020 was 3.7 million compared to 5.8 million for the prior year period.
Total other and income for the second quarter of 2020, 361000, compared to 5.6 million in the second quarter of 2019.
A year over year change in total other income and expense was primarily driven by the change in fair value of derivative financial instruments, which was a gain of $1000 in the second quarter 2020, compared to a gain of 5.5 million in the second quarter of 2019.
The change in fair value of the company's derivative financial instruments was primarily attributable to the change in the company stock price volatility and the number of derivative financial instruments being measured during the period.
Well the second quarter of 2020, we reported a net loss of 3.4 million or eight cents per basic and diluted common share compared to a net loss of 186000 or one cents per basic and diluted common share for the second quarter of 2019.
Turning to a discussion of our balance sheet condition and recent financing activities.
As of June Thirtyth 2020, we had 5.3 million of cash compared to 5.5 million at December 31st 2019, we had no outstanding debt obligations in either period.
The decrease in cash during the first six months of 2020 was primarily driven by net cash used in operating activities of $7 million and net cash used in investing activities $61000, partially offset by 6.7 million of cash provided by financing activity.
Net cash provided by financing activities. During the six month ended June Thirtyth 2020 included proceeds from the following activities.
During the period, we sold and issued 8.1 million shares of common stock under our ATM agreement at an average price of 62 cents per share, which resulted in net proceeds the $4.8 million.
On March Twentyth, we raised net proceeds of approximately 1.9 million <unk> registered direct offering and concurrent private placement of warrants.
We continue to evaluate multiple options to secure additional capital and strengthen our balance sheet and support our operations.
On April 13, the company was granted 323000 dollar loan under the Paycheck protection program.
That list under the Corona virus eight released an economic security or cares Act of 2020, the company plan to use the proceeds from the P.P.P. loan for covered payroll cost rent and utilities in accordance with the relevant terms and conditions of the cares Act.
Based upon subsequent guidance issued by the federal government, including a presumption that no publicly traded companies are eligible for the APTP long the company. They turn TPP loan proceeds in May.
Turning to our 2020 guidance given the uncertainties associated with the code that 19 pandemic, we're not providing any updated financial outlook for the full year 2020 at this time like many other companies the medical device industry. We are currently not able to estimate the duration and impact of Cobas 19.
Our operations and financial result at this time.
With that I'll turn the call back to you sell Phil Thank you Joyce.
So as Joyce missed or just mentioned the duration and impact of covert 19 on our performance remains uncertain and that's a very very frustrating.
Given the uncertainty, we're continuing to monitor our business trends and and a into obtained feedback from our clinic customers to assess the ongoing impact of the pandemic.
And while it's not our typical practice to provide details on current quarter trends. We appreciate the investment community is focused on how companies are faring in this time.
So many interest of transparency, we felt it would be appropriate to provide an updated view on what we've seen in the recent weeks.
By the end of July we were pleased to see that all of the ponds authorize clinics had in fact reopened to outside non emergency patients.
But despite this positive trend however, clinics continued to be impacted by the federal and provincial requirements limiting their capacity to 50% of normal services, so that didn't change.
Their overall productivity remains below level to the due to the factors that I that I just mentioned.
While the level of productivity varies from clinic the clinic at present, we estimate that the average clinic across our network is operating at about 30% capacity.
With this is a backdrop, we believe we continue to remain in the very early days of recovery and unlikely to see material improvements in business trends, a until the federal and provincial requirement lifted and the the clinic productivity increases.
While our outlook in the near term remains uncertain, we're incredibly proud of the performance of both our regulatory and commercial teams in their ability to execute our regulatory strategy and to pivot quickly in Canada in response to the challenging circumstances ultimately to do everything we can to position the company for success in the future.
As we ended the second half was 2020, we remain focused on continuing to pursue our commercial and regular <unk> regulatory strategies as efficiently and effectively as possible for the benefit of both our patience and shareholders.
Most importantly, we remain convinced that our ponds technology represents a truly revolutionary approach to the treatment of neurological disease and trauma with the ability to improve the lives of patients suffering from the effective enough.
<unk> and possibly other conditions in the future.
What's particularly exciting as research of Neuromodulation Neuromodulation effect through electrical stimulation of the surface of the tongue continues to significantly progress.
The Cascade of Neuromodulation of trigeminal nerve activity may enable changes to the brain, which continued to show promise in treating other kinds of neurological condition.
This work produced through clinical studies sponsored by humorous and through independent research has been submitted for publication and after peer review would potentially eliminate the true breadth of our ponds technology. So we look forward to those publications.
Before we open up the called the questions I'd like to close by thanking our employees for their important contributions to our recent progress our customers and of course, our shareholders for their support and everyone on tonight's call for your interest in Healios medical technologies.
Jason I happy to take a questions from from the phone.
Thank you.
If you'd like to ask a question. Please signal by pressing star one on your telephone keypad, if you're using a speakerphone. Please make sure that your mute function is turned off to allow your signal to reach our equipment.
We do ask that you limit yourself to one question and one follow up.
If you would like to ask additional questions. We invite you to add yourself to the Q again by pressing star one.
We will now take a moment to lot participants to join the queue.
Yeah.
My first question comes from Steven Lichtman with Oppenheimer and company. Please state your question.
Pretty bad.
Hi, Phil I joist nicely. So just I'm the Canadian centers that you have open you obviously the volumes today, you know are not reflective of what they could be but just trying to get a sense of the size of the clinics, you're in and what what sort of the patient run.
Rate do you think those centers a that you're in have on a monthly or annual basis, just trying to get us sense of the you know the size of centers that you're currently and yeah. So the Steve Viz, a viz clinics are all a private neurological clinics I'm. So as we mentioned we pivoted a in.
The late fall in January to really focus on on these kinds of clinics.
And there are varying size and we really focus on these on these clinics to to give access and specific parts of the country and we really focused on developing the network in a in southern Ontario, not to be able to give access so I I literally have to go through every clinic to give you the details on on where they go.
The biggest issue that a that the clinics are having and a and they're obviously chomping at the bit too to get back to the full business or is that you can imagine that P.T. clinics or are you know by design clinics that are providing services, where people are working hard and breathing hard.
And it's difficult for them to to do it while wearing masks. So a you know the the the declines of the kinds of things are very very difficult. So so that combined with the the difficulty of a of patients, especially N.S. patients who are a if there are a on drug therapy immuno compromised or they are they sort of have are lucky.
Then start to be able to go in having said all of that what what we're trying to do and working with them is to try to build the tools for them to be able to do this remotely.
As I mentioned on the call a we were trying a we were able to move our authorization process to a full virtual and we're trying to see whether elements of that program could be a could be put into be able to increase the capacity for it for patients. So right now or there are there a everybody is trying to find.
The way to a two to drive a the patient count.
And and we're just trying to reconcile you know what's what's happening on the ground I I'm in fact, the in Canada right now and we'll have the benefit of I'll be in the Toronto area Tomorrow, and a and will actually be visiting several of our clinics. So you know, perhaps we could a touch base next week and I can give you out.
Much you know a first hand look at what's actually happening all of this of course is based on the aggregate reporting we're getting from our team.
Thanks, Phil and I was just on F.D.A. <unk>.
<unk> about when do you think youre kind of hear back on R&D. The first review here.
Well, you alert that the alerted investors for that or or or now.
Yeah. So the first review is really a an administrative review.
And F.D.A. has their own pick sheet and of course, we've worked with very sophisticated attorneys to help us prepare this and I assure you that from an administrative <unk> standpoint every element of the a of the requirement for the the de Novo submission has been completed a so a you know we were able to tick.
Off the same sheets. So we fully expect that a that this is going to be a a a formality.
And a very often in fact in our TB I work after they didnt, even notified that they werent gobank going forward. So so this first step is is really administrative one and a and you can be sure Steve that a will obviously report on any any material feedback that a that F.D.A.
Gives us one way or the other.
And and certainly from my perspective, I hope the next feedback we give you the clearance [laughter].
Okay, and then Phil and enjoy it's just lastly on the.
The state of the balance sheet can you could give us some thoughts as to cash burn in the back back half I mean, just directionally, perhaps from from the a second quarter levels.
Yeah. So previously communicated Steve about 1.2 million a month was ER our expected burn we have been able to identify opportunities to further reduce that burn in and we're looking like a closer to about a million dollars amount that's why we're coming out.
Thanks, that's helpful. Thank you guys.
I think Steve Steve.
Our next question comes from Ben Haynor with Alliance Global Partners. Please state your question.
Good evening bands afternoon, guys.
Yeah really good.
Yes, that's one it's long.
Yes.
Congrats on the other submission to the idea in nicely done on get in five clinics are in.
Any rough order.
Really curious on you on the five grams, a though you added how do they start treating patients you mentioned that Oh, there's the current started talking about that that's a good gone and ramp up.
Capacity back up, but ER, where would you kind of Ah Ah or how would you kind of characterize their enthusiasm for are getting into their first stuff onstream.
Sure.
So what are the clinics or you know neurological clinics NERC neurological conditions are are a real a real pain to treat a these poor patients.
For the most part are fighting an uphill battle and it's pretty rare that physical therapists ultimately.
I I fight a winning battle in that most of the care that these clinics are giving these patients are let me manage a and try to slow down your decline.
So our data shows a and a and this is what has been excited our data shows that we're able to reverse a the decline that patients are seeing in there in their big quality.
So so as the team is reaching out to these two these top tier neurological clinics.
Obviously, a they they want to review the data were able to show them the data and so they're excited by the opportunity to craft that supply their craft and actually help patients actually get better.
And and it's a in you know every now and then for those of you are out there just visit the website. It's it's just so Ah Ah kinda ponds, Canada Dot CA.
Oh, I'm, sorry, ponds treatment dossier I, because we'll show you can see some anecdotes there and then you'll you'll sort of a figure out why there. The they're excited about this I also rest assured that a they don't jump into this likely are they a they review the data they seek advice from a their referral physicians.
And that's why our team is a is doing everything they can and the sort of the virtual world to to drive that a that awareness and the end to drive the patient. So once we're able to sort of close all of those loops or the clinic say Wow, you know I meant I I want to do this.
So as I said that we were able to deliver a to design a a virtual what training program a it used to be that we had that we used to spend a day a day in clinic doing all of the the ponds training and a an authorization process now we do that a completely virtually and a and so once they are they get treated a once they get authorized.
Then they are they start reaching out to out to their brought to there to their patients and a and you know let me give you a very tangible example, so let's say a clinic has three treatment groups right.
So they are able to treat and then the normal treatment is a is treating patients roughly every half hour just let's doing that so they were treat they would be treating a.
Three patients a half hours so six patients that our eight hours a you know about 50 patients a day.
What are the new reality for them is at 50% capacity that was three of those three rooms or be collar those three spaces becomes.
One and a half space per hour.
So it's it's extremely curtailed a and so they're trying to find a way to to select the kinds of patients that are going that's kinda clinics. So like the kinds of and you know we certainly encouraged them that ponds patients are sort of a nice patient to target because ultimately their treatment is an hour.
Good morning, an hour and evening, it's the same patient. So so it's a so it's that perhaps easy for them to fit.
And so there's a there's no lack of desire to to join the list of authorize clinics.
And and certainly as their outreach continues its just the physical limitations of a of being able to do this and do the safely is a is the is the biggest deal.
Sorry for the long winded answer there Ah Ben but I just wanted to make sure that a everybody on the phone sort of got a flavor for tangibly, what's happening out there.
No I mean that colors very helpful and obviously makes a lot of sensitive we think about it so it sounds like definitely the interest levels. There Diablo Centstwo <unk> you know if people if these claims or 30% capacity you're right now.
No they need to be at 70% <unk> bass before you really start or you know ex what's the X percent capacity, where your reserve or are you really think you'll start seeing patients schools through true yeah. So turn so I'd say, it's a great question. So I think that just to give you a little more color on the Canadian reopening.
Strategy for that for the country.
Basically as of last week I think last Thursday was there was one more district in Toronto that was student phase two now the whole country is in phase three.
In phase three is the permanent new normal.
Until there's a vaccine or a significant treatment a this is what the future looks like for the foreseeable future. So so visa restrictions.
Our gonna be in place for the foreseeable future.
You know what we're hoping is that a like everything in life a as time goes by a you start to get a you know they said a necessity is the mother of invention. A there there is a lot of interest in a in a in in our treatment. So we hope to think that even with those restrictions will be able to get a patient through but the reality is that.
That a this is gonna be a difficult climate until a until something happens with respect to the treatment front of cobot.
Okay. That's helpful.
Thanks for taking my questions guys with non people for good work all right. Thank you banks.
Thank you. Our next question comes from Randy HIG. Please state your question.
Hey, Randy.
Good afternoon.
Just a couple of quick question. The first is can you give an idea how many shares are currently outstanding on a fully diluted basis.
On a fully diluted basis that that number is roughly 58 million.
Okay. That's right so all right and how many warrants are currently outstanding and what's the strike on the warrants.
I do you have that so the strike on on the warrants is what I'm talking like it has that information <unk> I think it's 46 cents.
Yes, Oh actually does that there earlier work so that are much higher than are probably going for that.
Right Yeah.
Well, you're getting that went on that's still a quick question filter.
It's great that weve.
You know got our application and you know and the clock is ticking on that so it'd be great. Because this is kinda, but a priority fast track situation, there or any type of.
Historical things, we can look at at the time. This you should take from what would be the short end to the long end I mean, sorry, you know, we're we're burning a million two important obviously every month.
You know equate that number shares in the dilution it's significant yep. So.
Getting to that point as quickly as possible obviously is beneficial to all the shareholders. Just wondering what the what that long short middle range. What is your expectation levels sure well be expectations are really based on the guidance by by after <unk> and so I'll be able to do use their their own words.
The de Novo process is 150 day process for 60% of the or of the the files that they review so that's their goal.
And then after yeas own words, a they as I said in my sort of prepared remarks, a they commit to trying to expedite breakthrough designation products. There's no definition of what expedite means a the Randy I. So it's a it's really difficult to evaluate and a as you could imagine your question, we ask a to our attorneys.
All the time and they are giving us they give us the same answer that I'm, giving you now is that it really depends on the the individual the individual submission.
But a you know we're hopeful that a that within that hundred 50 day period, a were out we're going to be able to to go through the process.
Yeah. It seems like there already familiar with you know the application yep.
Super TB and you'd think that they would not need nearly that amount of time, but you know that's never we've never had this kind of break down the path [laughter] like that they were going to get a break at some point here rounded yeah. I mean at some point seems like you know maybe we'll get a break I guess my next question that you feel might have passed one quick course.
You know you obviously with what's happened with Canada, you know, it's not like you know we're going to you know if if we do get declared like we can declare victory here.
It seems like there's a lot of work that will go into.
You know what's its cleared to start attracting customers you know worried about you know the reimburse ability of the product as it is a very expensive product yep and you know how that will play out I mean, what's a were all.
The end result is always what we're looking at is that is the stock price and a lot of it had been holding for years and years and where did a very high.
Average cost and now we worked here we've got this application filed and we're trying to determine you know do we do we buy more shares and well the stocky drifting lower as time goes on over the months, while we wait because really there should be no they're really shouldn't be any significant news coming out of the company until you know we hear more about the clearance.
Well I you look I think we were all you we're as I mentioned again in my prepared remarks, we are continuing to do science, a and there was an enormous amount of interest a in a a in a in our product. So we're we're trying to do you work with a with a hospital systems.
To do a further research and the research is exciting and a and a and certainly when some of that research is a is a is about to be published obviously I can't I mentioned, what it is until it is but but we we you know we do expect that we'll we'll be able to to further the the the further the site.
Hi, it's a four for the investment community. So we do expect that there'll be some some some news or you know obviously, some sometimes the news generates a upside sometimes it doesn't but Ah, but we'll certainly a this is not the only thing that we got going to answer. Your other question in terms of the U.S. commercialization is.
We've already started to you that and it's just a really hard juxtaposition for the two positions that you said you know on the one hand, a you know in a perfect world, we'd love to to be able to start driving.
Our U.S. or U.S., our commercialization effort.
But we're in a position where we want to really make sure that Ah. We are we do rights and a and enjoy said we were able to move the 1.2 million down to 2 million and we're trying good we're going to try to do even better than that.
But so that we we you know we do think things responsibly and once they get more clearer and clearer from a from F.D.A.. Then then perhaps a will start to to evolve differently.
So that's a that's a circumstance we find ourselves.
Okay, Alright, super Thanks, but dress I did you want to have them for you right Randy's answered, but so what it and respond to your other question. So in total there's about 9.3 million warrants out there. There's about 646000, that's a expire at the December 20, Eightth of 2020 in there at <unk> at a 12 and a corridor.
There's about 2.4 million that expire on April 2021, and they're at 12 in a quarter as well and at the most recent wants them to register direct that we did in March is about six point Threemillion adds up 46 cents a share those warrants from the March registered direct.
But they can begin to be exercised on September onest, the up 2020, and they last March 2025.
Okay.
Great. Thank you.
Thank you Randy.
Keep your fingers crossed we're gonna get a break here [laughter].
Thank you just a reminder to ask a question press star one on your telephone keypad to remove yourself from the Q Press star too.
Our next question comes from Mary Parliament. Please state your question.
Hi, excuse me, if I misunderstood something I thought I heard earlier did you say that cost coupons.
User decreased this year.
Yes, joist, you want to describe them yes.
Yes, so so the cost of upon to use or what we had a done as we had to put a program in place that allowed the a patient to Oh, hey over time, it would allow them to put up it's supposed to the benefit you can tell if a patient will be respond or within the.
First month under the program they made an upfront payment for the first month, and then and evaluation that the four week Mark would determine if they were a responder and a they would that continue on for the balance of the treatment.
Okay. So for the patient to continue after the initial 14 weeks.
Continuing use of the ponds if not.
So I didn't around yeah. The continuing use of the pawns is a is a essentially a renewing a the mouthpiece right and a and so so that that right now but is a is a decision that made by the patients in the doctor and.
And right now a patient sub between now and the end of September Ah are able to have a reduced price a of the ponds and and since we don't we provide the the a the ponds mouthpieces to the clinics and obviously in the free market economy are there different prices that a that the the clinics charge. So I can't Oh I can't tell you exactly what it is but.
But if a if you know somebody or somebody who needs to do it now is a particularly good time to visit the clinics to oh to sign up for treatment well actually besides being a stockholder Jaime palms, either and so.
So I went up to be see last <unk> and I didn't using it and I expect don't have the rest of my life, just when I'm thinking and it's it's not cheap [laughter], Jeff and I appreciate got.
Someone who is asking for it it herself yep.
So yeah would be nice you could reduce.
See considerably.
No that each clinic priced at their or their own way I wasn't aware that they didn't you can make me I believe that was true when it came from the home office no essentially a we read like most manufacturers, we just deliver a they buy from US and then they resell it too.
Two of their customers.
Okay, well I have more information than I had before saying [laughter] because you're very welcome. Good luck to you. Thank you.
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Thank you.
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Thank you very much.
Very much like you have a good day.