Helius Medical secures $1.3M in private placement

Helius Medical (TASE:BLWV) Technologies, Inc. (NASDAQ:HSDT), currently trading at $0.30 per share and showing a concerning 93% decline over the past year, has entered into a securities purchase agreement with select investors, securing $1.3 million in a private placement deal, the company disclosed in an SEC filing today. According to InvestingPro data, the company has been quickly burning through cash, though it maintains more cash than debt on its balance sheet. The Newtown, Pennsylvania-based firm, specializing in electromedical apparatus, agreed to issue unsecured promissory notes and shares of common stock as part of the transaction.

According to the 8-K filing, the agreement, dated April 24, 2025, involves the sale of promissory notes with an aggregate principal amount of $1,560,000 and the issuance of 1,320,150 common shares. The promissory notes carry a 20% original issue discount and are set to mature on July 24, 2025, or upon the closing of the company’s next securities offering.

The company expects the transaction to close around April 25, 2025, and aims to use the proceeds for working capital and other general corporate purposes. With a weak gross profit margin of -12% and negative EBITDA of -$13.8 million, the funding comes at a crucial time. Maxim Group LLC served as the placement agent for the offering, receiving 7% of the gross proceeds and up to $15,000 for legal fees.

The notes do not accrue interest unless an event of default occurs, at which point a 20% per annum rate applies. The agreement outlines several events of default, including payment failures, insolvency, and breaches of the agreement.

Additionally, Helius Medical’s directors and executive officers have agreed to lock-up agreements, restricting the transfer of their shares until the maturity date of the notes. The company relied on exemptions from registration under the Securities Act of 1933, specifically Section 4(a)(2) and Rule 506, for this unregistered securities sale.

This financial move comes as Helius Medical continues to advance its presence in the medical device sector. The information provided is based on the company’s latest SEC filing. For deeper insights into Helius Medical’s financial health and growth prospects, including 12 additional ProTips and comprehensive valuation metrics, visit InvestingPro, where you’ll find detailed analysis in our exclusive Pro Research Report.

In other recent news, Helius Medical Technologies has announced the launch of Revelation Neuro, Inc., a new subsidiary focused on developing AI-driven brain-computer interface technology for neurorehabilitation. This initiative aims to enhance rehabilitation for patients with balance and gait deficits. Revelation Neuro will be funded through external sources, as Helius does not plan to invest significant additional capital. Helius is also set to present at the 37th Annual ROTH Conference, with the presentation available via webcast on their investor relations website.

In another development, Helius Medical Technologies is facing potential delisting from The Nasdaq Capital Market due to non-compliance with the Minimum Bid Price Requirement. The company received a notice on February 7, 2025, and plans to appeal the decision, delaying any delisting actions until the hearing process concludes. To strengthen its financial position, Helius has entered into agreements with warrant holders to exercise their warrants at a reduced price, contingent on stockholder approval at the upcoming Annual Meeting on April 21, 2025. The company has set a deadline of February 17, 2025, for stockholders to submit proposals or director nominations for the meeting. Helius has expressed its intention to present a plan to regain compliance with Nasdaq’s listing requirements, though there is no guarantee of success.

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