<SEC-DOCUMENT>0001062993-15-002355.txt : 20150504
<SEC-HEADER>0001062993-15-002355.hdr.sgml : 20150504
<ACCEPTANCE-DATETIME>20150504170400
ACCESSION NUMBER:		0001062993-15-002355
CONFORMED SUBMISSION TYPE:	10-12G/A
PUBLIC DOCUMENT COUNT:		9
FILED AS OF DATE:		20150504
DATE AS OF CHANGE:		20150504

FILER:

	COMPANY DATA:	
		COMPANY CONFORMED NAME:			HELIUS MEDICAL TECHNOLOGIES, INC.
		CENTRAL INDEX KEY:			0001610853
		STANDARD INDUSTRIAL CLASSIFICATION:	ELECTROMEDICAL & ELECTROTHERAPEUTIC APPARATUS [3845]
		IRS NUMBER:				000000000
		STATE OF INCORPORATION:			WY
		FISCAL YEAR END:			0331

	FILING VALUES:
		FORM TYPE:		10-12G/A
		SEC ACT:		1934 Act
		SEC FILE NUMBER:	000-55364
		FILM NUMBER:		15829328

	BUSINESS ADDRESS:	
		STREET 1:		SUITE 400, 41 UNIVERSITY DRIVE
		CITY:			NEWTOWN
		STATE:			PA
		ZIP:			18940
		BUSINESS PHONE:		215-809-2018

	MAIL ADDRESS:	
		STREET 1:		SUITE 400, 41 UNIVERSITY DRIVE
		CITY:			NEWTOWN
		STATE:			PA
		ZIP:			18940
</SEC-HEADER>
<DOCUMENT>
<TYPE>10-12G/A
<SEQUENCE>1
<FILENAME>form1012ga.htm
<DESCRIPTION>FORM 10-12G/A
<TEXT>
<HTML>
<HEAD>
   <TITLE>Helius Medical Technologies, Inc. Form 10-12G/A - Filed by newsfilecorp.com</TITLE>
</HEAD>
<BODY style="font-size:10pt;">
<HR noshade align="center" width=100% size=3 color="black">
<A name=page_1></A>
<P align=center><B><FONT size=5>UNITED STATES </FONT></B><BR><B><FONT
size=5>SECURITIES AND EXCHANGE COMMISSION </FONT></B><BR>Washington, D.C.
20549<B> </B><BR>
</P>
<hr noshade align="center" width="100%" size=1 color="black">
<P align=center><b> AMENDMENT NO. 1 TO </b></P>
<P align=center><B><FONT size=5>FORM 10 </FONT></B></P>
<P align=center><B>GENERAL FORM FOR REGISTRATION OF SECURITIES
</B><BR><B>PURSUANT TO SECTION 12(B) OR 12(G) OF THE </B><BR><B>SECURITIES
EXCHANGE ACT OF 1934
</B><BR></P>
<hr noshade align="center" width="100%" size=1 color="black">
<P align=center><B><FONT size=5>HELIUS MEDICAL TECHNOLOGIES,
INC.</FONT></B><B> </B><BR>(Exact Name of Registrant as Specified in Its
Charter) <BR></P>
<hr noshade align="center" width="100%" size=1 color="black">
<TABLE
style="BORDER-COLOR: black; FONT-SIZE: 10pt; BORDER-COLLAPSE: collapse; "
cellSpacing=0 cellPadding=0 width="100%" border=0>

  <TR vAlign=top>
    <TD align=center><B><U>WYOMING </U></B></TD>
  <TD align=center width="50%"><B><U>36-4787690 </U></B></TD>
  </TR>
  <TR vAlign=top>
    <TD align=center>(State or other jurisdiction of </TD>
  <TD align=center width="50%">(I.R.S. Employer </TD>
  </TR>
  <TR vAlign=top>
    <TD align=center>incorporation or organization) </TD>
  <TD align=center width="50%">Identification No.) </TD>
  </TR>
  <TR>
    <TD align=center>&nbsp; </TD>
  <TD align=center width="50%">&nbsp; </TD>
  </TR>
  <TR>
    <TD align=center>&nbsp; </TD>
  <TD align=center width="50%">&nbsp; </TD>
  </TR>
  <TR>
    <TD align=center>&nbsp; </TD>
  <TD align=center width="50%">&nbsp; </TD>
  </TR>
  <TR vAlign=top>
    <TD align=center><B>Suite 400, 41 University Drive </B></TD>
  <TD align=center width="50%"><B><U>18940 </U></B></TD>
  </TR>
  <TR vAlign=top>
    <TD align=center><B><U>Newtown, Pennsylvania </U></B></TD>
  <TD align=center width="50%">(Zip Code) </TD>
  </TR>
  <TR vAlign=top>
    <TD align=center>(Address of principal executive offices) </TD>
  <TD align=center width="50%">&nbsp; </TD>
  </TR></TABLE>
<P align=center><B><U>(215) 809-2018</U></B><BR>(Registrant&#146;s telephone number,
including area code)<B> </B></P>
<hr noshade align="center" width="100%" size=1 color="black">
<P align=center><B>Copies of correspondence to: </B></P>
<TABLE
style="BORDER-COLOR: black; FONT-SIZE: 10pt; BORDER-COLLAPSE: collapse; "
cellSpacing=0 cellPadding=0 width="100%" border=0>

  <TR vAlign=top>
    <TD align=center><B>Philippe Deschamps </B></TD>
  <TD align=center width="50%"><B>Trevor J. Chaplick, Esq. </B></TD>
  </TR>
  <TR vAlign=top>
    <TD align=center><B>President, Chief Executive Officer and a Director
</B></TD>
    <TD width="50%" align=center><B>Proskauer Rose LLP </B></TD>
  </TR>
  <TR vAlign=top>
    <TD align=center><B>Helius Medical Technologies, Inc. </B></TD>
    <TD width="50%" align=center><B>1001 Pennsylvania Avenue, NW </B></TD>
  </TR>
  <TR vAlign=top>
    <TD align=center><B>Suite 400, 41 University Drive </B></TD>
    <TD width="50%" align=center><B>Suite 600 South </B></TD>
  </TR>
  <TR vAlign=top>
    <TD align=center><B><U>Newtown, PA 18940 </U></B></TD>
    <TD width="50%" align=center><B><U>Washington, DC 20004 </U></B></TD>
  </TR></TABLE>
<hr noshade align="center" width="100%" size=1 color="black">
<P align=center><B>SECURITIES TO BE REGISTERED PURSUANT TO SECTION 12(B) OF THE
ACT: </B></P>
<TABLE
style="BORDER-COLOR: black; FONT-SIZE: 10pt; BORDER-COLLAPSE: collapse; "
cellSpacing=0 cellPadding=0 width="100%" border=0>

  <TR vAlign=top>
    <TD align=center>Title of each class </TD>
  <TD align=center width="50%">Name of each exchange on which </TD>
  </TR>
  <TR vAlign=top>
    <TD align=center>to be so registered </TD>
  <TD align=center width="50%">each class to be registered </TD>
  </TR>
  <TR>
    <TD align=center></TD>
  <TD align=center width="50%"></TD>
  </TR>
  <TR vAlign=top>
    <TD align=center><B><U>NOT APPLICABLE </U></B></TD>
    <TD align=center width="50%"><B><U>NOT APPLICABLE
</U></B></TD>
  </TR></TABLE>
<P align=center><B>SECURITIES TO BE REGISTERED PURSUANT TO SECTION 12(G) OF THE
ACT: </B></P>
<P align=center><B>CLASS A COMMON STOCK, WITHOUT PAR VALUE</B><B>
</B><BR>(Title of class) </P>
<p align="justify">Indicate by check mark whether the registrant is a large  accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller  reporting company. See the definitions of &ldquo;large accelerated filer,&rdquo;  &ldquo;accelerated filer&rdquo; and &ldquo;smaller reporting company&rdquo; in Rule 12b2 of the  Exchange Act. </p>
<TABLE width="100%" border=0 cellPadding=0
cellSpacing=0
style="BORDER-COLOR: black; FONT-SIZE: 10pt; BORDER-COLLAPSE: collapse; ">
  <TR vAlign=top>
    <TD align=left>Large  accelerated filer [&nbsp;&nbsp;&nbsp;]</TD>
    <TD align=left>Accelerated  filer [&nbsp;&nbsp;&nbsp;]</TD>
  </TR>
  <TR vAlign=top>
    <TD align=left>Non-accelerated  filer [X]</TD>
    <TD align=left width="50%">Smaller  reporting company [&nbsp;&nbsp;&nbsp;]</TD>
  </TR>
</TABLE>
<br>
<HR style="PAGE-BREAK-AFTER: always" align=center width="100%" color=black
noShade SIZE=5>
<A name=page_2></A>
<P align=center>TABLE OF CONTENTS </P>
<TABLE
style="BORDER-COLOR: black; FONT-SIZE: 10pt; BORDER-COLLAPSE: collapse; "
cellSpacing=0 cellPadding=0 width="100%" border=0>

  <TR vAlign=top>
    <TD align=left bgColor=#eeeeee><A href="#page_3">ITEM 1. </A></TD>
    <TD align=left width="85%" bgColor=#eeeeee ><A
      href="#page_3">BUSINESS </A></TD>
    <TD align=right width="5%" bgColor=#eeeeee ><A
      href="#page_3">2 </A></TD></TR>
  <TR>
    <TD align=left>&nbsp;</TD>
    <TD align=left width="85%" >&nbsp;</TD>
    <TD align=right width="5%" >&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD align=left bgColor=#eeeeee><A href="#page_24">ITEM 1A. </A></TD>
    <TD align=left width="85%" bgColor=#eeeeee ><A
      href="#page_24">RISK FACTORS. </A></TD>
    <TD align=right width="5%" bgColor=#eeeeee ><A
      href="#page_24">23 </A></TD></TR>
  <TR>
    <TD align=left>&nbsp;</TD>
    <TD align=left width="85%" >&nbsp;</TD>
    <TD align=right width="5%" >&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD align=left bgColor=#eeeeee><A href="#page_43">ITEM 2. </A></TD>
    <TD align=left width="85%" bgColor=#eeeeee ><A
      href="#page_43">FINANCIAL INFORMATION. </A></TD>
    <TD align=right width="5%" bgColor=#eeeeee ><A
      href="#page_43">42 </A></TD></TR>
  <TR>
    <TD align=left>&nbsp;</TD>
    <TD align=left width="85%" >&nbsp;</TD>
    <TD align=right width="5%" >&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD align=left bgColor=#eeeeee><A href="#page_51">ITEM 3. </A></TD>
    <TD align=left width="85%" bgColor=#eeeeee ><A
      href="#page_51">PROPERTIES </A></TD>
    <TD align=right width="5%" bgColor=#eeeeee ><A
      href="#page_51">50 </A></TD></TR>
  <TR>
    <TD align=left>&nbsp;</TD>
    <TD align=left width="85%" >&nbsp;</TD>
    <TD align=right width="5%" >&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD align=left bgColor=#eeeeee><A href="#page_51">ITEM 4. </A></TD>
    <TD align=left width="85%" bgColor=#eeeeee ><A
      href="#page_51">SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND
      MANAGEMENT. </A></TD>
    <TD align=right width="5%" bgColor=#eeeeee ><A
      href="#page_51">50 </A></TD></TR>
  <TR>
    <TD align=left>&nbsp;</TD>
    <TD align=left width="85%" >&nbsp;</TD>
    <TD align=right width="5%" >&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD align=left bgColor=#eeeeee><A href="#page_52">ITEM 5. </A></TD>
    <TD align=left width="85%" bgColor=#eeeeee ><A
      href="#page_52">DIRECTORS AND EXECUTIVE OFFICERS. </A></TD>
    <TD align=right width="5%" bgColor=#eeeeee ><A
      href="#page_52">51 </A></TD></TR>
  <TR>
    <TD align=left>&nbsp;</TD>
    <TD align=left width="85%" >&nbsp;</TD>
    <TD align=right width="5%" >&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD align=left bgColor=#eeeeee><A href="#page_57">ITEM 6. </A></TD>
    <TD align=left width="85%" bgColor=#eeeeee ><A
      href="#page_57">EXECUTIVE COMPENSATION. </A></TD>
    <TD align=right width="5%" bgColor=#eeeeee ><A
      href="#page_57">56 </A></TD></TR>
  <TR>
    <TD align=left>&nbsp;</TD>
    <TD align=left width="85%" >&nbsp;</TD>
    <TD align=right width="5%" >&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD align=left bgColor=#eeeeee><A href="#page_58">ITEM 7. </A></TD>
    <TD align=left width="85%" bgColor=#eeeeee ><A
      href="#page_58">CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND
      DIRECTOR INDEPENDENCE. </A></TD>
    <TD align=right width="5%" bgColor=#eeeeee ><A
      href="#page_58">58 </A></TD>
  </TR>
  <TR>
    <TD align=left>&nbsp;</TD>
    <TD align=left width="85%" >&nbsp;</TD>
    <TD align=right width="5%" >&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD align=left bgColor=#eeeeee><A href="#page_60">ITEM 8. </A></TD>
    <TD align=left width="85%" bgColor=#eeeeee ><A
      href="#page_60">LEGAL PROCEEDINGS. </A></TD>
    <TD align=right width="5%" bgColor=#eeeeee ><A
      href="#page_60">60 </A></TD>
  </TR>
  <TR>
    <TD align=left>&nbsp;</TD>
    <TD align=left width="85%" >&nbsp;</TD>
    <TD align=right width="5%" >&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD align=left bgColor=#eeeeee><A href="#page_60">ITEM 9. </A></TD>
    <TD align=left width="85%" bgColor=#eeeeee ><A
      href="#page_60">MARKET PRICE OF AND DIVIDENDS ON THE REGISTRANT&#146;S EQUITY
      AND RELATED STOCKHOLDER MATTERS. </A></TD>
    <TD align=right width="5%" bgColor=#eeeeee ><A
      href="#page_60">60 </A></TD>
  </TR>
  <TR>
    <TD align=left>&nbsp;</TD>
    <TD align=left width="85%" >&nbsp;</TD>
    <TD align=right width="5%" >&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD align=left bgColor=#eeeeee><A href="#page_61">ITEM 10. </A></TD>
    <TD align=left width="85%" bgColor=#eeeeee ><A
      href="#page_61">RECENT SALES OF UNREGISTERED SECURITIES. </A></TD>
    <TD align=right width="5%" bgColor=#eeeeee ><A
      href="#page_61">61 </A></TD>
  </TR>
  <TR>
    <TD align=left>&nbsp;</TD>
    <TD align=left width="85%" >&nbsp;</TD>
    <TD align=right width="5%" >&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD align=left bgColor=#eeeeee><A href="#page_62">ITEM 11. </A></TD>
    <TD align=left width="85%" bgColor=#eeeeee ><A
      href="#page_62">DESCRIPTION OF REGISTRANT&#146;S SECURITIES TO BE REGISTERED.
      </A></TD>
    <TD align=right width="5%" bgColor=#eeeeee ><A
      href="#page_62">62 </A></TD>
  </TR>
  <TR>
    <TD align=left>&nbsp;</TD>
    <TD align=left width="85%" >&nbsp;</TD>
    <TD align=right width="5%" >&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD align=left bgColor=#eeeeee><A href="#page_63">ITEM 12. </A></TD>
    <TD align=left width="85%" bgColor=#eeeeee ><A
      href="#page_63">INDEMNIFICATION OF DIRECTORS AND OFFICERS. </A></TD>
    <TD align=right width="5%" bgColor=#eeeeee ><A
      href="#page_63">63 </A></TD>
  </TR>
  <TR>
    <TD align=left>&nbsp;</TD>
    <TD align=left width="85%" >&nbsp;</TD>
    <TD align=right width="5%" >&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD align=left bgColor=#eeeeee><A href="#page_64">ITEM 13. </A></TD>
    <TD align=left width="85%" bgColor=#eeeeee ><A
      href="#page_64">FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA. </A></TD>
    <TD align=right width="5%" bgColor=#eeeeee ><A
      href="#page_64">64 </A></TD>
  </TR>
  <TR>
    <TD align=left>&nbsp;</TD>
    <TD align=left width="85%" >&nbsp;</TD>
    <TD align=right width="5%" >&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD align=left bgColor=#eeeeee><A href="#page_65">ITEM 14. </A></TD>
    <TD align=left width="85%" bgColor=#eeeeee ><A
      href="#page_65">CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON
      ACCOUNTING AND FINANCIAL DISCLOSURE. </A></TD>
    <TD align=right width="5%" bgColor=#eeeeee ><A
      href="#page_65">98</A></TD>
  </TR>
  <TR>
    <TD align=left>&nbsp;</TD>
    <TD align=left width="85%" >&nbsp;</TD>
    <TD align=right width="5%" >&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD align=left bgColor=#eeeeee><A href="#page_65">ITEM 15. </A></TD>
    <TD align=left width="85%" bgColor=#eeeeee ><A
      href="#page_65">FINANCIAL STATEMENTS AND EXHIBITS. </A></TD>
    <TD align=right width="5%" bgColor=#eeeeee ><A
      href="#page_65">98</A></TD>
  </TR></TABLE>
<P align=center>i </P>
<HR style="PAGE-BREAK-AFTER: always" align=center width="100%" color=black
noShade SIZE=5>
<A name=page_3></A>
<P align=justify>In this registration statement, unless otherwise specified,
references to &#147;we&#148;, &#147;us&#148; or &#147;our&#148; mean Helius Medical Technologies, Inc.
(formerly known as &#147;0996445 B.C. Ltd.&#148;) and its wholly-owned subsidiaries,
NeuroHabilitation Corporation, or NHC, and Helius Medical Technologies (Canada),
Inc., unless the context otherwise requires. All financial information is stated
in U.S. dollars unless otherwise specified. Our financial statements are
prepared in accordance with accounting principles generally accepted in the
United States, or U.S. GAAP. </P>
<P align=justify>FORWARD-LOOKING STATEMENTS </P>
<P align=justify>This registration statement contains forward-looking statements
that involve risks and uncertainties, including statements regarding our market,
strategy, competition, capital needs, business plans and expectations. Such
forward-looking statements involve risks and uncertainties regarding the success
of our business plan, availability of funds, government regulations, operating
costs, our ability to achieve significant revenues and other factors.
Forward-looking statements are made, without limitation, in relation to
operating plans, availability of funds and operating costs. Any statements
contained herein that are not statements of historical facts may be deemed to be
forward-looking statements. In some cases, you can identify forward-looking
statements by terminology such as &#147;may&#148;, &#147;will&#148;, &#147;should&#148;, &#147;expect&#148;, &#147;plan&#148;,
&#147;intend&#148;, &#147;anticipate&#148;, &#147;believe&#148;, &#147;estimate&#148;, &#147;predict&#148;, &#147;potential&#148; or
&#147;continue&#148;, the negative of such terms or other comparable terminology. Actual
events or results may differ materially. In evaluating these statements, you
should consider various factors, including the risks outlined in this
prospectus. These factors may cause our actual results to differ materially from
any forward-looking statements. While these forward-looking statements, and any
assumptions upon which they are based, are made in good faith, based on
information available to us as of the date hereof, and reflect our current
judgment regarding our business plans, our actual results will almost always
vary, sometimes materially, from any estimates, predictions, projections,
assumptions or other future performance suggested herein. We do not intend to
update any of the forward-looking statements to conform these statements to
actual results, except as required by applicable law, including the securities
laws of the United States. </P>
<P align=justify>INDUSTRY AND MARKET DATA </P>
<P align=justify>Within this registration statement, we reference information,
statistics and estimates regarding the medical devices and healthcare
industries. We have obtained this information from various independent
third-party sources, including independent industry publications, reports by
market research firms and other independent sources. This information involves a
number of assumptions and limitations, and we have not independently verified
the accuracy or completeness of this information. Some data and other
information are also based on the good faith estimates of management, which are
derived from our review of internal surveys and independent sources. We believe
that these external sources and estimates are reliable but have not
independently verified them. The industries in which we operate are subject to a
high degree of uncertainty and risk due to a variety of factors, including those
described in &#147;Item 1A. Risk Factors.&#148; These and other factors could cause
results to differ materially from those expressed in these publications and
reports. </P>
<P align=justify>ITEM 1.&nbsp;&nbsp;&nbsp;&nbsp; &nbsp;BUSINESS </P>
<P align=justify><B>Our Business </B></P>
<P align=justify>We are a medical technology company focused on neurological
wellness. We seek to develop, license or acquire unique and non-invasive
platform technologies that amplify the brain&#146;s ability to heal itself.</P>
<P align=justify>The brain&#146;s ability to reorganize its operation in response to
new information sources, new functional needs, or new communication pathways is
referred to as neuroplasticity. Neuroplasticity is a process underlying all cerebral learning, training, and rehabilitation.
Neuromodulation is the use of various external stimulation to intentionally
change and regulate the internal electrochemical environment of the brain. </P>
<P align=center>2 </P>
<HR style="PAGE-BREAK-AFTER: always" align=center width="100%" color=black
noShade SIZE=5>
<A name=page_4></A>
<P align=justify>Our mission is to develop, license and acquire non-invasive
treatments designed to help patients affected by neurological symptoms caused by
disease or trauma. Applying the principles of neuroplasticity, our portable
neuromodulation stimulator, or PoNS&#153;, device is designed to induce Cranial Nerve
Non Invasive Neuromodulation that utilizes the brain&#146;s innate ability to achieve
neuroplastic change to aid persons with neurological, cognitive, sensory, and
motor disorders when combined with the rehabilitation process.</P>
<P align=justify>Traditional rehabilitation interventions have typically
involved medication and various forms of therapies, including physical therapy.
Our patented PoNS&#153; device is being developed 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),
Huntington&#146;s, Muscular Dystrophy, Spina Bifida, Parkinson's and Alzheimer's
diseases, Stroke, Epilepsy, and Traumatic Brain Injury (TBI), we believe that
published studies in the field suggest that many such diseases may benefit from
neurostimulation.</P>
<P align=justify>The PoNS&#153; device, which is placed into and held in the
patient&#146;s mouth, 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. A series of case studies and
feasibility studies, which are further described below, suggest that prolonged
activation (20 minutes or more) of neuronal circuits, when combined with
physical therapy, may initiate long-lasting processes of neuronal reorganization
with a variety of positive results, including the correction of gait/balance
impairments resultant from TBI. However, these results represent what we refer
to as anecdotal evidence only, which means that the results are not
scientifically supported by a well-controlled, scientific study. Furthermore,
such results may be suggestive but are not adequate to support FDA approval.
</P>
<P align=justify>The inventors and background patent owners of the PoNS&#153; device
conducted a series of Institutional Review Board sanctioned feasibility studies,
case studies and one placebo-controlled study. In total, these studies involved
approximately 200 patients using the PoNS&#153; 2.2 device in conjunction with
physical or cognitive therapy at the University of Wisconsin-Madison. An
Institutional Review Board is a scientific and patient advocacy board that
reviews the validity and safety of clinical trials on behalf of patients. We use
the term &#147;feasibility study&#148; to mean a study that allows for early clinical
evaluation of devices to provide proof of principle and initial clinical safety
data. A feasibility study may be appropriate early in device development when
clinical experience is necessary because nonclinical testing methods are not
available or adequate to provide the information needed to advance the
developmental process. We use the term &#147;case study&#148; to mean a study of one
patient that may support at most anecdotal evidence of efficacy. By
&#147;placebo-controlled study&#148;, we mean a way of testing a medical therapy in which,
in addition to a group of subjects that receives the treatment to be evaluated,
a separate control group receives an artificial &#147;placebo&#148; treatment which is
specifically designed to have no real effect. These studies were conducted
primarily at the Tactile Communication and Neurorehabilitation Laboratory, or
TCNL, at the University of Wisconsin-Madison with the approval of and oversight
by the university&#146;s Institutional Review Board, which is required for scientific
studies involving human subjects. The results for a number of individual test
subjects from these studies suggest that usage of the PoNS&#153; 2.2 device resulted
in positive relief in rehabilitating symptoms caused by neurological disorders
or injury for such individual patients. While such case and feasibility studies
qualify only as anecdotal evidence, and the placebo-controlled study qualifies
only as directional evidence, we believe that relief achieved by these patients suggests that the PoNS&#153; device, when combined with
physical or cognitive therapy, improves and sustains functional rehabilitation
of the symptoms from brain dysfunction from traumatic, degenerative,
developmental, chemical, or unknown origins. We use the term &#147;directional
evidence&#148; to mean in respect of such placebo-controlled study that we conducted,
that the results suggested positive relief in the ten patients tested. However,
the feasibility, case, and placebo-controlled studies were not of sufficient
size to produce scientifically conclusive results. Furthermore, such tests were
not adequate to support clearance of the device by the U.S. Food and Drug Administration, or FDA, for commercial distribution. Furthermore, the PoNS&#153; 2.2 device is a
laboratory test device that is not designed for commercial use.</P>
<P align=center>3 </P>
<HR style="PAGE-BREAK-AFTER: always" align=center width="100%" color=black
noShade SIZE=5>
<A name=page_5></A>
<P align=justify>As described below, we are developing the PoNS&#153; 4.0 device to secure FDA clearance for
commercial use in treating balance disorder in mild to moderate TBI subjects. We
will be conducting clinical trials of our PoNS&#153; 4.0 device for the treatment of
balance disorder in patients in the US with mild to moderate TBI and for the
treatment of balance disorder associated with MS in patients in Canada. Both
registrational clinical trials are designed to be submitted for clearance, the TBI study in support of clearance of the PoNS&#153; 4.0 device by the
FDA and the MS study in support of clearance by Health Canada, which is the
counterpart to the FDA in Canada. Should the PoNS&#153; 4.0 device be cleared by the
FDA and Health Canada, we believe the addressable markets for our PoNS&#153; 4.0
device to treat balance disorder associated with TBI and MS are potentially up
to $5.3 billion for TBI in the U.S. and potentially up to $250 million for MS in
Canada. According to the U.S. Center for Disease Control and Prevention,
approximately 5.3 million individuals in the U.S. were living with permanent TBI
symptoms in 1999, and the incidence of new TBI diagnoses, as measured by
hospitalizations and emergency department visits, has increased between 2001 and
2010. Additionally, the Brain Injury Association of America estimates that
approximately 40% of patients diagnosed with TBI experience balance disturbance.
Our addressable market estimate for TBI in the U.S. is based on the product of
the number of persons living with TBI (5.3 million) multiplied by the rate of
balance disturbance in TBI patients (40%), and multiplied by the expected price
per unit of our product. Our addressable market estimate for MS in Canada is
calculated by multiplying the estimated number of persons with MS in Canada (the
Multiple Sclerosis Society of Canada estimates there are approximately 100,000
persons with MS in Canada) by the expected price per unit of our product. In
addition to the currently held method-of-use patent, we anticipate, based on our
pending patent filings, additional patent protection for the PoNS&#153; device tied
to uniquely designed therapy for specific therapeutic indications and functional
innovations with respect to design and technology development.</P>
<P align=justify><B>Business Uncertainties and Going Concern Risk </B></P>
<P align=justify>To date we have not generated any revenue from the sales of
products or services. There are a number of conditions that we must satisfy
before we will be able to generate revenue, including but not limited to
successful completion of the design of the PoNS&#153; device, successful completion of the TBI and MS clinical studies, FDA and Health Canada
clearance of the PoNS&#153; device for balance disorder associated with TBI and MS,
respectively, manufacturing of a commercially-viable version of the PoNS&#153; device and
demonstration of safety and effectiveness sufficient to generate commercial orders by
customers for our product. In addition, given the importance of the U.S. Army to
our early commercial plans, if the U.S. Army were to eventually decide not to
purchase our product, we would need to replace those sales in the civilian
market which will lower our early commercialization forecast. To date, we have
not achieved any of these conditions, and the successful achievement of such
conditions will require significant expenditures. Because we have not generated
any revenues, we are significantly dependent on funding from outside investors.
There is no guarantee that such funding will be available at all or in
sufficient amounts to satisfy our required expenditures. Furthermore, even if we
were able to raise sufficient capital to successfully design and manufacture a
commercially-viable version of the PoNS&#153; device and to receive FDA and Health Canada clearance, we
do not currently have any contract or other arrangement to sell the PoNS&#153;
device. Accordingly, we cannot assure you that we will ever be able to generate
any revenue from the sales of products or services. </P>
<P align=center>4 </P>
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<P align=justify>Additionally, our auditors have issued a going concern opinion.
This means that there is substantial doubt that we can continue as an on-going
business for the next twelve months unless we obtain additional capital to pay
our expenditures. While we are currently seeking additional funding, we do not
currently have sufficient resources to accomplish any of the above conditions
necessary for us to generate revenue. </P>
<P align=justify>In reviewing this registration statement, you should carefully
consider these risks and other risks described throughout the registration
statement. </P>
<P align=justify><B>Our Principal Product </B></P>
<P align=justify><I>History of the PoNS&#153; Device </I></P>
<P align=justify>The original PoNS&#153; 1.0 experimental device was developed in
2007 in the TCNL. The experimental PoNS&#153; 2.2 device shown in the pictures below
was released in 2010. We anticipate producing the commercial PoNS&#153; 4.0 device in
the second quarter of 2015. </P>
<P align=justify><I>Physical Construction and User Interface of Version 2.2</I>
</P>
<P align=justify>The PoNS&#153; version 2.2 device is an electrical pulse generator
that delivers controlled electrical stimulation to the tongue. Pulses are
generated and controlled by commercially available counter, timer, and
wave-shaping electronic components. The components are mounted to a single
printed circuit board (Figure 1 and Figure 2). The circuit board contains 143
gold-plated electrodes that contact the tongue. A rechargeable lithium- polymer
battery with built-in charge safety circuitry provides power. </P>
<P align=justify><B>Figure 1: Top of the PoNS&#153; Neuro-stimulator board </B></P>
<P align=center>
<IMG
src="form10-12gx6x1.jpg"
border=0 width="347" height="212">&nbsp;</P>
<P align=center>5 </P>
<HR style="PAGE-BREAK-AFTER: always" align=center width="100%" color=black
noShade SIZE=5>
<A name=page_7></A>
<P align=justify><B>Figure 2: Bottom of the PoNS&#153; Neuro-stimulator board</B></P>
<P align=center>
<IMG
src="form10-12gx7x1.jpg"
border=0 width="340" height="245"></P>
<P align=justify><B>Figure 3: Photographs of the PoNS&#153; Neuromodulation
Stimulator Being Investigated in Conjunction with Physical Therapy for the
Treatment of Balance and Gait Disorders.</B> </P>
<P align=center>
<IMG
src="form10-12gx7x2.jpg"
border=0 width="230" height="250"></P>
<P align=justify>The device 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 (1.50 mm
diameter, on 2.34 mm centers) that is created by a photolithographic process
used to make printed circuit boards. It is designed to use low-level electrical
current to stimulate the lingual branch projections of at least two cranial
nerves in the anterior tongue through the gold-plated electrodes. Device
function is controlled by four buttons: On, Off, Intensity &#147;Up&#148;, and Intensity
&#147;Down&#148;.</P>
<P align=justify>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. At any instant in time, one of the electrodes
in each of the nine sectors on the array is delivering stimulation while the
remaining electrodes serve as the current return path to ground. The sensation
produced by the array 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.</P>
<P align=center>6 </P>
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<P align=justify>When the PoNS&#153; 2.2 device is turned off, the intensity setting
automatically resets to zero. Upon first introduction to the device stimulation,
subjects are instructed to press the &#147;Up&#148; intensity button and hold it for
approximately 4-5 seconds to reach sensation threshold. Subjects will frequently
notice that the sensation intensity decreases 2-4 minutes after stimulation
onset. Subjects are instructed to simply increase the sensation level to return
to the predetermined perceptual midpoint of their individual perceptual dynamic
range. This procedure can be considered comparable to titrating a drug dosage
according to a desired blood level so that the percept (and to a first
approximation the neurophysiological impact) is held invariant.</P>
<P align=justify><I>Proposed Improvements in Version 4.0 </I></P>
<P align=justify>Based on market research we have performed to date, we believe
we have completed the technical and product design phases of the PoNS&#153; 4.0
device. While we expect to continue to enhance the PoNS&#153; 4.0 device design, we
are now commencing efforts to complete the manufacturing development phase which
will enable us to manufacture the device commercially. We anticipate performing
the registrational clinical trials for FDA and Health Canada clearance with the
PoNS&#153; 4.0 device for use in treating balance disorder in mild to moderate TBI
subjects and MS subjects. While we expect the PoNS&#153; 4.0 commercial device to
deliver the same level of stimulation to the patient as the PoNS&#153; 2.2 laboratory
device, we are designing the PoNS&#153; 4.0 device to be more ergonomic for better
patient comfort, more hygienic (including a replaceable mouthpiece), more
technologically advanced (including a data logging feature) and more feature
laden than its predecessor. The proposed additional functionality of data
logging and data communications for the PoNS&#153; version 4.0 device addresses
certain stakeholder needs, such as providing useful information like time
remaining during therapy and ready status of the device (e.g. charge level). We
also expect to produce the PoNS&#153; 4.0 device in accordance with FDA&#146;s Quality
System Regulation, or QSR, including good manufacturing practices, or GMPs, as
well as in accordance with Canadian regulatory requirements. </P>
<P align=justify><B>Figure 4: Design of PoNS&#153; 4.0</B> </P>
<P align=center><IMG src="form10-12gx8x1.jpg" border=0 width="244" height="350"> </P>
<P align=center>7 </P>
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<P align=justify><B>Our Design and Manufacturing Process </B></P>
<P align=justify><I>Ximedica</I> </P>
<P align=justify>Once we complete the design of and if we receive customer
orders for the PoNS&#153; 4.0 device, we will subcontract the design and build of the
PoNS&#153; device to Ximedica, LLC, or Ximedica (based in Providence, Rhode Island),
a contract manufacturer we selected after an exhaustive procurement process. We
expect to share with Ximedica our patented technology, trade secrets and
know-how on a confidential, need to know basis. We expect that the PoNS&#153; 4.0
device will require some very light assembly and labeling that will be performed
by Ximedica. Ximedica is certified to ISO 13485 and is registered as a medical
device manufacturer and in good standing with the FDA.</P>
<P align=justify>Using monthly forecasts that we will provide to it, Ximedica
will build to stock, warehouse and ship products to the customer as well as
initially handle all customer service related tasks including order entry, order
management and product warranty responsibility. We expect to retain
responsibility for sales, marketing, research and development and all back
office operations. At this stage, we anticipate the primary delivery points will
be regional military centers and national physical therapy centers.</P>
<P align=justify>Under the Commercial Development-to-Supply Program between
Ximedica and NHC, dated October 25, 2013, Ximedica&#146;s responsibilities will
include:</P>
<UL style="TEXT-ALIGN: justify">
  <LI>
  <P>designing the commercial device following their proven design development
  process; </P>
  <LI>
  <P>developing the manufacturing process and completing the initial
  manufacturing of the device (their facility can produce PoNS&#153; units in
  quantities of tens of thousands per year); and </P>
  <LI>
  <P>developing the quality control process. </P></LI></UL>
<P align=justify>If larger industrial quantities will be required, then we plan
to take over the manufacturing and quality control process. </P>
<P align=justify><I>U.S. Army</I> </P>
<P align=justify>We are designing the PoNS&#153; device with the cooperation of the
U.S. Army pursuant to an agreement known as a cooperative research and
development agreement, or CRADA. The U.S. Army was interested in signing the
CRADA because of the very high incidence of TBI in soldiers and the fact that
there are very few proven, effective treatments available for those soldiers who
suffer from chronic TBI symptoms. Department of Defense statistics show that
incidence of TBI in the U.S. Army has numbered approximately 30,000 per year
from 2012 to 2014 in active duty personnel, and over 300,000 U.S. military
personnel have been diagnosed with TBI since 2000. Of the 30,000 active duty
personnel who suffer from TBI annually, we estimate that approximately 20-30%
will develop chronic symptoms related to their TBI. While the number of cases of
TBI among active duty personnel may vary based on troop levels maintained by the
federal government, our primary target market will be the large number of
retired soldiers who suffer from chronic TBI symptoms since this population is
less subject to material, year-to-year fluctuation. The Army has expressed its
desire to distribute our PoNS&#153; 4.0 device to service members who would benefit,
should the device be cleared by the FDA. However, the U.S. Army is not under any
obligation to purchase our product under the CRADA or any other agreement with
us, and there is no assurance that the U.S. Army will ultimately purchase our
product.</P>
<P align=center>8 </P>
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<P align=justify>The parties to our CRADA with the U.S. Army are our subsidiary
NHC, as cooperator, Advanced NeuroRehabilitation, LLC, or ANR, as the background patent
holder, Yuri P. Danilov, Mitchell E. Tyler and Kurt A. Kaczmarek, as the
inventors and background patent owners, the U.S. Army Medical Material Agency,
or USAMMA, and the U.S. Army Medical Material Development Activity, or USAMMDA.
Pursuant to the CRADA, as amended, the laboratories of the USAMMA and the
USAMMDA, or collectively Army Laboratories, agree to cooperate with NHC on
research for the ongoing design and development to determine if the PoNS&#153; device
can 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, or PTSD, pain and any subsequent indications identified by the
parties. The CRADA may be terminated by NHC or the Army Laboratories
unilaterally at any time by providing the other party written notice at least 30
days prior to the desired termination date. In addition, the CRADA automatically
expires on December 15, 2015 unless modified in writing by the parties, provided
that the CRADA is subject to a four-year automatic extension as required for
both FDA clearance in the event that a pre-market approval application with the
FDA is required for a PoNS&#153; indication in respect of aid to therapy for chronic
balance deficits resulting from mild to moderate TBI as well as for
commercialization of the PoNS&#153; device.</P>
<P align=justify>We will initially seek FDA clearance only for treatment of
patients with chronic balance deficit due to mild to moderate TBI and Health Canada clearance for
balance disorder associated with MS. The U.S. Army has expressed an interest in
supplying PoNS&#153; devices to the personnel who need it, subject to our ability to
demonstrate its safety and effectiveness and our ability to obtain such FDA clearance.
Based on this interest, we estimate that there is a sufficient potential market
of active duty and retired soldiers who could potentially benefit from the PoNS&#153;
device due to their chronic TBI symptoms. However, the U.S. Army has not made
any guarantees and is not otherwise under any contractual obligations to
purchase PoNS&#153; devices, even if we do demonstrate effectiveness and obtain FDA
clearance. </P>
<P align=justify>If we are able to complete development of the PoNS&#153; device and
obtain FDA clearance of the PoNS&#153; device to treat chronic balance deficit due to mild to moderate TBI and Health Canada clearance for balance disorder associated with MS, we plan
to develop the PoNS&#153; device to treat other indications, or symptoms caused by
neurological disorders. As set forth in the most recent January 12, 2015
amendment of our CRADA as described below, the U.S. Army has also expressed
interest in our development of the PoNS&#153; device to treat other symptoms of TBI
or any other indications caused by neurological disorders. We would be required
to commit our own resources to sponsor the regulatory process for these additional
indications. However, the Army Laboratories has agreed in the January 12, 2015
amendment to our CRADA to be responsible for supporting the execution of studies
using the PoNS&#153; device as a treatment for mutually agreed-upon military relevant
neurological disorders, which could include but not be limited to Tinnitus,
PTSD, and pain and any subsequent indications identified by the parties. The
amount of such support, if any, and the terms of such responsibility to support
such 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. Some of
the indications among active duty and retired personnel that are being
considered under our CRADA are:</P>
<UL style="TEXT-ALIGN: justify">
  <LI>
 Tinnitus;
  <LI>
  Post-Traumatic Stress Disorder;
  <LI>
  Sleep regulation; and
  <LI>
Pain (headache) relief. </LI></UL>
<P align=justify>The parties agreed to the responsibilities set out below with
respect to the development of the PoNS&#153;<SUP> </SUP>device. </P>
<P align=center>9 </P>
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<P align=justify><U>Army Laboratories of the U.S. Armed Forces
Responsibilities</U>:</P>
<TABLE
style="BORDER-COLOR: black; FONT-SIZE: 10pt; BORDER-COLLAPSE: collapse; "
cellSpacing=0 cellPadding=0 width="100%" border=0>

  <TR vAlign=top>
    <TD align=left>&#149; </TD>
    <TD align=left width="95%" >
      <P align=justify>Support the execution of studies using the PoNS&#153; device
      as a treatment for mutually agreed- upon 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. </P></TD></TR>
  <TR vAlign=top>
    <TD align=left>&#149; </TD>
    <TD align=left width="95%" >
      <P align=justify>Conduct assessments of the manufacturing facility and
      assist/advise facility in meeting FDA manufacturing requirements.
  </P></TD></TR>
  <TR vAlign=top>
    <TD align=left>&#149; </TD>
    <TD align=left width="95%" >
      <P align=justify>Aid in designing the clinical protocols to study the
      PoNS&#153; device as an adjunct to specialized physical therapy in patients
      with balance and gait disorders. </P></TD></TR>
  <TR vAlign=top>
    <TD align=left>&#149; </TD>
    <TD align=left width="95%" >
      <P align=justify>Provide advice and expertise on all Army administrative
      protocols and approvals to execute the studies with military personnel,
      reservists, and/or veterans. </P></TD></TR></TABLE>
<P align=justify><U>NHC Responsibilities</U>: </P>
<TABLE
style="BORDER-COLOR: black; FONT-SIZE: 10pt; BORDER-COLLAPSE: collapse; "
cellSpacing=0 cellPadding=0 width="100%" border=0>

  <TR vAlign=top>
    <TD align=left>&#149; </TD>
    <TD align=left width="95%" >
      <P align=justify>Complete the commercial design, including ergonomics
      (e.g. user controls, comfort), and design for improved manufacturability,
      reliability, and field support and regulatory testing to comply with the
      FDA regulations for such devices. </P></TD></TR>
  <TR vAlign=top>
    <TD align=left>&#149; </TD>
    <TD align=left width="95%" >
      <P align=justify>Serve as the sole regulatory sponsor for all interactions
      with the FDA in order to gain approval and clearance from the FDA,
      including the initial 513(g) submission and the execution of any
      FDA-regulated studies. </P></TD></TR>
  <TR vAlign=top>
    <TD align=left>&#149; </TD>
    <TD align=left width="95%" >
      <P align=justify>Prepare and submit the necessary regulatory filings for
      the FDA to secure regulatory clearance or approval. </P></TD></TR>
  <TR vAlign=top>
    <TD align=left>&#149; </TD>
    <TD align=left width="95%" >
      <P align=justify>Ensure that the Army Laboratories receive copies of all
      formal and informal communications with the FDA related to the PoNS&#153;
      device. </P></TD></TR>
  <TR vAlign=top>
    <TD align=left>&#149; </TD>
    <TD align=left width="95%" >
      <P align=justify>Supply the facilities and personnel to execute and/or
      oversee the execution of clinical studies of the device for FDA
      clearance/approval in support of an intended use of the PoNS&#153; device for
      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 treatment of soldiers
      suffering from balance and gait disorders. </P></TD></TR>
  <TR vAlign=top>
    <TD align=left>&#149; </TD>
    <TD align=left width="95%" >
      <P align=justify>Provide the supply of PoNS&#153; devices in support of
      mutually agreed upon studies governed by the CRADA. </P></TD></TR>
  <TR vAlign=top>
    <TD align=left>&#149; </TD>
    <TD align=left width="95%" >
      <P align=justify>Supply all technical specifications, documentation and
      any other information required to address FDA requests to obtain FDA
      clearance/approval of the PoNS&#153; device. </P></TD></TR>
  <TR vAlign=top>
    <TD align=left>&#149; </TD>
    <TD align=left width="95%" >
      <P align=justify>Finalize the commercial design of the PoNS&#153; device so
      that the devices would be commercially available to the Army should the
      results of the study be positive. </P></TD></TR>
  <TR vAlign=top>
    <TD align=left>&#149; </TD>
    <TD align=left width="95%" >
      <P align=justify>Identify and engage a commercial manufacturer post-FDA
      clearance of the device to produce the device for purchase by the U.S.
      Army in the event it decides to order such devices for use by its
      personnel. </P></TD></TR></TABLE>
<P align=justify>To date, no prior premarket notifications for clearance of the PoNS&#153; device
have been submitted by NHC to the FDA, but the Army Laboratories, which
previously was responsible as the regulatory sponsor until such role was assumed
by NHC, submitted a request for information with the FDA with respect to the
potential classification of the PoNS&#153; device through what is known as a 513(g)
request for information. In response to a 513(g) request, the FDA provides
information regarding the classification of the device or the requirements
applicable to a device under the Federal Food, Drug, and Cosmetic Act, or the
FD&amp;C Act. Under the 513(g) request, the Army Laboratories sought guidance
from the FDA regarding the classification of the PoNS&#153; device and the applicable
requirements under the FD&amp;C Act. As a result of this process, the FDA
responded with guidance on pursuing de novo classification of the PoNS&#153; device
as a Class II medical device. </P>
<P align=center>10 </P>
<HR style="PAGE-BREAK-AFTER: always" align=center width="100%" color=black
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<P align=justify>We plan to utilize the de novo classification process to obtain
Class II classification and 510(k) clearance from the FDA for the PoNS&#153; device.
In order to obtain such classification, we need to demonstrate that the PoNS&#153;
device is low to moderate risk, and that general and special controls would
provide reasonable assurance of the safe and effective use of the PoNS&#153; device.
Device classification depends on the intended use of the device and also upon
indications for use and under Class II, and the applicability of general
controls (e.g., premarket notification) and special controls (e.g., specific
performance testing). We are seeking to complete a safety and effectiveness
clinical trial by the fourth quarter of 2015, and will thereafter submit a request for de
novo classification and the premarketing notification (i.e., 510(k)) to the FDA.
</P>
<P align=justify>On a parallel path to our request for de novo classification
and premarket notification to the FDA, we expect to submit an application for
the clearances of the PoNS&#153; device for both TBI and MS indications to Health
Canada (the department of the government of Canada with responsibility for
national public health). Our goal is that Canadian clearance for the PoNS&#153;
device will be obtained on a similar timeline to the FDA clearance of the
device. </P>
<P align=justify>On April 29, 2014, NHC, as cooperator, entered into Notice of
Modification No. 1 of Cooperative Research and Development Agreement, or the
Amended CRADA, with ANR, the inventors, and the Army Laboratories, whereby NHC
will no longer provide expertise and training in the design of clinical study
protocols or for U.S. Army and/or VA personnel in the physical therapy
interventions required for clinical studies. In addition, pursuant to the
Amended CRADA, ANR will share all data with USAMMA and NHC will provide all data
supporting clinical claims for regulatory approval.</P>
<P align=justify>On January 12, 2015, NHC, as cooperator, entered into Notice of
Modification No. 2 of the Amended CRADA, with ANR, the inventors, and the Army
Laboratories. Under this Amended CRADA, the Army Laboratories agreed to transfer
some of the CRADA responsibilities to NHC. We believe the Army Laboratories
agreed to transfer certain responsibilities to us under the CRADA to enable us
to accelerate development of the PoNS&#153; device for the eventual potential
treatment of soldiers. One of the material changes reflected in the Amended
CRADA is the shifting from the Army Laboratories to NHC of sole responsibility
as the regulatory sponsor for all interactions with the FDA in order to gain
approval and clearance from the FDA, including the initial 513(g) submission. As
part of the amendments to the CRADA, NHC has agreed to be responsible to fund
the FDA process as well as to provide the supply of all devices to support all
studies governed by the CRADA. While under the amendments NHC gains control of
the FDA regulatory process, the amendments materially increase the financial
burden on NHC to meet these funding and supply obligations. The amendments also
extend from two to four years both the time for regulatory approval in the event
a pre-market approval application, or PMA, is required by the FDA as well as for
commercialization of the PoNS&#153; device.</P>
<P align=justify>While NHC has sole responsibility as the regulatory sponsor
under the CRADA, the Army Laboratories has published a Notice of Intent to enter
into a sole-source contractual agreement to support the execution of the
registrational trial for treatment of balance disorder associated with mild to
moderate TBI. The objective of this contract would be to defray the costs of the
registrational trial. The terms of the contract and the actual amount of the
award are uncertain because we have not yet completed the negotiation for this
contract, nor can we be assured that the Army will ever ultimately negotiate and
enter into such a contract with us. The Army Laboratories also agreed in the
January 12, 2015 amendment to our CRADA to be responsible for supporting the
execution of studies using the PoNS&#153; device as a treatment for mutually
agreed-upon military relevant neurological disorders, which could include but
not be limited to Tinnitus, PTSD, and pain 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. The Army Laboratories may terminate their
obligations under the CRADA at any time upon 30 days prior written notice to us.
If there are insufficient funds available to cover the necessary research and
development costs for our product, the Army Laboratories could terminate the
CRADA and cease research and development efforts which could jeopardize our
ability to commercialize our PoNS&#153; device. </P>
<P align=center>11 </P>
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<P align=justify><B>Our Market </B></P>
<P align=justify>NHC is in the neurostimulation market. According to a study by
Grand View Research, the neurostimulation market was valued at $3.4 billion in
2013 and is expected to grow at a compounded annual growth rate of 14.4% from
2014 to 2020. The leading sectors in the industry are Spinal Cord Stimulation,
Deep Brain Stimulation, Sacral Nerve Stimulation and Vagal Nerve Stimulation. We
believe that due to the lack of non-invasive devices, non-invasive stimulation
addresses only approximately 3% of the overall neurostimulation market today.
</P>
<P align=justify><B>Market Competition</B> </P>
<P align=justify>The neurostimulation market is competitive and growing. Our
competitors in the industry are predominantly large, publically-traded companies
that have a history in the market, have significantly easier access to resources
and have an established product pipeline. The combined clinical research and
product development done by the industry, including by us and all of our
competitors, is foundational, and neurostimulation has slowly become integrated
into neurological therapy. This foundation has allowed for new and innovative
neurostimulation companies to enter the market as well.</P>
<P align=justify>We believe that our technology, the PoNS&#153; device, introduces an
innovative target and method of stimulation because targeting the tongue for
neurostimulation provides several advantages, which are discussed below. While
we believe that the factors described below competitively distinguish our
technologies and provide the PoNS&#153; device a competitive advantage for
non-invasive neuromodulation therapy, we note that these factors are only
supported by anecdotal evidence of efficacy. We therefore are making the
assumption that the results of our upcoming clinical trial program will be
positive and support these claims at that time. </P>
<TABLE
style="BORDER-COLOR: black; FONT-SIZE: 10pt; BORDER-COLLAPSE: collapse; "
cellSpacing=0 cellPadding=0 width="100%" border=0 BCLLIST>

  <TR>
    <TD width="10%"  >&nbsp;</TD>
    <TD vAlign=top width="5%">1) </TD>
    <TD>
      <P align=justify>The tongue has an anatomically unique surface with a high
      density of receptors, a consistently moist and conductive environment,
      constant pH, constant temperature and a direct connection to the brain
      through at least two cranial nerves.</P></TD></TR>
  <TR>
    <TD width="10%" >&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD>&nbsp;</TD></TR>
  <TR>
    <TD width="10%" >&nbsp;</TD>
    <TD vAlign=top width="5%">2) </TD>
    <TD>
      <P align=justify>We believe that the trigeminal and facial cranial nerves
      offer a high-bandwidth pathway for impulses to directly affect the central
      nervous system. The trigeminal and facial nerves project directly onto
      several areas of the brain, primarily the brainstem (trigeminal and
      solitary nuclei), cerebellum, cochlear nuclei and spinal cord. Secondary
      targets include the limbic system, basal ganglia and thalamus. We believe
      that this range of projections allows impulses be sent through sites
      regulating dozens of functions.</P></TD></TR>
  <TR>
    <TD width="10%" >&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD>&nbsp;</TD></TR>
  <TR>
    <TD width="10%" >&nbsp;</TD>
    <TD vAlign=top width="5%">3) </TD>
    <TD>
      <P align=justify>Other technologies stimulate other branches of the
      trigeminal nerve. We target the lowest branch of the trigeminal nerve,
      which is found in the tongue. It is also the largest branch, having the
      highest amount of nerve fibers of the three branches.</P></TD></TR>
  <TR>
    <TD width="10%" >&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD>&nbsp;</TD></TR>
  <TR>
    <TD width="10%" >&nbsp;</TD>
    <TD vAlign=top width="5%">4) </TD>
    <TD>
      <P align=justify>Stimulating the tongue also allows for the simultaneous
      stimulation of a second cranial nerve found in the tongue, the facial
      nerve. The ability to stimulate more than one
nerve alone differentiates us from our competition. However, it
      has not been scientifically proven that stimulating additional nerves adds
  to the efficacy of the treatment.</P></TD></TR></TABLE>
<P align=center>12 </P>
<HR style="PAGE-BREAK-AFTER: always" align=center width="100%" color=black
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<TABLE
style="BORDER-COLOR: black; FONT-SIZE: 10pt; BORDER-COLLAPSE: collapse; "
cellSpacing=0 cellPadding=0 width="100%" border=0 BCLLIST>
  <TR>
    <TD width="10%" >&nbsp;</TD>
    <TD vAlign=top width="5%">5) </TD>
    <TD>
      <P align=justify>Unlike Deep Brain Stimulation devices, implantable vagal
      nerve devices and other invasive forms of electrical stimulation, the
      tongue allows for neurostimulation to be delivered non-invasively and
      portably. This opens the door for integration of neurostimulation with a
      wide range of therapies previously unexplored for neurological
      rehabilitation.</P></TD></TR></TABLE>
<P align=justify><B>Reimbursement </B></P>
<P align=justify>If we complete our design efforts, obtain FDA clearance, and
ultimately receive customer orders for the PoNS&#153; device, we plan 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. We plan to seek coverage and
reimbursement of the PoNS&#153; device from public payers, such as Medicare and
Medicaid, as well as private payers. There are complex laws, regulations and
guidance that set forth Medicare coverage and reimbursement policies. From time
to time, Congress enacts laws that impact Medicare coverage and reimbursement
policy. In addition, the Centers for Medicare &amp; Medicaid Services, or CMS,
regularly engages in rulemaking activities and issues instructions and guidance
that may affect Medicare coverage and reimbursement policy. Similarly, the
federal and state governments may enact future laws or issue regulations or
guidance that may impact Medicaid coverage and reimbursement policies, or the
coverage and reimbursement policies of private insurers. We must ensure that we
are in full compliance with all applicable requirements, and that we remain
abreast of potential legislative or regulatory developments that could impact
its business. For all payers, the PoNS&#153; device must fit within an identifiable
coverage category and fully meet the requirements of such category. </P>
<P align=justify>Assuming we complete our design efforts, obtain FDA clearance,
and ultimately receive customer orders for the PoNS&#153; device, we intend seeking
coverage for the PoNS&#153; device under the Medicare part B durable medical
equipment benefit. This will involve ensuring that the PoNS&#153; device meets all of
the criteria for coverage under that benefit. In addition, as part of the
coverage process, we may 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&#153; 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, we do not believe that the PoNS&#153; device would fit easily within an
existing HCPCS code. Thus, we are 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, we must satisfy several criteria,
including but not limited to receiving documentation of the FDA&#146;s 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.</P>
<P align=justify>If we do submit such a request for a new HCPCS code, it will be
reviewed by the CMS HCPCS Workgroup, which is comprised of representatives of
CMS, Medicaid state agencies, and the Pricing, Data Analysis and Coding
contractor. The HCPCS Workgroup meets monthly and determines whether each coding
request warrants a change to the HCPCS national coding set. </P>
<P align=center>13 </P>
<HR style="PAGE-BREAK-AFTER: always" align=center width="100%" color=black
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<A name=page_15></A>
<P align=justify><B>Deployment </B></P>
<P align=justify>We expect the PoNS&#153; 4.0 device to have a design feature that
stops delivering therapy every 14 weeks. This is expected to force patients to
return to their physician or physical therapy center, or PTC, for assessment of
their progress and reestablishment of challenging physical therapy to achieve
higher goals. We currently expect the device to be inspected visually by the
physical therapist, reset for another 14 weeks of treatment, and we expect the
tongue array to be replaced by a new one to ensure no degradation of the
electrodes occurs. We expect this business model feature to ensure proper
support for patients in the early phase of their therapy.</P>
<P align=justify>We expect physicians will be informed to prescribe both the
PoNS&#153; device and the &#147;local&#148; trained PTCs for their patients to receive the
PoNS&#153; device and their training. We expect to launch a PoNS&#153; website and to
develop a smart phone application to help physicians select the appropriate PTC
convenient for the patient. </P>
<P align=justify>Upon discharge from the PTC, patients are expected to be
monitored in their home therapy from a PTC phone center (set up by NHC through
select PTCs) who plan to help the patients be compliant and ensure the therapy
is performed appropriately. At the end of the 14 weeks of therapy, we expect
patients to be directed back to their physician for assessment and then return
to the PTC for replacement of the tongue array. </P>
<P align=justify><I>PoNS&#153; in the U.S. Army </I></P>
<P align=justify>If it ultimately decides to purchase PoNS&#153; devices from us, we
expect that the U.S. Army would deploy the device through their rehabilitation
centers under orders from the central medical command. All personnel are
expected to be certified PoNS&#153; trainers supported by live, paper and video based
training materials developed through this project by the U.S. Army. </P>
<P align=justify>We have also approached the Canadian and United Kingdom Armed
Forces to discuss their support of a similar program in Canada and discussions
are ongoing. We also intend to pursue other military organizations in relevant
countries based on need and size of potential deployment.</P>
<P align=justify>We expect to be able to leverage the deployment of the device
in the U.S. Army in its marketing of the PoNS&#153; device to the civilian
population. </P>
<P align=justify><I>PoNS&#153; in Civilian Population </I></P>
<P align=justify>We believe that a key to deployment success will be to set up a
national framework of PoNS&#153;-trained Physical Therapists (PTs). We are actively
developing a training certification program where PTs can become trained PoNS&#153;
therapists. We expect there to be a strong financial incentive for the PT
community to partner with us because PoNS&#153; training offers substantial
opportunity for growth for the PTs. We anticipate that PTs will be able to use
existing reimbursement codes for the physical therapy portion of the therapy. As
discussed above, we plan to apply for reimbursement codes for the PoNS&#153; device.
</P>
<P align=justify>We plan to concentrate our efforts in the United States,
Canadian and UK marketplaces as first launch markets. We are currently uncertain
which of these three markets will launch first, primarily due to the relative
speed of the regulatory process, and there is no assurance that either will
launch at all. Following the launch of marketplaces in the United States, Canada
and the UK, we intend to commercialize the PoNS&#153; device in the rest of Europe
and Japan as second phase countries (2017) and Brazil, India and China as phase
III countries (2018). In November 2014 we signed a development and distribution
agreement with the Altair company in Russia to apply for
registration and distribute the PoNS&#153; device in the territories of the former
Soviet Union. However, there is no assurance that such commercialization will
occur. </P>
<P align=center>14 </P>
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noShade SIZE=5>
<A name=page_16></A>
<P align=justify><B>Licensed Intellectual Property </B></P>
<P align=justify>The intellectual property relating to the PoNS&#153; device is the
subject of U.S. Patent Applications 12/348,301, 14/340,144, 14/341,141 and
Provisional Patent Applications 61/019,061 and 61/020,265, which we collectively
refer to as the Patent Pending Rights. The Patent Pending Rights include the
following patent applications, which cover a device that non-invasively delivers
neurostimulation through the skin or intra-orally to the brain stem via the
trigeminal nerve, the facial nerve or both: </P>
<DIV>
<TABLE
style="BORDER-COLOR: black; FONT-SIZE: 10pt; BORDER-COLLAPSE: collapse; "
borderColor=#000000 cellSpacing=0 cellPadding=6 width="100%" border=1>

  <TR vAlign=top>
    <TD align=center bgcolor="#EEEEEE"><B>US Application No.</B> </TD>
    <TD width="20%" align=center bgcolor="#EEEEEE"><B>Filing Date</B> </TD>
    <TD width="20%" align=center bgcolor="#EEEEEE"><B>Status</B> </TD>
    <TD width="20%" align=center bgcolor="#EEEEEE"><B>Patent No.</B> </TD>
    <TD width="20%" align=center bgcolor="#EEEEEE"><B>Issue Date</B> </TD>
  </TR>
  <TR vAlign=top>
    <TD align=left>61/019,061 (Provisional) </TD>
    <TD align=center width="20%">1/4/2008 </TD>
    <TD align=center width="20%">Expired </TD>
    <TD align=center width="20%">N/A </TD>
    <TD align=center width="20%">N/A </TD></TR>
  <TR vAlign=top>
    <TD align=left>61/020,265 (Provisional) </TD>
    <TD align=center width="20%">1/10/2008 </TD>
    <TD align=center width="20%">Expired </TD>
    <TD align=center width="20%">N/A </TD>
    <TD align=center width="20%">N/A </TD></TR>
  <TR vAlign=top>
    <TD align=left>12/348,301 </TD>
    <TD align=center width="20%">1/4/2009 </TD>
    <TD align=center width="20%">Issued </TD>
    <TD align=center width="20%">8,849,407 </TD>
    <TD align=center width="20%">9/30/2014 </TD></TR>
  <TR vAlign=top>
    <TD align=left>14/340,144 </TD>
    <TD align=center width="20%">7/24/2014 </TD>
    <TD align=center width="20%">Issued </TD>
    <TD align=center width="20%">8,909,345 </TD>
    <TD align=center width="20%">12/9/2014 </TD></TR>
  <TR vAlign=top>
    <TD align=left>14/341,141 </TD>
    <TD align=center width="20%">7/25/2014 </TD>
    <TD align=center width="20%">Pending </TD>
    <TD align=center width="20%">N/A </TD>
    <TD align=center width="20%">N/A </TD></TR></TABLE></DIV>
<P align=justify>The inventors received U.S. Patent No. 8,849,407 in relation to
the patent application no. 12/348,301 on September 30, 2014. This patent covers
non-invasive neurostimulation of the skin combined with simultaneous physical
therapy to provide neurorehabilitation of a patient to treat various maladies
including, e.g., TBI, stroke and Alzheimer&#146;s disease. U.S. patent application
14/340,144, which became U.S. Patent No. 8,909,345 on December 9, 2014, and U.S.
patent application 14/341,141 are continuations of application 12/348,301 (now
U.S. Patent 8,849,407). U.S. Patent No. 8,909,345 covers non-invasive
neurostimulation within a patient&#146;s mouth combined with physical therapy to
provide neurorehabilitation of a patient to treat various maladies including,
e.g., TBI, stroke, and Alzheimer&#146;s disease. Patent application 14/341,141 covers
non-invasive neurostimulation within a patient&#146;s mouth combined with cognitive
therapy to provide neurorehabilitation of a patient resulting in improved
reading comprehension and increased attention span as well as the treatment
various maladies including, but not limited to, TBI, stroke, and Alzheimer&#146;s
disease. </P>
<P align=justify>A U.S. provisional patent application provides the means to
establish an early effective filing date for a later filed non-provisional
patent application. Therefore, though the two provisional applications have
expired, they establish a priority date for U.S. Patent Nos. 8,849,407 and
8,909,345 and U.S. application 14/341,141 and any future filings that claim
priority. </P>
<P align=justify>Now that the inventors have received the U.S. Patent Nos.
8,849,407 and 8,909,345, the use of the PoNS&#153; device for various treatment
techniques is patented in the United States, and we have a license to practice
these patented techniques from ANR. </P>
<P align=justify>ANR, which is one of our significant shareholders, holds an
interest in the Patent Pending Rights pursuant to an exclusive license from the
inventors. Patent applications 14/340,144 and 14/341,141 are included in the
exclusive license as the exclusive license agreement covers (i) patent
application 12/348,301 and provisional application 61/019,061, (ii) any patents
issuing therefrom, and (iii) any patents claiming priority to patent application
12/348,301 or provisional application 61/019,061, which patent applications 14/340,144 and 14/341,141 claim priority through such
provisional application as well as through provisional application 61/020,265.</P>
<P align=center>15 </P>
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<P align=justify>Pursuant to an amended and restated sublicense agreement, or
the Sublicense Agreement, ANR has granted NHC a worldwide, exclusive license to
make, have made, use, lease and sell devices utilizing the Patent Pending
Rights. In addition, ANR has agreed that ownership of any improvements,
enhancements or derivative works of the Patent Pending Rights that are developed
by NHC or ANR shall be owned by NHC, provided that if NHC decides not to patent
such improvements, ANR may choose to pursue patent rights independently.
Pursuant to the Sublicense Agreement, NHC has agreed to pay ANR royalties equal
to 4% of NHC&#146;s revenues collection from the sale of devices covered by the
Patent Pending Rights and services related to the therapy or use of devices
covered by the Patent Pending Rights in therapy services. The Sublicense
Agreement provides that the sub-license granted by ANR to NHC, if in good
standing, shall not be cancelled, limited or impaired in any way should there be
a termination of the master license granted by the inventors to ANR, which was
acknowledged by the inventors in the Sublicense Agreement. On June 6, 2014, NHC
and ANR entered into a second amended and restated sublicense agreement, or the
Second Sublicense Agreement, which acknowledges the Reverse Merger (See &#147;&#150; Our
Corporate History &#150; Acquisition of NeuroHabilitation Corporation and Concurrent
Financing&#148;), and adds us as a party to the agreement.</P>
<P align=justify>The license of the Patent Pending Rights are subject to the
right of the government of the United States, which funded certain research
relating to the development of the PoNS&#153; device, to a nonexclusive,
non-transferable, irrevocable, paid-up license to use the Patent Pending Rights
for governmental purposes. In addition, NHC has granted a perpetual,
royalty-free license to the Patent Pending Rights back to ANR for non-profit
research and development activities which do not compete with NHC&#146;s business and
to produce and derive revenues from devices and services in connection with
investigational uses of the PoNS&#153; device and related technology.</P>
<P align=justify>The license of the Patent Pending Rights is also subject to the
terms of the CRADA. In the event that we are not willing or able to
commercialize the PoNS&#153; technology within four years from the expiration of the
CRADA, we are required to transfer possession, ownership and
sponsorship/holdership of the regulation application, regulatory correspondence
and supporting regulatory information related technology to USAMRMC and grant
the U.S. Government a non-exclusive, irrevocable license to any patent,
copyright, data rights, proprietary information or regulatory information for
the U.S. Government to commercialize the technology.</P>
<P align=justify>With respect to the Patent Pending Rights, the United States
Patent and Trademark Office, or USPTO, issued U.S. Patent Nos. 8,849,407 and
8,909,345 and U.S. application 14/341,141 remains pending in the USPTO. In
addition, we intend to file additional continuation applications in the USPTO
claiming priority to U.S. application 14/341,141 to protect other aspects of the
PoNS&#153; device and related non-invasive neurostimulation techniques. </P>
<P align=justify><B>Company Owned Intellectual Property </B></P>
<P align=justify>We filed 26 patent applications related to various technical
and ornamental aspects of version 4.0 of the PoNS&#153; device. We filed ten
non-provisional patent applications that describe various technical features in
the version 4.0 device and 16 design patent applications describing various
ornamental designs for the PoNS&#153; version 4.0 device. We are the sole assignee
for these 26 new patent filings. </P>
<P align=justify>Currently, we use four trademarks in connection with the
operation of the business: PoNS, NeuroHabilitation, NHC and Helius Medical
Technologies. We own the rights to the PoNS mark by virtue of an assignment agreement having an effective date of
October 27, 2014 and entered into with ANR and the inventors of the PoNS&#153;
technology. We are the sole owner of the rights in the NeuroHabilitation and NHC
trademarks, and Helius Medical Technologies, Inc. is the owner of the rights in
the Helius Medical Technologies mark. On October 31, 2014, we filed trademark
applications in the USPTO for these four trademarks. </P>
<P align=center>16 </P>
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<A name=page_18></A>
<P align=justify>On January 7, 2015 we filed trademark applications with the
Canada Intellectual Property Office, claiming priority to the corresponding U.S.
applications filed on October 31, 2014. We are the owner of the rights in the
NeuroHabilitation, NHC, and PoNS marks in Canada, and Helius Medical
Technologies, Inc. is the owner of the rights in the Helius Medical Technologies
mark in Canada. </P>
<P align=justify>Our intellectual property has been the subject of a lawsuit
which has been dismissed. For a full description of this lawsuit, please see
&#147;Item 8. Legal Proceedings.&#148; </P>
<P align=justify><B>Government Regulation </B></P>
<P align=justify>Our products under development and our operations are subject
to significant government regulation. In the United States, our products are
regulated as medical devices by the FDA and other federal, state, and local
regulatory authorities. The following is a general description of the review and
clearance process of the FDA for medical devices. </P>
<P align=justify><I>FDA Regulation of Medical Devices </I></P>
<P align=justify>The FDA and other U.S. and foreign governmental agencies
regulate, among other things, the following activities with respect to medical
devices: </P>
<UL style="TEXT-ALIGN: justify">
  <LI>design, development and manufacturing;
  <LI>testing, labeling, content and language of instructions for use and
  storage;
  <LI>clinical trials;
  <LI>product storage and safety;
  <LI>marketing, sales and distribution;
  <LI>pre-market clearance and approval;
  <LI>record keeping procedures;
  <LI>advertising and promotion;
  <LI>recalls and field safety corrective actions;
  <LI>post-market surveillance, including reporting of deaths or serious
  injuries and malfunctions that, if they were to recur, could lead to death or
  serious injury;
  <LI>post-market approval studies; and
  <LI>product import and export. </LI></UL>
<P align=justify>In the United States, numerous laws and regulations govern all
the processes by which medical devices are brought to market and marketed. These
include the FD&amp;C Act and the FDA's implementing regulations, among others.
</P>
<P align=justify><I>The FDA Review, Clearance and Approval Process </I></P>
<P align=justify>Each medical device we seek to commercially distribute in the
United States must first receive either clearance under Section 510(k) of the
FD&amp;C Act, receive <I>de novo</I> down-classification, or pre-market
approval, or PMA, from the FDA, unless specifically exempted by the FDA. FDA
review and approval is required for each application of a device, regardless of
whether the device has been approved for other applications. The FDA classifies all medical devices into one
of three classes. Devices deemed to pose the lowest risk are categorized as
either Class I or II, which requires the manufacturer to submit to the FDA a
510(k) pre-market notification submission requesting clearance of the device for
commercial distribution in the United States, unless the device is exempted from
this requirement. Devices deemed by the FDA to pose the greatest risk, such as
life sustaining, life-supporting or implantable devices, or devices deemed not
substantially equivalent to a previously 510(k) cleared device are categorized
as Class III and require submission and approval of a PMA application. </P>
<P align=center>17 </P>
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<P align=justify>In the 510(k) clearance process, the FDA must determine that a
proposed device is &#147;substantially equivalent&#148; to a device legally on the market,
known as a &#147;predicate&#148; device, with respect to intended use, technology and
safety and effectiveness, in order to clear the proposed device for marketing.
Clinical data is sometimes required to support a determination of substantial
equivalence. The PMA pathway requires an applicant to demonstrate the safety and
effectiveness of the device based, in part, on extensive data, including, but
not limited to, technical, preclinical, clinical trial, manufacturing and
labeling data. The PMA process is typically required for devices that are deemed
to pose the greatest risk, such as life-sustaining, life-supporting or
implantable devices. However, some devices are automatically subject to the PMA
pathway regardless of the level of risk they pose, because they have not
previously been classified into a lower risk class by the FDA. Manufacturers of
these devices may request that the FDA review such devices in accordance with
the <I>de novo</I> classification procedure, which allows a manufacturer whose
novel device would otherwise require the submission and approval of a PMA prior
to marketing to request down-classification of the device on the basis that the
device presents low or moderate risk. If the FDA agrees with the
down-classification, the applicant will then receive approval to market the
device. This device type can then be used as a predicate device for future
510(k) submissions.</P>
<P align=justify>We intend to utilize the <I>de novo</I> classification
procedures to seek marketing authorization for the PoNS&#153; device, because there
is currently no predicate cleared or approved by the FDA for commercial
distribution and no existing classification decision by the FDA for such a
device. The process of obtaining regulatory clearances or approvals, or
completing the <I>de novo</I> classification process, to market a medical device
can be costly and time consuming, and we may not be able to successfully obtain
pre-market reviews on a timely basis, if at all. </P>
<P align=justify>If the FDA requires us to go through a lengthier, more rigorous
examination for the PoNS&#153; device, introducing the product could be delayed or
canceled, which could cause our launch to be delayed. In addition, the FDA may
determine that the PoNS&#153; device requires the more costly, lengthy and uncertain
PMA process. For example, if the FDA disagrees with our determination that the
<I>de novo</I> classification procedures are the appropriate path to obtain
marketing authorizations for the PoNS&#153; device, the FDA may require us to submit
a PMA application, which is generally more costly and uncertain and can take
from one to three years, or longer, from the time the application is submitted
to the FDA until an approval is obtained. Further, even with respect to those
future products where a PMA is not required, we cannot be certain that we will
be able to obtain 510(k) clearances with respect to those products. </P>
<P align=justify><I>510(k) Clearance Process </I></P>
<P align=justify>To obtain 510(k) clearance, we must submit a pre-market
notification to the FDA demonstrating that the proposed device is substantially
equivalent to a previously-cleared 510(k) device or is a device that was in
commercial distribution before May 28, 1976 for which the FDA has not yet called
for the submission of PMA applications. The FDA's 510(k) clearance process
usually takes from three to 12 months from the date the application is submitted
and filed with the FDA, but may take significantly longer and clearance is never
assured. Although many 510(k) pre-market notifications are cleared without
clinical data, in some cases, the FDA requires significant clinical data to
support substantial equivalence. In reviewing a pre-market notification submission, the FDA may request
additional information, including clinical data, which may significantly prolong
the review process. </P>
<P align=center>18 </P>
<HR style="PAGE-BREAK-AFTER: always" align=center width="100%" color=black
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<A name=page_20></A>
<P align=justify>After a device receives 510(k) clearance, any subsequent
modification of the device that could significantly affect its safety or
effectiveness, or that would constitute a major change in its intended use, will
require a new 510(k) clearance or could require PMA. The FDA requires each
manufacturer to make this determination initially, but the FDA may review any
such decision and may disagree with a manufacturer's determination. If the FDA
disagrees with a manufacturer's determination, the FDA may require the
manufacturer to cease marketing and/or recall the modified device until 510(k)
clearance or PMA is obtained. Under these circumstances, the FDA may also
subject a manufacturer to significant regulatory fines or other penalties. In
addition, the FDA is currently evaluating the 510(k) process and may make
substantial changes to industry requirements, including which devices are
eligible for 510(k) clearance, the ability to rescind previously granted 510(k)s
and additional requirements that may significantly impact the process. </P>
<P align=justify><I>De novo Classification Process </I></P>
<P align=justify>If a previously unclassified new medical device does not
qualify for the 510(k) pre-market notification process because no predicate
device to which it is substantially equivalent can be found, the device is
automatically classified Class III regardless of the level of risk it poses. The
Food and Drug Administration Modernization Act of 1997 established a new route
to market for low to moderate risk medical devices that are automatically placed
into Class III due to the absence of a predicate device, called the &#147;Request for
Evaluation of Automatic Class III Designation,&#148; or the <I>de novo</I>
classification procedure. This procedure allows a manufacturer whose novel
device is automatically classified into Class III to request down-classification
of its medical device into Class I or Class II on the basis that the device
presents low or moderate risk, rather than requiring the submission and approval
of a PMA application. Prior to the enactment of the Food and Drug Administration
Safety and Innovation Act, or FDASIA, in July 2012, a medical device could only
be eligible for <I>de novo</I> classification if the manufacturer first
submitted a 510(k) premarket notification and received a determination from the
FDA that the device was not substantially equivalent. The FDASIA streamlined the
<I>de novo</I> classification pathway by permitting manufacturers to request
<I>de novo</I> classification directly without first submitting a 510(k)
premarket notification to the FDA and receiving a not substantially equivalent
determination. Under the FDASIA, the FDA is required to classify the device
within 120 days following receipt of the <I>de novo</I> application. If the
manufacturer seeks reclassification into Class II, the manufacturer must include
a draft proposal for special controls that are necessary to provide a reasonable
assurance of the safety and effectiveness of the medical device. In addition,
the FDA may reject the reclassification petition if it identifies a legally
marketed predicate device that would be appropriate for a 510(k) or determines
that the device is not low to moderate risk or that general controls would be
inadequate to control the risks and special controls cannot be developed.</P>
<P align=justify>We plan to utilize the <I>de novo</I> classification process to
obtain marketing authorization for the PoNS&#153; device under development, and we
plan to seek Class II classification. In order to be placed in Class II, the FDA
would need reasonable assurance of safety and effectiveness of the PoNS&#153; device.
Under Class II, general controls (e.g., premarket notification) and special
controls (e.g., specific performance testing) would be applicable. Our goal
would be to complete in six months a safety and effectiveness clinical trial
using the PoNS&#153; device, initially only for the treatment of balance disorder in
patients with mild to moderate TBI and balance disorder associated with MS. Our
overall goal for submission of the <I>de novo</I> application and FDA clearance
of a 510(k) would be 18 months from December 2014. The application to the FDA will be made after the completion  of the registrational trial, which we anticipate will be completed at the end  of 2015. It will take us approximately  12 weeks to prepare the premarket notification to the FDA. We  thus anticipate that we will be applying for clearance in second quarter  2016. To the extent the FDA completed its review in 90 days, we anticipate clearance in the third quarter 2016.&nbsp; </P>
<P align=justify>Obtaining FDA clearance, <I>de novo</I> down-classification, or
approval for medical devices can be expensive and uncertain, generally takes
from several months to several years, and generally requires detailed and comprehensive scientific and clinical data. Notwithstanding the
expense, these efforts may never result in FDA clearance. Even if we were to
obtain regulatory clearance, it may not be for the uses we believe are important
or commercially attractive, in which case we would not be permitted to market
our product for those uses. </P>
<P align=center>19 </P>
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<P align=justify><I>Pre-market Approval Process </I></P>
<P align=justify>A PMA application must be submitted if the medical device is in
Class III (although the FDA has the discretion to continue to allow certain
pre-amendment Class III devices to use the 510(k) process) or cannot be cleared
through the 510(k) process. A PMA application must be supported by, among other
things, extensive technical, preclinical, clinical trial, manufacturing and
labeling data to demonstrate to the FDA's satisfaction the safety and
effectiveness of the device for its intended use. </P>
<P align=justify>After a PMA application is submitted and filed, the FDA begins
an in-depth review of the submitted information, which typically takes between
one and three years, but may take significantly longer. During this review
period, the FDA may request additional information or clarification of
information already provided. Also during the review period, an advisory panel
of experts from outside the FDA may be convened to review and evaluate the
application and provide recommendations to the FDA as to the approvability of
the device. In addition, the FDA will conduct a pre-approval inspection of the
manufacturing facility to ensure compliance with Quality System Regulations, or
QSR, which impose elaborate design development, testing, control, documentation
and other quality assurance procedures in the design and manufacturing process.
The FDA may approve a PMA application with post-approval conditions intended to
ensure the safety and effectiveness of the device including, among other things,
restrictions on labeling, promotion, sale and distribution and collection of
long-term follow-up data from patients in the clinical study that supported
approval. Failure to comply with the conditions of approval can result in
materially adverse enforcement action, including the loss or withdrawal of the
approval. New PMA applications or supplements are required for significant
modifications to the manufacturing process, labeling of the product and design
of a device that is approved through the PMA process. PMA supplements often
require submission of the same type of information as an original pre-market
approval application, except that the supplement is limited to information
needed to support any changes from the device covered by the original PMA
application, and may not require as extensive clinical data or the convening of
an advisory panel. </P>
<P align=justify><I>Clinical Trials </I></P>
<P align=justify>A clinical trial is typically required to support a PMA
application and is sometimes required for a 510(k) pre-market notification.
After a trial begins, the FDA may place it on hold or terminate it if, among
other reasons, it concludes that the clinical subjects are exposed to an
unacceptable health risk. Any trials we conduct must be conducted in accordance
with FDA regulations as well as other federal regulations and state laws
concerning human subject protection and privacy. Moreover, the results of a
clinical trial may not be sufficient to obtain clearance or approval of the
product, and separate clinical trials will be necessary to obtain clearance for
multiple uses of one device. </P>
<P align=justify><I>Risks of Delay from the FDA Clearance Process and Regulatory
Compliance Risks</I> </P>
<P align=justify>The FDA can delay, limit or deny clearance or approval of a
device for many reasons, including: </P>
<UL style="TEXT-ALIGN: justify">
  <LI>we may not be able to demonstrate to the FDA's satisfaction that our
  product candidates are safe and effective, sensitive and specific diagnostic
  tests, for their intended users;
  <LI>the data from our pre-clinical studies and clinical trials may be
  insufficient to support clearance or approval, where required; and </LI></UL>
<P align=center>20 </P>
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<UL style="TEXT-ALIGN: justify">
  <LI>the manufacturing process or facilities we use may not meet applicable
  requirements. </LI></UL>
<P align=justify>In addition, the FDA may change its clearance and approval
policies, adopt additional regulations or revise existing regulations, or take
other actions which may prevent or delay approval or clearance of our products
under development or impact our ability to modify our currently approved or
cleared products on a timely basis. For example, in response to industry and
healthcare provider concerns regarding the predictability, consistency and rigor
of the 510(k) regulatory pathway, the FDA initiated an evaluation of the
program, and in January 2011, announced several proposed actions intended to
reform the review process governing the clearance of medical devices. The FDA
intends these reform actions to improve the efficiency and transparency of the
clearance process, as well as bolster patient safety. In addition, as part of
the FDASIA the U.S. Congress reauthorized the Medical Device User Fee Amendments
with various FDA performance goal commitments and enacted several &#147;Medical
Device Regulatory Improvements&#148; and miscellaneous reforms that are further
intended to clarify and improve medical device regulation both pre- and
post-approval. Any delay in, or failure to receive or maintain, clearance or
approval for our product candidates could prevent us from generating revenue
from these product candidates and adversely affect our business operations and
financial results.</P>
<P align=justify>Even if we obtain FDA clearance for our PoNS&#153; device, we will
still be required to pursue a 510(k) clearance, <I>de novo</I>
down-classification, or PMA for any future product which will delay future
product launches and would likely place substantial restrictions on how our
device is manufactured, marketed and sold. For example, the manufacture of
medical devices must comply with FDA's QSR. In addition, manufacturers must
register their manufacturing facilities, list the products with FDA, and comply
with requirements relating to labeling, marketing, complaint handling, adverse
event and medical device reporting, reporting of corrections and removals, and
import and export. FDA monitors compliance with the QSR and these other
requirements through periodic inspections. If our facilities or those of our
manufacturers or suppliers are found to be in violation of applicable laws and
regulations, or if we or our manufacturers or suppliers fail to take
satisfactory corrective action in response to an adverse inspection, the
regulatory authority could take enforcement action, including any of the
following sanctions: </P>
<UL style="TEXT-ALIGN: justify">
  <LI>untitled letters, warning letters, fines, injunctions, consent decrees and
  civil penalties;
  <LI>customer notifications or repair, replacement, refunds, detention or
  seizure of our products;
  <LI>operating restrictions or partial suspension or total shutdown of
  production;
  <LI>refusing or delaying requests for 510(k) marketing clearance or pre-market
  approvals of new products or modified products;
  <LI>withdrawing 510(k) marketing clearances or pre-market approvals that have
  already been granted;
  <LI>refusing to provide Certificates for Foreign Government;
  <LI>refusing to grant export approval for our products; or
  <LI>pursuing criminal prosecution. </LI></UL>
<P align=justify>Additionally, FDA and other regulatory authorities have broad
enforcement powers. Regulatory enforcement or inquiries, or other increased
scrutiny on us, could affect the perceived safety and efficacy of our product
candidates and dissuade our customers from using our product candidates, if and
when they are authorized for marketing. </P>
<P align=justify><I>Pervasive and Continuing U.S. Food and Drug Administration
Regulation </I></P>
<P align=justify>After a medical device is placed on the market, numerous FDA
regulatory requirements apply, including, but not limited to the following: </P>
<P align=center>21 </P>
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<UL style="TEXT-ALIGN: justify">
  <LI>the QSR, which requires manufacturers to follow design, testing, control,
  documentation and other quality assurance procedures during the manufacturing
  process;
  <LI>establishment registration, which requires establishments involved in the
  production and distribution of medical devices, intended for commercial
  distribution in the United States, to register with the FDA;
  <LI>medical device listing, which requires manufacturers to list the devices
  they have in commercial distribution with the FDA;
  <LI>correction and removal reporting regulations which require that
  manufacturers report to the FDA field corrections and product recalls or
  removals undertaken to reduce a risk to health posed by the device or remedy a
  violation of the FD&amp;C Act that may present a risk to health;
  <LI>labeling regulations, which prohibit "misbranded" devices from entering
  the market, as well as prohibit the promotion of products for unapproved or
  "off-label" uses and impose other restrictions on labeling;
  <LI>clearance or approval of product modifications that could significantly
  affect safety or efficacy or that would constitute a major change in intended
  use;
  <LI>post-market surveillance including Medical Device Reporting, which
  requires manufacturers report to the FDA if their device may have caused or
  contributed to a death or serious injury, or malfunctioned in a way that would
  likely cause or contribute to a death or serious injury if it were to recur;
  and
  <LI>other post-approval restrictions or conditions. </LI></UL>
<P align=justify><B>Our Corporate History </B></P>
<P align=justify><I>Formation and Arrangement with Boomerang Oil, Inc.</I> </P>
<P align=justify>We were incorporated on March 13, 2014 under the British
Columbia Business Corporations Act, or the BCBCA, as &#147;0996445 B.C. Ltd.&#148; On
March 25, 2014, and amended on April 8, 2014, we entered into an arrangement
agreement with Boomerang Oil, Inc. (formerly known as 0922327 B.C. Ltd.) and
0995162 B.C. Ltd. to reorganize the business structure of such three entities in
such a manner which would allow Boomerang Oil, Inc. to spin us out to become an
independent entity that is a reporting issuer in Canada and for us to complete a
reverse take-over of 0995162 B.C. Ltd. As a result of the arrangement agreement,
we became a reporting issuer in the provinces of British Columbia and Alberta.
In addition, the arrangement resulted in 0995162 B.C. Ltd. becoming our
wholly-owned subsidiary. The assets of 0995162 B.C. Ltd. consisted of cash and
0995162 B.C. Ltd.&#146;s interest in a letter agreement pursuant to which it had
agreed to acquire all of the outstanding shares of NHC, a Delaware corporation,
and to seek a listing on a recognized stock exchange.</P>
<P align=justify><I>Reincorporation in Wyoming</I> </P>
<P align=justify>On May 23, 2014, we changed our name to &#147;Helius Medical
Technologies, Inc.&#148; and filed articles of continuation with the Wyoming
Secretary of State office to reincorporate from being a corporation governed by
the BCBCA to a corporation governed by the Wyoming Business Corporation Act, or
WBCA. </P>
<P align=justify><I>Acquisition of NeuroHabilitation Corporation and Concurrent
Financing</I> </P>
<P align=justify>On June 13, 2014, we completed the acquisition of NHC by way of
an agreement and plan of merger. We refer to this transaction as the Reverse
Merger. Pursuant to the agreement and plan of merger, HMT Mergersub, Inc., our
wholly-owned subsidiary, merged with and into NHC with NHC as the surviving
corporation. In connection with the Reverse Merger, we issued an aggregate of
35,300,083 shares of our Class A common stock, or our common stock, to the former
shareholders of NHC. The Reverse Merger constituted a reverse take-over of us by
NHC.</P>
<P align=center>22 </P>
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<P align=justify>In connection with the Reverse Merger, we completed a
non-brokered private placement financing of CAD$7.62 million by issuing 15.24
million subscription receipts. Pursuant to its terms, each subscription receipt
automatically converted into one unit upon satisfaction of certain escrow
release conditions, which had been satisfied. Each unit consisted of one share
of our common stock and one-half of one share purchase warrant with each whole
warrant being exercisable at CAD$1.00 per share for a period of two years. In
connection with the concurrent private placement financing, we paid aggregate
finders&#146; fees of $412,200 and issued 824,000 finder&#146;s warrants. Each finder
warrant is exercisable at CAD$1.00 per share for a period of two years.</P>
<P align=justify><I>General Development of the Business of NeuroHabilitation
Corporation </I></P>
<P align=justify>Prior to the acquisition of NHC, we had no active business. Our
primary operations are conducted through our wholly-owned subsidiary NHC. On
January 22 2013, NHC entered into a patent sub-license agreement whereby ANR
granted NHC exclusive worldwide rights to ANR&#146;s trade secrets, knowhow, and
patent pending technology for a non-invasive means for delivering
neurostimulation through the oral cavity, or the PoNS&#153; device. NHC obtained
these rights in exchange for 50% of the outstanding equity in NHC and an
obligation to pay ANR a royalty equal to 4% of any revenue collected by NHC from
(1) the sale of products covered by any claim of the patent rights to end users
and (2) services related to the therapy or use of such products in therapy
services. This agreement was subsequently amended by the Sublicense Agreement
and Second Sublicense Agreement described above. </P>
<P align=justify><I>Listing of our Common Stock on the CSE and on a U.S. Stock
Exchange </I></P>
<P align=justify>Following our Reverse Merger, we obtained approval of the
listing of our common stock on the Canadian Securities Exchange, or CSE. Our
common stock currently trades on the CSE under the symbol &#147;HSM&#148;. Our common stock is currently quoted on the OTCQB under the  symbol &ldquo;HSDT.&rdquo; We have applied to list  our common stock on the Nasdaq Capital Market. However, there is no guarantee that our listing application to the  Nasdaq Capital Market will be approved or, even if we were approved, that we  will satisfy continuing listing requirements.</P>
<P align=justify><B>Employees </B></P>
<P align=justify> As of May 1, 2015, we have three employees. </P>
<P align=justify>ITEM 1A.&nbsp;&nbsp; &nbsp;RISK FACTORS.</P>
<P align=justify><B><I>An investment in our common stock involves a number of
very significant risks. You should carefully consider the following risks and
uncertainties in addition to other information in this registration statement in
evaluating our company and its business before purchasing shares of our common
stock. Our business, operating results and financial condition could be
seriously harmed due to any of the following risks. The risks described below
may not be all of the risks facing our company. Additional risks not presently
known to us or that we currently consider immaterial may also impair our
business operations. You could lose all or part of your investment due to any of
these risks.</I></B><B><I> </I></B></P>
<P align=justify><B>Risks Related to Our Company </B></P>
<P align=center>23 </P>
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<P align=justify><B><I>We have a very limited operating history.</I></B></P>
<P align=justify>Helius Medical Technologies, Inc. is our holding company and it
has no material assets other than cash and cash equivalents and its ownership of
all of the outstanding shares of NHC, which is our wholly-owned subsidiary. NHC
was incorporated in Delaware on January 22, 2013 and is a development stage
company that has had limited operations to date.</P>
<P align=justify><B><I>We are heavily dependent upon the ability and expertise
of our CEO and a very limited number of employees and the loss of such
individuals could have a material adverse effect on our business, operating
results or financial condition. </I></B></P>
<P align=justify>We currently have a very small management team and almost no
other employees. Our success is dependent upon the ability, expertise, judgment,
discretion and good faith of our senior management, and in particular Mr. Phil
Deschamps, our President and CEO. Currently Mr. Deschamps is joined by Misha
Danilov, Project Manager, and Jonathan Sackier as our only full-time employees.
We also have engaged 15 full-time equivalent persons as independent contractors,
including our Chief Financial Officer. While employment agreements are
customarily used as a primary method of retaining the services of key employees,
these agreements cannot assure the continued services of such employees. Any
loss of the services of such individuals could have a material adverse effect on
our business, operating results or financial condition.<B><I> </I></B></P>
<P align=justify><B><I>We have incurred net losses since our inception and
anticipate that we will continue to incur substantial net losses for the
foreseeable future. We may never achieve or sustain profitability.</I></B></P>
<P align=justify>We have incurred substantial net losses since our inception.
For our year ended March 31, 2014 and the nine months ended December 31, 2014,
we incurred a net loss of $1,067,284 and $9,156,043, respectively, and used cash
in operations of $348,698 and $4,379,967, respectively. We have an accumulated
deficit of $9,585,134 as of March 31, 2014 and $18,741,177 as of December 31,
2014. We have incurred net losses since our inception. Our losses have resulted
principally from costs incurred in connection with our design, manufacturing and
development, research and development activities, stock based compensation,
legal, advertising, marketing and investor relations, and general and
administrative expenses associated with our operations. Even if we are
successful in obtaining clearance from the FDA and launching our PoNS&#153; device
into the market, we expect to continue to incur substantial losses for the
foreseeable future as we continue to sell and market our current product and
research and develop, and seek regulatory approvals for, other potential product
candidates. </P>
<P align=justify>We will be subject to all of the business risks and
uncertainties associated with any new business enterprise, including
under-capitalization, cash shortages, limitations with respect to personnel,
financial and other resources, lack of revenue and the risk that we will not
achieve our growth objective. If sales revenue from any of our current product
or product candidates that receive marketing clearance from the FDA or other
regulatory body is insufficient, if we are unable to develop and commercialize
any of our product candidates, or if our product development is delayed, we may
never become profitable.</P>
<p align=center>24 </p>
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<P align=justify><B><I>We will require additional financing to carry out our
plan of operations and if we are unable to obtain such financing, our business
may fail. </I></B></P>
<P align=justify>We currently have limited working capital and liquid assets.
Our cash and cash equivalents as of December 31, 2014 were $2,906,399. To date
we have not generated any revenue from the sales of products or services. There
are a number of conditions that we must satisfy before we will be able to
generate revenue, including but not limited to successful completion the design
of the PoNS&#153; device, FDA clearance of the PoNS&#153; device for treating balance disorder
in patients with mild to moderate TBI and balance disorder associated with MS,
manufacturing of a commercially-viable version of the PoNS&#153; device and
demonstration of effectiveness sufficient to generate commercial orders by
customers for our product. While we are currently seeking additional funding, we
do not currently have sufficient resources to accomplish any of these conditions
necessary for us to generate revenue. We will therefore require substantial
additional funds in order to continue to conduct the research and development
and regulatory clearance and approval activities necessary to bring our product
to market, to establish effective marketing and sales capabilities and to
develop other product candidates. Our existing capital resources will not be
sufficient to enable us to fund the completion of the development and
commercialization of our current product and our product candidates. We cannot
determine with certainty the duration and completion costs of the current or
future development and commercialization of our product candidates or if, when,
or to what extent we will generate revenues from the commercialization and sale
of any of these product candidates for which we obtain regulatory approval. We
may never succeed in achieving regulatory approval for our current and any
product candidates. We may be unable to raise the additional funding to finance
our business on commercially reasonable terms, or at all. If we are unable to
obtain additional financing as needed, we may be required to reduce the scope of
our operations and pursue only those projects that can be funded through cash
flows generated from its existing operations, if any. </P>
<P align=justify><B><I>Our independent registered public accounting firm has
included an explanatory paragraph relating to our ability to continue as a going
concern in its report on our audited financial statements. We may be unable to
continue to operate without the threat of liquidation for the foreseeable
future.</I></B></P>
<P align=justify>Our report from our independent registered public accounting
firm for the year ended March 31, 2014 includes an explanatory paragraph stating
that our recurring losses from operations and net capital deficiency raise
substantial doubt about our ability to continue as a going concern. If we are
unable to obtain sufficient funding, our business, prospects, financial
condition and results of operations will be materially and adversely affected
and we may be unable to continue as a going concern. For example, our existing capital resources will be
insufficient to fund our operations through the end of the first quarter of 2016. If we are
unable to continue as a going concern, we may have to liquidate our assets and
may receive less than the value at which those assets are carried on our
consolidated financial statements, and investors will likely lose all or a part
of their investment. Future reports from our independent registered public
accounting firm may also contain statements expressing doubt about our ability
to continue as a going concern. If we seek additional financing to fund our
business activities in the future and there remains doubt about our ability to
continue as a going concern, investors or other financing sources may be
unwilling to provide additional funding on commercially reasonable terms or at
all. </P>
<P align=justify><B><I>Raising additional capital by issuing securities or
through debt financings or licensing arrangements may cause dilution to existing
stockholders, restrict our operations or require us to relinquish proprietary
rights.</I></B></P>
<P align=justify>To the extent that we raise additional capital through the sale
of equity or convertible debt securities, your ownership interest will be
diluted, and the terms may include liquidation or other preferences that
adversely affect your rights as a stockholder. Debt financing, if available, may
involve agreements that include covenants limiting or restricting our ability to
take specific actions such as incurring additional debt, making capital
expenditures or declaring dividends. If we raise additional funds through
collaboration and licensing arrangements with third parties, we may have to
relinquish valuable rights to our technologies or products or grant licenses on
terms that are not favorable to us. Any of these events could adversely affect
our ability to achieve our product development and commercialization goals and
have a material adverse effect on our business, financial condition and results
of operations. </P>
<P align=center>25 </P>
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<P align=justify><b><i>We currently only have one product candidate, which is  still in development, and we have not obtained clearance from FDA to  commercially distribute the device in the United States and clearance from  Health Canada to commercially distribute the device in Canada, and we may never  obtain such clearances. </i></b> </P>
<p align="justify"> We currently are dependent on a single product which  is our PoNS&trade; device for use in the neuromodulation market. We are still  developing this product, and we cannot begin marketing and selling the device  in the United States and Canada until we obtain clearances from the FDA and  Health Canada, respectively. We have not yet submitted applications for  regulatory clearance in either the United States or Canada. The process of  obtaining regulatory clearance is expensive and time-consuming and can vary  substantially based upon, among other things, the type, complexity and novelty  of a product. Changes in regulatory policy, changes in or the enactment of additional  statutes or regulations, or changes in regulatory review for each submitted  product application may cause delays in the clearance of a product candidate or  rejection of a regulatory application altogether. The FDA has substantial  discretion in the <i>de novo</i> review and  clearance processes and may refuse to accept any application or may decide that  our data are insufficient for clearance and require additional pre-clinical,  clinical, or other studies. In addition, varying interpretations of the data obtained  from pre-clinical and clinical testing could delay, limit, or prevent marketing  authorization from the FDA or regulatory clearance of a product candidate. Any  marketing authorization from the FDA or regulatory clearance we ultimately  obtain may be limited or subject to restrictions or post-market commitments  that render the product candidate not commercially viable. If our attempts to  obtain marketing authorization are unsuccessful, we may be unable to generate  sufficient revenue to sustain and grow our business, and our business,  financial condition, and results of operations will be materially adversely  affected.</p>
<p align="justify"> If we are able to complete development of the PoNS&trade;  device and obtain clearance of the PoNS&trade; device for treatment of chronic  balance deficit in patients with mild to moderate TBI in the United States and  chronic balance deficit associated with MS in Canada, we plan to develop the  PoNS&trade; device to treat other indications, or symptoms caused by neurological  disorders. We would be required to commit our own resources to fund development  of any other indications and each would require separate FDA clearance. The  costs of such development efforts and FDA clearances would be substantial and  would likely require additional funding, and each such indication would be  subject to the same foregoing risks and uncertainties for FDA clearance.</p>
<P align=justify><B><I>We are and will continue to be dependent in significant
part on outside scientists and third-party research institutions for our
research and development in order to be able to commercialize our product
candidates. </I></B></P>
<P align=justify>We currently have a limited number of employees and resources
available to perform the research and development necessary to commercialize our
PoNS&#153; device and future product candidates. We therefore rely at present and
will need to continue to rely on third-party research institution collaborators
for this capability. </P>
<P align=center>26 </P>
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<P align=justify>Our subsidiary NHC is currently party to the CRADA with the
inventors, background patent owners and the Army Laboratories. 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&#153; 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. Under the terms of the CRADA,
we are solely responsible to fund and oversee clinical studies for the PoNS&#153;
device and seek FDA clearance and approval of the PoNS&#153; device. We are also
solely responsible to complete the research and development efforts necessary to commercialize our PoNS&#153; device. However,
the Army Laboratories has published a Notice of Intent to enter into a
sole-source contractual agreement to support the execution of the registrational
trial for treatment of balance disorder associated with mild to moderate TBI.
The objective of this contract is to defray the costs of the registrational
trial. The terms of the contract and the actual amount of the award are
uncertain because we have not yet completed the negotiation for this contract,
nor can we be assured that the Army will ever ultimately negotiate and enter
into such a contract with us. 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&#153; device as a treatment for mutually agreed upon
military relevant neurological disorders, which could include but not be limited
to Tinnitus, PTSD, and pain 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. The Army Laboratories may terminate their
obligations under the CRADA at any time upon 30 days prior written notice to us.
If there are insufficient funds available to cover the necessary research and
development costs for our product, the Army Laboratories could terminate the
CRADA and cease research and development efforts which could jeopardize our
ability to commercialize our PoNS&#153; device.</P>
<P align=justify><B><I>If we fail to obtain FDA clearance for commercialization
of or otherwise fail to ensure that the PoNS&#153; device is available for purchase
by the U.S. Government by December 31, 2017, we are subject to significant risk
of loss of data and proprietary rights. </I></B></P>
<P align=justify>Under the CRADA if we fail to obtain FDA clearance of the PoNS&#153;
device or otherwise fail to ensure that the PoNS&#153; device is available for
purchase by the U.S. Government, in each case by the expiration date under the
CRADA of December 31, 2017, we 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&#153; 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&#153; device would have a material adverse effect on our business. </P>
<P align=justify>In addition, given the importance of the U.S. Army to our
commercial plans, if the U.S. Army were to eventually decide not to purchase our
product, we would need to find other buyers for our product. If the U.S. Army
were to decline to purchase our product, we may have more difficulty persuading
other third parties to purchase our product. </P>
<P align=justify><B><I>There is limited market awareness of our product and the
neuromodulation market is new and uncertain. </I></B></P>
<P align=justify>We believe our PoNS&#153; product has strong potential therapeutic
benefits for the neuromodulation market. The neuromodulation market is
relatively new and its long-term growth prospects are uncertain. Since we do not
yet have FDA clearance for our product, there is limited to no market awareness
of our product. In order to succeed, we must among other things increase market
awareness of our PoNS&#153; product and implement a sales and marketing strategy. If
we fail in any of these endeavors or experience delays in pursuing them, we will
not generate revenues as planned and will need to curtail operations or seek
additional financing earlier than otherwise anticipated. In addition, should the
neuromodulation market fail to expand, it could have a materially adverse effect
on our business and financial position. </P>
<P align=center>27 </P>
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<P align=justify><B><I>Our PoNS&#153; technology is a new &#147;untested&#148; form of
neurostimulation therapy and the medical community tends to be very conservative
in not adopting new therapies very rapidly, which may have a material adverse
effect on our business and financial position.</I></B> </P>
<P align=justify>The effectiveness of our PoNS&#153; technology to treat TBI or any
other neurological disorder has not been established in studies conducted in a
controlled environment designed to produce scientifically significant results.
Accordingly, our PoNS&#153; technology is a new &#147;untested&#148;, and therefore unproven,
therapy. Unproven and untested technologies are usually more slowly adopted by
the medical community as the medical community tends to be very conservative and
does not adopt new &#147;untested&#148; therapies very rapidly. Physicians may elect not
to use our products for a variety of reasons, including:</P>
<UL style="TEXT-ALIGN: justify">
  <LI>lack or perceived lack of evidence supporting the beneficial
  characteristics of our technology;
  <LI>limited long-term data on the use of PoNS&#153; technology for therapy;
  <LI>physicians&#146; perception that there are insufficient advantages of our
  product relative to currently available products;
  <LI>hospitals may choose not to purchase our product;
  <LI>group purchasing organizations may choose not to contract for our product,
  thus limiting availability of our products to hospital purchasers;
  <LI>lack of coverage or adequate payment from managed care plans and other
  third-party payors for our product;
  <LI>Medicare, Medicaid or other third-party payors may limit or not permit
  reimbursement for our product; and
  <LI>the development of or improvement of competitive products. </LI></UL>
<P align=justify>If the medical community reacts in a similar fashion to
adopting our PoNS&#153; device for neurostimulation therapy, we will not be able to
generate significant revenues, if any.</P>
<P align=justify><B><I>In order to be successful, we must expand our products
beyond our single product by commercializing new product candidates, but we may
not be able to do so in a timely fashion and at expected costs, or at
all.</I></B></P>
<P align=justify>In order to be successful, we will need to expand our product
lines beyond our PoNS&#153; device which is currently our only product. To succeed in
our commercialization efforts, we must effectively continue product development
and testing, obtain regulatory clearances and approvals, and enhance our sales
and marketing capabilities. There is no assurance that we will succeed in
bringing any of our current or future product candidates to market. If we fail
in bringing our product candidates to market, or experience delays in doing so,
we will not generate revenues as planned and will need to curtail operations or
seek additional financing earlier than otherwise anticipated.</P>
<P align=justify>The development of additional products is subject to the risks
of failure inherent in the development of new, state of the art products,
laboratory devices and products based on new technologies. These risks include:
(i) delays in product development or manufacturing; (ii) unplanned expenditures
for product development or manufacturing; (iii) failure of new products to have
the desired effect or an acceptable accuracy profile; (iv) emergence of superior
or equivalent products; (v) failure by any potential collaborative partners to
successfully develop products; and (vi) the dependence on third parties for the
manufacture, development and sale of our products. Because of these risks, our
research and development efforts or those of potential collaborative partners
may not result in any commercially viable products. If a significant portion of
these development efforts is not successfully completed, or any products are not
commercially successful, we are less likely to generate significant revenues, or
become profitable. The failure to perform such activities could have a material
adverse effect on our business, financial condition and results of its
operations. </P>
<P align=center>28 </P>
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<P align=justify><B><I>We can provide no assurance that the development by
others of new or improved devices or products will not result in our present and
future products from becoming obsolete. </I></B></P>
<P align=justify>The areas in which we plan to commercialize, distribute, and/or
sell products involves rapidly developing technology. There can be no assurance
that we will be able to establish ourselves in such fields, or, if established,
that we will be able to maintain our market position, if any. There can be no
assurance that the development by others of new or improved products will not
make our present and future products, if any, superfluous or obsolete. </P>
<P align=justify><B><I>Our future success depends on our ability to obtain
approval on the patent for the PoNS&#153; technology, failing which we may be unable
to protect our proprietary information and any competitive advantage which may
have a material adverse effect on our business and financial condition.
</I></B></P>
<P align=justify>Our future success will depend, in part, on our ability to
obtain approval on the patent for the PoNS&#153; technology. There can be no
assurance that the patent application made will result in the issuance of the
patent or that the term of the patent will be extendable after it expires in due
course, which will prevent us from being able to protect our proprietary
information and may have a material adverse effect on our business and financial
condition. </P>
<P align=justify>Much of our know-how and technology may not be patentable,
though they may constitute trade secrets. There can be no assurance, however,
that we will be able to meaningfully protect our trade secrets. To help protect
our intellectual property rights and proprietary technology, we require
employees, consultants, advisors and collaborators to enter into confidentiality
agreements. There can be no assurance that these agreements will provide
meaningful protection for our trade secrets, know-how or other proprietary
information in the event of any unauthorized use or disclosure. </P>
<P align=justify>Our intellectual property has been the subject of a lawsuit
which has been dismissed. For a full description of this lawsuit, please see
&#147;Item 8. Legal Proceedings.&#148; </P>
<P align=justify><B><I>If our intellectual property protection is inadequate,
competitors may gain access to our technology and undermine our competitive
position.</I></B></P>
<P align=justify>We regard our intended and future intellectual property as
important to our success, and we intend to rely on patent law to protect our
proprietary rights. Despite our precautions, unauthorized third parties may copy
certain portions of our devices or products or reverse engineer or obtain and
use information that we regard as proprietary. We may seek additional patents in
the future. We do not know if any future patent application will be issued with
the scope of the claims we seek, if at all, or whether any patents we receive
will be challenged or invalidated. Thus, we cannot assure you that any
intellectual property rights that we may receive can be successfully asserted in
the future or that they will not be invalidated, circumvented or challenged. In
addition, the laws of some foreign countries do not protect proprietary rights
to the same extent as do the laws of the United States. Our means of protecting
any proprietary rights we may receive in the United States or abroad may not be
adequate and competitors may independently develop a similar technology. Any
failure to protect our proprietary information and any successful intellectual
property challenges or infringement proceedings against us could have a material
adverse effect on our business, financial condition, or results of
operations.<B><I> </I></B></P>
<P align=center>29 </P>
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<P align=justify><B><I>We may be subject to various litigation claims and legal
proceedings, including intellectual property litigation, such as patent
infringement claims, which could adversely affect our business. </I></B></P>
<P align=justify>We, as well as certain of our directors and officers, may be
subject to claims or lawsuits. These lawsuits may result in significant legal
fees and expenses and could divert management&#146;s time and other resources. If the
claims contained in these lawsuits are successfully asserted against us, we
could be liable for damages and be required to alter or cease certain of our
business practices or product lines. Any of these outcomes could cause our
business, financial performance and cash position to be negatively impacted.
</P>
<P align=justify>Additionally, our commercial success will also depend, in part,
on not infringing on the patents or proprietary rights of others. There can be
no assurance that the technologies and products used or developed by us will not
infringe such rights. If such infringement occurs and we are not able to obtain
a license from the relevant third party, we will not be able to continue the
development, manufacture, use, or sale of any such infringing technology or
product. There can be no assurance that necessary licenses to third-party
technology will be available at all or on commercially reasonable term. In some
cases, litigation or other proceedings may be necessary to defend against or
assert claims of infringement or to determine the scope and validity of the
proprietary rights of third parties. Any potential litigation could result in
substantial costs to, and diversion of, our resources and could have a material
and adverse impact on us. An adverse outcome in any such litigation or
proceeding could subject us to significant liabilities, require us to cease
using the subject technology or require us to license the subject technology
from the third party, all of which could have a material adverse effect on our
business. </P>
<P align=justify><B><I>If our expenses are greater than anticipated, then we
will have fewer funds with which to pursue our plan of operations and our
financing requirements will be greater than anticipated.</I></B></P>
<P align=justify>We may find that the costs of carrying out our plan of
operations are greater than we anticipate. Increased operating costs may cause
the amount of financing that we require to increase. Investors may be more
reluctant to provide additional financing if we cannot demonstrate that we can
control our operating costs. There is no assurance that additional financing
required as a result of our operating costs being greater than anticipated will
be available to us. If we do not control our operating expenses, then we will
have fewer funds with which to carry out our plan of operations with the result
that our business may fail. </P>
<P align=justify><B><I>We may not be able to build an effective distribution
network for our products. </I></B></P>
<P align=justify>We currently have very few employees and will likely need to
rely on third party distributors to sell our product. We cannot assure you that
we will succeed in entering into and maintaining productive arrangements with an
adequate number of distributors that are sufficiently committed to selling our
products. The establishment of a distribution network is expensive and time
consuming. As we launch new products and increase our marketing effort with
respect to existing products, we will need to continue to hire, train, retain
and motivate skilled independent distributors with significant technical
knowledge. In addition, the commissions we pay our distributors could increase
over time which would result in higher sales and marketing expenses.
Furthermore, current and potential distributors may market and sell the products
of our competitors. Even if the distributors market and sell our products, our
competitors may be able, by offering higher commission payments or other
incentives, to persuade these distributors to reduce or terminate their sales
and marketing efforts related to our products. The distributors may also help
competitors solicit business from our existing customers. Some of our
independent distributors will likely account for a significant portion of our
sales volume, and, if we were to lose them, our sales could be adversely
affected. Even if we engage and maintain suitable relationships with an adequate
number of distributors, they may not generate revenue as quickly as we expect
them to, commit the necessary resources to effectively market and sell our
products, or ultimately succeed in selling our products.</P>
<P align=center>30 </P>
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<P align=justify><B><I>We depend on a single source for the manufacture of our
product and the loss of this third-party manufacture could harm our
business.</I></B></P>
<P align=justify>We will be dependent on a single third-party to manufacture and
supply our PoNS&#153; device. This manufacturer will also hold our inventory,
warehouse and ship our products customers as well as handle all customer service
related tasks including, order entry, order management and product warranty
responsibility. Our reliance on a single third-party manufacturer to supply us
with our PoNS&#153; device and provide such other distribution and warranty services
exposes us to risks that could delay our sales, or result in higher costs or
lost product revenues. In particular, our manufacturer could:</P>
<UL style="TEXT-ALIGN: justify">
  <LI>encounter difficulties in achieving volume production, quality control and
  quality assurance or suffer shortages of qualified personnel, which could
  result in their inability to manufacture sufficient quantities of our
  commercially available product to meet market demand, or it could experience
  similar problems that result in the manufacture of insufficient quantities of
  our product candidates; and
  <LI>fail to follow and remain in compliance with the FDA-mandated QSRs,
  compliance which is required for all medical devices, or fail to document
  their compliance to QSRs, either of which could lead to significant delays in
  the availability of materials for our product. </LI></UL>
<P align=justify>If we are unable to obtain adequate supplies of our product
that meet our specifications and quality standards, it will be difficult for us
to compete effectively. We have no supply agreements in place with our
manufacturer and it may change the terms of our future orders or choose not to
supply us with products in the future. Furthermore, if such manufacturer fails
to perform its obligations, we may be forced to purchase our product from other
third-party manufacturers, which we may not be able to do on reasonable terms or
in sufficient time, if at all. In addition, if we are required to change
manufacturers for any reason, we will be required to verify that the new
manufacturer maintains facilities and procedures that comply with quality
standards and with all applicable regulations and guidelines. The delays
associated with the verification of a new manufacturer or the re-verification of
an existing manufacturer could negatively affect our ability to produce and
distribute our product in a timely manner.</P>
<P align=justify><B><I>If and when we sell our products, we may be liable for
product liability claims and we may not carry sufficient product liability
insurance.</I></B><I> </I></P>
<P align=justify>The devices and products that we intend to develop may expose
us to potential liability from personal injury claims by end-users of the
product. We intend to carry product liability insurance to protect us against
the risk that in the future a product liability claim or product recall could
materially and adversely affect our business. Inability to obtain sufficient
insurance coverage at an acceptable cost or otherwise to protect against
potential product liability claims could prevent or inhibit the
commercialization of our intended products. We cannot assure you that if and
when we commence distribution of our product that we will be able to obtain or
maintain adequate coverage on acceptable terms, or that such insurance will
provide adequate coverage against all potential claims. Moreover, even if we
maintain adequate insurance, any successful claim could materially and adversely
affect our reputation and prospects, and divert management&#146;s time and attention.
If we are sued for any injury allegedly caused by our future products our
liability could exceed our total assets and our ability to pay the
liability.<B><I> </I></B></P>
<P align=justify><B><I>We are an &#147;emerging growth company&#148; under the Jumpstart
Our Business Startups Act of 2012, or JOBS Act, and we cannot be certain if the
reduced disclosure requirements applicable to emerging growth companies will
make our common stock less attractive to investors. </I></B></P>
<P align=center>31 </P>
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<P align=justify>We are in the process of registering under Section 12(g) of the
Securities Exchange Act of 1934, or the Exchange Act. Once our registration statement becomes
effective, we will become subject to certain reporting requirements under the
Exchange Act as an &#147;emerging growth company&#148;, as defined in the JOBS Act. As an
&#147;emerging growth company&#148;, we may take advantage of certain exemptions from
various reporting requirements that are applicable to other public companies
that are not &#147;emerging growth companies&#148; including, but not limited to, not
being required to comply with the auditor attestation requirements of section
404 of the Sarbanes-Oxley Act of 2002, reduced disclosure obligations regarding
executive compensation in our periodic reports and proxy statements, and
exemptions from the requirements of holding a nonbinding advisory vote on
executive compensation, shareholder approval of any golden parachute payments
not previously approved and presenting the relationship between executive
compensation actually paid and our financial performance. We cannot predict if
investors will find our common stock less attractive because we may rely on
these exemptions. If some investors find our common stock less attractive as a
result, there may be a less active trading market for our common stock and our
stock price may be more volatile. Additionally, we have irrevocably elected to
comply with new or revised accounting standards even though we are an emerging
growth company.</P>
<P align=justify><B><I>We will remain an &#147;emerging growth company&#148; for up to
five years after our first sale of common stock pursuant to a Securities Act of
1933, as amended, or the Securities Act, registration statement, although we
will lose that status sooner if our revenues exceed $1 billion, if we issue more
than $1 billion in non-convertible debt in a three year period, or if the market
value of our common stock that is held by non-affiliates exceeds $700 million as
of the end of our third quarter in any calendar year. </I></B></P>
<P align=justify>Our status as an &#147;emerging growth company&#148; under the JOBS Act
may make it more difficult to raise capital as and when we need it. Because of
the exemptions from various reporting requirements provided to us as an
&#147;emerging growth company&#148;, we may be less attractive to investors and it may be
difficult for us to raise additional capital as and when we need it. If we are
unable to raise additional capital as and when we need it, our financial
condition and results of operations may be materially and adversely affected.
</P>
<P align=justify><B><I>We are a small company with limited resources compared to
some of our current and potential competitors and we may not be able to compete
effectively and increase market share.</I></B></P>
<P align=justify>There is potential that we will face intense competition from
other companies, some of which can be expected to have longer operating
histories and more financial resources and manufacturing and marketing
experience than us. Increased competition by larger and better financed
competitors could materially and adversely affect our business, financial
condition and our results of operations. </P>
<P align=justify>Because of the early stage of the industry in which we intend
to operate, we expect to face additional competition from new entrants. To be
competitive, we will require a continued high level of investment in research
and development, marketing, sales and client support. We may not have sufficient
resources to maintain research and development, marketing, sales and client
support efforts on a competitive basis which could materially and adversely
affect our business, financial condition and our results of operations. </P>
<P align=justify><B><I>We will incur increased costs and become subject to
additional regulations and requirements as a result of becoming a public
company, which could lower our profits, if any, or make it more difficult to run
our business. </I></B></P>
<P align=center>32 </P>
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<P align=justify>As a public company, we will incur significant legal,
accounting and other expenses that we have not incurred as a private company,
including costs associated with public company reporting requirements. We will
incur costs associated with the rules implemented by the SEC, any OTC market our
common stock may become quoted on, and any national exchange that our common
stock may become listed on. The expenses incurred by public companies generally
for reporting and corporate governance purposes have been increasing. We expect
these rules and regulations to increase our legal and financial compliance costs
and to make some activities more time-consuming and costly, although we are
currently unable to estimate these costs with any degree of certainty. These
laws and regulations also could make it more difficult or costly for us to
obtain certain types of insurance, including director and officer liability
insurance, and we may be forced to accept reduced policy limits and coverage or
incur substantially higher costs to obtain the same or similar coverage. These
laws and regulations could also make it more difficult for us to attract and
retain qualified persons to serve on our Board of Directors, our board
committees or as our executive officers. Furthermore, if we are unable to
satisfy our obligations as a public company, we could be subject to delisting of
our common stock, fines, sanctions and other regulatory action and potentially
civil litigation. </P>
<P align=justify> <b><i>One of our officers serves only on a part-time consulting
basis, and she and other persons who work for us on a part-time consulting basis may be subject to conflicts of
interest. </i></b> </P>
<P align=justify> We have three employees, including Philippe Deschamps, our President, CEO and a director, and
Jonathan Sackier, our Chief Medical Officer. All other persons who provide services
to us do so on a part-time consulting basis. Each may devote part of his working time to
other business endeavors, including consulting relationships with other
corporate entities, and may have responsibilities to these other entities. For
example, our Chief Financial Officer works for us on a part-time consulting
basis and serves as the Assistant Manager, Corporate Finance of Baron Global
Financial Canada Ltd. Pursuant to an agreement with us, Baron Global Financial
Canada Ltd. offers consulting services to us for transaction structuring,
corporate governance and compliance issues. Because of these relationships, some
of the persons who provide services to us may be subject to conflicts of interest. Such
conflicts may include deciding how much time to devote to our affairs, as well
as what business opportunities should be presented to us. </P>
<P align=justify>Furthermore, to the extent that our agreement with Baron Global
Financial Canada Ltd. is terminated, we will lose the services of our Chief
Financial Officer. </P>
<P align=justify><B>Risks Related to Government Regulation </B></P>
<P align=justify><B><I>Before we can market and sell our products, we will be
required to obtain approval and clearance by the FDA and foreign regulatory
authorities which will take significant time and require significant research,
development, and clinical study expenditures, and ultimately may not succeed.
</I></B></P>
<P align=justify>Before we begin to label and market the PoNS&#153; device for use in
the United States, we are required to obtain clearance from the FDA under
Section 510(k) of the FD&amp;C Act, approval of a de novo reclassification
petition for our product, or approval of pre-market approval application from
the FDA, unless an exemption from pre-market review applies. We intend to
utilize the de novo classification procedures to seek marketing authorization
for the PoNS&#153; device, because there is currently no predicate cleared or
approved by the FDA for commercial distribution and no existing classification
decision by the FDA for such a device. We will also be required to comply with
costly and time-consuming compliance by foreign regulatory authorities if we
want to sell our products outside of the United States. The process of obtaining
regulatory clearances or approvals, or completing the de novo classification
process, to market a medical device can be costly and time consuming, and
we may not be able to successfully obtain pre-market reviews on a timely basis,
if at all. </P>
<P align=center>33 </P>
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<P align=justify>If the FDA requires us to go through a lengthier, more rigorous
examination for the PoNS&#153; device, introducing the product could be delayed or
canceled, which could cause our launch to be delayed. In addition, the FDA may
determine that the PoNS&#153; device requires the more costly, lengthy and uncertain
pre-market approval process. For example, if the FDA disagrees with our
determination that the de novo classification procedures are the appropriate
path to obtain marketing authorizations for the PoNS&#153; device, the FDA may
require us to submit a PMA application, which is generally more costly and
uncertain and can take from one to three years, or longer, from the time the
application is submitted to the FDA until an approval is obtained. Further, even
with respect to those future products where a PMA is not required, we cannot be
certain that we will be able to obtain 510(k) clearances with respect to those
products. </P>
<P align=justify><B><I>Obtaining FDA clearance will be costly, may result in
time-consuming delays and will subject us to ongoing compliance costs and
regulatory risk for non-compliance. </I></B></P>
<P align=justify>Obtaining FDA clearance, <I>de novo</I> down-classification, or
approval for medical devices can be expensive and uncertain, and generally takes
from several months to several years, and generally requires detailed and
comprehensive scientific and clinical data. Notwithstanding the expense, these
efforts may never result in FDA clearance. Even if we were to obtain regulatory
clearance, it may not be for the uses we believe are important or commercially
attractive, in which case we would not be permitted to market our product for
those uses. </P>
<P align=justify>The FDA can delay, limit or deny clearance or approval of a
device for many reasons, including: </P>
<UL style="TEXT-ALIGN: justify">
  <LI>we may not be able to demonstrate to the FDA's satisfaction that our
  product candidates are safe and effective, sensitive and specific diagnostic
  tests, for their intended users;
  <LI>the data from our pre-clinical studies and clinical trials may be
  insufficient to support clearance or approval, where required; and
  <LI>the manufacturing process or facilities we use may not meet applicable
  requirements. </LI></UL>
<P align=justify>In addition, the FDA may change its clearance and approval
policies, adopt additional regulations or revise existing regulations, or take
other actions which may prevent or delay approval or clearance of our products
under development or impact our ability to modify our currently approved or
cleared products on a timely basis. For example, in response to industry and
healthcare provider concerns regarding the predictability, consistency and rigor
of the 510(k) regulatory pathway, the FDA initiated an evaluation of the
program, and in January 2011, announced several proposed actions intended to
reform the review process governing the clearance of medical devices. The FDA
intends these reform actions to improve the efficiency and transparency of the
clearance process, as well as bolster patient safety. In addition, as part of
the FDASIA the U.S. Congress reauthorized the Medical Device User Fee Amendments
with various FDA performance goal commitments and enacted several &#147;Medical
Device Regulatory Improvements&#148; and miscellaneous reforms which are further
intended to clarify and improve medical device regulation both pre- and
post-approval. Any delay in, or failure to receive or maintain, clearance or
approval for our product candidates could prevent us from generating revenue
from these product candidates and adversely affect our business operations and
financial results.</P>
<P align=justify>Even if granted, a 510(k) clearance, <I>de novo</I>
down-classification, or pre-market approval for any future product would likely
place substantial restrictions on how our device is marketed or sold, and FDA
will continue to place considerable restrictions on our products and operations.
For example, the manufacture of medical devices must comply with FDA's QSR. In addition,
manufacturers must register their manufacturing facilities, list the products
with FDA, and comply with requirements relating to labeling, marketing,
complaint handling, adverse event and medical device reporting, reporting of
corrections and removals, and import and export. FDA monitors compliance with
the QSR and these other requirements through periodic inspections. If our
facilities or those of our manufacturers or suppliers are found to be in
violation of applicable laws and regulations, or if we or our manufacturers or
suppliers fail to take satisfactory corrective action in response to an adverse
inspection, the regulatory authority could take enforcement action, including
any of the following sanctions: </P>
<P align=center>34 </P>
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<UL style="TEXT-ALIGN: justify">
  <LI>untitled letters, warning letters, fines, injunctions, consent decrees and
  civil penalties;
  <LI>customer notifications of repair, replacement, refunds, detention or
  seizure of our products
  <LI>operating restrictions or partial suspension or total shutdown of
  production;
  <LI>refusing or delaying requests for 510(k) marketing clearance or pre-market
  approvals of new products or modified products;
  <LI>withdrawing 510(k) marketing clearances or pre-market approvals that have
  already been granted;
  <LI>refusing to provide Certificates for Foreign Government;
  <LI>refusing to grant export approval for our products; or
  <LI>pursuing criminal prosecution </LI></UL>
<P align=justify>Additionally, the FDA and other regulatory authorities have
broad enforcement powers. Regulatory enforcement or inquiries, or other
increased scrutiny on us, could affect the perceived safety and efficacy of our
product candidates and dissuade our customers from using our product candidates,
if and when they are authorized for marketing. </P>
<P align=justify><B><I>We expect to be required to conduct clinical trials to
support regulatory approval of some of our product candidates. We have no
experience in the clinical trials process, they may proceed more slowly than
anticipated, and we cannot be certain that our product candidates will be shown
to be safe and effective for human use.</I></B></P>
<P align=justify>In order to commercialize our product candidates in the United
States, we may be required by the FDA to submit an application for PMA for
review and approval by the FDA. A PMA application must be submitted to the FDA
if our device cannot be cleared through the 510(k) clearance process or is not
exempt from premarket review by the FDA. We could also be required to submit a
PMA application for other future product candidates. If we are required by the
FDA to submit a PMA application, the FDA will also require us to conduct
clinical trials. The FDA could also require us to provide the FDA with clinical
trial data to support some of our 510(k) premarket notifications. We will
receive approval or clearance from the FDA to commercialize products requiring a
clinical trial only if we can demonstrate to the satisfaction of the FDA,
through well-designed and properly conducted clinical trials, that our product
candidates are safe and effective and otherwise meet the appropriate standards
required for approval or clearance for specified indications.</P>
<P align=justify>Clinical trials are complex, expensive, time consuming,
uncertain and are subject to substantial and unanticipated delays. Before we may
begin clinical trials, we must submit and obtain approval for an investigational
device exemption, or IDE, that describes, among other things, the manufacture
of, and controls for, the device and a complete investigational plan. Clinical
trials generally involve a substantial number of patients in a multi-year study.
Because we do not have the experience or the infrastructure necessary to conduct
clinical trials, we will have to hire one or more contract research
organizations, or CROs, to conduct trials on our behalf. CRO contract
negotiations may be costly and time consuming and we will rely heavily on the
CRO to ensure that our trials are conducted in accordance with regulatory and
industry standards. We may encounter problems with our clinical
trials and any of those problems could cause us or the FDA to suspend those
trials, or delay the analysis of the data derived from them.</P>
<P align=center>35 </P>
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<P align=justify>A number of events or factors, including any of the following,
could delay the completion of our clinical trials in the future and negatively
impact our ability to obtain FDA approval for, and to introduce our product
candidates:</P>
<UL style="TEXT-ALIGN: justify">
  <LI>failure to obtain financing necessary to bear the cost of designing and
  conducting clinical trials;
  <LI>failure to obtain approval from the FDA or foreign regulatory authorities
  to commence investigational studies;
  <LI>conditions imposed on us by the FDA or foreign regulatory authorities
  regarding the scope or design of our clinical trials;
  <LI>failure to find a qualified CRO to conduct our clinical trials or to
  negotiate a CRO services agreement on favorable terms;
  <LI>delays in obtaining or in our maintaining required approvals from
  institutional review boards or other reviewing entities at clinical sites
  selected for participation in our clinical trials;
  <LI>insufficient supply of our product candidates or other materials necessary
  to conduct our clinical trials;
  <LI>difficulties in enrolling patients in our clinical trials;
  <LI>negative or inconclusive results from clinical trials, or results that are
  inconsistent with earlier results, that necessitate additional clinical
  studies;
  <LI>failure on the part of the CRO to conduct the clinical trial in accordance
  with regulatory requirements;
  <LI>our failure to maintain a successful relationship with the CRO or
  termination of our contractual relationship with the CRO before completion of
  the clinical trials;
  <LI>serious or unexpected side effects experienced by patients in whom our
  product candidates are implanted; or
  <LI>failure by any of our third-party contractors or investigators to comply
  with regulatory requirements or meet other contractual obligations in a timely
  manner. </LI></UL>
<P align=justify>Our clinical trials may need to be redesigned or may not be
completed on schedule, if at all. Delays in our clinical trials may result in
increased development costs for our product candidates, which could cause our
stock price to decline and limit our ability to obtain additional financing. In
addition, if one or more of our clinical trials are delayed, competitors may be
able to bring products to market before we do, and the commercial viability of
our product candidates could be significantly reduced.</P>
<P align=justify><B><I>If we are required to conduct clinical trials to obtain
FDA clearance and approval, we will be substantially dependent on third parties
to conduct clinical trials. </I></B></P>
<P align=justify>In the event we were required to conduct clinical trials to
obtain FDA clearance, we would need to rely heavily on third parties over the
course of our clinical trials, and as a result will have limited control over
the clinical investigators and limited visibility into their day-to-day
activities. Nevertheless, we would ultimately be responsible for ensuring that
each of our studies is conducted in accordance with the applicable protocol and
legal, regulatory, and scientific standards, and our reliance on third parties
does not relieve us of our regulatory responsibilities. We and these third
parties would be required to comply with current good clinical practices, or
cGCPs, which are regulations and guidelines enforced by the FDA and comparable
foreign regulatory authorities for product candidates in clinical development.
Regulatory authorities enforce these cGCPs through periodic inspections of trial
sponsors, principal investigators, and trial sites. If we or any of these third
parties fail to comply with applicable cGCP regulations, the clinical data
generated in our clinical trials may be deemed unreliable and the FDA or
comparable foreign regulatory authorities may require us to perform additional
nonclinical or clinical trials before approving our marketing applications. We cannot be certain that, upon
inspection, such regulatory authorities will determine that any of our clinical
trials comply with the cGCP regulations. In addition, our clinical trials may be
required to be conducted with a large number of test patients. Our failure or
any failure by these third parties to comply with these regulations or to
recruit a sufficient number of patients may require us to repeat clinical
trials, which would delay the regulatory approval process. Moreover, our
business may be implicated if any of these third parties violates federal or
state fraud and abuse or false claims laws and regulations or healthcare privacy
and security laws. </P>
<P align=center>36 </P>
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<P align=justify>Any third parties conducting our clinical trials are not and
will not be our employees and, except for remedies available to us under our
agreements with such third parties, we cannot control whether or not they devote
sufficient time and resources to our ongoing preclinical, clinical, and
nonclinical programs. These third parties may also have relationships with other
commercial entities, including our competitors, for whom they may also be
conducting clinical studies or other drug development activities, which could
affect their performance on our behalf. If these third parties do not
successfully carry out their contractual duties or obligations or meet expected
deadlines, if they need to be replaced, or if the quality or accuracy of the
clinical data they obtain is compromised due to the failure to adhere to our
clinical protocols or regulatory requirements or for other reasons, our clinical
trials may be extended, delayed, or terminated and we may not be able to
complete development of, obtain regulatory approval of or successfully
commercialize our product candidates. As a result, our financial results and the
commercial prospects for our product candidates would be harmed, our costs could
increase, and our ability to generate revenue could be delayed.</P>
<P align=justify>If any of our relationships terminate with these third-party
CROs, we may not be able to enter into arrangements with alternative CROs or do
so on commercially reasonable terms. Switching or adding additional CROs
involves additional cost and requires management time and focus. In addition,
there is a natural transition period when a new CRO begins work. As a result,
delays occur, which can materially impact our ability to meet our desired
clinical development timelines. Though we carefully manage our relationships
with our CROs, there can be no assurance that we will not encounter similar
challenges or delays in the future or that these delays or challenges will not
have a material adverse impact on our business, financial condition, and
prospects. </P>
<P align=justify><B><I>If we are unable to obtain a reimbursement code from the
U.S. Department of Health and Human Services so that the PoNS&#153; device is covered
under Medicare and Medicaid, this would have a negative impact on our intended
sales and would have a material adverse effect on our business, financial
condition and operating results.</I></B> </P>
<P align=justify>We plan 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 PoNS&#153; device is covered under Medicare and
Medicaid. There can be no assurance that our application will be successful, or
that we will be able to obtain a reimbursement code in a timely manner. In the
event that we do not obtain a reimbursement code for the PoNS&#153; device, our
customers would be unable to obtain reimbursement for their purchases under
private or government-sponsored insurance plans which would have a negative
impact on sales and have a material adverse effect on our business, financial
condition and operating results. </P>
<P align=justify><B><I>If hospitals and other healthcare providers are unable to
obtain coverage or adequate reimbursement for procedures performed with our
products, our product will not likely be widely used. </I></B></P>
<P align=center>37 </P>
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<P align=justify>In the United States, the commercial success of our existing
product and any future products will depend, in part, on the extent to which
governmental payors at the federal and state levels, including Medicare and
Medicaid, private health insurers and other third-party payors provide coverage
for and establish adequate reimbursement levels for procedures utilizing our
products. Hospitals and other healthcare providers that purchase our product for
treatment of their patients generally rely on third-party payors to pay for all
or part of the costs and fees associated with our products as part of a
&#147;bundled&#148; rate for the associated procedures. The existence of coverage and
adequate reimbursement for our products and the procedures performed with them
by government and private payors critical to market acceptance of our existing
and future products. Neither hospitals nor physicians are likely to use our
product and any future products if they do not receive adequate reimbursement
for the procedures utilizing our products.</P>
<P align=justify>Many private payors currently base their reimbursement policies
on the coverage decisions and payment amounts determined by the CMS, which
administers the Medicare program. Others may adopt different coverage or
reimbursement policies for procedures performed with our products, while some
governmental programs, such as Medicaid, have reimbursement policies that vary
from state to state, some of which may not pay for the procedures performed with
our products in an adequate amount, if at all. A Medicare national or local
coverage decision denying coverage for one or more of our products could result
in private and other third-party payors also denying coverage for our products.
Third-party payors also may deny reimbursement for our products if they
determine that a product used in a procedure was not medically necessary, was
not used in accordance with cost-effective treatment methods, as determined by
the third-party payor, or was used for an unapproved use. Unfavorable coverage
or reimbursement decisions by government programs or private payors underscore
the uncertainty that our products face in the market and could have a material
adverse effect on our business.</P>
<P align=justify>Many hospitals and clinics in the United States belong to group
purchasing organizations, which typically incentivize their hospital members to
make a relatively large proportion of purchases from a limited number of vendors
of similar products that have contracted to offer discounted prices. Such
contracts often include exceptions for purchasing certain innovative new
technologies, however. Accordingly, the commercial success of our products may
also depend to some extent on our ability to either negotiate favorable purchase
contracts with key group purchasing organizations and/or persuade hospitals and
clinics to purchase our product &#147;off contract.&#148;</P>
<P align=justify>The healthcare industry in the United States has experienced a
trend toward cost containment as government and private payors seek to control
healthcare costs by paying service providers lower rates. While we believe that
hospitals will be able to obtain coverage for procedures using our products, the
level of payment available to them for such procedures may change over time.
State and federal healthcare programs, such as Medicare and Medicaid, closely
regulate provider payment levels and have sought to contain, and sometimes
reduce, payment levels. Private payors frequently follow government payment
policies and are likewise interested in controlling increases in the cost of
medical care. In addition, some payors are adopting pay-for-performance programs
that differentiate payments to healthcare providers based on the achievement of
documented quality-of-care metrics, cost efficiencies, or patient outcomes.
These programs are intended to provide incentives to providers to deliver the
same or better results while consuming fewer resources. As a result of these
programs, and related payor efforts to reduce payment levels, hospitals and
other providers are seeking ways to reduce their costs, including the amounts
they pay to medical device manufacturers. We may not be able to sell our
implants profitably if third-party payors deny or discontinue coverage or reduce
their levels of payment below that which we project, or if our production costs
increase at a greater rate than payment levels. Adverse changes in payment rates
by payors to hospitals could adversely impact our ability to market and sell our
products and negatively affect our financial performance.</P>
<P align=center>38 </P>
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<P align=justify>In international markets, medical device regulatory
requirements and healthcare payment systems vary significantly from country to
country, and many countries have instituted price ceilings on specific product
lines. We cannot assure you that our products will be considered cost-effective
by international third-party payors, that reimbursement will be available or, if
available, that the third-party payors&#146; reimbursement policies will not
adversely affect our ability to sell our products profitably. Any failure to
receive regulatory or reimbursement approvals would negatively impact market
acceptance of our products in any international markets in which those approvals
are sought.</P>
<P align=justify><B>Risks Related to Our Common Stock </B></P>
<P align=justify><B><I>Our common stock does not have a well-establish trading
market in the United States. Trading of our common stock is sporadic, and the
price of our common stock may be volatile; we caution you as to the highly
illiquid nature of an investment in our shares. </I></B></P>
<P align=justify>Our shares are currently periodically quoted on the OTCQB. We have applied to list our common stock on the Nasdaq  Capital Market. However, there is no  guarantee that our listing application to the Nasdaq Capital Market will be  approved or, even if we were approved, that we will satisfy continuing listing  requirements. As a result, a
  well-establish market for our common stock may never develop in the United
States.</P>
<P align=justify>Our common stock has been listed on the CSE since June 23,
2014. Our common stock is also restricted for immediate resale in Canada
pursuant to Canadian securities laws. To date, trading on the CSE in our common
stock has been limited and sporadic. </P>
<P align=justify>Securities of microcap and small-cap companies have experienced
substantial volatility in the past, often based on factors unrelated to the
companies&#146; financial performance or prospects. We believe that trading in our
stock, if it occurs at all, will likely be subject to significant volatility
since, among other reasons, we do not have nor will we have in the foreseeable
future an active trading market in our stock. These factors include
macroeconomic developments in North America and globally and market perceptions
of the attractiveness of particular industries. Factors unrelated to our
performance that may affect the price of our common stock include the following:
the extent of analytical coverage available to investors concerning our business
may be limited if investment banks with research capabilities do not follow us,
a reduction in trading volume and general market interest in our common stock
may affect an investor&#146;s ability to trade significant numbers of shares of our
common stock; the size of our public float may limit the ability of some
institutions to invest in our common stock; and a substantial decline in the
price of shares of our common stock that persists for a significant period of
time could cause our common stock, if listed on an exchange, to be delisted from
such exchange, further reducing market liquidity. As a result of any of these
factors, the market price of our common stock at any given point in time may not
accurately reflect our long-term value. The price of our common shares may
increase or decrease in response to a number of events and factors, including:
changes in financial estimates; our acquisitions and financings; quarterly
variations in our operating results; the operating and share price performance
of other companies that investors may deem comparable; and purchase or sale of
blocks of our common stock. These factors, or any of them, may materially
adversely affect the prices of our common shares regardless of our operating
performance. We caution you as to the highly illiquid nature of an investment in
our shares. </P>
<P align=justify>The market price of our common stock is affected by many other
variables which are not directly related to our success and are, therefore, not
within our control. These include other developments that affect the breadth of
the public market for shares of our common stock and the attractiveness of
alternative investments. The effect of these and other factors on the market
price of our common stock is expected to make our common stock price volatile in
the future, which may result in losses to investors. </P>
<P align=center>39 </P>
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<P align=justify><B><I>A decline in the price of our common stock could affect
our ability to raise any required working capital and adversely impact our
operations. </I></B></P>
<P align=justify>A decline in the price of our common stock could result in a
reduction in the liquidity of our common stock and a reduction in our ability to
raise any required capital for our operations. Because our operations to date
have been principally financed through the sale of equity securities, a decline
in the price of our common stock could have an adverse effect upon our liquidity
and our continued operations. A reduction in our ability to raise equity capital
in the future may have a material adverse effect upon our business plan and
operations. If our stock price declines, we may not be able to raise additional
capital or generate funds from operations sufficient to meet our obligations.
</P>
<P align=justify><i><b>Our two major shareholders have the ability to take
shareholder action without the involvement of our other shareholders.</b></i><br>
<br>
In accordance with our governing documents, any action required to be taken at a
shareholders' meeting may be taken without a meeting if consents in writing
setting forth the action so taken are signed by the holders of our outstanding
shares having not less than the minimum number of votes that would be required
to authorize or take the action at a meeting at which all shares entitled to
vote on the action were present and voted. Currently, our two major shareholders, MPJ Healthcare, LLC and ANR,
hold approximately 50.1% of our outstanding shares of common stock and if they
both consent in writing to take a particular corporate action, they could do so
without a meeting that involves our other shareholders.<br>
<br>
<i><b>Our two major shareholders may have the ability to take shareholder action
at a shareholders' meeting even if they do not hold a majority of our
outstanding common stock.</b></i><br>
<br>
As long as our two major shareholders, MPJ Healthcare, LLC and ANR, collectively hold at least 33 1/3% of our
outstanding common stock, they may be able to effect a vote requiring
shareholder approval. In accordance with our governing documents, shareholders
holding at least five percent of all the votes entitled to be cast on a proposal
may call a special meeting to vote on the proposal. Also in accordance with our
governing documents, quorum for a shareholders' meeting is at least 33 1/3% of
our outstanding common stock entitled to vote and, where quorum is present,
shareholder action may be taken by the affirmative vote of a majority of the
shares represented at the meeting and entitled to vote. Accordingly, if our two
major shareholders call a meeting and establish quorum, they can effect
shareholder approval on a proposal unless other shareholders holding a greater
number of shares than our two major shareholders were present at the meeting,
either in person or by proxy, and vote against the proposal. There is no
guarantee that such other shareholders will be present at any such meeting or,
even if they were present at such meeting, will vote against the proposal.<br>
&nbsp;</P>
<P align=justify><B><I>We have not paid any dividends and do not foresee paying
dividends in the future. </I></B></P>
<P align=justify>We intend to retain earnings, if any, to finance the growth and
development of our business and do not intend to pay cash dividends on shares of
our common stock in the foreseeable future. The payment of future cash
dividends, if any, will be reviewed periodically by the board of directors and
will depend upon, among other things, conditions then existing including
earnings, financial condition and capital requirements, restrictions in
financing agreements, business opportunities and other factors.</P>
<p align=center>40 </p>
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<P align=justify><B><I>Our stock is a penny stock. Trading of our stock may be
restricted by the SEC&#146;s penny stock regulations which may limit a stockholder&#146;s
ability to buy and sell our stock.</I></B><B> </B></P>
<P align=justify>Our stock is a penny stock. The SEC has adopted Rule 15g-9
which generally defines &#147;penny stock&#148; to be any equity security that has a
market price (as defined) less than $5.00 per share or an exercise price of less
than $5.00 per share, subject to certain exceptions. Our securities are covered
by the penny stock rules, which impose additional sales practice requirements on
broker-dealers who sell to persons other than established customers and &#147;accredited investors&#148;. The term
&#147;accredited investor&#148; refers generally to institutions with assets in excess of
$5,000,000 or individuals with a net worth in excess of $1,000,000, not
including any equity in that person&#146;s or person&#146;s spouse&#146;s primary residence, or
annual income exceeding $200,000 or $300,000 jointly with their spouse for two
consecutive years. The penny stock rules require a broker-dealer, prior to a
transaction in a penny stock not otherwise exempt from the rules, to deliver a
standardized risk disclosure document in a form prepared by the SEC which
provides information about penny stocks and the nature and level of risks in the
penny stock market. The broker-dealer also must provide the customer with
current bid and offer quotations for the penny stock, the compensation of the
broker-dealer and its salesperson in the transaction and monthly account
statements showing the market value of each penny stock held in the customer&#146;s
account. The bid and offer quotations, and the broker-dealer and salesperson
compensation information, must be given to the customer orally or in writing
prior to effecting the transaction and must be given to the customer in writing
before or with the customer&#146;s confirmation. In addition, the penny stock rules
require that prior to a transaction in a penny stock not otherwise exempt from
these rules, the broker-dealer must make a special written determination that
the penny stock is a suitable investment for the purchaser and receive the
purchaser&#146;s written agreement to the transaction. These disclosure requirements
may have the effect of reducing the level of trading activity in the secondary
market for the stock that is subject to these penny stock rules. Consequently,
these penny stock rules may affect the ability of broker-dealers to trade our
securities. We believe that the penny stock rules discourage investor interest
in and limit the marketability of our common stock.<B> </B></P>
<P align=justify><B><I>FINRA sales practice requirements may also limit a
stockholder&#146;s ability to buy and sell our stock. </I></B></P>
<P align=justify>In addition to the &#147;penny stock&#148; rules promulgated by the SEC,
the Financial Industry Regulatory Authority, or FINRA, has adopted rules that
require that in recommending an investment to a customer, a broker-dealer must
have reasonable grounds for believing that the investment is suitable for that
customer. Prior to recommending speculative low priced securities to their
non-institutional customers, broker-dealers must make reasonable efforts to
obtain information about the customer&#146;s financial status, tax status, investment
objectives and other information. Under interpretations of these rules, FINRA
believes that there is a high probability that speculative low priced securities
will not be suitable for at least some customers. The FINRA requirements make it
more difficult for broker-dealers to recommend that their customers buy our
common stock, which may limit your ability to buy and sell our stock.<B>
</B></P>
<P align=justify><B><I>Any future sales of our equity securities will dilute the
ownership percentage of our existing stockholders and may decrease the market
price for our common stock. </I></B></P>
<P align=justify>Future sales or issuances of equity securities, including the issuance of 8,444,400 shares of our common stock underlying warrants currently exercisable, could decrease
the value of our common stock, dilute stockholders&#146; voting power and reduce
future potential earnings per share. We intend to sell additional equity
securities in future offerings (including through the sale of securities
convertible into shares of our common stock) and may issue additional equity
securities to finance our operations, development, acquisitions or other
projects. We cannot predict the size of future sales and issuances of equity
securities or the effect, if any, that future sales and issuances of equity
securities will have on the market price of our common stock. Sales or issuances
of a substantial number of equity securities, or the perception that such sales
could occur, may adversely affect prevailing market prices for our common stock.
With any additional sale or issuance of equity securities, investors will suffer
dilution of their voting power and may experience dilution in our earnings per
share. </P>
<P align=justify><B><I>We are authorized to issue an unlimited number of common
stock which could result in substantial dilution to your investment in our
shares. </I></B></P>
<P align=center>41 </P>
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<P align=justify>Our Articles of Incorporation authorize the issuance of an
unlimited number of common shares, which shares can be issued for such
consideration and on such terms and conditions as are established by our board
of directors without the approval of any of our shareholders. We may issue
additional common shares in connection with a future financing or acquisition.
The issuance of additional common shares may dilute an investor&#146;s investment in
us and reduce cash available for distribution per common share, if any dividends
are declared by the board of directors in the future.<B> </B></P>
<P align=justify>ITEM 2.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; FINANCIAL INFORMATION.</P>
<p align="justify"> SELECTED FINANCIAL DATA </p>
<p align="justify"> The operating and balance sheet data included in the  following selected financial data table have been derived from our consolidated  financial statements. &nbsp;The selected  financial data presented below should be read in conjunction with our consolidated  financial statements included elsewhere in this registration statement and with  &ldquo;Management&rsquo;s Discussion and Analysis of Financial Condition and Results of  Operations.&rdquo;
<TABLE
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    <TD align=left> </TD>
    <TD align=left width="1%"></TD>
    <TD width="23%" colSpan=4 align=center nowrap> Nine months ended </TD>
    <TD width="2%" align=center nowrap></TD>
    <TD width="1%" align=center nowrap></TD>
    <TD width="23%" colSpan=4 align=center nowrap> Years ended March 31, </TD>
  <TD align=left width="2%"></TD>
  </TR>
  <TR vAlign=top>
    <TD align=left> </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left
    width="1%"></TD>
    <TD width="23%"
    colSpan=4 align=center nowrap style="BORDER-BOTTOM: #000000 1px solid"> December 31, </TD>
    <TD
    width="2%" align=center nowrap style="BORDER-BOTTOM: #000000 1px solid"></TD>
    <TD
    width="1%" align=center nowrap style="BORDER-BOTTOM: #000000 1px solid"></TD>
    <TD
      width="10%" align=center nowrap style="BORDER-BOTTOM: #000000 1px solid"> </TD>
    <TD
    width="2%" align=center nowrap style="BORDER-BOTTOM: #000000 1px solid"></TD>
    <TD
    width="1%" align=center nowrap style="BORDER-BOTTOM: #000000 1px solid"></TD>
    <TD
      width="10%" align=center nowrap style="BORDER-BOTTOM: #000000 1px solid"> </TD>
  <TD style="BORDER-BOTTOM: #000000 1px solid" align=left
    width="2%"></TD>
  </TR>
  <TR vAlign=top>
    <TD align=left> </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left
    width="1%"></TD>
    <TD width="10%" align=center nowrap style="BORDER-BOTTOM: #000000 1px solid"> 2015    </TD>
    <TD
    width="2%" align=center nowrap style="BORDER-BOTTOM: #000000 1px solid"></TD>
    <TD
    width="1%" align=center nowrap style="BORDER-BOTTOM: #000000 1px solid"></TD>
    <TD width="10%" align=center nowrap style="BORDER-BOTTOM: #000000 1px solid"> 2014    </TD>
    <TD
    width="2%" align=center nowrap style="BORDER-BOTTOM: #000000 1px solid"></TD>
    <TD
    width="1%" align=center nowrap style="BORDER-BOTTOM: #000000 1px solid"></TD>
    <TD width="10%" align=center nowrap style="BORDER-BOTTOM: #000000 1px solid"> 2014    </TD>
    <TD
    width="2%" align=center nowrap style="BORDER-BOTTOM: #000000 1px solid"></TD>
    <TD
    width="1%" align=center nowrap style="BORDER-BOTTOM: #000000 1px solid"></TD>
    <TD width="10%" align=center nowrap style="BORDER-BOTTOM: #000000 1px solid"> 2013    </TD>
  <TD style="BORDER-BOTTOM: #000000 1px solid" align=left
    width="2%"></TD>
  </TR>
  <TR vAlign=top>
    <TD align=left bgColor=#e6efff> <B>Operating Data:</B> </TD>
    <TD align=left width="1%" bgColor=#e6efff></TD>
    <TD align=left width="10%" bgColor=#e6efff> </TD>
    <TD align=left width="2%" bgColor=#e6efff></TD>
    <TD align=left width="1%" bgColor=#e6efff></TD>
    <TD align=left width="10%" bgColor=#e6efff> </TD>
    <TD align=left width="2%" bgColor=#e6efff></TD>
    <TD align=left width="1%" bgColor=#e6efff></TD>
    <TD align=left width="10%" bgColor=#e6efff> </TD>
    <TD align=left width="2%" bgColor=#e6efff></TD>
    <TD align=left width="1%" bgColor=#e6efff></TD>
    <TD align=left width="10%" bgColor=#e6efff> </TD>
  <TD align=left width="2%" bgColor=#e6efff></TD>
  </TR>
  <TR vAlign=top>
    <TD align=left> Revenues </TD>
    <TD align=left width="1%"></TD>
    <TD align=right width="10%"> - </TD>
    <TD align=left width="2%"></TD>
    <TD align=left width="1%"></TD>
    <TD align=right width="10%"> - </TD>
    <TD align=left width="2%"></TD>
    <TD align=left width="1%"></TD>
    <TD align=right width="10%"> - </TD>
    <TD align=left width="2%"></TD>
    <TD align=left width="1%"></TD>
    <TD align=right width="10%"> - </TD>
  <TD align=left width="2%"></TD>
  </TR>
  <TR vAlign=top>
    <TD align=left bgColor=#e6efff> Operating expenses: </TD>
    <TD align=left width="1%" bgColor=#e6efff></TD>
    <TD align=left width="10%" bgColor=#e6efff> </TD>
    <TD align=left width="2%" bgColor=#e6efff></TD>
    <TD align=left width="1%" bgColor=#e6efff></TD>
    <TD align=left width="10%" bgColor=#e6efff> </TD>
    <TD align=left width="2%" bgColor=#e6efff></TD>
    <TD align=left width="1%" bgColor=#e6efff></TD>
    <TD align=left width="10%" bgColor=#e6efff> </TD>
    <TD align=left width="2%" bgColor=#e6efff></TD>
    <TD align=left width="1%" bgColor=#e6efff></TD>
    <TD align=left width="10%" bgColor=#e6efff> </TD>
  <TD align=left width="2%" bgColor=#e6efff></TD>
  </TR>
  <TR vAlign=top>
    <TD align=left> &nbsp; &nbsp; &nbsp; &nbsp; &nbsp;Direct operating </TD>
    <TD align=left width="1%"></TD>
    <TD align=right width="10%"> 2,668,529 </TD>
    <TD align=left width="2%"></TD>
    <TD align=left width="1%"></TD>
    <TD align=right width="10%"> 173,872 </TD>
    <TD align=left width="2%"></TD>
    <TD align=left width="1%"></TD>
    <TD align=right width="10%"> 171,781 </TD>
    <TD align=left width="2%"></TD>
    <TD align=left width="1%"></TD>
    <TD align=right width="10%"> 4,250,000 </TD>
  <TD align=left width="2%"></TD>
  </TR>
  <TR vAlign=top>
    <TD align=left bgColor=#e6efff> &nbsp; &nbsp; &nbsp; &nbsp; &nbsp;Selling,
      general and administrative </TD>
    <TD align=left width="1%" bgColor=#e6efff></TD>
    <TD align=right width="10%" bgColor=#e6efff> 5,780,630 </TD>
    <TD align=left width="2%" bgColor=#e6efff></TD>
    <TD align=left width="1%" bgColor=#e6efff></TD>
    <TD align=right width="10%" bgColor=#e6efff> 290,990 </TD>
    <TD align=left width="2%" bgColor=#e6efff></TD>
    <TD align=left width="1%" bgColor=#e6efff></TD>
    <TD align=right width="10%" bgColor=#e6efff> 895,503 </TD>
    <TD align=left width="2%" bgColor=#e6efff></TD>
    <TD align=left width="1%" bgColor=#e6efff></TD>
    <TD align=right width="10%" bgColor=#e6efff> 4,267,850 </TD>
  <TD align=left width="2%" bgColor=#e6efff></TD>
  </TR>
  <TR vAlign=top>
    <TD align=left> &nbsp; &nbsp; &nbsp; &nbsp; &nbsp;Depreciation and
      amortization </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left
    width="1%"></TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=right width="10%"> - </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left
    width="2%"></TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left
    width="1%"></TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=right width="10%"> - </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left
    width="2%"></TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left
    width="1%"></TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=right width="10%"> - </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left
    width="2%"></TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left
    width="1%"></TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=right width="10%"> - </TD>
  <TD style="BORDER-BOTTOM: #000000 1px solid" align=left
    width="2%"></TD>
  </TR>
  <TR vAlign=top>
    <TD align=left bgColor=#e6efff> Operating loss </TD>
    <TD align=left width="1%" bgColor=#e6efff></TD>
    <TD align=right width="10%" bgColor=#e6efff> 8,449,159 </TD>
    <TD align=left width="2%" bgColor=#e6efff></TD>
    <TD align=left width="1%" bgColor=#e6efff></TD>
    <TD align=right width="10%" bgColor=#e6efff> 464,862 </TD>
    <TD align=left width="2%" bgColor=#e6efff></TD>
    <TD align=left width="1%" bgColor=#e6efff></TD>
    <TD align=right width="10%" bgColor=#e6efff> 1,067,284 </TD>
    <TD align=left width="2%" bgColor=#e6efff></TD>
    <TD align=left width="1%" bgColor=#e6efff></TD>
    <TD align=right width="10%" bgColor=#e6efff> 8,517,850 </TD>
  <TD align=left width="2%" bgColor=#e6efff></TD>
  </TR>
  <TR vAlign=top>
    <TD align=left> Other income (expense): </TD>
    <TD align=left width="1%"></TD>
    <TD align=left width="10%"> </TD>
    <TD align=left width="2%"></TD>
    <TD align=left width="1%"></TD>
    <TD align=left width="10%"> </TD>
    <TD align=left width="2%"></TD>
    <TD align=left width="1%"></TD>
    <TD align=left width="10%"> </TD>
    <TD align=left width="2%"></TD>
    <TD align=left width="1%"></TD>
    <TD align=left width="10%"> </TD>
  <TD align=left width="2%"></TD>
  </TR>
  <TR vAlign=top>
    <TD align=left bgColor=#e6efff> &nbsp; &nbsp; &nbsp; &nbsp; &nbsp;Interest
      expense </TD>
    <TD align=left width="1%" bgColor=#e6efff></TD>
    <TD align=right width="10%" bgColor=#e6efff> (176,488 </TD>
    <TD align=left width="2%" bgColor=#e6efff> ) </TD>
    <TD align=left width="1%" bgColor=#e6efff></TD>
    <TD align=right width="10%" bgColor=#e6efff> (55 </TD>
    <TD align=left width="2%" bgColor=#e6efff> ) </TD>
    <TD align=left width="1%" bgColor=#e6efff></TD>
    <TD align=right width="10%" bgColor=#e6efff> - </TD>
    <TD align=left width="2%" bgColor=#e6efff></TD>
    <TD align=left width="1%" bgColor=#e6efff></TD>
    <TD align=right width="10%" bgColor=#e6efff> - </TD>
  <TD align=left width="2%" bgColor=#e6efff></TD>
  </TR>
  <TR vAlign=top>
    <TD align=left> &nbsp; &nbsp; &nbsp; &nbsp; &nbsp;Interest income </TD>
    <TD align=left width="1%"></TD>
    <TD align=right width="10%"> 20,036 </TD>
    <TD align=left width="2%"></TD>
    <TD align=left width="1%"></TD>
    <TD align=right width="10%"> - </TD>
    <TD align=left width="2%"></TD>
    <TD align=left width="1%"></TD>
    <TD align=right width="10%"> - </TD>
    <TD align=left width="2%"></TD>
    <TD align=left width="1%"></TD>
    <TD align=right width="10%"> - </TD>
  <TD align=left width="2%"></TD>
  </TR>
  <TR vAlign=top>
    <TD align=left
      bgColor=#e6efff> &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Change
      in fair value of derivative liability </TD>
    <TD align=left width="1%" bgColor=#e6efff></TD>
    <TD align=right width="10%" bgColor=#e6efff> (818,382 </TD>
    <TD align=left width="2%" bgColor=#e6efff> ) </TD>
    <TD align=left width="1%" bgColor=#e6efff></TD>
    <TD align=right width="10%" bgColor=#e6efff> - </TD>
    <TD align=left width="2%" bgColor=#e6efff></TD>
    <TD align=left width="1%" bgColor=#e6efff></TD>
    <TD align=right width="10%" bgColor=#e6efff> - </TD>
    <TD align=left width="2%" bgColor=#e6efff></TD>
    <TD align=left width="1%" bgColor=#e6efff></TD>
    <TD align=right width="10%" bgColor=#e6efff> - </TD>
  <TD align=left width="2%" bgColor=#e6efff></TD>
  </TR>
  <TR vAlign=top>
    <TD align=left> &nbsp; &nbsp; &nbsp; &nbsp; &nbsp;Foreign exchange gain
      (loss) </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left
    width="1%"></TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=right
      width="10%"> 267,950 </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left
    width="2%"></TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left
    width="1%"></TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=right width="10%"> - </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left
    width="2%"></TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left
    width="1%"></TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=right width="10%"> - </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left
    width="2%"></TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left
    width="1%"></TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=right width="10%"> - </TD>
  <TD style="BORDER-BOTTOM: #000000 1px solid" align=left
    width="2%"></TD>
  </TR>
  <TR vAlign=top>
    <TD align=left bgColor=#e6efff> Loss from operating before income taxes </TD>
    <TD align=left width="1%" bgColor=#e6efff></TD>
    <TD align=right width="10%" bgColor=#e6efff> 9,156,043 </TD>
    <TD align=left width="2%" bgColor=#e6efff></TD>
    <TD align=left width="1%" bgColor=#e6efff></TD>
    <TD align=right width="10%" bgColor=#e6efff> 464,917 </TD>
    <TD align=left width="2%" bgColor=#e6efff></TD>
    <TD align=left width="1%" bgColor=#e6efff></TD>
    <TD align=right width="10%" bgColor=#e6efff> 1,067,284 </TD>
    <TD align=left width="2%" bgColor=#e6efff></TD>
    <TD align=left width="1%" bgColor=#e6efff></TD>
    <TD align=right width="10%" bgColor=#e6efff> 8,517,850 </TD>
  <TD align=left width="2%" bgColor=#e6efff></TD>
  </TR>
  <TR vAlign=top>
    <TD align=left> &nbsp; &nbsp; &nbsp; &nbsp; &nbsp;Income tax expense </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left
    width="1%"></TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=right width="10%"> - </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left
    width="2%"></TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left
    width="1%"></TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=right width="10%"> - </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left
    width="2%"></TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left
    width="1%"></TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=right width="10%"> - </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left
    width="2%"></TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left
    width="1%"></TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=right width="10%"> - </TD>
  <TD style="BORDER-BOTTOM: #000000 1px solid" align=left
    width="2%"></TD>
  </TR>
  <TR vAlign=top>
    <TD align=left bgColor=#e6efff> Net loss </TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid" align=left width="1%"
    bgColor=#e6efff></TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid" align=right width="10%"
    bgColor=#e6efff> 9,156,043 </TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid" align=left width="2%"
    bgColor=#e6efff></TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid" align=left width="1%"
    bgColor=#e6efff></TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid" align=right width="10%"
    bgColor=#e6efff> 464,917 </TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid" align=left width="2%"
    bgColor=#e6efff></TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid" align=left width="1%"
    bgColor=#e6efff></TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid" align=right width="10%"
    bgColor=#e6efff> 1,067,284 </TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid" align=left width="2%"
    bgColor=#e6efff></TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid" align=left width="1%"
    bgColor=#e6efff></TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid" align=right width="10%"
    bgColor=#e6efff> 8,517,850 </TD>
  <TD style="BORDER-BOTTOM: #000000 2px solid" align=left width="2%"
    bgColor=#e6efff></TD>
  </TR>
  <TR>
    <TD>&nbsp; </TD>
    <TD width="1%"></TD>
    <TD width="10%"> </TD>
    <TD width="2%"></TD>
    <TD width="1%"></TD>
    <TD width="10%"> </TD>
    <TD width="2%"></TD>
    <TD width="1%"></TD>
    <TD width="10%"> </TD>
    <TD width="2%"></TD>
    <TD width="1%"></TD>
    <TD width="10%"> </TD>
  <TD width="2%"></TD>
  </TR>
  <TR vAlign=top>
    <TD align=left bgColor=#e6efff> <B>Balance Sheet Data</B> </TD>
    <TD align=left width="1%" bgColor=#e6efff></TD>
    <TD align=left width="10%" bgColor=#e6efff> </TD>
    <TD align=left width="2%" bgColor=#e6efff></TD>
    <TD align=left width="1%" bgColor=#e6efff></TD>
    <TD align=left width="10%" bgColor=#e6efff> </TD>
    <TD align=left width="2%" bgColor=#e6efff></TD>
    <TD align=left width="1%" bgColor=#e6efff></TD>
    <TD align=left width="10%" bgColor=#e6efff> </TD>
    <TD align=left width="2%" bgColor=#e6efff></TD>
    <TD align=left width="1%" bgColor=#e6efff></TD>
    <TD align=left width="10%" bgColor=#e6efff> </TD>
  <TD align=left width="2%" bgColor=#e6efff></TD>
  </TR>
  <TR vAlign=top>
    <TD align=left> Total assets </TD>
    <TD align=left width="1%"></TD>
    <TD align=right width="10%"> 3,366,412 </TD>
    <TD align=left width="2%"></TD>
    <TD align=left width="1%"></TD>
    <TD align=right width="10%"> 111 </TD>
    <TD align=left width="2%"></TD>
    <TD align=left width="1%"></TD>
    <TD align=right width="10%"> 315,968 </TD>
    <TD align=left width="2%"></TD>
    <TD align=left width="1%"></TD>
    <TD align=right width="10%"> 217 </TD>
  <TD align=left width="2%"></TD>
  </TR>
  <TR vAlign=top>
    <TD align=left bgColor=#e6efff> Long-term liabilities </TD>
    <TD align=left width="1%" bgColor=#e6efff></TD>
    <TD align=right width="10%" bgColor=#e6efff> 2,095,228 </TD>
    <TD align=left width="2%" bgColor=#e6efff></TD>
    <TD align=left width="1%" bgColor=#e6efff></TD>
    <TD align=right width="10%" bgColor=#e6efff> - </TD>
    <TD align=left width="2%" bgColor=#e6efff></TD>
    <TD align=left width="1%" bgColor=#e6efff></TD>
    <TD align=right width="10%" bgColor=#e6efff> - </TD>
    <TD align=left width="2%" bgColor=#e6efff></TD>
    <TD align=left width="1%" bgColor=#e6efff></TD>
    <TD align=right width="10%" bgColor=#e6efff> - </TD>
  <TD align=left width="2%" bgColor=#e6efff></TD>
  </TR></TABLE>
<P align=justify>MANAGEMENT&#146;S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS </P>
<P align=justify><B>Overview </B></P>
<P align=justify>We are a medical technology company focused on neurological
wellness. We seek to develop, license or acquire unique and non-invasive
platform technologies that amplify the brain&#146;s ability to heal itself.</P>
<P align=justify>Our mission is to develop, license and acquire non-invasive
treatments designed to help patients affected by neurological symptoms caused by
disease or trauma. Applying the principles of neuroplasticity, our patented
PoNS&#153; device induces Cranial Nerve Non Invasive Neuromodulation that utilizes
the brain&#146;s innate ability to achieve neuroplastic change to aid persons with
neurological, cognitive, sensory, and motor disorders when combined with the
rehabilitation process. </P>
<P align=justify>The following discussion and analysis of our results of
operations, financial condition and plan of operations should be read in
conjunction with (i) our unaudited condensed interim consolidated financial
statements for the three and nine months ended December 31, 2014 and 2013 and (ii)
the audited financial statements of NHC for the year ended March 31, 2014 and
for the period from January 22, 2013 (inception) to March 31, 2013 and the
period from January 22, 2013 (inception) to March 31, 2014. The
discussion below contains forward-looking statements that involve risks,
uncertainties and assumptions. Our actual results may differ materially from
those anticipated in these forward-looking statements as a result of many
factors, including, but not limited to, those set forth under &#147;Item 1. Business
&#150; Business Uncertainties and Going Concern Risk&#148; and elsewhere in this
registration statement. </P>
<P align=center>42 </P>
<HR style="PAGE-BREAK-AFTER: always" align=center width="100%" color=black
noShade SIZE=5>
<p align="justify"><b><i>Fiscal Quarter Ended December 31,  2014 Compared to the Fiscal Quarter Ended December 31, 2013 </i></b></p>
<p align="justify"><i>Nine months ended December 31, 2014</i></p>
<p align="justify"><i>Revenues</i> </p>
<p align="justify">During the nine month period ended December  31, 2014, we did not generate any revenues (December 31, 2013 - $nil).</p>
<p align="justify"><i>Operating Expenses </i> </p>
<p align="justify">Operating expenses incurred during the nine-month period
ended December 31, 2014 were $8,449,159 (nine-month period ended December 31,
2013 - $464,862). Significant changes and expenditures are outlined as follows: </p>
<ul>
  <li>
<p align="justify" style="margin-top: 0; margin-bottom: 12">Research and
development expenses for the nine-month period ended December 31, 2014 were
$2,668,529 for the nine month period ended December 31, 2014 (nine-month period
ended December 31, 2013 - $173,872). The increase was primarily due to the
continuous efforts on research and development activities of the PoNS&trade; device
especially activities relating to preparation of clinical trials which mostly
includes Ximedica's commercial development-to-supply program and the
NeuroFeedback's 12- month pilot clinical trial. It is expected that such
expenses will continue until all the clinical trials required for regulatory
clearance are complete.</p>
  </li>
  <li>
<p align="justify" style="margin-top: 0; margin-bottom: 12">Advertising,
marketing, and investor relations expenses for the nine-month period ended
December 31, 2014 were $579,507 (nine-month period ended December 31, 2013 -
$nil). The increase relates to advertising and promotion expenses and investor
relation consulting fees. We have engaged both investor relations and public
relations professionals in Canada and the US to help develop corporate material
as well as arranging and participating in conferences and road shows to increase
the public's awareness of our activities and the PoNS&trade; device. We anticipate the
level of activities to be constant.</p>
  </li>
  <li>
<p align="justify" style="margin-top: 0; margin-bottom: 12">Legal fees for the
nine-month period ended December 31, 2014 were 1,064,453 (nine-month period
ended December 31, 2013 - $9,405). The increase was primarily composed of fees
incurred for general corporate matters and the reverse takeover transaction. In
addition, our legal activity to ensure current and quality regulatory filings
has increased significantly since becoming a public company in Canada.
Furthermore, the engagement of various specialized legal counsels for the
development of our intellectual properties and the commercialization of the PoNS&trade;
device is carried out to secure our intellectual property. With the legal
counsel's assistance, inventors have been issued two important patents so that
we now have a license to practice patented techniques. We do not expect a
decrease of legal expenses as we will continue filing various patents to expand
our intellectual property base. </p>
  </li>
  <li>
<p align="justify" style="margin-top: 0; margin-bottom: 12">Wages and salaries
for the nine-month period ended December 31, 2014 were $1,253,494 (nine- month
period ended December 31, 2013 - $nil). The increase relates to employee payroll
and stock based compensation granted to management. The employment contract with
our CEO was effective on March 15, 2014, and we hired a full-time employee on
June 1, 2014. We also hired a Chief Medical Officer on December 1, 2014. As our
operations expand, we expect this expense to increase in the long-run. </p>
  </li>
  <li>
<p align="justify" style="margin-top: 0; margin-bottom: 12">General office and
administrative expenses for the nine-month period ended December 31, 2014 were
$149,637 (nine-month period ended December 31, 2013 - $5,778). The increase
mainly relates to general and administrative expenses but also includes computer
and internet expenses, telephone expenses, and rent expenses. These expenses
increased significantly as we ramped up our operations. </p>
  </li>
  <li>
<p align="justify" style="margin-top: 0; margin-bottom: 12">Meals and travel
expenses for the nine-month period ended December 31, 2014 were $209,150
(nine-month period ended December 31 2013 - $15,151). The increase is primarily
due to travel to and from various investor and medical conferences as well as
required travel for personnel to coordinate the clinical trials. As the clinical
trials continue, we anticipate the level of activities to remain the same. </p>
  </li>
  <li>
<p align="justify" style="margin-top: 0; margin-bottom: 12">Transfer agent and
regulatory fees for the nine-month period ended December 31, 2014 were $76,215
(nine-month period ended December 31, 2013 - $nil). The increase is mainly
composed of transfer agent fees, the CSE's monthly listing fees, and other
regulatory fees. These fees increased since we listed on the CSE. </p>
  </li>
  <li>
<p align="justify" style="margin-top: 0; margin-bottom: 12">Consulting fees for
the nine-month period ended December 31, 2014 were $2,336,051 (nine-month period
ended December 31, 2013 - $260,656). The increase is primarily due to the
allocation of stock based compensation totaling $2,201,708 to consulting expense
for the nine month period ended December 31, 2014. During the nine month period
ended December 31, 2014, we granted options to directors and various consultants
to provide long-term incentives for our development. We will continue utilizing
the stock options as one of the long-term incentives. </p>
  </li>
  <li>
<p align="justify" style="margin-top: 0; margin-bottom: 12">Audit and accounting
fees for the nine-month period ended December 31, 2014 were $45,938 (nine-month
period ended December 31, 2013 - $nil). The increase relates to the previous
year's financial statement audit for the purpose of becoming a publicly listed
company. As a publicly listed company in Canada and potentially becoming a
publicly listed company in the United States, we anticipate this expense to
remain constant.</p>
  </li>
  <li>
<p align="justify" style="margin-top: 0; margin-bottom: 12">Insurance expenses
for the nine-month period ended December 31, 2014 were $52,060 (nine-month
period ended December 31, 2013 - $nil). The increase relates to clinical trial
insurance and directors&#146; and officers&#146; liability insurance coverage as we became
a publicly listed company in Canada.</p>
  </li>
  <li>
<p align="justify" style="margin-top: 0; margin-bottom: 12">Professional fees
for the three-month period ended December 31, 2014 were $14,125 (nine-month
period ended December 31, 2013 - $nil). The increase relates to corporate
communications and industry research fees. </p> </li>
<P align=center>43</P>


</ul>
<HR style="PAGE-BREAK-AFTER: always" align=center width="100%" color=black
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<p align="justify"><i>Non-Operating Items </i> </p>
<p align="justify"><i>We recorded a loss of $706,884 in respect of non-operating
items during the nine-month period ended December 31, 2014 (nine-month period
ended December 31, 2013 - $55). Significant changes are outlined as follows: </i> </p>
<ul>
  <li>
<p align="justify" style="margin-top: 0; margin-bottom: 12">Interest expense for
the nine-month period ended December 31, 2014 was $176,488 for the nine-month
period ended December 31, 2014 (nine-month period ended December 31, 2014 -
$55). The increase resulted from recording non-cash interest associated with the
contingent beneficial conversion feature arising from the conversion of the
convertible debenture. </p>
  </li>
  <li>
<p align="justify" style="margin-top: 0; margin-bottom: 12">Interest income for
the nine-month period ended December 31, 2014 was $20,036 (nine-month period
ended December 31, 2013 - $nil). The increase stems from the opening of a number
of interest-bearing short-term investment accounts with our banking
institutions. We expect the interest income to decrease as we draw from the
investment accounts.</p>
  </li>
  <li>
<p align="justify" style="margin-top: 0; margin-bottom: 12">Change in fair value
of derivative liability for the nine-month period ended December 31, 2014 was
$(818,382) (nine-month period ended December 31, 2014 - $nil). The change in
fair value of derivative liability is based on the change of the remaining term
of our options granted to non-employees providing services for NHC and the
change in our stock price. The derivative liabilities do not represent cash
liabilities.</p>
  </li>
  <li>
<p align="justify" style="margin-top: 0; margin-bottom: 12">Foreign exchange
gains for the nine-month period ended December 31, 2014 were $267,950
(nine-month period ended December 31, 2013 - $nil). The gains stem from our
exchange of a large sum of Canadian dollars into U.S. dollars interest-bearing
short-term investments with our banking institutions.<i> </i> </p>
  </li>
</ul>
<p align="justify"><i>Net Loss</i></p>
<p align="justify">We recorded a net loss of $9,156,043 during the nine-month
period ended December 31, 2014 (nine-month period ended December 31, 2013 -
$464,917). The significant change in net loss for the nine months ended December
31, 2014 is the result of a lack of revenue combined with significant increases
in operating expenses and net loss in respect of non-operating items during the
period as outlined in the analysis above.</p>
<p align="justify"><i>Three months ended December 31, 2014</i></p>
<p align="justify">Operating expenses incurred during the three-month period
ended December 31, 2014 were $4,117,423 (three-month period ended December 31,
2013 - $333,597). Significant changes in expenditures for the three months ended
December 31, 2014 are the result of the changes in a number of expenditures as
outlined in the analysis above for the nine months ended December 31, 2014. </p>
<p align="justify">We recorded a gain of $634,404 in respect of non-operating
items during the three-month period ended December 31, 2014 (three-month period
ended December 31, 2013 &#150; loss of $55). Significant changes in non-operating
items for the three months ended December 31, 2014 are primarily the result of a
gain in foreign exchange due to a significant portion of NHC&#146;s liabilities being
denominated in Canadian dollars and an appreciation of the U.S. dollar resulted
in decreased liabilities and created the foreign exchange gain. </p>
<p align="justify">We recorded a net loss of $3,483,019 during the three-month
period ended December 31, 2014 (three-month period ended December 31, 2013 -
$333,652). The significant change in net loss for the three months ended
December 31, 2014 is the result of a lack of revenue combined with a significant
increase in operating expenses, partially offset by an increase in net gain in
respect of non-operating items, during the period as outlined in the analysis
above.</p>
<p align="justify"><i>Translation Adjustments</i></p>
<p align="justify">We recognized foreign exchange losses on the translation of
subsidiaries of $707,875 (December 31, 2013 &#150; $nil) for the three-month period
ended December 31, 2014 and foreign exchange loss of $395,030 on the translation
of subsidiaries for the nine-month period ended December 31, 2014 (nine-month
period ended December 31, 2013 - $nil) in other comprehensive income. Depending
on the strength of the U.S. dollar, we expect the other comprehensive income to
fluctuate accordingly. </p>
<p align="justify">During the period from incorporation  on January 22, 2013 to December 31, 2014, there were no operating revenues as  it was still in the development stage.</p>
<p align="justify">Due to us being in our early stage  of development, management foresees further increases in our expenses during  the coming year resulting from our development activities. These expenses are  contingent upon our ability to fund these projects through private placements  and other forms of financing. In the event that we do not receive the required  funding, management will review all on-going expenditures and take appropriate  actions to remedy the funding shortage.</p>
<p align="justify"><i>Working Capital</i></p>
<p align="justify">We have experienced recurring losses  since inception and, as of December 31, 2014, we have working capital of $2,156,168  (March 31, 2014 - $(267,977)) and an accumulated deficit of $18,741,177 (March  31, 2014 - $9,585,134). Until we generate a level of revenue to support our  cost structure, we expect to continue to incur substantial operating losses and  net cash outflows. While we had cash and cash equivalents of $2,906,399 as of December  31, 2014 (March 31, 2014 - $15,968), management does not believe these  resources will be sufficient to meet our operating and capital needs through  2015. </p>
<P align=center>44 </P>
<HR style="PAGE-BREAK-AFTER: always" align=center width="100%" color=black
noShade SIZE=5>
<A name=page_46></A>
<P align=justify><B><I>Fiscal Year Ended March 31, 2014 Compared to the Fiscal
Year Ended March 31, 2013</I></B> </P>
<P align=justify><I>Revenues</I> </P>
<P align=justify>During the fiscal year ended March 31, 2014 and the period from
inception to March 31, 2013, we did not generate any revenues.</P>
<P align=justify><I>Operating Expenses </I></P>
<P align=justify>Operating expenses incurred during the fiscal year ended March
31, 2014 were $1,067,284 as compared to $8,517,850 during the period from
inception to March 31, 2013. Significant changes and expenditures are outlined
as follows: </P>
<UL style="TEXT-ALIGN: justify">
  <LI>
  <P>Consulting fees were $807,385 for the fiscal year ended March 31, 2014 and
  $2,800 for the period from inception to March 31, 2013. The increase of
  $804,585 was mainly due to the expense in 2014 associated with the granting of
  options to consultants for providing services in design and manufacturing and
  strategic growth plan, which were subsequently exercised. </P>
  <LI>
  <P>Interest expenses were $1,344 for the fiscal year ended March 31, 2014 as
  compared to $Nil for the period from inception to March 31, 2013. </P></LI></UL>
<P align=center>45 </P>
<HR style="PAGE-BREAK-AFTER: always" align=center width="100%" color=black
noShade SIZE=5>
<A name=page_47></A>
<UL style="TEXT-ALIGN: justify">
  <LI>
  <P>Legal fees were $33,966 for the fiscal year ended March 31, 2014 as
  compared to $14,192 for the period from inception to March 31, 2013. The
  increase of $19,774 was mainly due to legal fees associated with patent
  applications and general corporate matters. </P>
  <LI>
  <P>Meals and entertainment expenses were $833 for the fiscal year ended March
  31, 2014 as compared to $Nil for the period from inception to March 31, 2013.
  </P>
  <LI>
  <P>Office expenses were $6,793 for the fiscal year ended March 31, 2014 as
  compared to $482 for the period from inception to March 31, 2013. The increase
  of $6,311 was mainly due to the increased number of activities of the
  operation and engagement of a part-time office assistant. </P>
  <LI>
  <P>Research and development expenses were $171,781 for the fiscal year ended
  March 31, 2014 as compared to $4,250,000 for the period from inception to
  March 31, 2014. </P>
  <LI>
  <P>Compensation expenses for shares issued for services was $Nil for the
  fiscal year ended March 31, 2014 as compared to $4,250,000 for the period from
  inception to March 31, 2013. The decrease of $4,250,000 was a result of not
  issuing any shares as compensation for services rendered during the fiscal
  year ended March 31, 2014. </P>
  <LI>
  <P>Travel expenses were $22,027 for the fiscal year ended March 31, 2014 as
  compared to $376 for the period from inception to March 31, 2013. The increase
  of $21,651 was mainly due to the required traveling of the CEO as we were
  actively seeking for external financing and interviewing external parties in
  preparation of the research and development activities. </P>
  <LI>
  <P>Wages and salaries expenses were $23,155 for the fiscal year ended March
  31, 2014 as compared to $Nil for the period from inception to March 31, 2013.
  The increase of $23,155 was due to the new employment contract with the CEO.
  </P></LI></UL>
<P align=justify><I>Net Loss </I></P>
<P align=justify>The net loss was $1,067,284 for the fiscal year ended March 31,
2014 and $8,517,850 for the period from inception to March 31, 2013. The
decrease in net loss of $7,450,566 resulted primarily from a decrease in
research and development expenses and compensation expenses for shares issued
for services, which was offset somewhat by an increase in consulting fees, legal
fees, travel expenses and wages and salaries. </P>
<P align=center>46 </P>
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<P align=justify><B>Liquidity and Capital Resources </B></P>
<p align="justify">Our financial statements have been prepared  assuming that we will continue as a going concern and, accordingly, does not  include adjustments relating to the recoverability and realization of assets  and classification of liabilities that might be necessary should we be unable  to continue in operation. </p>
<p align="justify">The following table sets out our cash and  working capital as of December 31, 2014 and March 31, 2014: </p>
<TABLE width="100%" border=0 cellPadding=0
cellSpacing=0
style="BORDER-COLOR: black; FONT-SIZE: 10pt; BORDER-COLLAPSE: collapse; ">
  <TR>
    <TD valign="bottom">&nbsp;</TD>
    <TD valign="bottom" style="BORDER-BOTTOM: #000000 1px solid">&nbsp;</TD>
    <TD align="center" valign="bottom" nowrap style="BORDER-BOTTOM: #000000 1px solid"><b>December 31, 2014</b> </TD>
    <TD align="center" valign="bottom" nowrap style="BORDER-BOTTOM: #000000 1px solid">&nbsp;</TD>
    <TD align="center" valign="bottom" nowrap style="BORDER-BOTTOM: #000000 1px solid">&nbsp;</TD>
    <TD align="center" valign="bottom" nowrap style="BORDER-BOTTOM: #000000 1px solid"><b>March 31, 2014</b> </TD>
    <TD valign="bottom" style="BORDER-BOTTOM: #000000 1px solid">&nbsp;</TD>
  </TR>
  <TR>
    <TD valign="bottom" bgcolor="#e6efff">Cash and cash equivalents </TD>
    <TD valign="bottom" bgcolor="#e6efff">$</TD>
    <TD align="right" valign="bottom" bgcolor="#e6efff">2,906,399 </TD>
    <TD valign="bottom" bgcolor="#e6efff">&nbsp;</TD>
    <TD valign="bottom" bgcolor="#e6efff">$</TD>
    <TD align="right" valign="bottom" bgcolor="#e6efff">15,968 </TD>
    <TD valign="bottom" bgcolor="#e6efff">&nbsp;</TD>
  </TR>
  <TR>
    <TD valign="bottom">Working capital (deficit) </TD>
    <TD width="1%" valign="bottom">$</TD>
    <TD width="12%" align="right" valign="bottom">2,156,168 </TD>
    <TD width="2%" valign="bottom">&nbsp;</TD>
    <TD width="1%" valign="bottom">$</TD>
    <TD width="12%" align="right" valign="bottom">(267,977</TD>
    <TD width="2%" valign="bottom">)</TD>
  </TR>
</TABLE>
<p align="justify">As of December 31, 2014, our current assets  were $3,366,412 (March 31, 2014 - $315,968), which increased mostly due to the  closing of a private placement on June 13, 2014. Current liabilities were $1,210,144  (March 31, 2014 - $583,945), which increased due to an increase in our  operations since the closing of a private placement and our acquisition of NHC.  Working capital was $2,156,168 (March 31, 2014 &ndash; ($267,977)). Our current  assets as of December 31, 2014 consisted of cash and cash equivalents of  $2,906,399 (March 31, 2014 - $15,968), which increased mostly due to the  closing of the private placement, receivables of $3,679 (March 31, 2014 -  $nil), which increased due to the opening of numerous interest-bearing  short-term investments with our banking institutions, and prepaid expenses of  $456,334 (March 31, 2014 - $300,000), which mostly include a prepayment to  Ximedica. Our current liabilities as of December 31, 2014 consisted of accounts  payable and accrued liabilities of $1,210,244 (March 31, 2014 - $215,921),  which increased due to our increased operations, and a convertible debenture  amount of $nil (March 31, 2014 - $368,024).  During the nine months ended December 31, 2014, we received an additional  $633,195 in respect of convertible debenture. Upon completion of a qualifying  transaction, the convertible debenture was settled on conversion of the debt in  exchange for 2,564,705 common shares.</p>
<p align="justify">
  As a result of our increased activity, the  accumulated deficit increased from $9,585,134 as at March 31, 2014 to  $18,741,177 as at December 31, 2014. </p>
<p align="justify">
  We currently have limited working capital and  liquid assets. Our cash and cash equivalents as of December 31, 2014 were  $2,906,399. To date we have not generated any revenue from the sales of  products or services. There are a number of conditions that we must satisfy  before we will be able to generate revenue, including but not limited to  successful completion of the design of the PoNS&trade; device, FDA clearance of the  PoNS&trade; device for treating balance disorder associated with mild to moderate TBI  and MS, manufacturing of a commercially-viable version of the PoNS&trade; device and  demonstration of effectiveness sufficient to generate commercial orders by  customers for our product. While we are currently seeking additional funding,  we do not currently have sufficient resources to accomplish any of these  conditions necessary for us to generate revenue. We will therefore require  substantial additional funds in order to continue to conduct the research and  development and regulatory clearance and approval activities necessary to bring  our product to market, to establish effective marketing and sales capabilities  and to develop other product candidates. </p>
<p align="justify">
  We will have to continue to rely on equity  and debt financing. There can be no assurance that financing, whether debt or  equity, will always be available to us in the amount required at any particular  time or for any particular period or, if available, that it can be obtained on terms  satisfactory to us. Without additional financing, we do not believe our  resources will be sufficient to meet our operating and capital needs through  2015. </p>
<p align="justify">
  <b>Statement of Cash Flows </b> </p>
<p align="justify">
  During the nine-month period ended December  31, 2014, our net cash increased by $2,890,431 (December 31, 2013 - decreased  by $106), which included net cash used in operating activities of $4,379,967  (December 31, 2013 - $26,982) stemming from our increase in operations, and net  cash provided by financing activities of $7,270,398 December 31, 2013 -  $26,876) stemming from the closing of the private placement and funds received  for the issuance of a convertible debenture. </p>
<p align="justify">
  <i>Cash Used in Operating  Activities</i> </p>
<p align="justify">
  Operating activities in the nine-month period  ended December 31, 2014 used cash of $4,379,967 (December 31, 2013 - $26,982).  This was made up of a net loss of $9,156,043 (December 31, 2013 - $464,917)  less adjustments for non-cash items such as accretion of beneficial conversion  feature of $176,488 (December 31, 2013 &ndash;  $nil), change in fair value of derivative liability of $818,382 (December 31,  2013 &ndash; $nil), stock based compensation of $3,180,155 (December 31, 2013 -  $434,228), unrealized foreign exchange of $(222,244) (December 31, 2013 -  $nil), receivables of ($2,035) (December 31, 2013 - $nil), accounts payable of  $975,694 (December 31, 2013 &ndash; $3,707) and prepaid expenses of ($150,364)  (December 31, 2013 &ndash; $nil). Receivables increased due to the opening of  numerous interest-bearing short-term investments. Payables and prepaid expenses  increased due to our increase in operations.</p>
<p align="justify">
  <i>Cash Provided by Financing Activities </i> </p>
<p align="justify">
During the nine-month period ended December  31, 2014, financing activities provided cash of $7,270,398 (December 31, 2013 -  $26,876). Financing activities during the nine-month period ended December 31,  2014, consisted of: issuance of share capital (net of share issuance costs) of  $6,637,203 (December 31, 2013 - $nil) stemming from the private placement,  loans from shareholders of $nil (December 31, 2013 - $26,876), and proceeds  from the debenture of $633,195 (December 31, 2013 - $nil). </p>
  <P align=center>47</P>
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<p align="justify">
  <b>Off Balance Sheet Arrangements</b> </p>
<p align="justify">
  To the best of management&rsquo;s knowledge, there  are no off-balance sheet arrangements that have, or are reasonably likely to  have, a current or future effect on our results of operations or financial  condition. </p>
<p align="justify"><b> Tabular Disclosure of Contractual Obligations </b></p>
<p align="justify"> As of March 31, 2014, we did not have any contractual obligations required to be disclosed by Item 303(a)(5) of Regulation S-K, and there have been no material changes outside the ordinary course of our business in the specified contractual obligations during the nine-months ended December 31, 2014. </p>
<p align="justify">
  <b>Subsequent Events</b> </p>
<p align="justify">
  On January 5, 2015, Wicab, Inc., or Wicab, filed a complaint against us, two of our  directors, Yuri Danilov and Mitch Tyler, and ANR in the U.S. District Court for  the Western District of Wisconsin. The  complaint was voluntarily dismissed without prejudice on January 14, 2015. See &ldquo;Item 8. Legal Proceedings&rdquo; for more information  regarding this complaint.</p>
<p align="justify">
  On January 27, 2015, we received a demand  letter containing allegations that it had entered into a consulting arrangement  with the complainants and breached certain of its terms, and used certain  intellectual property in the form of business and marketing plans allegedly  prepared by the complainants, and seeking damages. We believe the probability  of economic outlay for these allegations is remote.</p>
<p align="justify">
  On March 16, 2015, we granted 100,000 stock  options to a director. All options are subject to any earlier termination in  accordance with their terms. The options are exercisable at a price of CAD  $3.20, with one-third of such options vesting on the date of grant, another  one-third vesting on the 1st anniversary of the date of grant and  the final one-third vesting on the 2nd anniversary of the date of  grant. </p>
<p align="justify">
  <b>Critical Accounting Policies and Estimates</b> </p>
<p align="justify">
  Our discussion and analysis of our financial  condition and results of operations are based upon our financial statements  that have been prepared in accordance with U.S. GAAP. This preparation requires  management to make estimates and assumptions that affect the reported amounts  of assets, liabilities, revenues and expenses, and the disclosure of contingent  assets and liabilities. U.S. GAAP provides the framework from which to make  these estimates, assumption and disclosures. We choose accounting policies within  U.S. GAAP that management believes are appropriate to accurately and fairly  report our operating results and financial position in a consistent manner.  Management regularly assesses these policies in light of current and forecasted  economic conditions. Actual results could differ from those estimates made by  management. While there are a number of significant accounting policies  affecting our financial statements, we believe the critical accounting policies  involving the most complex, difficult and subjective estimates and judgments  are: valuation of non-monetary transactions, stock compensation for services,  valuation of options and valuation of income taxes. </p>
<p align="justify">
  <b>Stock-Based Compensation</b></p>
<p>We account for all of our stock-based  payments and awards under the fair value based method. We recognize our  stock-based compensation using the accelerated attribution method.</p>
<p>Stock-based payments to non-employees are measured at the fair  value of the consideration received, or the fair value of the equity  instruments issued, or liabilities incurred, whichever is more reliably  measurable. The fair value of stock-based payments to non-employees is  periodically re-measured until the counterparty performance is complete, and  any change therein is recognized over the vesting period of the award and in  the same manner as if we had paid cash instead of paying with or using equity  based instruments. The fair value of the stock-based payments to non-employees  that is fully vested and non-forfeitable as at the grant date is measured and  recognized at that date. </p>
<p>We account for the granting of share purchase options to employees  using the fair value method whereby all awards to employees will be recorded at  fair value on the date of the grant. The fair value of all share purchase options  are expensed over their vesting period with a corresponding increase to  additional capital surplus. Upon exercise of share purchase options, the  consideration paid by the option holder, together with the amount previously  recognized in additional paid-in capital is recorded as an increase to share  capital. Share purchase options granted to employees are accounted for as  liabilities when they contain conditions or other features that are indexed to  other than a market, performance or service condition. </p>
<p>We use the Black-Scholes option pricing model to calculate the  fair value of our share purchase options. Option pricing models require the  input of highly subjective assumptions, including the expected price  volatility. Changes in these assumptions can materially affect the fair value  estimate.</p>
<P align=center>48</P>
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<p><b>Derivative  Liabilities</b></p>
<p>We evaluate our financial instruments and  other contracts to determine if those contracts or embedded components of those  contracts qualify as derivatives to be separately accounted for in accordance  with ASC 815. The result of this accounting treatment is that the fair value of  the embedded derivative is marked-to-market at each balance sheet date and  recorded as a liability and the change in fair value is recorded in the  consolidated statement of loss. Upon  conversion or exercise of a derivative instrument, the instrument is marked to  fair value at the conversion date and then that fair value is reclassified to  equity.</p>
<p>The classification of derivative  instruments, including whether such instruments should be recorded as  liabilities or as equity, is re-assessed at the end of each reporting  period. Derivative instruments that  become subject to reclassification are reclassified at the fair value of the  instrument on the reclassification date.  Derivative instrument liabilities will be classified in the balance  sheet as current or non-current based on whether or not settlement of the  derivative instrument is expected within 12 months of the balance sheet date.</p>
<p>We use the  Black-Scholes option valuation model to value derivative liabilities. This model uses Level 3 inputs in the fair  value hierarchy established by ASC 820 Fair Value Measurement.</p>
<p align="justify">
    <b>Recently Issued Accounting Pronouncements</b> </p>
<p align="justify">
  In June  2014, the FASB issued ASU No. 2014-10, &ldquo;Development Stage Entities,&rdquo; or ASU  2014-10, which removes the definition of a development stage entity from the  Master Glossary of the Accounting Standards Codification, thereby removing the  financial reporting distinction between development stage entities and other  reporting entities from U.S. GAAP. In addition, the update eliminates the  requirements for development stage entities to (1) present inception-to-date  information in the statements of income, cash flows, and shareholder equity,  (2) label the financial statements as those of a development stage entity, (3)  disclose a description of the development stage activities in which the entity  is engaged, and (4) disclose in the first year in which the entity is no longer  a development stage entity that in prior years it had been in the development  stage. ASU No. 2014-10 is effective for fiscal years and interim periods  beginning after December 15, 2014, with early adoption permissible. Effective  for the six months ended September 30, 2014, we early adopted ASU 2014-10 allowing  the financial statements to be cast without the inception to date information  and without references to the development stage. </p>
<p>The amendments also clarify that  the guidance in Topic 275, <i>Risks and  Uncertainties</i>, is applicable to entities that have not commenced planned principal  operations. The central feature of the guidance disclosure requirements is that required  disclosures are limited to matters significant to a particular entity. The  disclosures focus primarily on risks and uncertainties that could significantly  affect the amounts reported in the financial statements in the near term or the near-term functioning  of the reporting entity.</p>
<p align="justify">
    <b>Financial Instruments and Other Risks </b> </p>
<p align="justify">
  We are exposed to credit risks and market  risks related to changes to interest rates and foreign currency exchange rates,  each of which could affect the value of our current assets and liabilities. We  invest our cash equivalents in fixed rate, highly liquid and highly rated  financial instruments such as guaranteed investment contracts, or GICs. At December 31, 2014, our cash and cash  equivalents were primarily held as GICs, the majority of which was denominated  in U.S. dollars. We do not believe that the results of operations or cash flows  would be affected to any significant degree by a sudden change in market interest  rates relative to our investment portfolio, due to the relative short-term  nature of the investments. We have not entered into any forward currency  contracts or other financial derivatives to hedge foreign exchange risk. We are  subject to foreign exchange rate fluctuations that could have a material effect  on our total net assets or net loss. We are exposed to interest rate cash flow  risk on our cash and cash equivalents as these instruments bear interest on  current market rates.</p>
<P align=center>49</P>
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noShade SIZE=5>
<A name=page_51></A>
<P align=justify>ITEM 3.&nbsp;&nbsp;&nbsp;&nbsp; &nbsp;PROPERTIES.</P>
<P align=justify>Our head office is located at Suite 400, 41 University Drive,
Newtown, PA 18940. We currently lease three office rooms from Regus for
approximately $3,896 per month. The lease is for one year expiring on May 31,
2015 at which time we will determine whether we should have a dedicated office
space. Currently, we do not have any other material physical properties as we
seek to contract out all the non-core functions such as research and
development, human resources and investor relations in order to maintain a low
fixed cost business model. Our registered office and registered agent is located
at CT Corporation System, 1712 Pioneer Ave., Ste. 120, Cheyenne, Wyoming 82001.
</P>
<P align=justify>ITEM 4.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; SECURITY OWNERSHIP OF
CERTAIN BENEFICIAL OWNERS AND MANAGEMENT. </P>
<P align=justify>The following table sets forth certain information concerning
the number of shares of our common stock owned beneficially as of May 1, 2015 by: (i) each person (including any group) known to us to beneficially own
more than 5% of our shares of common stock; (ii) each of our directors; (iii)
each of our named executive officers; and (iv) our executive officers and
directors as a group. To our knowledge, each holder listed possesses sole voting
and investment power with respect to the shares shown. </P>
<DIV>
<TABLE
style="BORDER-COLOR: black; FONT-SIZE: 10pt; BORDER-COLLAPSE: collapse; "
borderColor=#000000 cellSpacing=0 cellPadding=3 width="100%" border=1>

  <TR vAlign=top>
    <TD align=center><B><U>Title of class</U></B> <BR></TD>
    <TD align=center width="40%" ><B><U>Name and address of
      beneficial</U></B> <BR><B><U>owner</U></B> </TD>
    <TD align=center width="20%"><B><U>Amount and nature</U></B> <BR><B>of
      beneficial owner</B> </TD>
    <TD align=center width="20%"><B><U>Percentage of</U></B>
      <BR><B><U>class</U></B><SUP>(1)</SUP> </TD></TR>
  <TR vAlign=top>
    <TD colspan="4" align=left><I>Officers and Directors</I>    </TD>
    </TR>
  <TR vAlign=top>
    <TD align=left>Common Stock </TD>
    <TD align=left width="40%" >Marco Babini (former CEO)
      <SUP>(2)</SUP> </TD>
    <TD align=center width="20%">671,600 </TD>
    <TD align=center width="20%">1.0% </TD></TR>
  <TR vAlign=top>
    <TD align=left>Common Stock </TD>
    <TD align=left width="40%" >Philippe Deschamps </TD>
    <TD align=center width="20%"> 1,204,700<SUP>(3)</SUP> </TD>
    <TD align=center width="20%">1.8%</TD></TR>
  <TR vAlign=top>
    <TD align=left>Common Stock </TD>
    <TD align=left >Jonathan Sackier</TD>
    <TD align=center> 200,000<sup>(4)</sup> </TD>
    <TD align=center>(*)</TD>
  </TR>
  <TR vAlign=top>
    <TD align=left>Common Stock </TD>
    <TD align=left width="40%" >Savio Chiu </TD>
    <TD align=center width="20%"> 40,000<SUP>(5)</SUP> </TD>
    <TD align=center width="20%">(*) </TD></TR>
  <TR vAlign=top>
    <TD align=left>Common Stock </TD>
    <TD align=left width="40%" >Yuri Danilov </TD>
    <TD align=center width="20%"> 266,667<SUP>(6)</SUP> </TD>
    <TD align=center width="20%">(*) </TD></TR>
  <TR vAlign=top>
    <TD align=left>Common Stock </TD>
    <TD align=left width="40%" >Mitch Tyler </TD>
    <TD align=center width="20%"> 266,667<SUP>(7)</SUP> </TD>
    <TD align=center width="20%">(*) </TD></TR>
  <TR vAlign=top>
    <TD align=left>Common Stock </TD>
    <TD align=left width="40%" >Edward Straw </TD>
    <TD align=center width="20%"> 33,334<SUP>(8)</SUP> </TD>
    <TD align=center width="20%">(*) </TD></TR>
  <TR vAlign=top>
    <TD align=left>Common Stock </TD>
    <TD align=left >Joyce LaViscount</TD>
    <TD align=center> 33,334<sup>(9)</sup> </TD>
    <TD align=center>(*)</TD>
  </TR>
  <TR vAlign=top>
    <TD align=left>Common Stock </TD>
    <TD align=left width="40%" >All executive officers and
      directors as a group (8 persons) </TD>
    <TD align=center width="20%"> 2,084,702<sup>(10)</sup> </TD>
    <TD align=center width="20%">3.2% </TD>
  </TR>
  <TR vAlign=top>
    <TD colspan="4" align=left><I>Persons owning more than 5% of voting securities</I>   </TD>
    </TR></TABLE>
</DIV>
<P align=center>50 </P>
<HR style="PAGE-BREAK-AFTER: always" align=center width="100%" color=black
noShade SIZE=5>
<A name=page_52></A><BR>
<DIV>
<TABLE
style="BORDER-COLOR: black; FONT-SIZE: 10pt; BORDER-COLLAPSE: collapse; "
borderColor=#000000 cellSpacing=0 cellPadding=3 width="100%" border=1>

  <TR vAlign=top>
    <TD align=left>Common Stock <BR><BR></TD>
    <TD align=left width="40%" >MPJ Healthcare, LLC <BR>208
      Palmer Aly <BR>Newtown, PA 18940 </TD>
    <TD align=center width="20%">16,035,026<SUP>(11)</SUP> <BR>
        <BR>    </TD>
    <TD align=center width="20%">25.1% <BR><BR></TD></TR>
  <TR vAlign=top>
    <TD align=left>Common Stock <BR><BR></TD>
    <TD align=left width="40%" >Advanced NeuroRehabilitation, LLC
      <BR>510 Charmany Dr., Suite 175F <BR>Madison, WI 53719 </TD>
    <TD align=center width="20%">16,035,026<SUP>(12)</SUP> <BR>
        <BR>    </TD>
    <TD align=center width="20%">25.1% <BR><BR></TD></TR></TABLE>
</DIV>
<P align=justify>(*) indicates less than 1%. <BR>
(1) Based on 63,918,461 shares
of our common stock issued and outstanding as of
  May 1, 2015. <BR>(2) Mr.
Babini resigned as our CEO, President and a director on June 13, 2014. <BR>
(3)
This figure includes 1,200,000 stock options which are immediately exercisable or which will become exercisable within 60 days.<br>
(4) This figure  includes 200,000 stock options which are immediately exercisable or which will become exercisable within 60 days.<br>
(5) This figure includes 40,000 stock options which are immediately
  exercisable or which will become exercisable within 60 days. <br>
(6) This figure includes 266,667 stock options which are
  immediately exercisable or which will become exercisable within 60 days.<br>
(7) This figure includes 266,667 stock options which
  are immediately exercisable or which will become exercisable within 60 days. <br>
(8) This figure includes 33,334 stock options
  which are immediately exercisable or which will become exercisable within 60 days.<br>
(9)
  This figure include 33,334 stock options which are  immediately exercisable or which will become exercisable within 60 days.<br>
(10) This figure includes 2,080,002 stock
  options, which are immediately exercisable or which will become exercisable within 60 days. <BR>
  (11) Investment and voting
  decisions for the shares held by MPJ Healthcare, LLC are made by a board of
  three members, each holding one vote. The three board members are Philippe
  Deschamps, Jonathan Sackier and Montel Williams. This amount includes 12,026,270 shares held in escrow. The holder has only voting power and no investment power with respect to the escrowed shares. See &ldquo;Item 11.&nbsp;  Description of Registrant&rsquo;s Securities to be Registered&rdquo; for a  description of the escrow and release schedule. <br>
  (12) Investment and voting decisions for shares held by Advanced NeuroRehabilitation, LLC are made by Kurt Kaczmarek, as the managing member. This amount includes 12,026,270 shares held in escrow. The holder has only voting power and no investment power with respect to the escrowed shares. See &ldquo;Item 11.&nbsp;  Description of Registrant&rsquo;s Securities to be Registered&rdquo; for a  description of the escrow and release schedule. </P>
<P align=justify><B>Changes in Control</B> </P>
<P align=justify>We are unaware of any contract, or other arrangement or
provision, the operation of which may at a subsequent date result in a change of
control of our company. </P>
<P align=justify>ITEM 5.&nbsp;&nbsp;&nbsp;&nbsp; &nbsp;DIRECTORS AND EXECUTIVE
OFFICERS. </P>
<P align=justify>Our directors and executive officers and their respective ages
as of the date of May 1, 2015 are as follows: </P>
<DIV>
<TABLE
style="BORDER-COLOR: black; FONT-SIZE: 10pt; BORDER-COLLAPSE: collapse; "
borderColor=#000000 cellSpacing=0 cellPadding=3 width="100%" border=1>

  <TR vAlign=top>
    <TD align=left><B><U>Name</U></B> </TD>
    <TD align=left width="33%"><B><U>Age</U></B> </TD>
    <TD align=left width="33%"><B><U>Position Held</U></B> </TD></TR>
  <TR vAlign=top>
    <TD align=left>Philippe Deschamps </TD>
    <TD align=left width="33%">52 </TD>
    <TD align=left width="33%">CEO, President and Director </TD></TR>
  <TR vAlign=top>
    <TD align=left>Amanda Tseng </TD>
    <TD align=left width="33%">32 </TD>
    <TD align=left width="33%">CFO and Corporate Secretary </TD></TR>
  <TR vAlign=top>
    <TD align=left>Jonathan Sackier </TD>
    <TD align=left width="33%">57</TD>
    <TD align=left width="33%">Chief Medical Officer </TD></TR>
  <TR vAlign=top>
    <TD align=left>Savio Chiu </TD>
    <TD align=left width="33%">32 </TD>
    <TD align=left width="33%">Director </TD></TR>
  <TR vAlign=top>
    <TD align=left>Yuri Danilov </TD>
    <TD align=left width="33%">58</TD>
    <TD align=left width="33%">Director </TD></TR>
  <TR vAlign=top>
    <TD align=left>Mitch Tyler </TD>
    <TD align=left width="33%">62</TD>
    <TD align=left width="33%">Director </TD></TR>
  <TR vAlign=top>
    <TD align=left>Edward M. Straw </TD>
    <TD align=left width="33%">76</TD>
    <TD align=left width="33%">Director </TD></TR>
  <TR vAlign=top>
    <TD align=left>Joyce LaViscount</TD>
    <TD align=left>53</TD>
    <TD align=left>Director</TD>
  </TR>
</TABLE>
</DIV>
<P align=justify>The following describes the business experience of each of our
directors and executive officers, including other directorships held in
reporting companies: </P>
<P align=center>51 </P>
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<A name=page_53></A>
<P align=justify><B><I>Philippe Deschamps</I></B><I>, Chief Executive Officer,
President and a Director </I></P>
<P align=justify>Mr. Deschamps has served as our CEO, President and director
since June 13, 2014. Mr. Deschamps offers extensive experience in pharmaceutical
and healthcare commercialization. The depth of his expertise stems from his 27
years in the health sciences industry, half spent at Bristol Myers Squibb (NYSE:
BMY), and half on the service side as CEO of GSW Worldwide, a healthcare
advertising agency. Mr. Deschamps started at GSW Worldwide in February 1998 as a
Vice President and Account Director and became President and CEO of GSW
Worldwide from January 2002 to September 2011. Mr. Deschamps was responsible for
the GSW Worldwide operations which includes offices in the 15 major markets
around the world. He primarily consulted on global marketing, commercialization
and new business model development for pharmaceutical, device and diagnostics
companies. From 1986 to 1998, Mr. Deschamps served as director of neuroscience
marketing at Bristol Myers Squibb in Princeton, N.J., where he participated on
several pre-launch global marketing teams in the neuroscience and pain
therapeutic areas.</P>
<P align=justify>In February 2012, Mr. Deschamps joined MediMedia Health, a
marketing services company as CEO until October 2013 when he finished his
assignment. At MediMedia Health, he was responsible for the strategic
development of the organization, nurturing their clients and developing new
non-personal products and services for the healthcare industry. In October 2013,
he became CEO of NHC. </P>
<P align=justify>Mr. Deschamps has a BSc. from the University of Ottawa in
Canada which he obtained in 1985. </P>
<P align=justify><B><I>Amanda Tseng</I></B>, <I>Chief Financial Officer,
Corporate Secretary </I></P>
<P align=justify>Ms. Tseng has served as our CFO and Corporate Secretary since
June 13, 2014 and as a director from June 13, 2014 to November 17, 2014. Ms.
Tseng is a Chartered Accountant and holds a Bachelor of Commerce degree from the
University of British Columbia which she obtained in 2007. From January 2012 to
present, she serves as the Assistant Manager, Corporate Finance of Baron Global
Financial Canada Ltd. From December 2008 to December 2011, Ms. Tseng served as
the Manager of MNP LLP (Chang Lee LLP). Baron Global Financial Canada Ltd. is
the Canadian arm of Baron Group which is a merchant bank headquartered in Hong
Kong. The corporate finance of Baron Global Financial Canada offers consulting
services on transaction structuring, corporate governance and compliance issues.
Ms. Tseng&#146;s primary responsibilities are managing the investment banking
projects and assisting in executing all facets of the investment bank projects.
For managing an investment banking project, Ms. Tseng reviews the quarterly and
yearly financial statements and management discussion and analysis and interacts
with professionals such as lawyers, auditors and transfer agents to facilitate
smooth operations. MNP LLP is a chartered accountant firm where its principal
services include tax, accounting and a wide range of business advisory services.
Ms. Tseng started as a staff accountant and was promoted to a manager at MNP LLP
from March 2007 to December 2011 where her primary responsibilities were
managing audit engagements specifically in relation to public company audits.
The audit engagements ranged in various industries including mining, education,
film, gaming, technology and wholesale. These audit engagements covered
compliance in Canadian GAAP, U.S. GAAP and IFRS. In addition, Ms. Tseng was a
staff accountant of Steingarten &amp; Company LLP from March 2007 to December
2008. </P>
<P align=justify>Ms. Tseng is serving as our CFO and Corporate Secretary
pursuant to an agreement we have with Baron Group Financial Canada Ltd.
Accordingly, Ms. Tseng is not an employee and devotes approximately 50% of her
time to our business. If our agreement with Baron Group Financial Canada Ltd.
were to terminate, we would likely lose the services of Ms. Tseng. </P>
<P align=center>52 </P>
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<A name=page_54></A>
<P align=justify><B><I>Jonathan Sackier</I></B><I>, Chief Medical Officer</I>
</P>
<P align=justify>With more than 30 years in the healthcare industry, Mr. Sackier
brings to his role as Chief Medical Officer extensive experience in new
technologies and treatment methodologies. He is widely recognized as one of the
leaders of the laparoscopic surgery revolution. </P>
<P align=justify>A trained surgeon, Mr. Sackier has helped build several
companies including medical technology, research and product-design and medical
contract sales organizations. He has also collaborated with pharmaceutical and
medical device technology partners including Bristol Myers, Pfizer, Karl Storz,
Applied Medical, Stryker, Siemens, Bayer and Novartis.</P>
<P align=justify>Mr. Sackier recently served as Chairman of Adenosine
Therapeutics, which became part of Clinical Data and then Forest Laboratories.
Prior, he worked to develop and market the AESOP robot with Computer Motion and
that company went through a successful IPO. He also founded Genethics, which
patented and licensed amniotic stem cell technology </P>
<P align=justify>As a Professor at George Washington University in Washington,
DC, Mr. Sackier founded and funded the Washington Institute of Surgical
Endoscopy, a center for education, research, innovation and technology transfer.
He is now a pro bono Visiting Professor of Surgery at the Nuffield Department of
Surgical Sciences at Oxford University. </P>
<P align=justify>Mr. Sackier sits on the board of directors of Kypha, Clinvue,
and Hemoshear. He is Chairman of the Board of The Load Zero Foundation and a
Trustee of First Star and previously chaired The Larry King Cardiac Foundation
Board of Governors. He has also served as a board member of The American College
of Surgeons Foundation, The Surgical Fellowship Foundation and Rex Bionics,
winner of London&#146;s 2014 Aim Award for outstanding achievement for most
successful growth market. </P>
<P align=justify>A keen pilot, Mr. Sackier advises the Aircraft Owners &amp;
Pilots Association (AOPA) on medical issues germane to pilots and authors the
&#147;Fly Well&#148; column in AOPA Pilot magazine.</P>
<P align=justify><B><I>Savio Chiu</I></B>, <I>Director</I> </P>
<P align=justify>Mr. Chiu has served as one of our directors since June 13,
2014. From April 2011 to present, Mr. Chiu serves as the Chief Financial Officer
and Corporate Secretary of Confederation Minerals Ltd. (TSXV: CFM). From
December 2010 to present, Mr. Chiu serves as a director of Finore Mining Inc.
(CSE: FIN). From June 2009 to present, Mr. Chiu has been the Senior Manager,
Corporate Finance of Baron Global Financial Canada Ltd. From October 2010 to
August 2013, Mr. Chiu served as the Chief Financial Officer of Golden Fame
Resources Corp. (TSXV: PFE). From July 2010 to June 2011, he served as the Chief
Financial Officer of Cassius Ventures Ltd. (TSXV: CZ). </P>
<P align=justify>Mr. Chiu is a Chartered Accountant and holds a Bachelor of
Commerce degree in Accounting from the University of British Columbia which he
obtained in 2005. </P>
<P align=justify><B><I>Yuri Danilov</I></B>, <I>Director </I></P>
<P align=justify>Mr. Danilov has served as one of our directors since June 13,
2014. Mr. Danilov, a co-inventor of the PoNS&#153; device, is currently the Research
Director of the Tactile Communication and NeuroRehabilitation Laboratory,
UW-Madison (2008 to present), co-owner and Neuroscience Director of ANR (2009 to
present), and former Research Director of Wicab (2002 to 2007). He is also
currently a Senior Scientist of Biomedical Engineering Department of
University of Wisconsin-Madison (2008 to present).</P>
<P align=center>53 </P>
<HR style="PAGE-BREAK-AFTER: always" align=center width="100%" color=black
noShade SIZE=5>
<A name=page_55></A>
<P align=justify>Mr. Danilov received his Ph.D. in Neuroscience from Pavlov
Institute of Physiology, Russian Academy of Science in 1984. </P>
<P align=justify><B><I>Mitch Tyler</I></B>,<B><I> </I></B><I>Director </I></P>
<P align=justify>Mr. Tyler has served as one of our directors since June 13,
2014. Mr. Tyler is a co-inventor of the PoNS&#153; device and co-owner of ANR (2009
to present). Mr. Tyler is the Clinical Director of the Tactile Communication and
NeuroRehabilitation Laboratory, UW-Wisconsin (2008 to present), a Senior
Lecturer in Biomedical Engineering, and Clinical Director of ANR. He received
his M.S. of Bioengineering from University of California in 1985 and is
currently working on his Ph.D. in Biomedical Engineering at the University of
Wisconsin. In addition, Mr. Tyler was the Principal Investigator for Wicab from
1998 to 2006. </P>
<P align=justify><B><I>Edward M. Straw</I></B><I>, Director</I> </P>
<P align=justify>Admiral Straw has served as one of our directors since November
18, 2014. Admiral Straw is the founder and managing partner of Ospey Venture
Partners, a firm that finds investment capital and assists with business
development for start-up 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,
Capital Teas and Document Capture Technologies. He is also the Chairman of
Odyssey Logistics. Prior to joining the Estee Lauder Companies, he was Senior
Vice President, Global Manufacturing and Supply Chain Manager at the Compaq
Corporation in Houston and President of Ryder Logistics in Miami. Prior to
joining the private sector, Admiral Straw had a distinguished career in the U.S.
Navy, retiring as a three-star admiral in 1996.</P>
<p align="justify"><b><i>Joyce LaViscount</i></b>, <i>Director</i></p>
<p align="justify">Ms. LaViscount has served as one of our directors since  March 2, 2015. Ms. LaViscount currently  serves as the Chief Financial Officer of MediMedia Pharmaceutical Solutions,  the pharmaceutical division of MediMedia USA. Prior to joining MediMedia, Ms. LaViscount was Executive Director/Group  Controller North America for Aptalis Pharmaceuticals and spent more than five  years at 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.  LaViscount&rsquo;s pharmaceutical industry experience also includes more than 15  years in finance at Bristol-Myers Squibb and Pharmacia. Ms. LaViscount began her career with Ernst  &amp; Young and is a New Jersey Certified Public Accountant.</p>
<P align=justify><B>Term of Office</B> </P>
<P align=justify>Our directors are appointed for a one-year term to hold office
until the next annual general meeting of our stockholders or until they resign
or are removed from the board in accordance with our bylaws. Our officers are
appointed by our Board of Directors and hold office until they resign or are
removed from office by the Board of Directors. </P>
<P align=justify><B>Family Relationships</B> </P>
<P align=justify>There are no family relationships among our directors and
officers. </P>
<P align=justify><B>Involvement in Certain Legal Proceedings</B> </P>
<P align=justify>Except as disclosed in this registration statement, during the
past ten years none of the following events have occurred with respect to any of
our directors or executive officers: </P>
<P style="MARGIN-LEFT: 5%"
align=justify>1.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; A petition under the
Federal bankruptcy laws or any state insolvency law was filed by or against, or
a receiver, fiscal agent or similar officer was appointed by a court for the
business or property of such person, or any partnership in which he was a
general partner at or within two years before the time of such filing, or any
corporation or business association of which he was an executive officer at or
within two years before the time of such filing; </P>
<P align=center>54 </P>
<HR style="PAGE-BREAK-AFTER: always" align=center width="100%" color=black
noShade SIZE=5>
<A name=page_56></A>
<P style="MARGIN-LEFT: 5%"
align=justify>2.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Such person was
convicted in a criminal proceeding or is a named subject of a pending criminal
proceeding (excluding traffic violations and other minor offenses); </P>
<P style="MARGIN-LEFT: 5%"
align=justify>3.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Such person was the
subject of any order, judgment, or decree, not subsequently reversed, suspended
or vacated, of any court of competent jurisdiction, permanently or temporarily
enjoining him from, or otherwise limiting, the following activities: </P>
<P style="MARGIN-LEFT: 10%"
align=justify>i.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Acting as
a futures commission merchant, introducing broker, commodity trading advisor,
commodity pool operator, floor broker, leverage transaction merchant, any other
person regulated by the Commodity Futures Trading Commission, or an associated
person of any of the foregoing, or as an investment adviser, underwriter, broker
or dealer in securities, or as an affiliated person, director or employee of any
investment company, bank, savings and loan association or insurance company, or
engaging in or continuing any conduct or practice in connection with such
activity; </P>
<P style="MARGIN-LEFT: 10%"
align=justify>ii.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; &nbsp;Engaging in
any type of business practice; or </P>
<P style="MARGIN-LEFT: 10%"
align=justify>iii.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Engaging in any
activity in connection with the purchase or sale of any security or commodity or
in connection with any violation of Federal or State securities laws or Federal
commodities laws; </P>
<P style="MARGIN-LEFT: 5%"
align=justify>4.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Such person was the
subject of any order, judgment or decree, not subsequently reversed, suspended
or vacated, of any Federal or State authority barring, suspending or otherwise
limiting for more than 60 days the right of such person to engage in any
activity described in paragraph (3)(i) above, or to be associated with persons
engaged in any such activity; </P>
<P style="MARGIN-LEFT: 5%"
align=justify>5.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Such person was found
by a court of competent jurisdiction in a civil action or by the Commission to
have violated any Federal or State securities law, and the judgment in such
civil action or finding by the Commission has not been subsequently reversed,
suspended, or vacated; </P>
<P style="MARGIN-LEFT: 5%"
align=justify>6.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Such person was found
by a court of competent jurisdiction in a civil action or by the Commodity
Futures Trading Commission to have violated any Federal commodities law, and the
judgment in such civil action or finding by the Commodity Futures Trading
Commission has not been subsequently reversed, suspended or vacated; </P>
<P style="MARGIN-LEFT: 5%"
align=justify>7.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Such person was the
subject of, or a party to, any Federal or State judicial or administrative
order, judgment, decree, or finding, not subsequently reversed, suspended or
vacated, relating to an alleged violation of: </P>
<P style="MARGIN-LEFT: 10%"
align=justify>i.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Any
Federal or State securities or commodities law or regulation; or </P>
<P style="MARGIN-LEFT: 10%"
align=justify>ii.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Any law or
regulation respecting financial institutions or insurance companies including,
but not limited to, a temporary or permanent injunction, order of disgorgement
or restitution, civil money penalty or temporary or permanent cease-and-desist
order, or removal or prohibition order; or </P>
<P style="MARGIN-LEFT: 10%"
align=justify>iii.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Any law or
regulation prohibiting mail or wire fraud or fraud in connection with any
business entity; or </P>
<P style="MARGIN-LEFT: 5%"
align=justify>8.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Such person was the
subject of, or a party to, any sanction or order, not subsequently reversed,
suspended or vacated, of any self-regulatory organization (as defined in Section
3(a)(26) of the Exchange Act), any
registered entity (as defined in Section 1(a)(29) of the Commodity Exchange
Act), or any equivalent exchange, association, entity or organization that has
disciplinary authority over its members or persons associated with a member.</P>
<P align=center>55 </P>
<HR style="PAGE-BREAK-AFTER: always" align=center width="100%" color=black
noShade SIZE=5>
<A name=page_57></A>
<P align=justify>ITEM 6.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; EXECUTIVE
COMPENSATION.</P>
<P align=justify>During  the fiscal year ended March 31, 2015, our named executive officers consisted of  Marco Babini and Philippe Deschamps, each of whom served as our principal  executive officer during a portion of the fiscal year, and Jonathan Sackier,  our Chief Medical Officer. Mr. Babini  served as our principal executive officer until June 13, 2014, at which time  Mr. Deschamps became our principal executive officer.</P>

<P align=center><B>Summary Compensation Table </B></P>
<DIV>
<TABLE
style="BORDER-COLOR: black; FONT-SIZE: 10pt; BORDER-COLLAPSE: collapse; "
cellSpacing=0 cellPadding=0 width="100%" border=0>

  <TR vAlign=top>
    <TD align=center nowrap><B>Name and </B></TD>
    <TD width="2%" align=left nowrap  >&nbsp;</TD>
    <TD width="6%" align=center nowrap >&nbsp; </TD>
    <TD width="2%" align=center nowrap  >&nbsp;</TD>
    <TD width="17%" align=center nowrap>&nbsp; </TD>
    <TD width="2%" align=center nowrap  >&nbsp;</TD>
    <TD width="17%" align=center nowrap>&nbsp; </TD>
    <TD width="2%" align=center nowrap  >&nbsp;</TD>
    <TD width="17%" align=center nowrap>&nbsp; </TD>
    <TD width="2%" align=center nowrap  >&nbsp;</TD>
    <TD width="17%" align=center nowrap>&nbsp; </TD>
  </TR>
  <TR vAlign=top>
    <TD align=center nowrap><B>principal </B></TD>
    <TD width="2%" align=left nowrap  >&nbsp;</TD>
    <TD width="6%" align=center nowrap >&nbsp; </TD>
    <TD width="2%" align=center nowrap  >&nbsp;</TD>
    <TD width="17%" align=center nowrap>&nbsp; </TD>
    <TD width="2%" align=center nowrap  >&nbsp;</TD>
    <TD width="17%" align=center nowrap>&nbsp; </TD>
    <TD width="2%" align=center nowrap  >&nbsp;</TD>
    <TD width="17%" align=center nowrap><B>All other </B></TD>
    <TD width="2%" align=center nowrap  >&nbsp;</TD>
    <TD width="17%" align=center nowrap>&nbsp; </TD>
  </TR>
  <TR vAlign=top>
    <TD align=center nowrap style="BORDER-BOTTOM: #000000 2px solid"><B>position
    </B></TD>
    <TD width="2%" align=center nowrap  >&nbsp;</TD>
    <TD width="6%" align=center nowrap style="BORDER-BOTTOM: #000000 2px solid"
    ><B>Year </B></TD>
    <TD width="2%" align=center nowrap  >&nbsp;</TD>
    <TD
      width="17%" align=center nowrap style="BORDER-BOTTOM: #000000 2px solid"><B>Salary ($) </B></TD>
    <TD width="2%" align=center nowrap  >&nbsp;</TD>
    <TD
      width="17%" align=center nowrap style="BORDER-BOTTOM: #000000 2px solid"><B>Option awards ($) </B></TD>
    <TD width="2%" align=center nowrap  >&nbsp;</TD>
    <TD
      width="17%" align=center nowrap style="BORDER-BOTTOM: #000000 2px solid"><B>compensation ($) </B></TD>
    <TD width="2%" align=center nowrap  >&nbsp;</TD>
    <TD
      width="17%" align=center nowrap style="BORDER-BOTTOM: #000000 2px solid"><B>Total ($) </B></TD>
  </TR>
  <TR>
    <TD>&nbsp; </TD>
    <TD width="2%"  >&nbsp;</TD>
    <TD align=center width="6%" >&nbsp; </TD>
    <TD align=center width="2%"  >&nbsp;</TD>
    <TD align=center width="17%">&nbsp; </TD>
    <TD align=center width="2%"  >&nbsp;</TD>
    <TD align=center width="17%">&nbsp; </TD>
    <TD align=center width="2%"  >&nbsp;</TD>
    <TD align=center width="17%">&nbsp; </TD>
    <TD align=center width="2%"  >&nbsp;</TD>
    <TD align=center width="17%">&nbsp; </TD></TR>
  <TR vAlign=top>
    <TD align=left nowrap bgColor=#e6efff>Marco Babini </TD>
    <TD align=center width="2%"  bgColor=#e6efff
    >&nbsp;</TD>
    <TD align=center width="6%" bgColor=#e6efff >2015 </TD>
    <TD align=center width="2%"  bgColor=#e6efff
    >&nbsp;</TD>
    <TD align=center width="17%" bgColor=#e6efff>6,607<SUP>(1) </SUP></TD>
    <TD align=center width="2%"  bgColor=#e6efff
    >&nbsp;</TD>
    <TD align=center width="17%" bgColor=#e6efff>- </TD>
    <TD align=center width="2%"  bgColor=#e6efff
    >&nbsp;</TD>
    <TD align=center width="17%" bgColor=#e6efff>- </TD>
    <TD align=center width="2%"  bgColor=#e6efff
    >&nbsp;</TD>
    <TD align=center width="17%" bgColor=#e6efff>6,607 </TD></TR>

  <TR vAlign=top>
    <TD align=left nowrap bgColor=#e6efff><I>Chief Executive </I><I>Officer </I></TD>
    <TD align=left width="2%"  bgColor=#e6efff
    >&nbsp;</TD>
    <TD align=center width="6%" bgColor=#e6efff ></TD>
    <TD align=center width="2%"  bgColor=#e6efff
    >&nbsp;</TD>
    <TD align=center width="17%" bgColor=#e6efff></TD>
    <TD align=center width="2%"  bgColor=#e6efff
    >&nbsp;</TD>
    <TD align=center width="17%" bgColor=#e6efff></TD>
    <TD align=center width="2%"  bgColor=#e6efff
    >&nbsp;</TD>
    <TD align=center width="17%" bgColor=#e6efff></TD>
    <TD align=center width="2%"  bgColor=#e6efff
    >&nbsp;</TD>
    <TD align=center width="17%" bgColor=#e6efff></TD></TR>
  <TR>
    <TD nowrap>&nbsp; </TD>
    <TD width="2%"  >&nbsp;</TD>
    <TD align=center width="6%" >&nbsp; </TD>
    <TD align=center width="2%"  >&nbsp;</TD>
    <TD align=center width="17%">&nbsp; </TD>
    <TD align=center width="2%"  >&nbsp;</TD>
    <TD align=center width="17%">&nbsp; </TD>
    <TD align=center width="2%"  >&nbsp;</TD>
    <TD align=center width="17%">&nbsp; </TD>
    <TD align=center width="2%"  >&nbsp;</TD>
    <TD align=center width="17%">&nbsp; </TD></TR>
  <TR vAlign=top>
    <TD align=left nowrap bgColor=#e6efff>Philippe Deschamps </TD>
    <TD align=center width="2%"  bgColor=#e6efff
    >&nbsp;</TD>
    <TD align=center width="6%" bgColor=#e6efff >2015 </TD>
    <TD align=center width="2%"  bgColor=#e6efff
    >&nbsp;</TD>
    <TD align=center width="17%" bgColor=#e6efff>360,417 </TD>
    <TD align=center width="2%"  bgColor=#e6efff
    >&nbsp;</TD>
    <TD align=center width="17%" bgColor=#e6efff>664,376<SUP>(2) </SUP></TD>
    <TD align=center width="2%"  bgColor=#e6efff
    >&nbsp;</TD>
    <TD align=center width="17%" bgColor=#e6efff>5,000 </TD>
    <TD align=center width="2%"  bgColor=#e6efff
    >&nbsp;</TD>
    <TD align=center width="17%" bgColor=#e6efff>1,029,793 </TD></TR>

  <TR vAlign=top>
    <TD align=left nowrap bgColor=#e6efff><I>Chief Executive </I><I>Officer </I></TD>
    <TD align=left width="2%"  bgColor=#e6efff
    >&nbsp;</TD>
    <TD align=center width="6%" bgColor=#e6efff ></TD>
    <TD align=center width="2%"  bgColor=#e6efff
    >&nbsp;</TD>
    <TD align=center width="17%" bgColor=#e6efff></TD>
    <TD align=center width="2%"  bgColor=#e6efff
    >&nbsp;</TD>
    <TD align=center width="17%" bgColor=#e6efff></TD>
    <TD align=center width="2%"  bgColor=#e6efff
    >&nbsp;</TD>
    <TD align=center width="17%" bgColor=#e6efff></TD>
    <TD align=center width="2%"  bgColor=#e6efff
    >&nbsp;</TD>
    <TD align=center width="17%" bgColor=#e6efff></TD></TR>
  <TR>
    <TD nowrap>&nbsp; </TD>
    <TD width="2%"  >&nbsp;</TD>
    <TD align=center width="6%" >&nbsp; </TD>
    <TD align=center width="2%"  >&nbsp;</TD>
    <TD align=center width="17%">&nbsp; </TD>
    <TD align=center width="2%"  >&nbsp;</TD>
    <TD align=center width="17%">&nbsp; </TD>
    <TD align=center width="2%"  >&nbsp;</TD>
    <TD align=center width="17%">&nbsp; </TD>
    <TD align=center width="2%"  >&nbsp;</TD>
    <TD align=center width="17%">&nbsp; </TD></TR>
  <TR vAlign=top>
    <TD align=left nowrap bgColor=#e6efff>Jonathan Sackier </TD>
    <TD align=center width="2%"  bgColor=#e6efff
    >&nbsp;</TD>
    <TD align=center width="6%" bgColor=#e6efff >2015 </TD>
    <TD align=center width="2%"  bgColor=#e6efff
    >&nbsp;</TD>
    <TD align=center width="17%" bgColor=#e6efff>100,000 </TD>
    <TD align=center width="2%"  bgColor=#e6efff
    >&nbsp;</TD>
    <TD align=center width="17%" bgColor=#e6efff>826,522<SUP>(3) </SUP></TD>
    <TD align=center width="2%"  bgColor=#e6efff
    >&nbsp;</TD>
    <TD align=center width="17%" bgColor=#e6efff>- </TD>
    <TD align=center width="2%"  bgColor=#e6efff
    >&nbsp;</TD>
    <TD align=center width="17%" bgColor=#e6efff>926,522 </TD></TR>

  <TR vAlign=top>
    <TD align=left nowrap bgColor=#e6efff><I>Chief Medical </I><I>Officer </I></TD>
    <TD align=left width="2%"  bgColor=#e6efff
    >&nbsp;</TD>
    <TD align=center width="6%" bgColor=#e6efff ></TD>
    <TD align=center width="2%"  bgColor=#e6efff
    >&nbsp;</TD>
    <TD align=center width="17%" bgColor=#e6efff></TD>
    <TD align=center width="2%"  bgColor=#e6efff
    >&nbsp;</TD>
    <TD align=center width="17%" bgColor=#e6efff></TD>
    <TD align=center width="2%"  bgColor=#e6efff
    >&nbsp;</TD>
    <TD align=center width="17%" bgColor=#e6efff></TD>
    <TD align=center width="2%"  bgColor=#e6efff
    >&nbsp;</TD>
    <TD align=center width="17%"
bgColor=#e6efff></TD></TR></TABLE>
</DIV><BR>
<TABLE
style="BORDER-COLOR: black; FONT-SIZE: 10pt; BORDER-COLLAPSE: collapse; "
cellSpacing=0 cellPadding=0 width="100%" border=0 BCLLIST>

  <TR>
    <TD vAlign=top width="5%">(1) </TD>
    <TD>
      <P align=justify>The salary was denominated in Canadian dollars and
      converted into U.S. dollars using the average Bank of Canada nominal noon
      exchange rate between April 1, 2014 and March 31, 2015 of CAD$1.00 =
      USD$0.8809.</P></TD></TR>
  <TR>
    <TD vAlign=top width="5%">(2) </TD>
    <TD>
      <P align=justify>The grant date fair value was denominated in Canadian
      dollars and converted into U.S. Dollars using the Bank of Canada nominal
      noon exchange rate on June 19, 2014 (the grant date) of CAD$1.00 =
      USD$0.9235.</P></TD></TR>
  <TR>
    <TD vAlign=top width="5%">(3) </TD>
    <TD>
      <P align=justify>The grant date fair value was denominated in Canadian
      dollars and converted into U.S. dollars using the Bank of Canada nominal
      noon exchange rate on December 8, 2014 (the grant date) of CAD$1.00 =
      USD$0.8717.</P></TD></TR></TABLE>
<P align=justify><B>Narrative Disclosure to Summary Compensation Table</B></P>
<P align=justify><i>Employment Agreement with Philippe Deschamps</i></P>
<P align=justify>On June 13, 2014, we entered into an employment agreement
  with Philippe Deschamps to serve as our President and CEO. This employment
  agreement was amended on September 1, 2014. Pursuant to the employment
  agreement, Mr. Deschamps will receive a base salary at an annualized rate of
  $250,000 until investments reach a level of $5 million, or the Financing
  Threshold, and after such Financing Threshold is met, his base salary will
  increase to $400,000 until the end of the employment term, which is at-will. In
  addition to Mr. Deschamps&#146; base salary, he shall have the opportunity to receive
  a target annual bonus of 30% of the base salary, conditional upon, and subject
  to upward or downward adjustment based upon, achievements and individual goals
  to be established in good faith by the Board of Directors and Mr. Deschamps,
  which goals have not yet been established. If Mr. Deschamps is
  terminated without cause or if Mr. Deschamps resigns for good reason, we shall
  pay Mr. Deschamps an aggregate amount equal to the sum of his base salary and
  the earned portion of the annual bonus paid for the year preceding the year of
  his termination of which such amount is to be paid in equal monthly installments
  during the twelve month period following such termination of employment. </P>
<P align=center>56 </P>
<HR style="PAGE-BREAK-AFTER: always" align=center width="100%" color=black
noShade SIZE=5>
<A name=page_58></A>
<p align="justify"><i>Employment  Agreement with Jonathan Sackier</i> </p>
<p align="justify">On  December 1, 2014, we entered into an employment agreement with Jonathan Sackier  to serve as our Chief Medical Officer.  Pursuant to the employment agreement, Mr. Sackier will receive a base  salary at an annualized rate of $300,000 for his employment term, which is  at-will. In addition to Mr. Sackier&rsquo;s  base salary, he shall have the opportunity to receive a target annual bonus of  25% of the base salary, conditional upon, and subject to upward or downward adjustment  based on upon, achievements and individual goals to be established in good faith  by our CEO and Mr. Sackier, which goals have not yet been established. If Mr. Sackier is terminated without cause or  if Mr. Sackier resigns for good reason, we will pay Mr. Sackier an aggregate  amount equal to the sum of his base salary and the earned portion of the annual  bonus paid for the year of his termination of which such amount is to be paid  in equal monthly installments during the twelve month period following such  termination of employment.</p>
<p align="justify"><i>Option Grants  during Fiscal Year 2015<u></u></i></p>
<p align="justify">During  the fiscal year ended March 31, 2015, we granted 1,800,000 options and 400,000  options to Philippe Deschamps and Jonathan Sackier, respectively. The grants were made pursuant to the 2014  Stock Incentive Plan, or the 2014 Plan, which is further described below. One-third of Mr. Deschamps&rsquo;s options vested  upon grant, and one-third will vest on each of the first and second  anniversaries of the grant date. Mr.  Deschamps&rsquo;s options have an exercise price of CAD$0.60 and expire on June 18,  2019. One-quarter of Mr. Sackier&rsquo;s  options vested upon grant, and one-quarter will vest every six months from the  grant date. Mr. Sackier&rsquo;s options have  an exercise price of CAD$2.96 and expire on December 8, 2019.</p>
<P align=justify><B>Management Contract with  Baron Group</B></P>
<P align=justify>Effective July 1, 2014, Baron Group Financial Canada Ltd. has
been engaged as an advisor to provide corporate advisory and CFO services for a
period of 12 months ending on July 1, 2015. The corporate advisory services will
include advising on corporate governance, assisting in compliance with the
standards and policies of stock exchanges and regulators, advising on continuous
disclosure requirements, assisting in compilation of financial statements,
liaising with legal counsel, auditors and transfer agent, and assisting/advising
on corporate finance related matters. The CFO services will be provided by
Amanda Tseng, who is an employee of Baron Group Financial Canada Ltd. During the
duration of the agreement, each party may terminate the agreement by providing
the other party with 60 days written notice. Once the 12 month period has
passed, a renewal contract is required to be entered into between the parties in
order to continue the relationship. Baron Group Financial Canada Ltd. will
receive CAD$12,500 per month for the services provided. </P>
<p align="justify"><b>June 2014 Stock  Incentive Plan</b> </p>
<p align="justify">On  June 18, 2014, our Board of Directors authorized and approved the adoption of  the 2014 Plan, effective June 18, 2014, under which an aggregate of 12,108,016  shares of our common stock may be issued. The purpose of the 2014 Plan is to enhance  our long-term stockholder value by offering opportunities to our directors,  officers, employees and eligible consultants to acquire and maintain stock  ownership in order to give these persons the opportunity to participate in our  growth and success, and to encourage them to remain in our service. Pursuant to  the terms of the 2014 Plan, we are authorized to grant stock options, as well  as awards of stock appreciation rights, restricted stock, unrestricted shares,  restricted stock units and deferred stock units. </p>
<p align="justify">The  foregoing summary of the 2014 Plan is not complete and is qualified in its  entirety by reference to the 2014 Plan, a copy of which is filed herewith as  Exhibit 10.1.</p>

<P align=center><B>Outstanding Equity Awards at Fiscal Year-End </B></P>
<DIV>
<TABLE
style="BORDER-COLOR: black; FONT-SIZE: 10pt; BORDER-COLLAPSE: collapse; "
cellSpacing=0 cellPadding=0 width="100%" border=0>

  <TR vAlign=top>
    <TD align=left>&nbsp; </TD>
    <TD align=center width="2%"  >&nbsp;</TD>
    <TD width="14%" align=center nowrap><B>Number of </B></TD>
    <TD width="2%" align=center nowrap  >&nbsp;</TD>
    <TD width="14%" align=center nowrap><B>Number of </B></TD>
    <TD width="2%" align=center nowrap  >&nbsp;</TD>
    <TD width="14%" align=center nowrap>&nbsp; </TD>
    <TD width="2%" align=center nowrap  >&nbsp;</TD>
    <TD width="14%" align=center nowrap>&nbsp; </TD>
  </TR>
  <TR vAlign=top>
    <TD align=left>&nbsp; </TD>
    <TD align=center width="2%"  >&nbsp;</TD>
    <TD width="14%" align=center nowrap><B>Securities </B></TD>
    <TD width="2%" align=center nowrap  >&nbsp;</TD>
    <TD width="14%" align=center nowrap><B>Securities </B></TD>
    <TD width="2%" align=center nowrap  >&nbsp;</TD>
    <TD width="14%" align=center nowrap>&nbsp; </TD>
    <TD width="2%" align=center nowrap  >&nbsp;</TD>
    <TD width="14%" align=center nowrap>&nbsp; </TD>
  </TR>
  <TR vAlign=top>
    <TD align=left>&nbsp; </TD>
    <TD align=center width="2%"  >&nbsp;</TD>
    <TD width="14%" align=center nowrap><B>Underlying </B></TD>
    <TD width="2%" align=center nowrap  >&nbsp;</TD>
    <TD width="14%" align=center nowrap><B>Underlying </B></TD>
    <TD width="2%" align=center nowrap  >&nbsp;</TD>
    <TD width="14%" align=center nowrap>&nbsp; </TD>
    <TD width="2%" align=center nowrap  >&nbsp;</TD>
    <TD width="14%" align=center nowrap>&nbsp; </TD>
  </TR>
  <TR vAlign=top>
    <TD align=left>&nbsp; </TD>
    <TD align=center width="2%"  >&nbsp;</TD>
    <TD width="14%" align=center nowrap><B>Unexercised </B></TD>
    <TD width="2%" align=center nowrap  >&nbsp;</TD>
    <TD width="14%" align=center nowrap><B>Unexercised </B></TD>
    <TD width="2%" align=center nowrap  >&nbsp;</TD>
    <TD width="14%" align=center nowrap>&nbsp; </TD>
    <TD width="2%" align=center nowrap  >&nbsp;</TD>
    <TD width="14%" align=center nowrap>&nbsp; </TD>
  </TR>
  <TR vAlign=top>
    <TD align=left>&nbsp; </TD>
    <TD align=center width="2%"  >&nbsp;</TD>
    <TD width="14%" align=center nowrap><B>Options </B></TD>
    <TD width="2%" align=center nowrap  >&nbsp;</TD>
    <TD width="14%" align=center nowrap><B>Options </B></TD>
    <TD width="2%" align=center nowrap  >&nbsp;</TD>
    <TD width="14%" align=center nowrap><B>Option </B></TD>
    <TD width="2%" align=center nowrap  >&nbsp;</TD>
    <TD width="14%" align=center nowrap>&nbsp; </TD>
  </TR>
  <TR vAlign=top>
    <TD align=left>&nbsp; </TD>
    <TD align=center width="2%"  >&nbsp;</TD>
    <TD width="14%" align=center nowrap><B>(#) </B></TD>
    <TD width="2%" align=center nowrap  >&nbsp;</TD>
    <TD width="14%" align=center nowrap><B>(#) </B></TD>
    <TD width="2%" align=center nowrap  >&nbsp;</TD>
    <TD width="14%" align=center nowrap><B>Exercise Price </B></TD>
    <TD width="2%" align=center nowrap  >&nbsp;</TD>
    <TD width="14%" align=center nowrap><B>Option Expiration </B></TD>
  </TR>
  <TR vAlign=top>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left><B>Name </B></TD>
    <TD align=center width="2%"  >&nbsp;</TD>
    <TD
      width="14%" align=center nowrap style="BORDER-BOTTOM: #000000 1px solid"><B>Exercisable </B></TD>
    <TD width="2%" align=center nowrap  >&nbsp;</TD>
    <TD
      width="14%" align=center nowrap style="BORDER-BOTTOM: #000000 1px solid"><B>Unexercisable </B></TD>
    <TD width="2%" align=center nowrap  >&nbsp;</TD>
    <TD
      width="14%" align=center nowrap style="BORDER-BOTTOM: #000000 1px solid"><B>($) </B></TD>
    <TD width="2%" align=center nowrap  >&nbsp;</TD>
    <TD
      width="14%" align=center nowrap style="BORDER-BOTTOM: #000000 1px solid"><B>Date </B></TD>
  </TR>
  <TR>
    <TD>&nbsp; </TD>
    <TD align=center width="2%"  >&nbsp;</TD>
    <TD align=center width="14%">&nbsp; </TD>
    <TD align=center width="2%"  >&nbsp;</TD>
    <TD align=center width="14%">&nbsp; </TD>
    <TD align=center width="2%"  >&nbsp;</TD>
    <TD align=center width="14%">&nbsp; </TD>
    <TD align=center width="2%"  >&nbsp;</TD>
    <TD align=center width="14%">&nbsp; </TD></TR>
  <TR vAlign=top>
    <TD align=left bgColor=#e6efff>Marco Babini </TD>
    <TD align=center width="2%"  bgColor=#e6efff
    >&nbsp;</TD>
    <TD align=center width="14%" bgColor=#e6efff>- </TD>
    <TD align=center width="2%"  bgColor=#e6efff
    >&nbsp;</TD>
    <TD align=center width="14%" bgColor=#e6efff>- </TD>
    <TD align=center width="2%"  bgColor=#e6efff
    >&nbsp;</TD>
    <TD align=center width="14%" bgColor=#e6efff>- </TD>
    <TD align=center width="2%"  bgColor=#e6efff
    >&nbsp;</TD>
    <TD align=center width="14%" bgColor=#e6efff>- </TD></TR>
  <TR>
    <TD>&nbsp; </TD>
    <TD align=center width="2%"  >&nbsp;</TD>
    <TD align=center width="14%">&nbsp; </TD>
    <TD align=center width="2%"  >&nbsp;</TD>
    <TD align=center width="14%">&nbsp; </TD>
    <TD align=center width="2%"  >&nbsp;</TD>
    <TD align=center width="14%">&nbsp; </TD>
    <TD align=center width="2%"  >&nbsp;</TD>
    <TD align=center width="14%">&nbsp; </TD></TR>
  <TR vAlign=top>
    <TD align=left bgColor=#e6efff>Philippe Deschamps </TD>
    <TD align=center width="2%"  bgColor=#e6efff
    >&nbsp;</TD>
    <TD align=center width="14%" bgColor=#e6efff>600,000 </TD>
    <TD align=center width="2%"  bgColor=#e6efff
    >&nbsp;</TD>
    <TD align=center width="14%" bgColor=#e6efff>1,200,000<SUP>(1) </SUP></TD>
    <TD align=center width="2%"  bgColor=#e6efff
    >&nbsp;</TD>
    <TD align=center width="14%" bgColor=#e6efff>$0.55<SUP>(2) </SUP></TD>
    <TD align=center width="2%"  bgColor=#e6efff
    >&nbsp;</TD>
    <TD align=center width="14%" bgColor=#e6efff>06/18/2019 </TD></TR>
  <TR>
    <TD>&nbsp; </TD>
    <TD align=center width="2%"  >&nbsp;</TD>
    <TD align=center width="14%">&nbsp; </TD>
    <TD align=center width="2%"  >&nbsp;</TD>
    <TD align=center width="14%">&nbsp; </TD>
    <TD align=center width="2%"  >&nbsp;</TD>
    <TD align=center width="14%">&nbsp; </TD>
    <TD align=center width="2%"  >&nbsp;</TD>
    <TD align=center width="14%">&nbsp; </TD></TR>
  <TR vAlign=top>
    <TD align=left bgColor=#e6efff>Jonathan Sackier </TD>
    <TD align=center width="2%"  bgColor=#e6efff
    >&nbsp;</TD>
    <TD align=center width="14%" bgColor=#e6efff>100,000 </TD>
    <TD align=center width="2%"  bgColor=#e6efff
    >&nbsp;</TD>
    <TD align=center width="14%" bgColor=#e6efff>300,000<SUP>(3) </SUP></TD>
    <TD align=center width="2%"  bgColor=#e6efff
    >&nbsp;</TD>
    <TD align=center width="14%" bgColor=#e6efff>$2.58<SUP>(4) </SUP></TD>
    <TD align=center width="2%"  bgColor=#e6efff
    >&nbsp;</TD>
    <TD align=center width="14%" bgColor=#e6efff>12/08/2019
</TD></TR></TABLE></DIV><BR>
<TABLE
style="BORDER-COLOR: black; FONT-SIZE: 10pt; BORDER-COLLAPSE: collapse; "
cellSpacing=0 cellPadding=0 width="100%" border=0 BCLLIST>

  <TR>
    <TD vAlign=top width="5%">(1) </TD>
    <TD>
      <P align=justify>600,000 options will vest on each of June 19, 2015 and
      June 19, 2016.</P></TD></TR>
  <TR>
    <TD vAlign=top width="5%">(2) </TD>
    <TD>
      <P align=justify>The option exercise price of CAD$0.60 was converted from
      Canadian dollars to U.S. dollars based on the Bank of Canada nominal noon
      exchange rate on June 19, 2014 (the grant date) of CAD$1.00 =
      USD$0.9235.</P></TD></TR>
  <TR>
    <TD vAlign=top width="5%">(3) </TD>
    <TD>
      <P align=justify>100,000 options will vest on each of June 8, 2015,
      December 8, 2015 and June 8, 2016.</P></TD></TR>
  <TR>
    <TD vAlign=top width="5%">(4) </TD>
    <TD>
      <P align=justify>The option exercise price of CAD$2.96 was converted from
      Canadian dollars to U.S. dollars based on the Bank of Canada nominal noon
      exchange rate on December 8, 2014 (the grant date) of CAD$1.00 =
      USD$0.8717.</P></TD></TR></TABLE>
<P align=center>57</P>
<HR style="PAGE-BREAK-AFTER: always" align=center width="100%" color=black
noShade SIZE=5>
<p align="center"><B>Director Compensation</B> </p>

<TABLE
style="BORDER-COLOR: black; FONT-SIZE: 10pt; BORDER-COLLAPSE: collapse; "
cellSpacing=0 cellPadding=0 width="100%" border=0>

  <TR vAlign=top>
    <TD align=center>&nbsp; </TD>
    <TD align=center width="2%"  >&nbsp;</TD>
    <TD width="23%" align=center nowrap><B>Option</B> </TD>
    <TD width="2%" align=center nowrap  >&nbsp;</TD>
    <TD width="23%" align=center nowrap><B>All Other</B> </TD>
    <TD width="2%" align=center nowrap  >&nbsp;</TD>
    <TD width="23%" align=center nowrap><B>Total</B> </TD>
  </TR>
  <TR vAlign=top>
    <TD align=center>&nbsp; </TD>
    <TD align=center width="2%"  >&nbsp;</TD>
    <TD width="23%" align=center nowrap><B>Awards</B> </TD>
    <TD width="2%" align=center nowrap  >&nbsp;</TD>
    <TD width="23%" align=center nowrap><B>Compensation</B> </TD>
    <TD width="2%" align=center nowrap  >&nbsp;</TD>
    <TD width="23%" align=center nowrap><B>Compensation</B> </TD>
  </TR>
  <TR vAlign=top>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=center><B>Name</B> </TD>
    <TD align=center width="2%"  >&nbsp;</TD>
    <TD
      width="23%" align=center nowrap style="BORDER-BOTTOM: #000000 1px solid"><B>($)</B> </TD>
    <TD width="2%" align=center nowrap  >&nbsp;</TD>
    <TD
      width="23%" align=center nowrap style="BORDER-BOTTOM: #000000 1px solid"><B>($)</B> </TD>
    <TD width="2%" align=center nowrap  >&nbsp;</TD>
    <TD
      width="23%" align=center nowrap style="BORDER-BOTTOM: #000000 1px solid"><B>($)</B> </TD>
  </TR>
  <TR vAlign=top>
    <TD align=left bgColor=#e6efff>Savio Chiu </TD>
    <TD align=center width="2%"  bgColor=#e6efff
    >&nbsp;</TD>
    <TD align=center width="23%" bgColor=#e6efff>22,146<SUP>(1)</SUP> </TD>
    <TD align=center width="2%"  bgColor=#e6efff
    >&nbsp;</TD>
    <TD align=center width="23%" bgColor=#e6efff>- </TD>
    <TD align=center width="2%"  bgColor=#e6efff
    >&nbsp;</TD>
    <TD align=center width="23%" bgColor=#e6efff>22,146 </TD></TR>
  <TR vAlign=top>
    <TD align=left>Yuri Danilov </TD>
    <TD align=center width="2%"  >&nbsp;</TD>
    <TD align=center width="23%">147,639<SUP>(2)</SUP> </TD>
    <TD align=center width="2%"  >&nbsp;</TD>
    <TD align=center width="23%">8,250<SUP>(6)</SUP> </TD>
    <TD align=center width="2%"  >&nbsp;</TD>
    <TD align=center width="23%">155,889 </TD></TR>
  <TR vAlign=top>
    <TD align=left bgColor=#e6efff>Mitch Tyler </TD>
    <TD align=center width="2%"  bgColor=#e6efff
    >&nbsp;</TD>
    <TD align=center width="23%" bgColor=#e6efff>147,639<SUP>(3)</SUP> </TD>
    <TD align=center width="2%"  bgColor=#e6efff
    >&nbsp;</TD>
    <TD align=center width="23%" bgColor=#e6efff>19,950<SUP>(6)</SUP> </TD>
    <TD align=center width="2%"  bgColor=#e6efff
    >&nbsp;</TD>
    <TD align=center width="23%" bgColor=#e6efff>167,589 </TD></TR>
  <TR vAlign=top>
    <TD align=left>Edward Straw </TD>
    <TD align=center width="2%"  >&nbsp;</TD>
    <TD align=center width="23%">246,051<SUP>(4)</SUP> </TD>
    <TD align=center width="2%"  >&nbsp;</TD>
    <TD align=center width="23%">- </TD>
    <TD align=center width="2%"  >&nbsp;</TD>
    <TD align=center width="23%">246,051 </TD></TR>
  <TR vAlign=top>
    <TD align=left bgColor=#e6efff>Joyce LaViscount </TD>
    <TD align=center width="2%"  bgColor=#e6efff
    >&nbsp;</TD>
    <TD align=center width="23%" bgColor=#e6efff>224,585<SUP>(5)</SUP> </TD>
    <TD align=center width="2%"  bgColor=#e6efff
    >&nbsp;</TD>
    <TD align=center width="23%" bgColor=#e6efff>- </TD>
    <TD align=center width="2%"  bgColor=#e6efff
    >&nbsp;</TD>
<TD align=center width="23%" bgColor=#e6efff>224,585</TD></TR></TABLE>
<BR>
<TABLE
style="BORDER-COLOR: black; FONT-SIZE: 10pt; BORDER-COLLAPSE: collapse; "
cellSpacing=0 cellPadding=0 width="100%" border=0 BCLLIST>

  <TR>
    <TD vAlign=top width="5%">(1) </TD>
    <TD>
      <P align=justify>Mr. Chiu had 60,000 options outstanding as of March 31,
      2015, of which 40,000 were not vested. The grant date fair value was
      denominated in Canadian dollars and converted into U.S. dollars using the
      Bank of Canada nominal noon exchange rate on June 19, 2014 (the grant
      date) of CAD$1.00 = USD$0.9235.</P></TD></TR>
  <TR>
    <TD vAlign=top width="5%">(2) </TD>
    <TD>
      <P align=justify>Mr. Danilov had 400,000 options outstanding as of March
      31, 2015, of which 266,666.67 were not vested. The grant date fair value
      was denominated in Canadian dollars and converted into U.S. dollars using
      the Bank of Canada nominal noon exchange rate on June 19, 2014 (the grant
      date) of CAD$1.00 = USD$0.9235.</P></TD></TR>
  <TR>
    <TD vAlign=top width="5%">(3) </TD>
    <TD>
      <P align=justify>Mr. Tyler had 400,000 options outstanding as of March 31,
      2015, of which 266,666.67 were not vested. The grant date fair value was
      denominated in Canadian dollars and converted into U.S. dollars using the
      Bank of Canada nominal noon exchange rate on June 19, 2014 (the grant
      date) of CAD$1.00 = USD$0.9235.</P></TD></TR>
  <TR>
    <TD vAlign=top width="5%">(4) </TD>
    <TD>
      <P align=justify>Mr. Straw had 100,000 options outstanding as of March 31,
      2015, of which 66,666.67 were not vested. The grant date fair value was
      denominated in Canadian dollars and converted into U.S. dollars using the
      Bank of Canada nominal noon exchange rate on December 8, 2014 (the grant
      date) of CAD$1.00 = USD$0.8717.</P></TD></TR>
  <TR>
    <TD vAlign=top width="5%">(5) </TD>
    <TD>
      <P align=justify>Ms. LaViscount had 100,000 options outstanding as of
      March 31, 2015, of which 66,666.67 were not vested. The grant date fair
      value was denominated in Canadian dollars and converted into U.S. dollars
      using the Bank of Canada nominal noon exchange rate on March 16, 2015 (the
      grant date) of CAD$1.00 = USD$0.7834.</P></TD></TR>
  <TR>
    <TD vAlign=top width="5%">(6) </TD>
    <TD>
      <P align=justify>These amounts were paid pursuant to a consulting
      agreement between each of Messrs. Danilov and Tyler and us. See &#147;Item 7.
      Certain Relationships and Related Transactions, and Director
      Independence&#151;Related Party Transactions&#148; for a description of each
      agreement.</P></TD></TR></TABLE>
<p align="justify"><b>Narrative  Disclosure to Director Compensation Table</b> </p>
<p align="justify">During  the fiscal year ended March 31, 2015, our directors did not receive any fees  for their service. Instead, we granted  each director stock options.&nbsp; We granted  60,000; 400,000; 400,000; 100,000 and 100,000 options to Messrs. Chiu, Danilov,  Tyler and Straw and Ms. LaViscount, respectively. Messrs. Chiu, Danilov and Tyler&rsquo;s options  expire on June 18, 2019 and have an exercise price of CAD$0.60. Mr. Straw&rsquo;s options expire on December 8,  2019 and have an exercise price of CAD$2.92.&nbsp;  Ms. LaViscount&rsquo;s options expire on March 15, 2020 have an exercise price  of CAD$3.20.</p>
<P align=justify>ITEM 7.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; CERTAIN RELATIONSHIPS AND
RELATED TRANSACTIONS, AND DIRECTOR INDEPENDENCE. </P>
<P align=justify> Except as described below, there are no transactions from our
inception (March 13, 2014) to date, or any currently proposed transactions, in
which we were or are to be a participant where the amount involved exceeds $120,000 and in which any &#147;related person&#148; had or
will have a direct or indirect material interest. &#147;Related person&#148; includes: </P>
<TABLE
style="BORDER-COLOR: black; FONT-SIZE: 10pt; BORDER-COLLAPSE: collapse; "
cellSpacing=0 cellPadding=0 width="100%" border=0 BCLLIST>

  <TR>
    <TD width="5%"  >&nbsp;</TD>
    <TD vAlign=top width="5%">(a) </TD>
    <TD>
      <P align=justify>any of our directors or executive officers;</P></TD></TR>
  <TR>
    <TD width="5%" >&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD>&nbsp;</TD></TR>
  <TR>
    <TD width="5%" >&nbsp;</TD>
    <TD vAlign=top width="5%">(b) </TD>
    <TD>
      <P align=justify>any person proposed as a nominee for election as a
      director;</P></TD></TR>
  <TR>
    <TD width="5%" >&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD>&nbsp;</TD></TR>
  <TR>
    <TD width="5%" >&nbsp;</TD>
    <TD vAlign=top width="5%">(c) </TD>
    <TD>
      <P align=justify>any person who beneficially owns more than 5% of our
      common stock; or</P></TD></TR>
  <TR>
    <TD width="5%" >&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD>&nbsp;</TD></TR>
  <TR>
    <TD width="5%" >&nbsp;</TD>
    <TD vAlign=top width="5%">(d) </TD>
    <TD>
      <P align=justify>any child, stepchild, parent, stepparent, spouse,
      sibling, mother-in-law, father-in-law, son-in-law, daughter-in-law,
      brother-in-law, sister-in-law or person (other than a tenant or employee)
      sharing the same household of any person enumerated in paragraph (a), (b)
      or (c).</P></TD></TR></TABLE>
<P align=justify><B>Related Party Transactions </B></P>
<P align=justify><I>Agreement and Plan of Merger with NHC </I></P>
<P align=justify>On June 6, 2014, we entered into an Agreement and Plan of
Merger among us, HMT Mergersub, Inc., our wholly-owned subsidiary, and NHC.
Pursuant to the Agreement and Plan of Merger we issued 35,300,083 shares of our
common stock to the shareholders of NHC. Two of the shareholders of NHC that
received 16,035,026 shares each were MPJ Healthcare, LLC and ANR. Messrs. Philippe
Deschamps, our President, CEO and director, and Jonathan Sackier, our Chief Medical Officer, are shareholders of MPJ
Healthcare, LLC, and Messrs. Yuri Danilov and Mitch Tyler, two of our directors,
are shareholders of ANR. </P>
<P align=center>58</P>
<HR style="PAGE-BREAK-AFTER: always" align=center width="100%" color=black
noShade SIZE=5>
<A name=page_59></A>
<P align=justify><I>Sublicense Agreement with Advanced Rehabilitation, LLC
</I></P>
<P align=justify>Pursuant to the Second Sublicense Agreement, ANR has granted
NHC a worldwide, exclusive license to make, have made, use, lease and sell
devices utilizing the Patent Pending Rights. In addition, ANR has agreed that
ownership of any improvements, enhancements or derivative works of the Patent
Pending Rights which are developed by NHC or ANR shall be owned by NHC, provided
that if NHC decides not to patent such improvements, ANR may choose to pursue
patent rights independently. Pursuant to the Sublicense Agreement, NHC has
agreed to pay ANR royalties equal to 4% of NHC&#146;s revenues collection from the
sale of devices covered by the Patent Pending Rights and services related to the
therapy or use of devices covered by the Patent Pending Rights in therapy
services. Messrs. Yuri Danilov and Mitch Tyler, two of our directors, are
shareholders of ANR. </P>
<P align=justify><I>Consulting Agreement with Yuri Danilov </I></P>
<P align=justify>On July 1, 2014, Mr. Danilov entered into a consulting
agreement, or the Danilov Consulting Agreement, with NHC to provide consulting
services in relation to the development of the PoNS&#153; technology. The Danilov
Consulting Agreement is valid for a period of 12 months and Mr. Danilov will
charge an hourly fee of $150 per hour or $1,000 per day if 8 or more hours are
worked. Pursuant to the Danilov Consulting Agreement, Mr. Danilov will be an
independent contractor and subject to the confidentiality provisions contained
in the Danilov Consulting Agreement. </P>
<P align=justify><I>Consulting Agreement with Mitch Tyler </I></P>
<P align=justify>On December 10, 2014, Mr. Tyler entered into a consulting
agreement, or the Tyler Consulting Agreement, with NHC to provide consulting
services in relation to the development of the PoNS&#153; technology. The Tyler
Consulting Agreement is valid for a period of 12 months and Mr. Tyler will
charge an hourly fee of $150 per hour or $1,000 per day if 8 or more hours are
worked. Pursuant to the Tyler Consulting Agreement, Mr. Tyler will be an
independent contractor and subject to the confidentiality provisions contained
in the Tyler Consulting Agreement. </P>
<P align=justify><I>Loan from MPJ Healthcare, LLC </I></P>
<P align=justify>MPJ Healthcare, LLC provided us
a loan of $29,107 bearing interest at a rate of 3% per annum in December 2013.
  Messrs. Philippe
Deschamps, our President, CEO and director, and Jonathan Sackier, our Chief Medical Officer, are shareholders of MPJ
Healthcare, LLC. We repaid this loan in full during year ended March 31, 2014. </P>
<P align=justify><B>Review, Approval and Ratification of Related Party
Transactions </B></P>
<P align=justify>Our Board of Directors has responsibility for establishing and
maintaining guidelines relating to any related party transactions between us and
any of our officers or directors. Any conflict of interest between a related
party and us must be referred to the non-interested directors, if any, for
approval. We intend to adopt written guidelines for the board of directors which
will set forth the requirements for review and approval of any related party
transactions. </P>
<P align=justify><B>Director Independence </B></P>
<P align=justify>We believe  that Savio Chiu, Joyce LaViscount and Edward Straw qualify as  independent directors under the listing standards of the Nasdaq Capital Market. However, our Board of Directors has not made a formal determination on this matter.</P>
<P align=center>59</P>
<HR style="PAGE-BREAK-AFTER: always" align=center width="100%" color=black
noShade SIZE=5>
<A name=page_60></A>
<P align=justify>ITEM 8.&nbsp;&nbsp;&nbsp;&nbsp; &nbsp;LEGAL PROCEEDINGS.</P>
<P align=justify>On January 5, 2015, Wicab filed a complaint against us, two of
our directors, Yuri Danilov and Mitch Tyler, and ANR in the U.S. District Court
for the Western District of Wisconsin. The complaint contained various state and
common law claims arising from Danilov&#146;s and Tyler&#146;s prior employment with Wicab
and our two issued patents for the PoNS&#153; device. 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 our two issued patents are therefore rightfully the property of Wicab.
The complaint sought an unspecified amount of monetary damages, an injunction
preventing us from using the ideas and inventions in the two patents, an order
transferring ownership of the patents from us to Wicab, and recovery of costs
and attorneys&#146; fees. The complaint was voluntarily dismissed without prejudice
on January 14, 2015. </P>
<P align=justify>On January 27, 2015 we received a demand letter containing
allegations that we had entered into a consulting arrangement with the
complainants and breached certain of its terms, and used certain intellectual
property in the form of business and marketing plans allegedly prepared by the
complainants, and seeking damages. We are not currently the subject of a lawsuit
in connection with these allegations.</P>
<P align=justify>Except as described above, we are not aware of any legal
proceedings contemplated by any governmental authority or any other party
involving us or our properties. As of May 1, 2015, no director, officer or
affiliate is (i) a party adverse to us in any legal proceeding, or (ii) has an
adverse interest to us in any legal proceedings. We are not aware of any other
legal proceedings pending or that have been threatened against us or our
properties. </P>
<TABLE
style="BORDER-COLOR: black; FONT-SIZE: 10pt; BORDER-COLLAPSE: collapse; "
cellSpacing=0 cellPadding=0 width="100%" border=0>

  <TR vAlign=top>
    <TD align=left>
      <P align=justify>ITEM 9. </P></TD>
    <TD align=left width="93%" >
      <P align=justify>MARKET PRICE OF AND DIVIDENDS ON THE REGISTRANT&#146;S EQUITY
      AND RELATED STOCKHOLDER MATTERS. </P></TD></TR></TABLE>
<P align=justify><B>Market Information </B></P>
<P align=justify>There is no established trading market for our common stock in
the United States. Shares of our common stock have been listed on the CSE since
June 23, 2014 under the symbol &#147;HSM&#148;. The market for our common stock on the CSE
is very recent, and therefore, limited, volatile and sporadic. The following
table sets forth the high and low prices relating to our common stock for the
periods indicated, as provided by the CSE. These quotations reflect inter-dealer
prices without retail mark-up, mark-down, or commissions, and may not reflect
actual transactions.</P>
<DIV>
<TABLE
style="BORDER-COLOR: black; FONT-SIZE: 10pt; BORDER-COLLAPSE: collapse; "
borderColor=#000000 cellSpacing=0 cellPadding=6 width="100%" border=1>

  <TR vAlign=top>
    <TD align=left><B>Quarter Ended</B> </TD>
    <TD align=center width="33%"><B>High</B> </TD>
    <TD align=center width="33%"><B>Low</B> </TD></TR>
  <TR vAlign=top>
    <TD align=left>June 30, 2014 </TD>
    <TD align=center width="33%">CAD$2.37 </TD>
    <TD align=center width="33%">CAD$1.00 </TD>
  </TR>
  <TR vAlign=top>
    <TD align=left>September 30, 2014 </TD>
    <TD align=center width="33%">CAD$2.72 </TD>
    <TD align=center width="33%">CAD$2.27 </TD>
  </TR>
  <TR vAlign=top>
    <TD align=left>December 31, 2014 </TD>
    <TD align=center width="33%">CAD$3.00 </TD>
    <TD align=center width="33%">CAD$2.25 </TD>
  </TR>
  <TR vAlign=top>
    <TD align=left>March 31, 2015</TD>
    <TD align=center>CAD$3.40</TD>
    <TD align=center>CAD$2.24</TD>
  </TR>
</TABLE>
</DIV>
<P align=justify>Our common stock is also quoted on the OTCQB under
the symbol &#147;HSDT.&#148; </P>
<P align=justify><B>Holders </B></P>
<P align=justify>As of May 1, 2015, we had approximately 195 shareholders
of record. </P>
<P align=center>60</P>
<HR style="PAGE-BREAK-AFTER: always" align=center width="100%" color=black
noShade SIZE=5>
<A name=page_61></A>
<P align=justify><B>Options </B></P>
<P align=justify>As of May 1, 2015, we have 4,920,000 stock options
outstanding which are exercisable into 4,920,000 shares of our common stock.</P>
<P align=justify><B>Warrants </B></P>
<P align=justify>As of May 1, 2015, we have 8,882,032 common share
purchase warrants outstanding which are exercisable into 8,882,032 shares of
common stock. </P>
<P align=justify><B>Shares Subject to Rule 144 and Registration Rights</B> </P>
<P align=justify>Because we were formerly a shell company, holders of our common
stock must meet the requirements of Rule 144(i) under the Securities Act to
avail themselves of the safe harbor under Rule 144. Rule 144(i) requires, among
other things, that &#147;Form 10 information&#148; about us has been on file with the SEC
for at least one year. As of May 1, 2015, we did not meet this
requirement. Accordingly, as of such date, none of our outstanding shares may be
resold pursuant to the safe harbor provided by Rule 144. We have not agreed to
register for resale under the Securities Act any of our common stock. </P>
<P align=justify><B>Dividend Policy </B></P>
<P align=justify>We have not paid any cash dividends on our common shares since
our inception and do not anticipate paying any cash dividends in the foreseeable
future. We plan to retain our earnings, if any, to provide funds for the
expansion of our business. </P>
<P align=justify><B>Securities Authorized For Issuance Under Compensation Plans
</B></P>

<TABLE
style="BORDER-COLOR: black; FONT-SIZE: 10pt; BORDER-COLLAPSE: collapse; "
cellSpacing=0 cellPadding=0 width="100%" border=0>

  <TR vAlign=top>
    <TD align=left>&nbsp; </TD>
    <TD width="18%" align=left nowrap>&nbsp; </TD>
    <TD width="1%" align=left nowrap>&nbsp;</TD>
    <TD width="18%" align=left nowrap>&nbsp; </TD>
    <TD width="1%" align=center nowrap>&nbsp;</TD>
  <TD width="18%" align=center nowrap><B>Number of securities</B> </TD>
  </TR>
  <TR vAlign=top>
    <TD align=left>&nbsp; </TD>
    <TD width="18%" align=left nowrap>&nbsp; </TD>
    <TD width="1%" align=left nowrap>&nbsp;</TD>
    <TD width="18%" align=left nowrap>&nbsp; </TD>
    <TD width="1%" align=center nowrap>&nbsp;</TD>
  <TD width="18%" align=center nowrap><B>remaining available for</B> </TD>
  </TR>
  <TR vAlign=top>
    <TD align=left>&nbsp; </TD>
    <TD width="18%" align=center nowrap><B>Number of securities to be</B> </TD>
    <TD width="1%" align=center nowrap>&nbsp;</TD>
    <TD width="18%" align=center nowrap><B>Weighted-average exercise</B> </TD>
    <TD width="1%" align=center nowrap>&nbsp;</TD>
  <TD width="18%" align=center nowrap><B>future issuance under</B> </TD>
  </TR>
  <TR vAlign=top>
    <TD align=left>&nbsp; </TD>
    <TD width="18%" align=center nowrap><B>issued upon exercise of</B> </TD>
    <TD width="1%" align=center nowrap>&nbsp;</TD>
    <TD width="18%" align=center nowrap><B>price of outstanding</B> </TD>
    <TD width="1%" align=center nowrap>&nbsp;</TD>
  <TD width="18%" align=center nowrap><B>equity compensation plans</B> </TD>
  </TR>
  <TR vAlign=top>
    <TD align=left>&nbsp; </TD>
    <TD width="18%" align=center nowrap><B>outstanding options,</B> </TD>
    <TD width="1%" align=center nowrap>&nbsp;</TD>
    <TD width="18%" align=center nowrap><B>options, warrants and</B> </TD>
    <TD width="1%" align=center nowrap>&nbsp;</TD>
  <TD width="18%" align=center nowrap><B>(excluding securities</B> </TD>
  </TR>
  <TR vAlign=top>
    <TD align=left>&nbsp; </TD>
    <TD width="18%" align=center nowrap><B>warrants and rights</B> </TD>
    <TD width="1%" align=center nowrap>&nbsp;</TD>
    <TD width="18%" align=center nowrap><B>rights</B> </TD>
    <TD width="1%" align=center nowrap>&nbsp;</TD>
  <TD width="18%" align=center nowrap><B>reflected in column (a))</B> </TD>
  </TR>
  <TR vAlign=top>
    <TD align=left>&nbsp; </TD>
    <TD
      width="18%" align=center nowrap style="BORDER-BOTTOM: #000000 1px solid"><B>(a)</B> </TD>
    <TD width="1%" align=center nowrap>&nbsp;</TD>
    <TD
      width="18%" align=center nowrap style="BORDER-BOTTOM: #000000 1px solid"><B>(b)</B> </TD>
    <TD width="1%" align=center nowrap>&nbsp;</TD>
  <TD
      width="18%" align=center nowrap style="BORDER-BOTTOM: #000000 1px solid"><B>(c)</B> </TD>
  </TR>
  <TR vAlign=top>
    <TD align=left bgColor=#e6efff><B>Equity compensation plans</B>
      <BR><B>approved by security holders</B> </TD>
    <TD vAlign=bottom align=center width="18%" bgColor=#e6efff>- </TD>
    <TD vAlign=bottom align=center width="1%" bgColor=#e6efff></TD>
    <TD vAlign=bottom align=center width="18%" bgColor=#e6efff>- </TD>
    <TD vAlign=bottom align=center width="1%" bgColor=#e6efff></TD>
    <TD vAlign=bottom align=center width="18%" bgColor=#e6efff>- </TD></TR>
  <TR vAlign=top>
    <TD align=left>&nbsp;</TD>
    <TD vAlign=bottom align=center>&nbsp;</TD>
    <TD vAlign=bottom align=center></TD>
    <TD vAlign=bottom align=center>&nbsp;</TD>
    <TD vAlign=bottom align=center></TD>
    <TD vAlign=bottom align=center>&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD align=left bgcolor="#E6EFFF"><B>Equity compensation plans not</B> <BR><B>approved by
      security holders</B><SUP>(1)</SUP> </TD>
    <TD
    width="18%" align=center vAlign=bottom bgcolor="#E6EFFF" style="BORDER-BOTTOM: #000000 1px solid">4,920,000 </TD>
    <TD width="1%" align=center vAlign=bottom bgcolor="#E6EFFF"></TD>
    <TD
    width="18%" align=center vAlign=bottom bgcolor="#E6EFFF" style="BORDER-BOTTOM: #000000 1px solid">$0.71<SUP>(2)</SUP> </TD>
    <TD width="1%" align=center vAlign=bottom bgcolor="#E6EFFF"></TD>
    <TD
    width="18%" align=center vAlign=bottom bgcolor="#E6EFFF" style="BORDER-BOTTOM: #000000 1px solid">7,188,016 </TD>
  </TR>
  <TR>
    <TD>&nbsp; </TD>
    <TD vAlign=bottom align=center width="18%">&nbsp; </TD>
    <TD vAlign=bottom align=center width="1%">&nbsp;</TD>
    <TD vAlign=bottom align=center width="18%">&nbsp; </TD>
    <TD vAlign=bottom align=center width="1%">&nbsp;</TD>
    <TD vAlign=bottom align=center width="18%">&nbsp; </TD></TR>
  <TR vAlign=top>
    <TD align=left bgcolor="#E6EFFF">&nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp;
      &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp;Total    </TD>
    <TD
    width="18%" align=center vAlign=bottom bgcolor="#E6EFFF" style="BORDER-BOTTOM: #000000 3px double">4,920,000 </TD>
    <TD width="1%" align=center vAlign=bottom bgcolor="#E6EFFF">&nbsp;</TD>
    <TD
    width="18%" align=center vAlign=bottom bgcolor="#E6EFFF" style="BORDER-BOTTOM: #000000 3px double">$0.71<SUP>(2)</SUP> </TD>
    <TD width="1%" align=center vAlign=bottom bgcolor="#E6EFFF">&nbsp;</TD>
    <TD
    width="18%" align=center vAlign=bottom bgcolor="#E6EFFF" style="BORDER-BOTTOM: #000000 3px double">7,188,016 </TD></TR></TABLE>
<BR>
<TABLE
style="BORDER-COLOR: black; FONT-SIZE: 10pt; BORDER-COLLAPSE: collapse; "
cellSpacing=0 cellPadding=0 width="100%" border=0 BCLLIST>

  <TR>
    <TD vAlign=top width="5%">(1) </TD>
    <TD>
      <P align=justify>Represents grants of stock options pursuant to the 2014
      Plan. See &#147;Item 6. Executive Compensation&#151; June 2014 Stock Incentive Plan&#148;
      for a description of the material features of the 2014 Plan.</P></TD></TR>
  <TR>
    <TD vAlign=top width="5%">(2) </TD>
    <TD>
      <P align=justify>The weighted-average exercise price was denominated in
      Canadian dollars and converted into U.S. dollars based on the Bank of
      Canada nominal noon exchange rate on March 31, 2015 of CAD$1.00 = USD
      $0.7885.</P></TD></TR></TABLE>
<P align=justify>ITEM 10.&nbsp;&nbsp; &nbsp;RECENT SALES OF UNREGISTERED
SECURITIES. </P>
<P align=justify>On March 13, 2014, we issued 10 shares of our common stock to
Boomerang Oil, Inc. for aggregate consideration of $9.00 (CAD$10.00). We relied
upon the exemption provided under Section 2.4 of the Canadian Securities
Administrators National Instrument 45-106 &#150; <I>Prospectus and Registration
Exemptions</I>. We did not issue any of our common stock to any U.S. persons.
</P>
<P align=justify>On April 15, 2014, we issued in aggregate 10,000,000 shares of
our common stock to the shareholders of 0995162 BC Ltd. (174
individuals/entities from Canada and 1 individual from Germany) pursuant to the
plan of arrangement between us, Boomerang Oil, Inc. and 0995162 BC Ltd., in
exchange for all of the issued and outstanding shares of 0995162 BC Ltd. We
relied upon the exemption provided under Section 2.11 of the Canadian Securities
Administrators National Instrument 45-106 - <I>Prospectus and Registration
Exemptions</I>. We did not issue any of our common stock to any U.S. persons.
</P>
<P align=justify>On May 28, 2014 we filed our Articles of Continuance with the
Wyoming Secretary of State, which was effective with the State of Wyoming on
June 2, 2014, whereby we continued from the Province of British Columbia into
the State of Wyoming pursuant to a plan of arrangement between us and our
shareholders in accordance with section 288 of the BCBCA. This reincorporation
resulted in the issuance of 10,000,010 shares of our common stock to our
shareholders, in exchange for their existing common shares in the capital of our
company that were issued and outstanding immediately prior to the effectiveness
of the reincorporation transaction. The plan of arrangement between us and our
shareholders required court approval under section 291 of the
BCBCA. We advised the British Columbia Supreme Court, or the Court, prior to the
hearing that we would be relying upon the registration exemption under Section
3(a)(10) of the Securities Act, and that in order for us to rely upon such
Section 3(a)(10) exemption the Court must approve the fairness of the terms and
conditions of the exchange of our shares from a British Columbia corporation to
shares of us as a Wyoming corporation. The fairness hearing was open to all our
shareholders to whom securities of us as a Wyoming corporation would be
exchanged pursuant to the plan of arrangement and adequate notice was provided
to all our shareholders. On May 27, 2014, the Court found that the terms and
conditions of the plan of arrangement were fair and approved the plan of
arrangement. None of our shareholders exercised their rights of dissent under
the BCBCA in respect of the reincorporation transaction. </P>
<P align=center>61</P>
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<P align=justify>On May 30, 2014, we closed a private placement consisting of
15,240,000 subscription receipts at a price of CAD$0.50 per subscription receipt
for gross proceeds of CAD$7,620,000. On June 13, 2014, each subscription receipt
automatically converted, for no additional consideration, into one common share
and one-half of one common share purchase warrant. We refer to each whole
warrant as a Warrant. Each Warrant entitles the holder thereof to purchase one
additional share of our common stock at a price of CAD$1.00 until May 30, 2016.
We relied on exemptions from registration under the Securities Act, provided by
Rule 506 of Regulation D and/or Section 4(a)(2) for the one U.S. purchaser who
was an &#147;accredited investor&#148; as defined under Rule 501(a) of Regulation D as
well as Regulation S for the Canadian and offshore purchasers, based on
representations and warranties provided by the purchasers of the subscription
receipts in their respective subscription agreements entered into between us and
each purchaser. </P>
<P align=justify>In connection with the May 30, 2014 private placement, we paid
finder&#146;s fees of CAD$412,200 in cash and 824,400 finder&#146;s warrants, or a
Finder&#146;s Warrant, in aggregate to five entities in British Columbia, Canada and
one entity in Nevis, West Indies. The Finder&#146;s Warrants have the same attributes
as the Warrants. We relied on the exemption from registration under the
Securities Act provided by Regulation S for the issuance of the Finder&#146;s
Warrants to each finder. </P>
<P align=justify>On June 13, 2014, we acquired a 100% interest in NHC, as
discussed above, pursuant to an agreement and plan of merger whereby our
wholly-owned subsidiary was merged with and into NHC and all of the common
shares in the capital of NHC were cancelled in consideration for the issuance of
an aggregate of 35,300,083 shares of our common stock to the NHC shareholders.
We relied on the exemption from registration under the Securities Act provided
by Section 4(a)(2) for the issuance of shares of our common stock to the four
NHC shareholders with which we had a pre-existing relationship. Of the 35,300,083 shares issued in this private placement, 32,070,052 shares were held in escrow beginning on June 23, 2014. See &#147;Item 11. Description of Registrant&#146;s Securities to be Registered&#148; for a description of the escrow and the release schedule.</P>
<p align="justify">On June 19, 2014, we granted 2,660,000 options to purchase  our common stock to four of our directors (in individual amounts of 1,800,000;  400,000; 400,000 and 60,000) for services rendered as directors. We also granted 400,000 options to purchase  our common stock to an advisor for consulting services rendered. We relied on Rule 701 under the Securities  Act for these grants. Also on such date,  we issued 460,000 options to purchase our common stock to four persons (in  individual amounts of 60,000; 250,000; 50,000 and 100,000). The four persons did not pay cash for the  options but rendered consulting services to us. We relied on Section 4(a)(2) of the Securities Act for the issuances of  these options, as we had a substantive, pre-existing relationship with each of  these four persons, and these persons had access to information about us.</p>
<p align="justify">On June 20, 2014, we issued 250,000 options to purchase our  common stock to one entity. The entity  did not pay cash for the options but rendered consulting services to us. We relied on Section 4(a)(2) of the  Securities Act for the issuances of these options, as we had a substantive,  pre-existing relationship with the entity, and the entity had access to  information about us. </p>
<P align=justify>On June 30, 2014, we issued 2,564,705 common shares to one
offshore individual pursuant to the conversion of a convertible note that was
issued by our subsidiary, NHC, in the principal amount of $1,000,000
(CAD$1,090,000 when converted to CAD$) at a price of CAD$0.425 per share. Under
the terms of the agreement and plan of merger with NHC, we agreed to assume
responsibility for satisfying the payment obligations under such convertible
note by issuing shares of our capital stock. We relied upon the exemption from
registration as provided under Regulation S promulgated under the Securities Act
as the securities were issued to the individual through an offshore transaction
which was negotiated and consummated outside of the United States. </P>
<p align="justify">On July 14, 2014, we granted 100,000 options to purchase our  common stock to an advisor for consulting services rendered. We relied on Rule 701 under the Securities  Act for this grant.</p>
<p align="justify"> On December 8, 2014, we granted 50,000 options to purchase  our common stock to each of nine advisors for consulting services  rendered. Also on such date, we granted  100,000 options to purchase our common stock to one of our directors and  400,000 options to purchase our common stock to one of our employees for  services rendered as director and employee, respectively. We relied on Rule 701 under the Securities  Act for these grants.</p>
<p align="justify"> On March 16, 2015, we granted 100,000 options to purchase  our common stock to one of our directors for services rendered as director. We relied on Rule 701 under the Securities  Act for this grant. </p>
<p align="justify"> On April 30, 2015, we closed a private placement to 12
accredited investors, which included one institution and 11 individuals,
consisting of an aggregate of 849,273 units at a price of $2.15 per unit for
gross proceeds of approximately $1,825,937. Each unit consisted of one share of
our common stock and one-half of one common share purchase warrant. Each whole
warrant entitles the holder to purchase one additional share of our common stock
at a price of $3.00 per share until April 30, 2018. We relied on the exemption
from registration provided by Section 4(a)(2) of the Securities Act and Rule
506(b) thereunder for the private placement. In connection with the private
placement, we issued 27,396 warrants to one institutional accredited investor
that served as a finder for the private placement. The finder&#146;s warrant permits
the holder to purchase one share of our common stock at a price of $3.00 per
share until April 30, 2018. We relied on the exemption from registration
provided by Section 4(a)(2) of the Securities Act for the issuance of the
finder&#146;s warrant.</p>
<P align=justify>ITEM 11.&nbsp;&nbsp;&nbsp; DESCRIPTION OF REGISTRANT&#146;S
SECURITIES TO BE REGISTERED. </P>
<P align=justify><B>General</B> </P>
<P align=justify>Our authorized capital stock consists of an unlimited number of
Class A common stock, without par value. As of May 1, 2015, there were
63,968,461 shares of our common stock issued and outstanding. </P>
<p align="justify">Of the 63,968,461 shares outstanding, 24,052,540 were held  in escrow as of May 1, 2015. The  escrowed shares are held by MPJ Healthcare, LLC and ANR and were received in  connection with the Reverse Merger on June 13, 2014. Following the Reverse Merger, we listed our  common stock on the CSE on June 23, 2014. The CSE&rsquo;s Policy 2 requires that shares owned by &ldquo;related persons&rdquo; be  subject to an escrow agreement, and MPJ Healthcare, LLC and ANR qualified as  related persons. Accordingly, we have  entered into an escrow agreement with each of MPJ Healthcare, LLC and ANR with  respect to the 16,035,026 shares of our common stock that each received in the  June 13, 2014 Reverse Merger. National  Policy 46-201, which was promulgated by the Canadian Securities Administrators,  sets forth the release schedule for these types of escrowed shares. Pursuant to National Policy 46-201, 10% of  the escrowed securities are released on the initial date of the company&rsquo;s  listing on a Canadian exchange, which was June 23, 2014 in our situation, and  the remaining escrowed securities are released in equal tranches of 15% every  six months. Accordingly, of the  32,070,052 total shares escrowed, 24,052,540 shares remain escrowed and will be  released in equal installments on each of June 23, 2015; December 23, 2015;  June 23, 2016; December 23, 2016; and June 23, 2017.</p>
<P align=center>62 </P>
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<A name=page_63></A>
<P align=justify><B>Class A Common Stock </B></P>
<P align=justify>Holders of our common stock are entitled to receive dividends
when and if declared by our Board of Directors. Each share of our outstanding
common stock is entitled to one vote upon each matter to which it is entitled to
vote. Holders of our common stock have rights as set forth in the WBCA, except
to the extent such rights have been properly superseded by our Articles of
Continuance and our Bylaws, copies of which are filed as exhibits to this
registration statement and incorporated herein by reference.</P>
<P align=justify>ITEM 12.&nbsp;&nbsp;&nbsp; INDEMNIFICATION OF DIRECTORS AND
OFFICERS. </P>
<P align=justify>Our directors and officers are indemnified as provided by the
WBCA, our Articles of Continuance and our Bylaws. </P>
<P align=justify><B>Wyoming Business Corporation Act </B></P>
<P align=justify>The WBCA provides that a corporation shall indemnify any
director, officer, employee or agent of a corporation against expenses,
including attorneys' fees, actually and reasonably incurred by him in connection
with any defense to the extent that a director, officer, employee or agent of a
corporation has been successful on the merits or otherwise in defense of any
action, suit or proceeding, or in defense of any claim, issue or matter
therein.</P>
<P align=justify>The WBCA provides that a corporation may indemnify any person
who was or is a party or is threatened to be made a party to any threatened,
pending or completed action, suit or proceeding, whether civil, criminal,
administrative or investigative, except an action by or in the right of the
corporation, by reason of the fact that he is or was a director, officer,
employee or agent of the corporation, or is or was serving at the request of the
corporation as a director, officer, employee or agent of another corporation,
partnership, joint venture, trust or other enterprise, against expenses,
including attorneys' fees, judgments, fines and amounts paid in settlement
actually and reasonably incurred by him in connection with the action, suit or
proceeding if he: (a) is not liable pursuant to the WBCA; or (b) acted in good
faith and in a manner which he reasonably believed to be in or not opposed to
the best interests of the corporation, and, with respect to any criminal action
or proceeding, had no reasonable cause to believe his conduct was unlawful.
Indemnification may not be made for any claim, issue or matter as to which such
a person has been adjudged by a court of competent jurisdiction, after
exhaustion of all appeals there from, to be liable to the corporation or for
amounts paid in settlement to the corporation, unless and only to the extent
that the court in which the action or suit was brought or other court of
competent jurisdiction determines upon application that in view of all the
circumstances of the case, the person is fairly and reasonably entitled to
indemnity for such expenses as the court deems proper. </P>
<P align=justify>The WBCA provides that except as otherwise provided by specific
statute, no director or officer of a corporation is individually liable for a
debt or liability of the corporation, unless the director or officer acts as the
alter ego of the corporation. The court as a matter of law must determine the
question of whether a director or officer acts as the alter ego of a
corporation. </P>
<P align=justify><B>Our Articles of Continuance</B> </P>
<P align=center>63</P>
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<P align=justify>Article 14 of our Articles of Continuance provide for
indemnification of our directors and officers as follows: </P>
<P align=justify>PERSONAL LIABILITY; INDEMNIFICATION; ADVANCEMENT OF EXPENSES:
To the fullest extent permitted by law, a director of the Company shall not be
personally liable to the Company or to its shareholders for monetary damages for
any breach of fiduciary duty as a director. No amendment to, modification of or
repeal of this paragraph 14 shall apply to or have any effect on the liability
or alleged liability of any director of the Company for or with respect to any
acts or omissions of such director occurring prior to such amendment. The
Company shall indemnify, advance expenses, and hold harmless, to the fullest
extent permitted by applicable law as it presently exists or may hereafter be
amended, any person (a &#147;Covered Person&#148;) who was or is made or is threatened to
be made a party or is otherwise involved in any action, suit or proceeding,
whether civil, criminal, administrative or investigative (a &#147;Proceeding&#148;), by
reason of the fact that he or she, or a person for whom he or she is the legal
representative, is or was a director or officer of the Company or, while a
director or officer of the Company, is or was serving at the request of the
Company as a director, officer, employee or agent of another corporation or of a
partnership, joint venture, trust, enterprise or nonprofit entity, including
service with respect to employee benefit plans, against all liability and loss
suffered and expenses (including attorneys' fees) reasonably incurred by such
Covered Person. Notwithstanding the preceding sentence, except for claims for
indemnification (following the final disposition of such Proceeding) or
advancement of expenses not paid in full, the Company shall be required to
indemnify a Covered Person in connection with a Proceeding (or part thereof)
commenced by such Covered Person only if the commencement of such Proceeding (or
part thereof) by the Covered Person was authorized in the specific case by the
board of directors of the Company. Any amendment, repeal or modification of this
paragraph 14 shall not adversely affect any right or protection hereunder of any
person in respect of any act or omission occurring prior to the time of such
repeal or modification. </P>
<P align=justify><B>Our Bylaws</B> </P>
<P align=justify>Our Bylaws provide that we shall indemnify a director as
required by the mandatory indemnification provisions of the WBCA, to the extent
applicable, and as otherwise provided in the Articles of Incorporation </P>
<P align=justify>ITEM 13.&nbsp;&nbsp;&nbsp; FINANCIAL STATEMENTS AND
SUPPLEMENTARY DATA. </P>
<P align=center>64</P>
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<P align=justify>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</P>
<P align=center><B>HELIUS MEDICAL TECHNOLOGIES, INC. </B></P>
<P align=center><B>(FORMERLY NEUROHABILITATION CORPORATION) </B></P>
<P align=center>(A Development Stage Company) </P>
<P align=center>&nbsp;</P>
<P align=center><B>FINANCIAL STATEMENTS </B></P>
<P align=center><B>Year Ended March 31, 2014 </B></P>
<P align=center>&nbsp;</P>
<P align=center>(Expressed in United States Dollars) <BR>
  (Prepared in accordance
  with generally accepted accounting principles<BR>
  used in the United States of
America (U.S. GAAP)) </P>
<P align=center>65<BR>
</P>
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<P align=center>
<IMG
src="heliusmarfinx2x1.jpg"
border=0 width="771" height="53"></P>
<BR>
<P align=center><B>REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM </B></P>
<P align=justify>&nbsp;</P>
<P align=justify>To the Shareholders and Directors of <br>
  Helius Medical Technologies, Inc.<br>
  (formerly NeuroHabilitation
  Corporation)<br>
  (A Development Stage Company) </P>
<P align=justify>We have audited the accompanying financial statements of Helius
  Medical Technologies, Inc. (formerly NeuroHabilitation Corporation) (the
  &#147;Company&#148;), which comprise the balance sheets of Helius Medical Technologies,
  Inc. as of March 31, 2014 and 2013, and the related statements of loss and
  comprehensive loss, stockholders&#146; equity (deficiency), and cash flows for the
  year ended March 31, 2014, and period from inception on January 22, 2013 to March 31, 2013 and the period from inception on January 22, 2013 to
  March 31, 2014. These financial statements are the responsibility of the
  Company&#146;s management. Our responsibility is to express an opinion on these
  financial statements based on our audit.</P>
<P align=justify>We conducted our audit in accordance with the standards of the
  Public Company Accounting Oversight Board (United States). Those standards
  require that we plan and perform the audit to obtain reasonable assurance about
  whether the financial statements are free of material misstatement. An audit
  includes examining, on a test basis, evidence supporting the amounts and
  disclosures in the financial statements. An audit also includes assessing the
  accounting principles used and significant estimates made by management, as well
  as evaluating the overall financial statement presentation. We believe that our
  audit provide a reasonable basis for our opinion. </P>
<P align=justify>In our opinion, the financial statements referred to above
  present fairly, in all material respects, the financial position of Helius
  Medical Technologies, Inc. as of March 31, 2014 and 2013, and the results of its
  operations and its cash flows for the year ended March 31, 2014,  the period from inception on January 22, 2013 to March 31, 2013 and the period
  from inception on January 22, 2013 to March 31, 2014 in conformity with
  accounting principles generally accepted in the United States of America. </P>
<P align=justify>The accompanying financial statements have been prepared
  assuming that Helius Medical Technologies, Inc. will continue as a going concern.
  As discussed in Note 1 to the financial statements, Helius Medical
  Technologies, Inc. has suffered recurring losses from operations and has a net
  capital deficiency. These matters, along with the other matters set forth in
  Note 1, indicate the existence of material uncertainties that raises substantial
  doubt about its ability to continue as a going concern. Management's plans in
  regard to these matters are also described in Note 1. The financial statements
  do not include any adjustments that might result from the outcome of this
  uncertainty. </P>
<P align=justify>&nbsp;</P>
<TABLE
style="BORDER-COLOR: black; FONT-SIZE: 10pt; BORDER-COLLAPSE: collapse; "
cellSpacing=0 cellPadding=0 width="100%" border=0>
  <TR vAlign=top>
    <TD align=left>&nbsp;</TD>
    <TD align=right>&#147;DAVIDSON &amp; COMPANY LLP&#148;</TD>
  </TR>
  <TR vAlign=top>
    <TD align=left>&nbsp;</TD>
    <TD align=right>&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD align=left>Vancouver, Canada </TD>
    <TD align=right width="50%">Chartered Accountants </TD>
  </TR>
  <TR>
    <TD align=left >&nbsp;</TD>
    <TD align=right width="50%" >&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD align=left>January 30, 2015 </TD>
    <TD align=left width="50%">&nbsp;</TD>
  </TR>
</TABLE>
<P align=center>
<IMG src="heliusmarfinx2x2.jpg" border=0 width="453" height="101"> </P>
<P align=center>66</P>
<HR style="PAGE-BREAK-AFTER: always" align=center width="100%" color=black
noShade SIZE=5>
<A name=page_MF-3></A><BR>
<TABLE
style="BORDER-COLOR: black; FONT-SIZE: 10pt; BORDER-COLLAPSE: collapse; "
cellSpacing=0 cellPadding=0 width="100%" border=0>
  <TR vAlign=top>
    <TD style="BORDER-TOP: #000000 2px solid" align=left><B>HELIUS MEDICAL
      TECHNOLOGIES, INC.</B> </TD>
  </TR>
  <TR vAlign=top>
    <TD align=left><B>(FORMERLY NEUROHABILITATION CORPORATION)</B> </TD>
  </TR>
  <TR vAlign=top>
    <TD align=left>(A development stage company) </TD>
  </TR>
  <TR vAlign=top>
    <TD align=left><B>Balance Sheets</B> </TD>
  </TR>
  <TR vAlign=top>
    <TD align=left>(Expressed in United States Dollars) </TD>
  </TR>
</TABLE>
<BR>
<TABLE
style="BORDER-COLOR: black; FONT-SIZE: 10pt; BORDER-COLLAPSE: collapse; "
cellSpacing=0 cellPadding=0 width="100%" border=0>
  <TR vAlign=top>
    <TD align=left valign="bottom">&nbsp;</TD>
    <TD width="1%" align=left valign="bottom">&nbsp;</TD>
    <TD width="12%" align=center valign="bottom" nowrap><B>March 31,</B> </TD>
    <TD width="2%" align=center valign="bottom" nowrap>&nbsp;</TD>
    <TD width="1%" align=center valign="bottom" nowrap>&nbsp;</TD>
    <TD width="12%" align=center valign="bottom" nowrap><B>March 31,</B> </TD>
    <TD width="2%" align=left valign="bottom">&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD align=left valign="bottom">&nbsp;</TD>
    <TD
    width="1%" align=left valign="bottom" style="BORDER-BOTTOM: #000000 1px solid">&nbsp;</TD>
    <TD
      width="12%" align=center valign="bottom" nowrap style="BORDER-BOTTOM: #000000 1px solid"><B>2014</B> </TD>
    <TD
    width="2%" align=center valign="bottom" nowrap style="BORDER-BOTTOM: #000000 1px solid">&nbsp;</TD>
    <TD
    width="1%" align=center valign="bottom" nowrap style="BORDER-BOTTOM: #000000 1px solid">&nbsp;</TD>
    <TD
      width="12%" align=center valign="bottom" nowrap style="BORDER-BOTTOM: #000000 1px solid"><B>2013</B> </TD>
    <TD
    width="2%" align=left valign="bottom" style="BORDER-BOTTOM: #000000 1px solid">&nbsp;</TD>
  </TR>
  <TR>
    <TD valign="bottom">&nbsp;</TD>
    <TD width="1%" valign="bottom">&nbsp;</TD>
    <TD width="12%" valign="bottom">&nbsp;</TD>
    <TD width="2%" valign="bottom">&nbsp;</TD>
    <TD width="1%" valign="bottom">&nbsp;</TD>
    <TD width="12%" valign="bottom">&nbsp;</TD>
    <TD width="2%" valign="bottom">&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD align=left valign="bottom"><B>ASSETS</B> </TD>
    <TD width="1%" align=left valign="bottom">&nbsp;</TD>
    <TD width="12%" align=left valign="bottom">&nbsp;</TD>
    <TD width="2%" align=left valign="bottom">&nbsp;</TD>
    <TD width="1%" align=left valign="bottom">&nbsp;</TD>
    <TD width="12%" align=left valign="bottom">&nbsp;</TD>
    <TD width="2%" align=left valign="bottom">&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD align=left valign="bottom" bgColor=#e6efff><B>Current Assets:</B> </TD>
    <TD width="1%" align=left valign="bottom" bgColor=#e6efff>&nbsp;</TD>
    <TD width="12%" align=left valign="bottom" bgColor=#e6efff>&nbsp;</TD>
    <TD width="2%" align=left valign="bottom" bgColor=#e6efff>&nbsp;</TD>
    <TD width="1%" align=left valign="bottom" bgColor=#e6efff>&nbsp;</TD>
    <TD width="12%" align=left valign="bottom" bgColor=#e6efff>&nbsp;</TD>
    <TD width="2%" align=left valign="bottom" bgColor=#e6efff>&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD align=left valign="bottom">&nbsp; &nbsp; &nbsp; &nbsp; &nbsp;Cash and cash equivalents </TD>
    <TD width="1%" align=left valign="bottom">$</TD>
    <TD width="12%" align=right valign="bottom">&nbsp;15,968 </TD>
    <TD width="2%" align=left valign="bottom">&nbsp;</TD>
    <TD width="1%" align=left valign="bottom">$</TD>
    <TD width="12%" align=right valign="bottom">&nbsp;217 </TD>
    <TD width="2%" align=left valign="bottom">&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD align=left valign="bottom" bgColor=#e6efff>&nbsp; &nbsp; &nbsp; &nbsp; &nbsp;Prepaids
      (Note 9) </TD>
    <TD width="1%" align=left valign="bottom"
    bgColor=#e6efff style="BORDER-BOTTOM: #000000 1px solid">&nbsp;</TD>
    <TD width="12%" align=right valign="bottom"
    bgColor=#e6efff style="BORDER-BOTTOM: #000000 1px solid">300,000 </TD>
    <TD width="2%" align=left valign="bottom"
    bgColor=#e6efff style="BORDER-BOTTOM: #000000 1px solid">&nbsp;</TD>
    <TD width="1%" align=left valign="bottom"
    bgColor=#e6efff style="BORDER-BOTTOM: #000000 1px solid">&nbsp;</TD>
    <TD width="12%" align=right valign="bottom"
    bgColor=#e6efff style="BORDER-BOTTOM: #000000 1px solid">- </TD>
    <TD width="2%" align=left valign="bottom"
    bgColor=#e6efff style="BORDER-BOTTOM: #000000 1px solid">&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD align=left valign="bottom"><B>Total Current Assets</B> </TD>
    <TD width="1%" align=left valign="bottom">&nbsp;</TD>
    <TD width="12%" align=right valign="bottom">315,968 </TD>
    <TD width="2%" align=left valign="bottom">&nbsp;</TD>
    <TD width="1%" align=left valign="bottom">&nbsp;</TD>
    <TD width="12%" align=right valign="bottom">217 </TD>
    <TD width="2%" align=left valign="bottom">&nbsp;</TD>
  </TR>
  <TR>
    <TD valign="bottom" bgColor=#e6efff>&nbsp;</TD>
    <TD width="1%" valign="bottom" bgColor=#e6efff>&nbsp;</TD>
    <TD width="12%" valign="bottom" bgColor=#e6efff>&nbsp;</TD>
    <TD width="2%" valign="bottom" bgColor=#e6efff>&nbsp;</TD>
    <TD width="1%" valign="bottom" bgColor=#e6efff>&nbsp;</TD>
    <TD width="12%" valign="bottom" bgColor=#e6efff>&nbsp;</TD>
    <TD width="2%" valign="bottom" bgColor=#e6efff>&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD align=left valign="bottom"><B>TOTAL ASSETS</B> </TD>
    <TD width="1%" align=left valign="bottom" style="BORDER-BOTTOM: #000000 3px double">$</TD>
    <TD
      width="12%" align=right valign="bottom" style="BORDER-BOTTOM: #000000 3px double">&nbsp;315,968 </TD>
    <TD
    width="2%" align=left valign="bottom" style="BORDER-BOTTOM: #000000 3px double">&nbsp;</TD>
    <TD width="1%" align=left valign="bottom" style="BORDER-BOTTOM: #000000 3px double">$</TD>
    <TD
      width="12%" align=right valign="bottom" style="BORDER-BOTTOM: #000000 3px double">&nbsp;217 </TD>
    <TD
    width="2%" align=left valign="bottom" style="BORDER-BOTTOM: #000000 3px double">&nbsp;</TD>
  </TR>
  <TR>
    <TD valign="bottom" bgColor=#e6efff>&nbsp;</TD>
    <TD width="1%" valign="bottom" bgColor=#e6efff>&nbsp;</TD>
    <TD width="12%" valign="bottom" bgColor=#e6efff>&nbsp;</TD>
    <TD width="2%" valign="bottom" bgColor=#e6efff>&nbsp;</TD>
    <TD width="1%" valign="bottom" bgColor=#e6efff>&nbsp;</TD>
    <TD width="12%" valign="bottom" bgColor=#e6efff>&nbsp;</TD>
    <TD width="2%" valign="bottom" bgColor=#e6efff>&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD align=left valign="bottom"><B>LIABILITIES &amp; SHAREHOLDERS&#146; EQUITY (DEFICIENCY)</B> </TD>
    <TD width="1%" align=left valign="bottom">&nbsp;</TD>
    <TD width="12%" align=left valign="bottom">&nbsp;</TD>
    <TD width="2%" align=left valign="bottom">&nbsp;</TD>
    <TD width="1%" align=left valign="bottom">&nbsp;</TD>
    <TD width="12%" align=left valign="bottom">&nbsp;</TD>
    <TD width="2%" align=left valign="bottom">&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD align=left valign="bottom" bgColor=#e6efff><B>Current Liabilities:</B> </TD>
    <TD width="1%" align=left valign="bottom" bgColor=#e6efff>&nbsp;</TD>
    <TD width="12%" align=left valign="bottom" bgColor=#e6efff>&nbsp;</TD>
    <TD width="2%" align=left valign="bottom" bgColor=#e6efff>&nbsp;</TD>
    <TD width="1%" align=left valign="bottom" bgColor=#e6efff>&nbsp;</TD>
    <TD width="12%" align=left valign="bottom" bgColor=#e6efff>&nbsp;</TD>
    <TD width="2%" align=left valign="bottom" bgColor=#e6efff>&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD align=left valign="bottom">&nbsp; &nbsp; &nbsp; &nbsp; &nbsp;Accounts payable and
      accrued liabilities </TD>
    <TD width="1%" align=left valign="bottom">$</TD>
    <TD width="12%" align=right valign="bottom">&nbsp;215,921 </TD>
    <TD width="2%" align=left valign="bottom">&nbsp;</TD>
    <TD width="1%" align=left valign="bottom">$</TD>
    <TD width="12%" align=right valign="bottom">&nbsp;5,836 </TD>
    <TD width="2%" align=left valign="bottom">&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD align=left valign="bottom" bgColor=#e6efff>&nbsp; &nbsp; &nbsp; &nbsp; &nbsp;Related
      party balance (Note 4) </TD>
    <TD width="1%" align=left valign="bottom" bgColor=#e6efff>&nbsp;</TD>
    <TD width="12%" align=right valign="bottom" bgColor=#e6efff>- </TD>
    <TD width="2%" align=left valign="bottom" bgColor=#e6efff>&nbsp;</TD>
    <TD width="1%" align=left valign="bottom" bgColor=#e6efff>&nbsp;</TD>
    <TD width="12%" align=right valign="bottom" bgColor=#e6efff>2,231 </TD>
    <TD width="2%" align=left valign="bottom" bgColor=#e6efff>&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD align=left valign="bottom">&nbsp; &nbsp; &nbsp; &nbsp; &nbsp;Convertible debenture
      (Note 5) </TD>
    <TD
    width="1%" align=left valign="bottom" style="BORDER-BOTTOM: #000000 1px solid">&nbsp;</TD>
    <TD
      width="12%" align=right valign="bottom" style="BORDER-BOTTOM: #000000 1px solid">368,024 </TD>
    <TD
    width="2%" align=left valign="bottom" style="BORDER-BOTTOM: #000000 1px solid">&nbsp;</TD>
    <TD
    width="1%" align=left valign="bottom" style="BORDER-BOTTOM: #000000 1px solid">&nbsp;</TD>
    <TD width="12%" align=right valign="bottom" style="BORDER-BOTTOM: #000000 1px solid">- </TD>
    <TD
    width="2%" align=left valign="bottom" style="BORDER-BOTTOM: #000000 1px solid">&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD align=left valign="bottom" bgColor=#e6efff><B>Total Liabilities</B> </TD>
    <TD width="1%" align=left valign="bottom"
    bgColor=#e6efff style="BORDER-BOTTOM: #000000 1px solid">&nbsp;</TD>
    <TD width="12%" align=right valign="bottom"
    bgColor=#e6efff style="BORDER-BOTTOM: #000000 1px solid">583,945 </TD>
    <TD width="2%" align=left valign="bottom"
    bgColor=#e6efff style="BORDER-BOTTOM: #000000 1px solid">&nbsp;</TD>
    <TD width="1%" align=left valign="bottom"
    bgColor=#e6efff style="BORDER-BOTTOM: #000000 1px solid">&nbsp;</TD>
    <TD width="12%" align=right valign="bottom"
    bgColor=#e6efff style="BORDER-BOTTOM: #000000 1px solid">8,067 </TD>
    <TD width="2%" align=left valign="bottom"
    bgColor=#e6efff style="BORDER-BOTTOM: #000000 1px solid">&nbsp;</TD>
  </TR>
  <TR>
    <TD valign="bottom">&nbsp;</TD>
    <TD width="1%" valign="bottom">&nbsp;</TD>
    <TD width="12%" valign="bottom">&nbsp;</TD>
    <TD width="2%" valign="bottom">&nbsp;</TD>
    <TD width="1%" valign="bottom">&nbsp;</TD>
    <TD width="12%" valign="bottom">&nbsp;</TD>
    <TD width="2%" valign="bottom">&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD align=left valign="bottom" bgColor=#e6efff><B>Stockholders' Equity (Deficiency):</B> </TD>
    <TD width="1%" align=left valign="bottom" bgColor=#e6efff>&nbsp;</TD>
    <TD width="12%" align=left valign="bottom" bgColor=#e6efff>&nbsp;</TD>
    <TD width="2%" align=left valign="bottom" bgColor=#e6efff>&nbsp;</TD>
    <TD width="1%" align=left valign="bottom" bgColor=#e6efff>&nbsp;</TD>
    <TD width="12%" align=left valign="bottom" bgColor=#e6efff>&nbsp;</TD>
    <TD width="2%" align=left valign="bottom" bgColor=#e6efff>&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD
      align=left valign="bottom"><STRONG>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</STRONG>Common
      Stock (unlimited Class A common shares authorized); <BR>
      &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; 32,070,052 shares
      issued and outstanding as at March 31, 2013 and 2014 </TD>
    <TD width="1%" align=left valign="bottom">&nbsp;</TD>
    <TD width="12%" align=right valign="bottom">8,510,000 </TD>
    <TD width="2%" align=left valign="bottom">&nbsp;</TD>
    <TD width="1%" align=left valign="bottom">&nbsp;</TD>
    <TD width="12%" align=right valign="bottom">8,510,000 </TD>
    <TD width="2%" align=left valign="bottom">&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD align=left valign="bottom" bgColor=#e6efff>&nbsp; &nbsp; &nbsp; &nbsp;
      &nbsp;Additional paid-in capital </TD>
    <TD width="1%" align=left valign="bottom" bgColor=#e6efff>&nbsp;</TD>
    <TD width="12%" align=right valign="bottom" bgColor=#e6efff>807,157 </TD>
    <TD width="2%" align=left valign="bottom" bgColor=#e6efff>&nbsp;</TD>
    <TD width="1%" align=left valign="bottom" bgColor=#e6efff>&nbsp;</TD>
    <TD width="12%" align=right valign="bottom" bgColor=#e6efff>- </TD>
    <TD width="2%" align=left valign="bottom" bgColor=#e6efff>&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD align=left valign="bottom">&nbsp; &nbsp; &nbsp; &nbsp; &nbsp;Deficit accumulated
      during the development stage </TD>
    <TD
    width="1%" align=left valign="bottom" style="BORDER-BOTTOM: #000000 1px solid">&nbsp;</TD>
    <TD
      width="12%" align=right valign="bottom" style="BORDER-BOTTOM: #000000 1px solid">(9,585,134</TD>
    <TD width="2%" align=left valign="bottom" style="BORDER-BOTTOM: #000000 1px solid">) </TD>
    <TD
    width="1%" align=left valign="bottom" style="BORDER-BOTTOM: #000000 1px solid">&nbsp;</TD>
    <TD
      width="12%" align=right valign="bottom" style="BORDER-BOTTOM: #000000 1px solid">(8,517,850</TD>
    <TD width="2%" align=left valign="bottom" style="BORDER-BOTTOM: #000000 1px solid">)</TD>
  </TR>
  <TR vAlign=top>
    <TD align=left valign="bottom" bgColor=#e6efff><B>Total Stockholders' Equity
      (Deficiency)</B> </TD>
    <TD width="1%" align=left valign="bottom"
    bgColor=#e6efff style="BORDER-BOTTOM: #000000 1px solid">&nbsp;</TD>
    <TD width="12%" align=right valign="bottom"
    bgColor=#e6efff style="BORDER-BOTTOM: #000000 1px solid">(267,977</TD>
    <TD width="2%" align=left valign="bottom"
    bgColor=#e6efff style="BORDER-BOTTOM: #000000 1px solid">) </TD>
    <TD width="1%" align=left valign="bottom"
    bgColor=#e6efff style="BORDER-BOTTOM: #000000 1px solid">&nbsp;</TD>
    <TD width="12%" align=right valign="bottom"
    bgColor=#e6efff style="BORDER-BOTTOM: #000000 1px solid">(7,850</TD>
    <TD width="2%" align=left valign="bottom"
    bgColor=#e6efff style="BORDER-BOTTOM: #000000 1px solid">) </TD>
  </TR>
  <TR>
    <TD valign="bottom">&nbsp;</TD>
    <TD width="1%" valign="bottom">&nbsp;</TD>
    <TD width="12%" valign="bottom">&nbsp;</TD>
    <TD width="2%" valign="bottom">&nbsp;</TD>
    <TD width="1%" valign="bottom">&nbsp;</TD>
    <TD width="12%" valign="bottom">&nbsp;</TD>
    <TD width="2%" valign="bottom">&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD align=left valign="bottom" bgColor=#e6efff><B>TOTAL LIABILITIES &amp; STOCKHOLDERS'
      EQUITY (DEFICIENCY)</B> </TD>
    <TD width="1%" align=left valign="bottom"
    bgColor=#e6efff style="BORDER-BOTTOM: #000000 3px double">$</TD>
    <TD width="12%" align=right valign="bottom"
    bgColor=#e6efff style="BORDER-BOTTOM: #000000 3px double">&nbsp;315,968 </TD>
    <TD width="2%" align=left valign="bottom"
    bgColor=#e6efff style="BORDER-BOTTOM: #000000 3px double">&nbsp;</TD>
    <TD width="1%" align=left valign="bottom"
    bgColor=#e6efff style="BORDER-BOTTOM: #000000 3px double">$</TD>
    <TD width="12%" align=right valign="bottom"
    bgColor=#e6efff style="BORDER-BOTTOM: #000000 3px double">&nbsp;217 </TD>
    <TD width="2%" align=left valign="bottom"
    bgColor=#e6efff style="BORDER-BOTTOM: #000000 3px double">&nbsp;</TD>
  </TR>
</TABLE>
<P align=justify>Nature and continuance of operations (Note 1) <BR>
  Commitments
  and contingencies (Note 9) <BR>
  Subsequent events (Note 11) <BR>
</P>
<P align=justify>These financial statements are authorized for issue by the
  Board of Directors on January 30, 2015. They are signed on the Company&#146;s behalf by: </P>
<TABLE
style="BORDER-COLOR: black; FONT-SIZE: 10pt; BORDER-COLLAPSE: collapse; "
cellSpacing=0 cellPadding=0 width="100%" border=0>
  <TR vAlign=top>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left><I>"Philippe
      Deschamps"</I> </TD>
    <TD align=left width="25%">Director </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left
      width="25%"><I>"Savio Chiu"</I> </TD>
    <TD align=left width="25%">Director </TD>
  </TR>
</TABLE>
<P align=center>(The accompanying notes are an integral part of these financial
  statements.) </P>
<P align=center>67</P>
<HR style="PAGE-BREAK-AFTER: always" align=center width="100%" color=black
noShade SIZE=5>
<A name=page_MF-4></A><BR>
<TABLE
style="BORDER-COLOR: black; FONT-SIZE: 10pt; BORDER-COLLAPSE: collapse; "
cellSpacing=0 cellPadding=0 width="100%" border=0>
  <TR vAlign=top>
    <TD style="BORDER-TOP: #000000 2px solid" align=left><B>HELIUS MEDICAL
      TECHNOLOGIES, INC.</B> </TD>
  </TR>
  <TR vAlign=top>
    <TD align=left><B>(FORMERLY NEUROHABILITATION CORPORATION)</B> </TD>
  </TR>
  <TR vAlign=top>
    <TD align=left>(A development stage company) </TD>
  </TR>
  <TR vAlign=top>
    <TD align=left><B>Statements of loss and comprehensive loss</B> </TD>
  </TR>
  <TR vAlign=top>
    <TD align=left>(Expressed in United States Dollars) </TD>
  </TR>
</TABLE>
<BR>
<TABLE
style="BORDER-COLOR: black; FONT-SIZE: 10pt; BORDER-COLLAPSE: collapse; "
cellSpacing=0 cellPadding=0 width="100%" border=0>
  <TR vAlign=top>
    <TD align=left valign="bottom">&nbsp;</TD>
    <TD width="1%" align=left valign="bottom" >&nbsp;</TD>
    <TD width="12%" align=center valign="bottom" nowrap>&nbsp;</TD>
    <TD width="2%" align=center valign="bottom" nowrap >&nbsp;</TD>
    <TD width="1%" align=center valign="bottom" nowrap >&nbsp;</TD>
    <TD width="12%" align=center valign="bottom" nowrap><B>Period from</B> </TD>
    <TD width="2%" align=center valign="bottom" nowrap >&nbsp;</TD>
    <TD width="1%" align=center valign="bottom" nowrap >&nbsp;</TD>
    <TD width="12%" align=center valign="bottom" nowrap><B>Period from</B> </TD>
    <TD width="2%" align=center valign="bottom" >&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD align=left valign="bottom">&nbsp;</TD>
    <TD width="1%" align=left valign="bottom" >&nbsp;</TD>
    <TD width="12%" align=center valign="bottom" nowrap>&nbsp;</TD>
    <TD width="2%" align=center valign="bottom" nowrap >&nbsp;</TD>
    <TD width="1%" align=center valign="bottom" nowrap >&nbsp;</TD>
    <TD width="12%" align=center valign="bottom" nowrap><B>January 22, 2013</B> </TD>
    <TD width="2%" align=center valign="bottom" nowrap >&nbsp;</TD>
    <TD width="1%" align=center valign="bottom" nowrap >&nbsp;</TD>
    <TD width="12%" align=center valign="bottom" nowrap><B>January 22, 2013</B> </TD>
    <TD width="2%" align=center valign="bottom" >&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD align=left valign="bottom">&nbsp;</TD>
    <TD width="1%" align=left valign="bottom" >&nbsp;</TD>
    <TD width="12%" align=center valign="bottom" nowrap><B>Year Ended</B> </TD>
    <TD width="2%" align=center valign="bottom" nowrap >&nbsp;</TD>
    <TD width="1%" align=center valign="bottom" nowrap >&nbsp;</TD>
    <TD width="12%" align=center valign="bottom" nowrap><B>(inception) to</B> </TD>
    <TD width="2%" align=center valign="bottom" nowrap >&nbsp;</TD>
    <TD width="1%" align=center valign="bottom" nowrap >&nbsp;</TD>
    <TD width="12%" align=center valign="bottom" nowrap><B>(inception) to</B> </TD>
    <TD width="2%" align=center valign="bottom" >&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD align=left valign="bottom">&nbsp;</TD>
    <TD width="1%" align=left valign="bottom" style="BORDER-BOTTOM: #000000 1px solid"
    >&nbsp;</TD>
    <TD
      width="12%" align=center valign="bottom" nowrap style="BORDER-BOTTOM: #000000 1px solid"><B>March 31, 2014</B> </TD>
    <TD width="2%" align=center valign="bottom" nowrap style="BORDER-BOTTOM: #000000 1px solid"
    >&nbsp;</TD>
    <TD width="1%" align=center valign="bottom" nowrap style="BORDER-BOTTOM: #000000 1px solid"
    >&nbsp;</TD>
    <TD
      width="12%" align=center valign="bottom" nowrap style="BORDER-BOTTOM: #000000 1px solid"><B>March 31, 2013</B> </TD>
    <TD width="2%" align=center valign="bottom" nowrap style="BORDER-BOTTOM: #000000 1px solid"
    >&nbsp;</TD>
    <TD width="1%" align=center valign="bottom" nowrap style="BORDER-BOTTOM: #000000 1px solid"
    >&nbsp;</TD>
    <TD
      width="12%" align=center valign="bottom" nowrap style="BORDER-BOTTOM: #000000 1px solid"><B>March 31, 2014</B> </TD>
    <TD width="2%" align=center valign="bottom" style="BORDER-BOTTOM: #000000 1px solid"
    >&nbsp;</TD>
  </TR>
  <TR>
    <TD valign="bottom">&nbsp;</TD>
    <TD width="1%" valign="bottom" >&nbsp;</TD>
    <TD width="12%" valign="bottom">&nbsp;</TD>
    <TD width="2%" valign="bottom" >&nbsp;</TD>
    <TD width="1%" valign="bottom" >&nbsp;</TD>
    <TD width="12%" valign="bottom">&nbsp;</TD>
    <TD width="2%" valign="bottom" >&nbsp;</TD>
    <TD width="1%" valign="bottom" >&nbsp;</TD>
    <TD width="12%" valign="bottom">&nbsp;</TD>
    <TD width="2%" valign="bottom" >&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD align=left valign="bottom" bgColor=#e6efff><B>Operating Expenses:</B> </TD>
    <TD width="1%" align=left valign="bottom"  bgColor=#e6efff>&nbsp;</TD>
    <TD width="12%" align=left valign="bottom" bgColor=#e6efff>&nbsp;</TD>
    <TD width="2%" align=left valign="bottom"  bgColor=#e6efff>&nbsp;</TD>
    <TD width="1%" align=left valign="bottom"  bgColor=#e6efff>&nbsp;</TD>
    <TD width="12%" align=left valign="bottom" bgColor=#e6efff>&nbsp;</TD>
    <TD width="2%" align=left valign="bottom"  bgColor=#e6efff>&nbsp;</TD>
    <TD width="1%" align=left valign="bottom"  bgColor=#e6efff>&nbsp;</TD>
    <TD width="12%" align=left valign="bottom" bgColor=#e6efff>&nbsp;</TD>
    <TD width="2%" align=left valign="bottom"  bgColor=#e6efff>&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD align=left valign="bottom">&nbsp;Consulting fees </TD>
    <TD width="1%" align=left valign="bottom" >$</TD>
    <TD width="12%" align=right valign="bottom">&nbsp;807,385 </TD>
    <TD width="2%" align=left valign="bottom" >&nbsp;</TD>
    <TD width="1%" align=left valign="bottom" >$</TD>
    <TD width="12%" align=right valign="bottom">&nbsp;2,800 </TD>
    <TD width="2%" align=left valign="bottom" >&nbsp;</TD>
    <TD width="1%" align=left valign="bottom" >$</TD>
    <TD width="12%" align=right valign="bottom">&nbsp;810,185 </TD>
    <TD width="2%" align=left valign="bottom" >&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD align=left valign="bottom" bgColor=#e6efff>&nbsp;Interest expense </TD>
    <TD width="1%" align=left valign="bottom"  bgColor=#e6efff>&nbsp;</TD>
    <TD width="12%" align=right valign="bottom" bgColor=#e6efff>1,344 </TD>
    <TD width="2%" align=left valign="bottom"  bgColor=#e6efff>&nbsp;</TD>
    <TD width="1%" align=left valign="bottom"  bgColor=#e6efff>&nbsp;</TD>
    <TD width="12%" align=right valign="bottom" bgColor=#e6efff>- </TD>
    <TD width="2%" align=left valign="bottom"  bgColor=#e6efff>&nbsp;</TD>
    <TD width="1%" align=left valign="bottom"  bgColor=#e6efff>&nbsp;</TD>
    <TD width="12%" align=right valign="bottom" bgColor=#e6efff>1,344 </TD>
    <TD width="2%" align=left valign="bottom"  bgColor=#e6efff>&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD align=left valign="bottom">&nbsp;Legal fees </TD>
    <TD width="1%" align=left valign="bottom" >&nbsp;</TD>
    <TD width="12%" align=right valign="bottom">33,966 </TD>
    <TD width="2%" align=left valign="bottom" >&nbsp;</TD>
    <TD width="1%" align=left valign="bottom" >&nbsp;</TD>
    <TD width="12%" align=right valign="bottom">14,192 </TD>
    <TD width="2%" align=left valign="bottom" >&nbsp;</TD>
    <TD width="1%" align=left valign="bottom" >&nbsp;</TD>
    <TD width="12%" align=right valign="bottom">48,158 </TD>
    <TD width="2%" align=left valign="bottom" >&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD align=left valign="bottom" bgColor=#e6efff>&nbsp;Meals and entertainment </TD>
    <TD width="1%" align=left valign="bottom"  bgColor=#e6efff>&nbsp;</TD>
    <TD width="12%" align=right valign="bottom" bgColor=#e6efff>833 </TD>
    <TD width="2%" align=left valign="bottom"  bgColor=#e6efff>&nbsp;</TD>
    <TD width="1%" align=left valign="bottom"  bgColor=#e6efff>&nbsp;</TD>
    <TD width="12%" align=right valign="bottom" bgColor=#e6efff>- </TD>
    <TD width="2%" align=left valign="bottom"  bgColor=#e6efff>&nbsp;</TD>
    <TD width="1%" align=left valign="bottom"  bgColor=#e6efff>&nbsp;</TD>
    <TD width="12%" align=right valign="bottom" bgColor=#e6efff>833 </TD>
    <TD width="2%" align=left valign="bottom"  bgColor=#e6efff>&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD align=left valign="bottom">&nbsp;Office expense </TD>
    <TD width="1%" align=left valign="bottom" >&nbsp;</TD>
    <TD width="12%" align=right valign="bottom">6,793 </TD>
    <TD width="2%" align=left valign="bottom" >&nbsp;</TD>
    <TD width="1%" align=left valign="bottom" >&nbsp;</TD>
    <TD width="12%" align=right valign="bottom">482 </TD>
    <TD width="2%" align=left valign="bottom" >&nbsp;</TD>
    <TD width="1%" align=left valign="bottom" >&nbsp;</TD>
    <TD width="12%" align=right valign="bottom">7,275 </TD>
    <TD width="2%" align=left valign="bottom" >&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD align=left valign="bottom" bgColor=#e6efff>&nbsp;Research and development expense </TD>
    <TD width="1%" align=left valign="bottom"  bgColor=#e6efff>&nbsp;</TD>
    <TD width="12%" align=right valign="bottom" bgColor=#e6efff>171,781 </TD>
    <TD width="2%" align=left valign="bottom"  bgColor=#e6efff>&nbsp;</TD>
    <TD width="1%" align=left valign="bottom"  bgColor=#e6efff>&nbsp;</TD>
    <TD width="12%" align=right valign="bottom" bgColor=#e6efff>4,250,000 </TD>
    <TD width="2%" align=left valign="bottom"  bgColor=#e6efff>&nbsp;</TD>
    <TD width="1%" align=left valign="bottom"  bgColor=#e6efff>&nbsp;</TD>
    <TD width="12%" align=right valign="bottom" bgColor=#e6efff>4,421,781 </TD>
    <TD width="2%" align=left valign="bottom"  bgColor=#e6efff>&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD align=left valign="bottom">&nbsp;Compensation expense for shares issued for services </TD>
    <TD width="1%" align=left valign="bottom" >&nbsp;</TD>
    <TD width="12%" align=right valign="bottom">- </TD>
    <TD width="2%" align=left valign="bottom" >&nbsp;</TD>
    <TD width="1%" align=left valign="bottom" >&nbsp;</TD>
    <TD width="12%" align=right valign="bottom">4,250,000 </TD>
    <TD width="2%" align=left valign="bottom" >&nbsp;</TD>
    <TD width="1%" align=left valign="bottom" >&nbsp;</TD>
    <TD width="12%" align=right valign="bottom">4,250,000 </TD>
    <TD width="2%" align=left valign="bottom" >&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD align=left valign="bottom" bgColor=#e6efff>&nbsp;Travel </TD>
    <TD width="1%" align=left valign="bottom"  bgColor=#e6efff>&nbsp;</TD>
    <TD width="12%" align=right valign="bottom" bgColor=#e6efff>22,027 </TD>
    <TD width="2%" align=left valign="bottom"  bgColor=#e6efff>&nbsp;</TD>
    <TD width="1%" align=left valign="bottom"  bgColor=#e6efff>&nbsp;</TD>
    <TD width="12%" align=right valign="bottom" bgColor=#e6efff>376 </TD>
    <TD width="2%" align=left valign="bottom"  bgColor=#e6efff>&nbsp;</TD>
    <TD width="1%" align=left valign="bottom"  bgColor=#e6efff>&nbsp;</TD>
    <TD width="12%" align=right valign="bottom" bgColor=#e6efff>22,403 </TD>
    <TD width="2%" align=left valign="bottom"  bgColor=#e6efff>&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD align=left valign="bottom">&nbsp;Wages and salaries </TD>
    <TD width="1%" align=left valign="bottom" style="BORDER-BOTTOM: #000000 1px solid"
    >&nbsp;</TD>
    <TD
      width="12%" align=right valign="bottom" style="BORDER-BOTTOM: #000000 1px solid">23,155 </TD>
    <TD width="2%" align=left valign="bottom" style="BORDER-BOTTOM: #000000 1px solid"
    >&nbsp;</TD>
    <TD width="1%" align=left valign="bottom" style="BORDER-BOTTOM: #000000 1px solid"
    >&nbsp;</TD>
    <TD width="12%" align=right valign="bottom" style="BORDER-BOTTOM: #000000 1px solid">- </TD>
    <TD width="2%" align=left valign="bottom" style="BORDER-BOTTOM: #000000 1px solid"
    >&nbsp;</TD>
    <TD width="1%" align=left valign="bottom" style="BORDER-BOTTOM: #000000 1px solid"
    >&nbsp;</TD>
    <TD
      width="12%" align=right valign="bottom" style="BORDER-BOTTOM: #000000 1px solid">23,155 </TD>
    <TD width="2%" align=left valign="bottom" style="BORDER-BOTTOM: #000000 1px solid"
    >&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD align=left valign="bottom" bgColor=#e6efff>Loss from operations </TD>
    <TD width="1%" align=left valign="bottom"  bgColor=#e6efff>&nbsp;</TD>
    <TD width="12%" align=right valign="bottom" bgColor=#e6efff>1,067,284 </TD>
    <TD width="2%" align=left valign="bottom"  bgColor=#e6efff>&nbsp;</TD>
    <TD width="1%" align=left valign="bottom"  bgColor=#e6efff>&nbsp;</TD>
    <TD width="12%" align=right valign="bottom" bgColor=#e6efff>8,517,850 </TD>
    <TD width="2%" align=left valign="bottom"  bgColor=#e6efff>&nbsp;</TD>
    <TD width="1%" align=left valign="bottom"  bgColor=#e6efff>&nbsp;</TD>
    <TD width="12%" align=right valign="bottom" bgColor=#e6efff>9,585,134 </TD>
    <TD width="2%" align=left valign="bottom"  bgColor=#e6efff>&nbsp;</TD>
  </TR>
  <TR>
    <TD valign="bottom">&nbsp;</TD>
    <TD width="1%" valign="bottom" >&nbsp;</TD>
    <TD width="12%" valign="bottom">&nbsp;</TD>
    <TD width="2%" valign="bottom" >&nbsp;</TD>
    <TD width="1%" valign="bottom" >&nbsp;</TD>
    <TD width="12%" valign="bottom">&nbsp;</TD>
    <TD width="2%" valign="bottom" >&nbsp;</TD>
    <TD width="1%" valign="bottom" >&nbsp;</TD>
    <TD width="12%" valign="bottom">&nbsp;</TD>
    <TD width="2%" valign="bottom" >&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD align=left valign="bottom" bgColor=#e6efff><B>Net loss and comprehensive loss</B> </TD>
    <TD width="1%" align=left valign="bottom"
     bgColor=#e6efff style="BORDER-BOTTOM: #000000 3px double">$</TD>
    <TD width="12%" align=right valign="bottom"
    bgColor=#e6efff style="BORDER-BOTTOM: #000000 3px double">&nbsp;1,067,284 </TD>
    <TD width="2%" align=left valign="bottom"
     bgColor=#e6efff style="BORDER-BOTTOM: #000000 3px double">&nbsp;</TD>
    <TD width="1%" align=left valign="bottom"
     bgColor=#e6efff style="BORDER-BOTTOM: #000000 3px double">$</TD>
    <TD width="12%" align=right valign="bottom"
    bgColor=#e6efff style="BORDER-BOTTOM: #000000 3px double">&nbsp;8,517,850 </TD>
    <TD width="2%" align=left valign="bottom"
     bgColor=#e6efff style="BORDER-BOTTOM: #000000 3px double">&nbsp;</TD>
    <TD width="1%" align=left valign="bottom"
     bgColor=#e6efff style="BORDER-BOTTOM: #000000 3px double">$</TD>
    <TD width="12%" align=right valign="bottom"
    bgColor=#e6efff style="BORDER-BOTTOM: #000000 3px double">&nbsp;9,585,134 </TD>
    <TD width="2%" align=left valign="bottom"
     bgColor=#e6efff style="BORDER-BOTTOM: #000000 3px double">&nbsp;</TD>
  </TR>
  <TR>
    <TD valign="bottom">&nbsp;</TD>
    <TD width="1%" valign="bottom" >&nbsp;</TD>
    <TD width="12%" valign="bottom">&nbsp;</TD>
    <TD width="2%" valign="bottom" >&nbsp;</TD>
    <TD width="1%" valign="bottom" >&nbsp;</TD>
    <TD width="12%" valign="bottom">&nbsp;</TD>
    <TD width="2%" valign="bottom" >&nbsp;</TD>
    <TD width="1%" valign="bottom" >&nbsp;</TD>
    <TD width="12%" valign="bottom">&nbsp;</TD>
    <TD width="2%" valign="bottom" >&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD align=left valign="bottom" bgColor=#e6efff><B>Basic and diluted net loss per share</B> </TD>
    <TD width="1%" align=left valign="bottom"
     bgColor=#e6efff style="BORDER-BOTTOM: #000000 3px double">$</TD>
    <TD width="12%" align=right valign="bottom"
    bgColor=#e6efff style="BORDER-BOTTOM: #000000 3px double">&nbsp;0.03 </TD>
    <TD width="2%" align=left valign="bottom"
     bgColor=#e6efff style="BORDER-BOTTOM: #000000 3px double">&nbsp;</TD>
    <TD width="1%" align=left valign="bottom"
     bgColor=#e6efff style="BORDER-BOTTOM: #000000 3px double">$</TD>
    <TD width="12%" align=right valign="bottom"
    bgColor=#e6efff style="BORDER-BOTTOM: #000000 3px double">&nbsp;0.27 </TD>
    <TD width="2%" align=left valign="bottom"
     bgColor=#e6efff style="BORDER-BOTTOM: #000000 3px double">&nbsp;</TD>
    <TD width="1%" align=left valign="bottom"  bgColor=#e6efff>&nbsp;</TD>
    <TD width="12%" align=left valign="bottom" bgColor=#e6efff>&nbsp;</TD>
    <TD width="2%" align=left valign="bottom"  bgColor=#e6efff>&nbsp;</TD>
  </TR>
  <TR>
    <TD valign="bottom">&nbsp;</TD>
    <TD width="1%" valign="bottom" >&nbsp;</TD>
    <TD width="12%" valign="bottom">&nbsp;</TD>
    <TD width="2%" valign="bottom" >&nbsp;</TD>
    <TD width="1%" valign="bottom" >&nbsp;</TD>
    <TD width="12%" valign="bottom">&nbsp;</TD>
    <TD width="2%" valign="bottom" >&nbsp;</TD>
    <TD width="1%" valign="bottom" >&nbsp;</TD>
    <TD width="12%" valign="bottom">&nbsp;</TD>
    <TD width="2%" valign="bottom" >&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD align=left valign="bottom" bgColor=#e6efff><B>Weighted average number of common shares
      outstanding -</B> <B>basic and diluted</B> </TD>
    <TD width="1%" align=left valign="bottom"
     bgColor=#e6efff style="BORDER-BOTTOM: #000000 3px double">&nbsp;</TD>
    <TD width="12%" align=right valign="bottom"
    bgColor=#e6efff style="BORDER-BOTTOM: #000000 3px double">32,070,052 </TD>
    <TD width="2%" align=left valign="bottom"
     bgColor=#e6efff style="BORDER-BOTTOM: #000000 3px double">&nbsp;</TD>
    <TD width="1%" align=left valign="bottom"
     bgColor=#e6efff style="BORDER-BOTTOM: #000000 3px double">&nbsp;</TD>
    <TD width="12%" align=right valign="bottom"
    bgColor=#e6efff style="BORDER-BOTTOM: #000000 3px double">32,070,052 </TD>
    <TD width="2%" align=left valign="bottom"
     bgColor=#e6efff style="BORDER-BOTTOM: #000000 3px double">&nbsp;</TD>
    <TD width="1%" align=left valign="bottom"  bgColor=#e6efff>&nbsp;</TD>
    <TD width="12%" align=left valign="bottom" bgColor=#e6efff></TD>
    <TD width="2%" align=left valign="bottom"
  bgColor=#e6efff>&nbsp;</TD>
  </TR>
</TABLE>
<P align=center>(The accompanying notes are an integral part of these financial
  statements.) </P>
<P align=center>68</P>
<HR style="PAGE-BREAK-AFTER: always" align=center width="100%" color=black
noShade SIZE=5>
<A name=page_MF-5></A><BR>
<TABLE
style="BORDER-COLOR: black; FONT-SIZE: 10pt; BORDER-COLLAPSE: collapse; "
cellSpacing=0 cellPadding=0 width="100%" border=0>
  <TR vAlign=top>
    <TD style="BORDER-TOP: #000000 2px solid" align=left><B>HELIUS MEDICAL
      TECHNOLOGIES, INC.</B> </TD>
  </TR>
  <TR vAlign=top>
    <TD align=left><B>(FORMERLY NEUROHABILITATION CORPORATION)</B> </TD>
  </TR>
  <TR vAlign=top>
    <TD align=left>(A development stage company) </TD>
  </TR>
  <TR vAlign=top>
    <TD align=left><B>Statements of stockholders&#146; equity (deficiency)</B> </TD>
  </TR>
  <TR vAlign=top>
    <TD align=left><B>January 22, 2013 (inception) to March 31, 2014</B> </TD>
  </TR>
  <TR vAlign=top>
    <TD align=left>(Expressed in United States Dollars) </TD>
  </TR>
</TABLE>
<BR>
<DIV>
  <TABLE
style="BORDER-COLOR: black; FONT-SIZE: 10pt; BORDER-COLLAPSE: collapse; "
cellSpacing=0 cellPadding=0 width="100%" border=0>
    <TR vAlign=top>
      <TD align=left valign="bottom" >&nbsp;</TD>
      <TD width="1%" align=left valign="bottom" >&nbsp;</TD>
      <TD width="10%" align=center valign="bottom" nowrap>&nbsp;</TD>
      <TD width="2%" align=center valign="bottom" nowrap >&nbsp;</TD>
      <TD width="1%" align=center valign="bottom" nowrap >&nbsp;</TD>
      <TD width="10%" align=center valign="bottom" nowrap>&nbsp;</TD>
      <TD width="2%" align=center valign="bottom" nowrap >&nbsp;</TD>
      <TD width="1%" align=center valign="bottom" nowrap >&nbsp;</TD>
      <TD width="10%" align=center valign="bottom" nowrap>&nbsp;</TD>
      <TD width="2%" align=center valign="bottom" nowrap >&nbsp;</TD>
      <TD width="1%" align=center valign="bottom" nowrap >&nbsp;</TD>
      <TD width="10%" align=center valign="bottom" nowrap><B>Deficit</B> </TD>
      <TD width="2%" align=center valign="bottom" nowrap >&nbsp;</TD>
      <TD width="1%" align=center valign="bottom" nowrap >&nbsp;</TD>
      <TD width="10%" align=center valign="bottom" nowrap>&nbsp;</TD>
      <TD width="2%" align=left valign="bottom" >&nbsp;</TD>
    </TR>
    <TR vAlign=top>
      <TD align=left valign="bottom" >&nbsp;</TD>
      <TD width="1%" align=left valign="bottom" >&nbsp;</TD>
      <TD width="10%" align=center valign="bottom" nowrap>&nbsp;</TD>
      <TD width="2%" align=center valign="bottom" nowrap >&nbsp;</TD>
      <TD width="1%" align=center valign="bottom" nowrap >&nbsp;</TD>
      <TD width="10%" align=center valign="bottom" nowrap>&nbsp;</TD>
      <TD width="2%" align=center valign="bottom" nowrap >&nbsp;</TD>
      <TD width="1%" align=center valign="bottom" nowrap >&nbsp;</TD>
      <TD width="10%" align=center valign="bottom" nowrap>&nbsp;</TD>
      <TD width="2%" align=center valign="bottom" nowrap >&nbsp;</TD>
      <TD width="1%" align=center valign="bottom" nowrap >&nbsp;</TD>
      <TD width="10%" align=center valign="bottom" nowrap><B>Accumulated</B> </TD>
      <TD width="2%" align=center valign="bottom" nowrap >&nbsp;</TD>
      <TD width="1%" align=center valign="bottom" nowrap >&nbsp;</TD>
      <TD width="10%" align=center valign="bottom" nowrap><B>Total</B> </TD>
      <TD width="2%" align=left valign="bottom" >&nbsp;</TD>
    </TR>
    <TR vAlign=top>
      <TD align=left valign="bottom" >&nbsp;</TD>
      <TD width="1%" align=left valign="bottom" >&nbsp;</TD>
      <TD width="10%" align=center valign="bottom" nowrap>&nbsp;</TD>
      <TD width="2%" align=center valign="bottom" nowrap >&nbsp;</TD>
      <TD width="1%" align=center valign="bottom" nowrap >&nbsp;</TD>
      <TD width="10%" align=center valign="bottom" nowrap>&nbsp;</TD>
      <TD width="2%" align=center valign="bottom" nowrap >&nbsp;</TD>
      <TD width="1%" align=center valign="bottom" nowrap >&nbsp;</TD>
      <TD width="10%" align=center valign="bottom" nowrap>&nbsp;</TD>
      <TD width="2%" align=center valign="bottom" nowrap >&nbsp;</TD>
      <TD width="1%" align=center valign="bottom" nowrap >&nbsp;</TD>
      <TD width="10%" align=center valign="bottom" nowrap><B>During the</B> </TD>
      <TD width="2%" align=center valign="bottom" nowrap >&nbsp;</TD>
      <TD width="1%" align=center valign="bottom" nowrap >&nbsp;</TD>
      <TD width="10%" align=center valign="bottom" nowrap><B>Shareholders'</B> </TD>
      <TD width="2%" align=left valign="bottom" >&nbsp;</TD>
    </TR>
    <TR vAlign=top>
      <TD align=left valign="bottom" >&nbsp;</TD>
      <TD width="1%" align=left valign="bottom" style="BORDER-BOTTOM: #000000 1px solid"
    >&nbsp;</TD>
      <TD colspan="4" align=center valign="bottom" nowrap style="BORDER-BOTTOM: #000000 1px solid"><B>Common Shares</B> </TD>
      <TD width="2%" align=center valign="bottom" nowrap style="BORDER-BOTTOM: #000000 1px solid"
    >&nbsp;</TD>
      <TD width="1%" align=center valign="bottom" nowrap >&nbsp;</TD>
      <TD width="10%" align=center valign="bottom" nowrap><B>Additional Paid-</B> </TD>
      <TD width="2%" align=center valign="bottom" nowrap >&nbsp;</TD>
      <TD width="1%" align=center valign="bottom" nowrap >&nbsp;</TD>
      <TD width="10%" align=center valign="bottom" nowrap><B>Development</B> </TD>
      <TD width="2%" align=center valign="bottom" nowrap >&nbsp;</TD>
      <TD width="1%" align=center valign="bottom" nowrap >&nbsp;</TD>
      <TD width="10%" align=center valign="bottom" nowrap><B>Equity</B> </TD>
      <TD width="2%" align=left valign="bottom" >&nbsp;</TD>
    </TR>
    <TR vAlign=top>
      <TD align=left valign="bottom" >&nbsp;</TD>
      <TD width="1%" align=left valign="bottom" style="BORDER-BOTTOM: #000000 1px solid"
    >&nbsp;</TD>
      <TD
      width="10%" align=center valign="bottom" nowrap style="BORDER-BOTTOM: #000000 1px solid"><B>Shares</B> </TD>
      <TD width="2%" align=center valign="bottom" nowrap style="BORDER-BOTTOM: #000000 1px solid"
    >&nbsp;</TD>
      <TD width="1%" align=center valign="bottom" nowrap style="BORDER-BOTTOM: #000000 1px solid"
    >&nbsp;</TD>
      <TD
      width="10%" align=center valign="bottom" nowrap style="BORDER-BOTTOM: #000000 1px solid"><B>Amount</B> </TD>
      <TD width="2%" align=center valign="bottom" nowrap style="BORDER-BOTTOM: #000000 1px solid"
    >&nbsp;</TD>
      <TD width="1%" align=center valign="bottom" nowrap style="BORDER-BOTTOM: #000000 1px solid"
    >&nbsp;</TD>
      <TD
      width="10%" align=center valign="bottom" nowrap style="BORDER-BOTTOM: #000000 1px solid"><B>In Capital</B> </TD>
      <TD width="2%" align=center valign="bottom" nowrap style="BORDER-BOTTOM: #000000 1px solid"
    >&nbsp;</TD>
      <TD width="1%" align=center valign="bottom" nowrap style="BORDER-BOTTOM: #000000 1px solid"
    >&nbsp;</TD>
      <TD
      width="10%" align=center valign="bottom" nowrap style="BORDER-BOTTOM: #000000 1px solid"><B>Stage</B> </TD>
      <TD width="2%" align=center valign="bottom" nowrap style="BORDER-BOTTOM: #000000 1px solid"
    >&nbsp;</TD>
      <TD width="1%" align=center valign="bottom" nowrap style="BORDER-BOTTOM: #000000 1px solid"
    >&nbsp;</TD>
      <TD
      width="10%" align=center valign="bottom" nowrap style="BORDER-BOTTOM: #000000 1px solid"><B>(Deficiency)</B> </TD>
      <TD width="2%" align=left valign="bottom" style="BORDER-BOTTOM: #000000 1px solid"
    >&nbsp;</TD>
    </TR>
    <TR>
      <TD valign="bottom" >&nbsp;</TD>
      <TD vAlign=bottom width="1%" >&nbsp;</TD>
      <TD vAlign=bottom width="10%">&nbsp;</TD>
      <TD vAlign=bottom width="2%" >&nbsp;</TD>
      <TD vAlign=bottom width="1%" >&nbsp;</TD>
      <TD vAlign=bottom width="10%">&nbsp;</TD>
      <TD vAlign=bottom width="2%" >&nbsp;</TD>
      <TD vAlign=bottom width="1%" >&nbsp;</TD>
      <TD vAlign=bottom width="10%">&nbsp;</TD>
      <TD vAlign=bottom width="2%" >&nbsp;</TD>
      <TD vAlign=bottom width="1%" >&nbsp;</TD>
      <TD vAlign=bottom width="10%">&nbsp;</TD>
      <TD vAlign=bottom width="2%" >&nbsp;</TD>
      <TD vAlign=bottom width="1%" >&nbsp;</TD>
      <TD vAlign=bottom width="10%">&nbsp;</TD>
      <TD vAlign=bottom width="2%" >&nbsp;</TD>
    </TR>
    <TR vAlign=top>
      <TD align=left valign="bottom" bgColor=#e6efff >Balance at January 22, 2013
        (Inception) </TD>
      <TD vAlign=bottom align=left width="1%"
    bgColor=#e6efff>&nbsp;</TD>
      <TD vAlign=bottom align=right width="10%" bgColor=#e6efff>- </TD>
      <TD vAlign=bottom align=left width="2%"
    bgColor=#e6efff>&nbsp;</TD>
      <TD vAlign=bottom align=left width="1%"  bgColor=#e6efff>$</TD>
      <TD vAlign=bottom align=right width="10%" bgColor=#e6efff>&nbsp;- </TD>
      <TD vAlign=bottom align=left width="2%"
    bgColor=#e6efff>&nbsp;</TD>
      <TD vAlign=bottom align=left width="1%"  bgColor=#e6efff>$</TD>
      <TD vAlign=bottom align=right width="10%" bgColor=#e6efff>&nbsp;- </TD>
      <TD vAlign=bottom align=left width="2%"
    bgColor=#e6efff>&nbsp;</TD>
      <TD vAlign=bottom align=left width="1%"  bgColor=#e6efff>$</TD>
      <TD vAlign=bottom align=right width="10%" bgColor=#e6efff>&nbsp;- </TD>
      <TD vAlign=bottom align=left width="2%"
    bgColor=#e6efff>&nbsp;</TD>
      <TD vAlign=bottom align=left width="1%"  bgColor=#e6efff>$</TD>
      <TD vAlign=bottom align=right width="10%" bgColor=#e6efff>&nbsp;- </TD>
      <TD vAlign=bottom align=left width="2%"
    bgColor=#e6efff>&nbsp;</TD>
    </TR>
    <TR>
      <TD valign="bottom" >&nbsp;</TD>
      <TD vAlign=bottom width="1%" >&nbsp;</TD>
      <TD vAlign=bottom width="10%">&nbsp;</TD>
      <TD vAlign=bottom width="2%" >&nbsp;</TD>
      <TD vAlign=bottom width="1%" >&nbsp;</TD>
      <TD vAlign=bottom width="10%">&nbsp;</TD>
      <TD vAlign=bottom width="2%" >&nbsp;</TD>
      <TD vAlign=bottom width="1%" >&nbsp;</TD>
      <TD vAlign=bottom width="10%">&nbsp;</TD>
      <TD vAlign=bottom width="2%" >&nbsp;</TD>
      <TD vAlign=bottom width="1%" >&nbsp;</TD>
      <TD vAlign=bottom width="10%">&nbsp;</TD>
      <TD vAlign=bottom width="2%" >&nbsp;</TD>
      <TD vAlign=bottom width="1%" >&nbsp;</TD>
      <TD vAlign=bottom width="10%">&nbsp;</TD>
      <TD vAlign=bottom width="2%" >&nbsp;</TD>
    </TR>
    <TR vAlign=top>
      <TD align=left valign="bottom" bgColor=#e6efff >Shares issued to ANR and MPJ
        (Note 6) </TD>
      <TD vAlign=bottom align=left width="1%"
    bgColor=#e6efff>&nbsp;</TD>
      <TD vAlign=bottom align=right width="10%" bgColor=#e6efff>32,070,052 </TD>
      <TD vAlign=bottom align=left width="2%"
    bgColor=#e6efff>&nbsp;</TD>
      <TD vAlign=bottom align=left width="1%"
    bgColor=#e6efff>&nbsp;</TD>
      <TD vAlign=bottom align=right width="10%" bgColor=#e6efff>8,510,000 </TD>
      <TD vAlign=bottom align=left width="2%"
    bgColor=#e6efff>&nbsp;</TD>
      <TD vAlign=bottom align=left width="1%"
    bgColor=#e6efff>&nbsp;</TD>
      <TD vAlign=bottom align=right width="10%" bgColor=#e6efff>- </TD>
      <TD vAlign=bottom align=left width="2%"
    bgColor=#e6efff>&nbsp;</TD>
      <TD vAlign=bottom align=left width="1%"
    bgColor=#e6efff>&nbsp;</TD>
      <TD vAlign=bottom align=right width="10%" bgColor=#e6efff>- </TD>
      <TD vAlign=bottom align=left width="2%"
    bgColor=#e6efff>&nbsp;</TD>
      <TD vAlign=bottom align=left width="1%"
    bgColor=#e6efff>&nbsp;</TD>
      <TD vAlign=bottom align=right width="10%" bgColor=#e6efff>8,510,000 </TD>
      <TD vAlign=bottom align=left width="2%"
    bgColor=#e6efff>&nbsp;</TD>
    </TR>
    <TR vAlign=top>
      <TD align=left valign="bottom" >Net loss and comprehensive loss </TD>
      <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=left
    width="1%" >&nbsp;</TD>
      <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=right
    width="10%">- </TD>
      <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=left
    width="2%" >&nbsp;</TD>
      <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=left
    width="1%" >&nbsp;</TD>
      <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=right
    width="10%">- </TD>
      <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=left
    width="2%" >&nbsp;</TD>
      <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=left
    width="1%" >&nbsp;</TD>
      <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=right
    width="10%">- </TD>
      <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=left
    width="2%" >&nbsp;</TD>
      <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=left
    width="1%" >&nbsp;</TD>
      <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=right
    width="10%">(8,517,850</TD>
      <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=left
    width="2%" >) </TD>
      <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=left
    width="1%" >&nbsp;</TD>
      <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=right
    width="10%">(8,517,850</TD>
      <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=left
    width="2%" >) </TD>
    </TR>
    <TR vAlign=top>
      <TD align=left valign="bottom" bgColor=#e6efff >Balance at March 31, 2013 </TD>
      <TD vAlign=bottom align=left width="1%"
    bgColor=#e6efff>&nbsp;</TD>
      <TD vAlign=bottom align=right width="10%" bgColor=#e6efff>32,070,052 </TD>
      <TD vAlign=bottom align=left width="2%"
    bgColor=#e6efff>&nbsp;</TD>
      <TD vAlign=bottom align=left width="1%"
    bgColor=#e6efff>&nbsp;</TD>
      <TD vAlign=bottom align=right width="10%" bgColor=#e6efff>8,510,000 </TD>
      <TD vAlign=bottom align=left width="2%"
    bgColor=#e6efff>&nbsp;</TD>
      <TD vAlign=bottom align=left width="1%"
    bgColor=#e6efff>&nbsp;</TD>
      <TD vAlign=bottom align=right width="10%" bgColor=#e6efff>- </TD>
      <TD vAlign=bottom align=left width="2%"
    bgColor=#e6efff>&nbsp;</TD>
      <TD vAlign=bottom align=left width="1%"
    bgColor=#e6efff>&nbsp;</TD>
      <TD vAlign=bottom align=right width="10%" bgColor=#e6efff>(8,517,850</TD>
      <TD vAlign=bottom align=left width="2%"  bgColor=#e6efff>)</TD>
      <TD vAlign=bottom align=left width="1%"
    bgColor=#e6efff>&nbsp;</TD>
      <TD vAlign=bottom align=right width="10%" bgColor=#e6efff>(7,850</TD>
      <TD vAlign=bottom align=left width="2%"  bgColor=#e6efff>) </TD>
    </TR>
    <TR>
      <TD valign="bottom" >&nbsp;</TD>
      <TD vAlign=bottom width="1%" >&nbsp;</TD>
      <TD vAlign=bottom width="10%">&nbsp;</TD>
      <TD vAlign=bottom width="2%" >&nbsp;</TD>
      <TD vAlign=bottom width="1%" >&nbsp;</TD>
      <TD vAlign=bottom width="10%">&nbsp;</TD>
      <TD vAlign=bottom width="2%" >&nbsp;</TD>
      <TD vAlign=bottom width="1%" >&nbsp;</TD>
      <TD vAlign=bottom width="10%">&nbsp;</TD>
      <TD vAlign=bottom width="2%" >&nbsp;</TD>
      <TD vAlign=bottom width="1%" >&nbsp;</TD>
      <TD vAlign=bottom width="10%">&nbsp;</TD>
      <TD vAlign=bottom width="2%" >&nbsp;</TD>
      <TD vAlign=bottom width="1%" >&nbsp;</TD>
      <TD vAlign=bottom width="10%">&nbsp;</TD>
      <TD vAlign=bottom width="2%" >&nbsp;</TD>
    </TR>
    <TR vAlign=top>
      <TD align=left valign="bottom" bgColor=#e6efff >Stock based compensation on
        40,816 options granted </TD>
      <TD vAlign=bottom align=left width="1%"
    bgColor=#e6efff>&nbsp;</TD>
      <TD vAlign=bottom align=right width="10%" bgColor=#e6efff>- </TD>
      <TD vAlign=bottom align=left width="2%"
    bgColor=#e6efff>&nbsp;</TD>
      <TD vAlign=bottom align=left width="1%"
    bgColor=#e6efff>&nbsp;</TD>
      <TD vAlign=bottom align=right width="10%" bgColor=#e6efff>- </TD>
      <TD vAlign=bottom align=left width="2%"
    bgColor=#e6efff>&nbsp;</TD>
      <TD vAlign=bottom align=left width="1%"
    bgColor=#e6efff>&nbsp;</TD>
      <TD vAlign=bottom align=right width="10%" bgColor=#e6efff>173,872 </TD>
      <TD vAlign=bottom align=left width="2%"
    bgColor=#e6efff>&nbsp;</TD>
      <TD vAlign=bottom align=left width="1%"
    bgColor=#e6efff>&nbsp;</TD>
      <TD vAlign=bottom align=right width="10%" bgColor=#e6efff>- </TD>
      <TD vAlign=bottom align=left width="2%"
    bgColor=#e6efff>&nbsp;</TD>
      <TD vAlign=bottom align=left width="1%"
    bgColor=#e6efff>&nbsp;</TD>
      <TD vAlign=bottom align=right width="10%" bgColor=#e6efff>173,872 </TD>
      <TD vAlign=bottom align=left width="2%"
    bgColor=#e6efff>&nbsp;</TD>
    </TR>
    <TR vAlign=top>
      <TD align=left valign="bottom" >Stock based compensation on 143,436 options
        granted </TD>
      <TD vAlign=bottom align=left width="1%" >&nbsp;</TD>
      <TD vAlign=bottom align=right width="10%">- </TD>
      <TD vAlign=bottom align=left width="2%" >&nbsp;</TD>
      <TD vAlign=bottom align=left width="1%" >&nbsp;</TD>
      <TD vAlign=bottom align=right width="10%">- </TD>
      <TD vAlign=bottom align=left width="2%" >&nbsp;</TD>
      <TD vAlign=bottom align=left width="1%" >&nbsp;</TD>
      <TD vAlign=bottom align=right width="10%">560,082 </TD>
      <TD vAlign=bottom align=left width="2%" >&nbsp;</TD>
      <TD vAlign=bottom align=left width="1%" >&nbsp;</TD>
      <TD vAlign=bottom align=right width="10%">- </TD>
      <TD vAlign=bottom align=left width="2%" >&nbsp;</TD>
      <TD vAlign=bottom align=left width="1%" >&nbsp;</TD>
      <TD vAlign=bottom align=right width="10%">560,082 </TD>
      <TD vAlign=bottom align=left width="2%" >&nbsp;</TD>
    </TR>
    <TR vAlign=top>
      <TD align=left valign="bottom" bgColor=#e6efff >Stock based compensation on
        17,184 options granted </TD>
      <TD vAlign=bottom align=left width="1%"
    bgColor=#e6efff>&nbsp;</TD>
      <TD vAlign=bottom align=right width="10%" bgColor=#e6efff>- </TD>
      <TD vAlign=bottom align=left width="2%"
    bgColor=#e6efff>&nbsp;</TD>
      <TD vAlign=bottom align=left width="1%"
    bgColor=#e6efff>&nbsp;</TD>
      <TD vAlign=bottom align=right width="10%" bgColor=#e6efff>- </TD>
      <TD vAlign=bottom align=left width="2%"
    bgColor=#e6efff>&nbsp;</TD>
      <TD vAlign=bottom align=left width="1%"
    bgColor=#e6efff>&nbsp;</TD>
      <TD vAlign=bottom align=right width="10%" bgColor=#e6efff>73,202 </TD>
      <TD vAlign=bottom align=left width="2%"
    bgColor=#e6efff>&nbsp;</TD>
      <TD vAlign=bottom align=left width="1%"
    bgColor=#e6efff>&nbsp;</TD>
      <TD vAlign=bottom align=right width="10%" bgColor=#e6efff>- </TD>
      <TD vAlign=bottom align=left width="2%"
    bgColor=#e6efff>&nbsp;</TD>
      <TD vAlign=bottom align=left width="1%"
    bgColor=#e6efff>&nbsp;</TD>
      <TD vAlign=bottom align=right width="10%" bgColor=#e6efff>73,202 </TD>
      <TD vAlign=bottom align=left width="2%"
    bgColor=#e6efff>&nbsp;</TD>
    </TR>
    <TR vAlign=top>
      <TD align=left valign="bottom" >Net loss and comprehensive loss </TD>
      <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=left
    width="1%" >&nbsp;</TD>
      <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=right
    width="10%">- </TD>
      <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=left
    width="2%" >&nbsp;</TD>
      <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=left
    width="1%" >&nbsp;</TD>
      <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=right
    width="10%">- </TD>
      <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=left
    width="2%" >&nbsp;</TD>
      <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=left
    width="1%" >&nbsp;</TD>
      <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=right
    width="10%">- </TD>
      <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=left
    width="2%" >&nbsp;</TD>
      <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=left
    width="1%" >&nbsp;</TD>
      <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=right
    width="10%">(1,067,284</TD>
      <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=left
    width="2%" >) </TD>
      <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=left
    width="1%" >&nbsp;</TD>
      <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=right
    width="10%">(1,067,284</TD>
      <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=left
    width="2%" >) </TD>
    </TR>
    <TR vAlign=top>
      <TD align=left valign="bottom" bgColor=#e6efff >Balance at March 31, 2014 </TD>
      <TD style="BORDER-BOTTOM: #000000 3px double" vAlign=bottom align=left
    width="1%"  bgColor=#e6efff>&nbsp;</TD>
      <TD style="BORDER-BOTTOM: #000000 3px double" vAlign=bottom align=right
    width="10%" bgColor=#e6efff>32,070,052 </TD>
      <TD style="BORDER-BOTTOM: #000000 3px double" vAlign=bottom align=left
    width="2%"  bgColor=#e6efff>&nbsp;</TD>
      <TD style="BORDER-BOTTOM: #000000 3px double" vAlign=bottom align=left
    width="1%"  bgColor=#e6efff>$</TD>
      <TD style="BORDER-BOTTOM: #000000 3px double" vAlign=bottom align=right
    width="10%" bgColor=#e6efff>&nbsp;8,510,000 </TD>
      <TD style="BORDER-BOTTOM: #000000 3px double" vAlign=bottom align=left
    width="2%"  bgColor=#e6efff>&nbsp;</TD>
      <TD style="BORDER-BOTTOM: #000000 3px double" vAlign=bottom align=left
    width="1%"  bgColor=#e6efff>$</TD>
      <TD style="BORDER-BOTTOM: #000000 3px double" vAlign=bottom align=right
    width="10%" bgColor=#e6efff>&nbsp;807,157 </TD>
      <TD style="BORDER-BOTTOM: #000000 3px double" vAlign=bottom align=left
    width="2%"  bgColor=#e6efff>&nbsp;</TD>
      <TD style="BORDER-BOTTOM: #000000 3px double" vAlign=bottom align=left
    width="1%"  bgColor=#e6efff>$</TD>
      <TD style="BORDER-BOTTOM: #000000 3px double" vAlign=bottom align=right
    width="10%" bgColor=#e6efff>&nbsp;(9,585,134</TD>
      <TD style="BORDER-BOTTOM: #000000 3px double" vAlign=bottom align=left
    width="2%"  bgColor=#e6efff>) </TD>
      <TD style="BORDER-BOTTOM: #000000 3px double" vAlign=bottom align=left
    width="1%"  bgColor=#e6efff>$</TD>
      <TD style="BORDER-BOTTOM: #000000 3px double" vAlign=bottom align=right
    width="10%" bgColor=#e6efff>&nbsp;(267,977</TD>
      <TD style="BORDER-BOTTOM: #000000 3px double" vAlign=bottom align=left
    width="2%"  bgColor=#e6efff>) </TD>
    </TR>
  </TABLE>
</DIV>
<P align=center>(The accompanying notes are an integral part of these financial
  statements.) </P>
<P align=center>69</P>
<HR style="PAGE-BREAK-AFTER: always" align=center width="100%" color=black
noShade SIZE=5>
<A name=page_MF-6></A><BR>
<TABLE
style="BORDER-COLOR: black; FONT-SIZE: 10pt; BORDER-COLLAPSE: collapse; "
cellSpacing=0 cellPadding=0 width="100%" border=0>
  <TR vAlign=top>
    <TD style="BORDER-TOP: #000000 2px solid" align=left><B>HELIUS MEDICAL
      TECHNOLOGIES, INC.</B> </TD>
  </TR>
  <TR vAlign=top>
    <TD align=left><B>(FORMERLY NEUROHABILITATION CORPORATION)</B> </TD>
  </TR>
  <TR vAlign=top>
    <TD align=left>(A development stage company) </TD>
  </TR>
  <TR vAlign=top>
    <TD align=left><B>Statements of cash flows</B> </TD>
  </TR>
  <TR vAlign=top>
    <TD align=left>(Expressed in United States Dollars) </TD>
  </TR>
</TABLE>
<BR>
<TABLE
style="BORDER-COLOR: black; FONT-SIZE: 10pt; BORDER-COLLAPSE: collapse; "
cellSpacing=0 cellPadding=0 width="100%" border=0>
  <TR vAlign=top>
    <TD align=left valign="bottom">&nbsp;</TD>
    <TD width="1%" align=left valign="bottom" >&nbsp;</TD>
    <TD width="12%" align=center valign="bottom" nowrap>&nbsp;</TD>
    <TD width="2%" align=center valign="bottom" nowrap >&nbsp;</TD>
    <TD width="1%" align=center valign="bottom" nowrap >&nbsp;</TD>
    <TD width="12%" align=center valign="bottom" nowrap><B>Period from</B> </TD>
    <TD width="2%" align=center valign="bottom" nowrap >&nbsp;</TD>
    <TD width="1%" align=center valign="bottom" nowrap >&nbsp;</TD>
    <TD width="12%" align=center valign="bottom" nowrap><B>Period from</B> </TD>
    <TD width="2%" align=center valign="bottom" >&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD align=left valign="bottom">&nbsp;</TD>
    <TD width="1%" align=left valign="bottom" >&nbsp;</TD>
    <TD width="12%" align=center valign="bottom" nowrap>&nbsp;</TD>
    <TD width="2%" align=center valign="bottom" nowrap >&nbsp;</TD>
    <TD width="1%" align=center valign="bottom" nowrap >&nbsp;</TD>
    <TD width="12%" align=center valign="bottom" nowrap><B>January 22, 2013</B> </TD>
    <TD width="2%" align=center valign="bottom" nowrap >&nbsp;</TD>
    <TD width="1%" align=center valign="bottom" nowrap >&nbsp;</TD>
    <TD width="12%" align=center valign="bottom" nowrap><B>January 22, 2013</B> </TD>
    <TD width="2%" align=center valign="bottom" >&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD align=left valign="bottom">&nbsp;</TD>
    <TD width="1%" align=left valign="bottom" >&nbsp;</TD>
    <TD width="12%" align=center valign="bottom" nowrap><B>Year Ended</B> </TD>
    <TD width="2%" align=center valign="bottom" nowrap >&nbsp;</TD>
    <TD width="1%" align=center valign="bottom" nowrap >&nbsp;</TD>
    <TD width="12%" align=center valign="bottom" nowrap><B>(inception) to</B> </TD>
    <TD width="2%" align=center valign="bottom" nowrap >&nbsp;</TD>
    <TD width="1%" align=center valign="bottom" nowrap >&nbsp;</TD>
    <TD width="12%" align=center valign="bottom" nowrap><B>(inception) to</B> </TD>
    <TD width="2%" align=center valign="bottom" >&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD align=left valign="bottom">&nbsp;</TD>
    <TD width="1%" align=left valign="bottom" >&nbsp;</TD>
    <TD width="12%" align=center valign="bottom" nowrap><B>March 31,</B> </TD>
    <TD width="2%" align=center valign="bottom" nowrap >&nbsp;</TD>
    <TD width="1%" align=center valign="bottom" nowrap >&nbsp;</TD>
    <TD width="12%" align=center valign="bottom" nowrap><B>March 31,</B> </TD>
    <TD width="2%" align=center valign="bottom" nowrap >&nbsp;</TD>
    <TD width="1%" align=center valign="bottom" nowrap >&nbsp;</TD>
    <TD width="12%" align=center valign="bottom" nowrap><B>March 31,</B> </TD>
    <TD width="2%" align=center valign="bottom" >&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD align=left valign="bottom">&nbsp;</TD>
    <TD width="1%" align=left valign="bottom" style="BORDER-BOTTOM: #000000 1px solid"
    >&nbsp;</TD>
    <TD
      width="12%" align=center valign="bottom" nowrap style="BORDER-BOTTOM: #000000 1px solid"><B>2014</B> </TD>
    <TD width="2%" align=center valign="bottom" nowrap style="BORDER-BOTTOM: #000000 1px solid"
    >&nbsp;</TD>
    <TD width="1%" align=center valign="bottom" nowrap style="BORDER-BOTTOM: #000000 1px solid"
    >&nbsp;</TD>
    <TD
      width="12%" align=center valign="bottom" nowrap style="BORDER-BOTTOM: #000000 1px solid"><B>2013</B> </TD>
    <TD width="2%" align=center valign="bottom" nowrap style="BORDER-BOTTOM: #000000 1px solid"
    >&nbsp;</TD>
    <TD width="1%" align=center valign="bottom" nowrap style="BORDER-BOTTOM: #000000 1px solid"
    >&nbsp;</TD>
    <TD
      width="12%" align=center valign="bottom" nowrap style="BORDER-BOTTOM: #000000 1px solid"><B>2014</B> </TD>
    <TD width="2%" align=center valign="bottom" style="BORDER-BOTTOM: #000000 1px solid"
    >&nbsp;</TD>
  </TR>
  <TR>
    <TD valign="bottom">&nbsp;</TD>
    <TD width="1%" valign="bottom" >&nbsp;</TD>
    <TD width="12%" valign="bottom">&nbsp;</TD>
    <TD width="2%" valign="bottom" >&nbsp;</TD>
    <TD width="1%" valign="bottom" >&nbsp;</TD>
    <TD width="12%" valign="bottom">&nbsp;</TD>
    <TD width="2%" valign="bottom" >&nbsp;</TD>
    <TD width="1%" valign="bottom" >&nbsp;</TD>
    <TD width="12%" valign="bottom">&nbsp;</TD>
    <TD width="2%" valign="bottom" >&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD align=left valign="bottom" bgColor=#e6efff><B>Cash Flows from Operating
      Activities:</B> </TD>
    <TD width="1%" align=left valign="bottom"  bgColor=#e6efff>&nbsp;</TD>
    <TD width="12%" align=left valign="bottom" bgColor=#e6efff>&nbsp;</TD>
    <TD width="2%" align=left valign="bottom"  bgColor=#e6efff>&nbsp;</TD>
    <TD width="1%" align=left valign="bottom"  bgColor=#e6efff>&nbsp;</TD>
    <TD width="12%" align=left valign="bottom" bgColor=#e6efff>&nbsp;</TD>
    <TD width="2%" align=left valign="bottom"  bgColor=#e6efff>&nbsp;</TD>
    <TD width="1%" align=left valign="bottom"  bgColor=#e6efff>&nbsp;</TD>
    <TD width="12%" align=left valign="bottom" bgColor=#e6efff>&nbsp;</TD>
    <TD width="2%" align=left valign="bottom"  bgColor=#e6efff>&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD align=left valign="bottom">Net loss </TD>
    <TD width="1%" align=left valign="bottom" >$</TD>
    <TD width="12%" align=right valign="bottom">&nbsp;(1,067,284</TD>
    <TD width="2%" align=left valign="bottom" >) </TD>
    <TD width="1%" align=left valign="bottom" >$</TD>
    <TD width="12%" align=right valign="bottom">&nbsp;(8,517,850</TD>
    <TD width="2%" align=left valign="bottom" >) </TD>
    <TD width="1%" align=left valign="bottom" >$</TD>
    <TD width="12%" align=right valign="bottom">&nbsp;(9,585,134</TD>
    <TD width="2%" align=left valign="bottom" >) </TD>
  </TR>
  <TR vAlign=top>
    <TD align=left valign="bottom" bgColor=#e6efff>Accreted interest </TD>
    <TD width="1%" align=left valign="bottom"  bgColor=#e6efff>&nbsp;</TD>
    <TD width="12%" align=right valign="bottom" bgColor=#e6efff>1,344 </TD>
    <TD width="2%" align=left valign="bottom"  bgColor=#e6efff>&nbsp;</TD>
    <TD width="1%" align=left valign="bottom"  bgColor=#e6efff>&nbsp;</TD>
    <TD width="12%" align=right valign="bottom" bgColor=#e6efff>- </TD>
    <TD width="2%" align=left valign="bottom"  bgColor=#e6efff>&nbsp;</TD>
    <TD width="1%" align=left valign="bottom"  bgColor=#e6efff>&nbsp;</TD>
    <TD width="12%" align=right valign="bottom" bgColor=#e6efff>1,344 </TD>
    <TD width="2%" align=left valign="bottom"  bgColor=#e6efff>&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD align=left valign="bottom">Consulting expense </TD>
    <TD width="1%" align=left valign="bottom" >&nbsp;</TD>
    <TD width="12%" align=right valign="bottom">807,157 </TD>
    <TD width="2%" align=left valign="bottom" >&nbsp;</TD>
    <TD width="1%" align=left valign="bottom" >&nbsp;</TD>
    <TD width="12%" align=right valign="bottom">- </TD>
    <TD width="2%" align=left valign="bottom" >&nbsp;</TD>
    <TD width="1%" align=left valign="bottom" >&nbsp;</TD>
    <TD width="12%" align=right valign="bottom">807,157 </TD>
    <TD width="2%" align=left valign="bottom" >&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD align=left valign="bottom" bgColor=#e6efff>Research and development </TD>
    <TD width="1%" align=left valign="bottom"  bgColor=#e6efff>&nbsp;</TD>
    <TD width="12%" align=right valign="bottom" bgColor=#e6efff>- </TD>
    <TD width="2%" align=left valign="bottom"  bgColor=#e6efff>&nbsp;</TD>
    <TD width="1%" align=left valign="bottom"  bgColor=#e6efff>&nbsp;</TD>
    <TD width="12%" align=right valign="bottom" bgColor=#e6efff>4,250,000 </TD>
    <TD width="2%" align=left valign="bottom"  bgColor=#e6efff>&nbsp;</TD>
    <TD width="1%" align=left valign="bottom"  bgColor=#e6efff>&nbsp;</TD>
    <TD width="12%" align=right valign="bottom" bgColor=#e6efff>4,250,000 </TD>
    <TD width="2%" align=left valign="bottom"  bgColor=#e6efff>&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD align=left valign="bottom">Compensation expense for shares issued for services </TD>
    <TD width="1%" align=left valign="bottom" >&nbsp;</TD>
    <TD width="12%" align=right valign="bottom">- </TD>
    <TD width="2%" align=left valign="bottom" >&nbsp;</TD>
    <TD width="1%" align=left valign="bottom" >&nbsp;</TD>
    <TD width="12%" align=right valign="bottom">4,250,000 </TD>
    <TD width="2%" align=left valign="bottom" >&nbsp;</TD>
    <TD width="1%" align=left valign="bottom" >&nbsp;</TD>
    <TD width="12%" align=right valign="bottom">4,250,000 </TD>
    <TD width="2%" align=left valign="bottom" >&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD align=left valign="bottom" bgColor=#e6efff>Changes in operating assets and
      liabilities: </TD>
    <TD width="1%" align=left valign="bottom"  bgColor=#e6efff>&nbsp;</TD>
    <TD width="12%" align=left valign="bottom" bgColor=#e6efff>&nbsp;</TD>
    <TD width="2%" align=left valign="bottom"  bgColor=#e6efff>&nbsp;</TD>
    <TD width="1%" align=left valign="bottom"  bgColor=#e6efff>&nbsp;</TD>
    <TD width="12%" align=left valign="bottom" bgColor=#e6efff>&nbsp;</TD>
    <TD width="2%" align=left valign="bottom"  bgColor=#e6efff>&nbsp;</TD>
    <TD width="1%" align=left valign="bottom"  bgColor=#e6efff>&nbsp;</TD>
    <TD width="12%" align=left valign="bottom" bgColor=#e6efff>&nbsp;</TD>
    <TD width="2%" align=left valign="bottom"  bgColor=#e6efff>&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD align=left valign="bottom">&nbsp; &nbsp; &nbsp; &nbsp;Prepaids </TD>
    <TD width="1%" align=left valign="bottom" >&nbsp;</TD>
    <TD width="12%" align=right valign="bottom">(300,000</TD>
    <TD width="2%" align=left valign="bottom" >) </TD>
    <TD width="1%" align=left valign="bottom" >&nbsp;</TD>
    <TD width="12%" align=right valign="bottom">- </TD>
    <TD width="2%" align=left valign="bottom" >&nbsp;</TD>
    <TD width="1%" align=left valign="bottom" >&nbsp;</TD>
    <TD width="12%" align=right valign="bottom">(300,000</TD>
    <TD width="2%" align=left valign="bottom" >) </TD>
  </TR>
  <TR vAlign=top>
    <TD align=left valign="bottom" bgColor=#e6efff>&nbsp; &nbsp; &nbsp; &nbsp;Account payable
      and accrued liabilities </TD>
    <TD width="1%" align=left valign="bottom"
     bgColor=#e6efff style="BORDER-BOTTOM: #000000 1px solid">&nbsp;</TD>
    <TD width="12%" align=right valign="bottom"
    bgColor=#e6efff style="BORDER-BOTTOM: #000000 1px solid">210,085 </TD>
    <TD width="2%" align=left valign="bottom"
     bgColor=#e6efff style="BORDER-BOTTOM: #000000 1px solid">&nbsp;</TD>
    <TD width="1%" align=left valign="bottom"
     bgColor=#e6efff style="BORDER-BOTTOM: #000000 1px solid">&nbsp;</TD>
    <TD width="12%" align=right valign="bottom"
    bgColor=#e6efff style="BORDER-BOTTOM: #000000 1px solid">5,836 </TD>
    <TD width="2%" align=left valign="bottom"
     bgColor=#e6efff style="BORDER-BOTTOM: #000000 1px solid">&nbsp;</TD>
    <TD width="1%" align=left valign="bottom"
     bgColor=#e6efff style="BORDER-BOTTOM: #000000 1px solid">&nbsp;</TD>
    <TD width="12%" align=right valign="bottom"
    bgColor=#e6efff style="BORDER-BOTTOM: #000000 1px solid">215,921 </TD>
    <TD width="2%" align=left valign="bottom"
     bgColor=#e6efff style="BORDER-BOTTOM: #000000 1px solid">&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD align=left valign="bottom">&nbsp; &nbsp; &nbsp; &nbsp; &nbsp;Net cash flows used for
      operating activities </TD>
    <TD width="1%" align=left valign="bottom" style="BORDER-BOTTOM: #000000 1px solid"
    >&nbsp;</TD>
    <TD
      width="12%" align=right valign="bottom" style="BORDER-BOTTOM: #000000 1px solid">(348,698</TD>
    <TD width="2%" align=left valign="bottom" style="BORDER-BOTTOM: #000000 1px solid"
    >) </TD>
    <TD width="1%" align=left valign="bottom" style="BORDER-BOTTOM: #000000 1px solid"
    >&nbsp;</TD>
    <TD
      width="12%" align=right valign="bottom" style="BORDER-BOTTOM: #000000 1px solid">(12,014</TD>
    <TD width="2%" align=left valign="bottom" style="BORDER-BOTTOM: #000000 1px solid"
    >) </TD>
    <TD width="1%" align=left valign="bottom" style="BORDER-BOTTOM: #000000 1px solid"
    >&nbsp;</TD>
    <TD
      width="12%" align=right valign="bottom" style="BORDER-BOTTOM: #000000 1px solid">(360,712</TD>
    <TD width="2%" align=left valign="bottom" style="BORDER-BOTTOM: #000000 1px solid"
    >) </TD>
  </TR>
  <TR>
    <TD valign="bottom" bgColor=#e6efff>&nbsp;</TD>
    <TD width="1%" valign="bottom"  bgColor=#e6efff>&nbsp;</TD>
    <TD width="12%" valign="bottom" bgColor=#e6efff>&nbsp;</TD>
    <TD width="2%" valign="bottom"  bgColor=#e6efff>&nbsp;</TD>
    <TD width="1%" valign="bottom"  bgColor=#e6efff>&nbsp;</TD>
    <TD width="12%" valign="bottom" bgColor=#e6efff>&nbsp;</TD>
    <TD width="2%" valign="bottom"  bgColor=#e6efff>&nbsp;</TD>
    <TD width="1%" valign="bottom"  bgColor=#e6efff>&nbsp;</TD>
    <TD width="12%" valign="bottom" bgColor=#e6efff>&nbsp;</TD>
    <TD width="2%" valign="bottom"  bgColor=#e6efff>&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD align=left valign="bottom"><B>Cash Flows from Investing Activities:</B> </TD>
    <TD width="1%" align=left valign="bottom" style="BORDER-BOTTOM: #000000 1px solid"
    >&nbsp;</TD>
    <TD width="12%" align=left valign="bottom" style="BORDER-BOTTOM: #000000 1px solid">&nbsp;</TD>
    <TD width="2%" align=left valign="bottom" style="BORDER-BOTTOM: #000000 1px solid"
    >&nbsp;</TD>
    <TD width="1%" align=left valign="bottom" style="BORDER-BOTTOM: #000000 1px solid"
    >&nbsp;</TD>
    <TD width="12%" align=left valign="bottom" style="BORDER-BOTTOM: #000000 1px solid">&nbsp;</TD>
    <TD width="2%" align=left valign="bottom" style="BORDER-BOTTOM: #000000 1px solid"
    >&nbsp;</TD>
    <TD width="1%" align=left valign="bottom" style="BORDER-BOTTOM: #000000 1px solid"
    >&nbsp;</TD>
    <TD width="12%" align=left valign="bottom" style="BORDER-BOTTOM: #000000 1px solid">&nbsp;</TD>
    <TD width="2%" align=left valign="bottom" style="BORDER-BOTTOM: #000000 1px solid"
    >&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD align=left valign="bottom" bgColor=#e6efff>&nbsp; &nbsp; &nbsp; &nbsp; &nbsp;Net cash
      flows provided by (used for) investing activities </TD>
    <TD width="1%" align=left valign="bottom"
     bgColor=#e6efff style="BORDER-BOTTOM: #000000 1px solid">&nbsp;</TD>
    <TD width="12%" align=right valign="bottom"
    bgColor=#e6efff style="BORDER-BOTTOM: #000000 1px solid">- </TD>
    <TD width="2%" align=left valign="bottom"
     bgColor=#e6efff style="BORDER-BOTTOM: #000000 1px solid">&nbsp;</TD>
    <TD width="1%" align=left valign="bottom"
     bgColor=#e6efff style="BORDER-BOTTOM: #000000 1px solid">&nbsp;</TD>
    <TD width="12%" align=right valign="bottom"
    bgColor=#e6efff style="BORDER-BOTTOM: #000000 1px solid">- </TD>
    <TD width="2%" align=left valign="bottom"
     bgColor=#e6efff style="BORDER-BOTTOM: #000000 1px solid">&nbsp;</TD>
    <TD width="1%" align=left valign="bottom"
     bgColor=#e6efff style="BORDER-BOTTOM: #000000 1px solid">&nbsp;</TD>
    <TD width="12%" align=right valign="bottom"
    bgColor=#e6efff style="BORDER-BOTTOM: #000000 1px solid">- </TD>
    <TD width="2%" align=left valign="bottom"
     bgColor=#e6efff style="BORDER-BOTTOM: #000000 1px solid">&nbsp;</TD>
  </TR>
  <TR>
    <TD valign="bottom">&nbsp;</TD>
    <TD width="1%" valign="bottom" >&nbsp;</TD>
    <TD width="12%" valign="bottom">&nbsp;</TD>
    <TD width="2%" valign="bottom" >&nbsp;</TD>
    <TD width="1%" valign="bottom" >&nbsp;</TD>
    <TD width="12%" valign="bottom">&nbsp;</TD>
    <TD width="2%" valign="bottom" >&nbsp;</TD>
    <TD width="1%" valign="bottom" >&nbsp;</TD>
    <TD width="12%" valign="bottom">&nbsp;</TD>
    <TD width="2%" valign="bottom" >&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD align=left valign="bottom" bgColor=#e6efff><B>Cash Flows from Financing
      Activities:</B> </TD>
    <TD width="1%" align=left valign="bottom"  bgColor=#e6efff>&nbsp;</TD>
    <TD width="12%" align=left valign="bottom" bgColor=#e6efff>&nbsp;</TD>
    <TD width="2%" align=left valign="bottom"  bgColor=#e6efff>&nbsp;</TD>
    <TD width="1%" align=left valign="bottom"  bgColor=#e6efff>&nbsp;</TD>
    <TD width="12%" align=left valign="bottom" bgColor=#e6efff>&nbsp;</TD>
    <TD width="2%" align=left valign="bottom"  bgColor=#e6efff>&nbsp;</TD>
    <TD width="1%" align=left valign="bottom"  bgColor=#e6efff>&nbsp;</TD>
    <TD width="12%" align=left valign="bottom" bgColor=#e6efff>&nbsp;</TD>
    <TD width="2%" align=left valign="bottom"  bgColor=#e6efff>&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD align=left valign="bottom">&nbsp; &nbsp;Proceeds from convertible debenture </TD>
    <TD width="1%" align=left valign="bottom" >&nbsp;</TD>
    <TD width="12%" align=right valign="bottom">366,680 </TD>
    <TD width="2%" align=left valign="bottom" >&nbsp;</TD>
    <TD width="1%" align=left valign="bottom" >&nbsp;</TD>
    <TD width="12%" align=right valign="bottom">- </TD>
    <TD width="2%" align=left valign="bottom" >&nbsp;</TD>
    <TD width="1%" align=left valign="bottom" >&nbsp;</TD>
    <TD width="12%" align=right valign="bottom">366,680 </TD>
    <TD width="2%" align=left valign="bottom" >&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD align=left valign="bottom" bgColor=#e6efff>&nbsp; &nbsp;Proceeds from share issuance </TD>
    <TD width="1%" align=left valign="bottom"  bgColor=#e6efff>&nbsp;</TD>
    <TD width="12%" align=right valign="bottom" bgColor=#e6efff>- </TD>
    <TD width="2%" align=left valign="bottom"  bgColor=#e6efff>&nbsp;</TD>
    <TD width="1%" align=left valign="bottom"  bgColor=#e6efff>&nbsp;</TD>
    <TD width="12%" align=right valign="bottom" bgColor=#e6efff>10,000 </TD>
    <TD width="2%" align=left valign="bottom"  bgColor=#e6efff>&nbsp;</TD>
    <TD width="1%" align=left valign="bottom"  bgColor=#e6efff>&nbsp;</TD>
    <TD width="12%" align=right valign="bottom" bgColor=#e6efff>10,000 </TD>
    <TD width="2%" align=left valign="bottom"  bgColor=#e6efff>&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD align=left valign="bottom">&nbsp; &nbsp; &nbsp; &nbsp;Short term loan </TD>
    <TD width="1%" align=left valign="bottom" style="BORDER-BOTTOM: #000000 1px solid"
    >&nbsp;</TD>
    <TD
    width="12%" align=right valign="bottom" style="BORDER-BOTTOM: #000000 1px solid">(2,231</TD>
    <TD width="2%" align=left valign="bottom" style="BORDER-BOTTOM: #000000 1px solid"
    >) </TD>
    <TD width="1%" align=left valign="bottom" style="BORDER-BOTTOM: #000000 1px solid"
    >&nbsp;</TD>
    <TD width="12%" align=right valign="bottom" style="BORDER-BOTTOM: #000000 1px solid">2,231 </TD>
    <TD width="2%" align=left valign="bottom" style="BORDER-BOTTOM: #000000 1px solid"
    >&nbsp;</TD>
    <TD width="1%" align=left valign="bottom" style="BORDER-BOTTOM: #000000 1px solid"
    >&nbsp;</TD>
    <TD width="12%" align=right valign="bottom" style="BORDER-BOTTOM: #000000 1px solid">- </TD>
    <TD width="2%" align=left valign="bottom" style="BORDER-BOTTOM: #000000 1px solid"
    >&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD align=left valign="bottom" bgColor=#e6efff>&nbsp; &nbsp; &nbsp; &nbsp; &nbsp;Net cash
      flows provided by financing activities </TD>
    <TD width="1%" align=left valign="bottom"
     bgColor=#e6efff style="BORDER-BOTTOM: #000000 1px solid">&nbsp;</TD>
    <TD width="12%" align=right valign="bottom"
    bgColor=#e6efff style="BORDER-BOTTOM: #000000 1px solid">364,449 </TD>
    <TD width="2%" align=left valign="bottom"
     bgColor=#e6efff style="BORDER-BOTTOM: #000000 1px solid">&nbsp;</TD>
    <TD width="1%" align=left valign="bottom"
     bgColor=#e6efff style="BORDER-BOTTOM: #000000 1px solid">&nbsp;</TD>
    <TD width="12%" align=right valign="bottom"
    bgColor=#e6efff style="BORDER-BOTTOM: #000000 1px solid">12,231 </TD>
    <TD width="2%" align=left valign="bottom"
     bgColor=#e6efff style="BORDER-BOTTOM: #000000 1px solid">&nbsp;</TD>
    <TD width="1%" align=left valign="bottom"
     bgColor=#e6efff style="BORDER-BOTTOM: #000000 1px solid">&nbsp;</TD>
    <TD width="12%" align=right valign="bottom"
    bgColor=#e6efff style="BORDER-BOTTOM: #000000 1px solid">376,680 </TD>
    <TD width="2%" align=left valign="bottom"
     bgColor=#e6efff style="BORDER-BOTTOM: #000000 1px solid">&nbsp;</TD>
  </TR>
  <TR>
    <TD valign="bottom">&nbsp;</TD>
    <TD width="1%" valign="bottom" >&nbsp;</TD>
    <TD width="12%" valign="bottom">&nbsp;</TD>
    <TD width="2%" valign="bottom" >&nbsp;</TD>
    <TD width="1%" valign="bottom" >&nbsp;</TD>
    <TD width="12%" valign="bottom">&nbsp;</TD>
    <TD width="2%" valign="bottom" >&nbsp;</TD>
    <TD width="1%" valign="bottom" >&nbsp;</TD>
    <TD width="12%" valign="bottom">&nbsp;</TD>
    <TD width="2%" valign="bottom" >&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD align=left valign="bottom" bgColor=#e6efff>Net increase in cash and cash equivalents </TD>
    <TD width="1%" align=left valign="bottom"
     bgColor=#e6efff style="BORDER-BOTTOM: #000000 1px solid">&nbsp;</TD>
    <TD width="12%" align=right valign="bottom"
    bgColor=#e6efff style="BORDER-BOTTOM: #000000 1px solid">15,751 </TD>
    <TD width="2%" align=left valign="bottom"
     bgColor=#e6efff style="BORDER-BOTTOM: #000000 1px solid">&nbsp;</TD>
    <TD width="1%" align=left valign="bottom"
     bgColor=#e6efff style="BORDER-BOTTOM: #000000 1px solid">&nbsp;</TD>
    <TD width="12%" align=right valign="bottom"
    bgColor=#e6efff style="BORDER-BOTTOM: #000000 1px solid">217 </TD>
    <TD width="2%" align=left valign="bottom"
     bgColor=#e6efff style="BORDER-BOTTOM: #000000 1px solid">&nbsp;</TD>
    <TD width="1%" align=left valign="bottom"
     bgColor=#e6efff style="BORDER-BOTTOM: #000000 1px solid">&nbsp;</TD>
    <TD width="12%" align=right valign="bottom"
    bgColor=#e6efff style="BORDER-BOTTOM: #000000 1px solid">15,968 </TD>
    <TD width="2%" align=left valign="bottom"
     bgColor=#e6efff style="BORDER-BOTTOM: #000000 1px solid">&nbsp;</TD>
  </TR>
  <TR>
    <TD valign="bottom">&nbsp;</TD>
    <TD width="1%" valign="bottom" >&nbsp;</TD>
    <TD width="12%" valign="bottom">&nbsp;</TD>
    <TD width="2%" valign="bottom" >&nbsp;</TD>
    <TD width="1%" valign="bottom" >&nbsp;</TD>
    <TD width="12%" valign="bottom">&nbsp;</TD>
    <TD width="2%" valign="bottom" >&nbsp;</TD>
    <TD width="1%" valign="bottom" >&nbsp;</TD>
    <TD width="12%" valign="bottom">&nbsp;</TD>
    <TD width="2%" valign="bottom" >&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD align=left valign="bottom" bgColor=#e6efff>Cash and Cash Equivalents at beginning of
      period </TD>
    <TD width="1%" align=left valign="bottom"  bgColor=#e6efff>&nbsp;</TD>
    <TD width="12%" align=right valign="bottom" bgColor=#e6efff>217 </TD>
    <TD width="2%" align=left valign="bottom"  bgColor=#e6efff>&nbsp;</TD>
    <TD width="1%" align=left valign="bottom"  bgColor=#e6efff>&nbsp;</TD>
    <TD width="12%" align=right valign="bottom" bgColor=#e6efff>- </TD>
    <TD width="2%" align=left valign="bottom"  bgColor=#e6efff>&nbsp;</TD>
    <TD width="1%" align=left valign="bottom"  bgColor=#e6efff>&nbsp;</TD>
    <TD width="12%" align=right valign="bottom" bgColor=#e6efff>- </TD>
    <TD width="2%" align=left valign="bottom"  bgColor=#e6efff>&nbsp;</TD>
  </TR>
  <TR>
    <TD valign="bottom">&nbsp;</TD>
    <TD width="1%" valign="bottom" >&nbsp;</TD>
    <TD width="12%" valign="bottom">&nbsp;</TD>
    <TD width="2%" valign="bottom" >&nbsp;</TD>
    <TD width="1%" valign="bottom" >&nbsp;</TD>
    <TD width="12%" valign="bottom">&nbsp;</TD>
    <TD width="2%" valign="bottom" >&nbsp;</TD>
    <TD width="1%" valign="bottom" >&nbsp;</TD>
    <TD width="12%" valign="bottom">&nbsp;</TD>
    <TD width="2%" valign="bottom" >&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD align=left valign="bottom" bgColor=#e6efff><B>Cash and Cash Equivalents at end of
      period</B> </TD>
    <TD width="1%" align=left valign="bottom"
     bgColor=#e6efff style="BORDER-BOTTOM: #000000 3px double">$</TD>
    <TD width="12%" align=right valign="bottom"
    bgColor=#e6efff style="BORDER-BOTTOM: #000000 3px double">&nbsp;15,968 </TD>
    <TD width="2%" align=left valign="bottom"
     bgColor=#e6efff style="BORDER-BOTTOM: #000000 3px double">&nbsp;</TD>
    <TD width="1%" align=left valign="bottom"
     bgColor=#e6efff style="BORDER-BOTTOM: #000000 3px double">$</TD>
    <TD width="12%" align=right valign="bottom"
    bgColor=#e6efff style="BORDER-BOTTOM: #000000 3px double">&nbsp;217 </TD>
    <TD width="2%" align=left valign="bottom"
     bgColor=#e6efff style="BORDER-BOTTOM: #000000 3px double">&nbsp;</TD>
    <TD width="1%" align=left valign="bottom"
     bgColor=#e6efff style="BORDER-BOTTOM: #000000 3px double">$</TD>
    <TD width="12%" align=right valign="bottom"
    bgColor=#e6efff style="BORDER-BOTTOM: #000000 3px double">&nbsp;15,968 </TD>
    <TD width="2%" align=left valign="bottom"
     bgColor=#e6efff style="BORDER-BOTTOM: #000000 3px double">&nbsp;</TD>
  </TR>
  <TR>
    <TD valign="bottom">&nbsp;</TD>
    <TD width="1%" valign="bottom" >&nbsp;</TD>
    <TD width="12%" valign="bottom">&nbsp;</TD>
    <TD width="2%" valign="bottom" >&nbsp;</TD>
    <TD width="1%" valign="bottom" >&nbsp;</TD>
    <TD width="12%" valign="bottom">&nbsp;</TD>
    <TD width="2%" valign="bottom" >&nbsp;</TD>
    <TD width="1%" valign="bottom" >&nbsp;</TD>
    <TD width="12%" valign="bottom">&nbsp;</TD>
    <TD width="2%" valign="bottom" >&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD align=left valign="bottom" bgColor=#e6efff>Supplementary disclosure with respect to
      cash flows </TD>
    <TD width="1%" align=left valign="bottom"  bgColor=#e6efff>&nbsp;</TD>
    <TD width="12%" align=left valign="bottom" bgColor=#e6efff>&nbsp;</TD>
    <TD width="2%" align=left valign="bottom"  bgColor=#e6efff>&nbsp;</TD>
    <TD width="1%" align=left valign="bottom"  bgColor=#e6efff>&nbsp;</TD>
    <TD width="12%" align=left valign="bottom" bgColor=#e6efff>&nbsp;</TD>
    <TD width="2%" align=left valign="bottom"  bgColor=#e6efff>&nbsp;</TD>
    <TD width="1%" align=left valign="bottom"  bgColor=#e6efff>&nbsp;</TD>
    <TD width="12%" align=left valign="bottom" bgColor=#e6efff>&nbsp;</TD>
    <TD width="2%" align=left valign="bottom"  bgColor=#e6efff>&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD align=left valign="bottom" style="BORDER-BOTTOM: #000000 1px solid">Cash paid for
      interest </TD>
    <TD width="1%" align=left valign="bottom" style="BORDER-BOTTOM: #000000 1px solid"
    >$</TD>
    <TD
      width="12%" align=right valign="bottom" style="BORDER-BOTTOM: #000000 1px solid">&nbsp;212 </TD>
    <TD width="2%" align=left valign="bottom" style="BORDER-BOTTOM: #000000 1px solid"
    >&nbsp;</TD>
    <TD width="1%" align=left valign="bottom" style="BORDER-BOTTOM: #000000 1px solid"
    >$</TD>
    <TD
      width="12%" align=right valign="bottom" style="BORDER-BOTTOM: #000000 1px solid">&nbsp;- </TD>
    <TD width="2%" align=left valign="bottom" style="BORDER-BOTTOM: #000000 1px solid"
    >&nbsp;</TD>
    <TD width="1%" align=left valign="bottom" style="BORDER-BOTTOM: #000000 1px solid"
    >$</TD>
    <TD
      width="12%" align=right valign="bottom" style="BORDER-BOTTOM: #000000 1px solid">&nbsp;212 </TD>
    <TD width="2%" align=left valign="bottom" style="BORDER-BOTTOM: #000000 1px solid"
    >&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD align=left valign="bottom"
      bgColor=#e6efff style="BORDER-BOTTOM: #000000 1px solid">Cash paid for income taxes </TD>
    <TD width="1%" align=left valign="bottom"
     bgColor=#e6efff style="BORDER-BOTTOM: #000000 1px solid">$</TD>
    <TD width="12%" align=right valign="bottom"
    bgColor=#e6efff style="BORDER-BOTTOM: #000000 1px solid">&nbsp;- </TD>
    <TD width="2%" align=left valign="bottom"
     bgColor=#e6efff style="BORDER-BOTTOM: #000000 1px solid">&nbsp;</TD>
    <TD width="1%" align=left valign="bottom"
     bgColor=#e6efff style="BORDER-BOTTOM: #000000 1px solid">$</TD>
    <TD width="12%" align=right valign="bottom"
    bgColor=#e6efff style="BORDER-BOTTOM: #000000 1px solid">&nbsp;- </TD>
    <TD width="2%" align=left valign="bottom"
     bgColor=#e6efff style="BORDER-BOTTOM: #000000 1px solid">&nbsp;</TD>
    <TD width="1%" align=left valign="bottom"
     bgColor=#e6efff style="BORDER-BOTTOM: #000000 1px solid">$</TD>
    <TD width="12%" align=right valign="bottom"
    bgColor=#e6efff style="BORDER-BOTTOM: #000000 1px solid">&nbsp;- </TD>
    <TD width="2%" align=left valign="bottom"
     bgColor=#e6efff style="BORDER-BOTTOM: #000000 1px solid">&nbsp;</TD>
  </TR>
</TABLE>
<P align=center>There were no non-cash financing or investing activities during
  the periods presented. </P>
<P align=center>(The accompanying notes are an integral part of these financial
  statements</P>
<P align=center>70</P>
<HR style="PAGE-BREAK-AFTER: always" align=center width="100%" color=black
noShade SIZE=5>
<A name=page_MF-7></A><BR>
<TABLE
style="BORDER-COLOR: black; FONT-SIZE: 10pt; BORDER-COLLAPSE: collapse; "
cellSpacing=0 cellPadding=0 width="100%" border=0>
  <TR vAlign=top>
    <TD align=left><B>HELIUS MEDICAL TECHNOLOGIES, INC. (FORMERLY
      NEUROHABILITATION CORPORATION)</B> </TD>
  </TR>
  <TR vAlign=top>
    <TD align=left>(A development stage company) </TD>
  </TR>
  <TR vAlign=top>
    <TD align=left><B>Notes to Financial Statements for the periods ended
      March 31, 2014 and 2013</B> </TD>
  </TR>
  <TR vAlign=top>
    <TD align=left>(Expressed in United States Dollars) </TD>
  </TR>
  <TR vAlign=top>
    <TD style="BORDER-BOTTOM: #000000 1px solid"
  align=left>&nbsp;</TD>
  </TR>
</TABLE>
<P
align=justify>1.&nbsp;<STRONG>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
  NATURE AND CONTINUANCE OF OPERATIONS </STRONG></P>
<P align=justify>Helius Medical Technologies, Inc. (formerly NeuroHabilitation
  Corp.) (&#147;Company&#148;) was incorporated in Delaware, USA, on January 22, 2013. The
  Company is engaged primarily in the business of developing a patent-pending
  technology (&#147;PoNS<SUP>TM</SUP>&#148;) that will enable the first non-invasive means
  for delivering neurostimulation through the oral cavity. The Company&#146;s head
  office is located at 41 University Drive, Suite 400, Newtown PA 18940.</P>
<P align=justify>On June 13, 2014, the Company completed a recapitalization
  transaction (Note 3). These financial statements present the results of
  operations of the Company with the exception of capital stock and the Statement
  of Stock Equity (Deficiency) which have been retroactively restated to reflect
  the recapitalization.</P>
<P align=justify>The financial information is presented in United States
  Dollars, which is the functional currency of the Company. </P>
<P align=justify>The Company has experienced recurring losses since inception
  and, as of March 31, 2014, the Company has negative working capital as at March
  31, 2014 of $267,977 (March 31, 2013 - $7,850) and an accumulated deficit during
  the development stage of $9,585,134 (March 31, 2013 - $8,517,850). Until the
  Company generates a level of revenue to support its cost structure, the Company
  expects to continue to incur substantial operating losses and net cash outflows.
  While the Company had cash of $15,968 as of March 31, 2014 (March 31, 2013 -
  $217), management does not believe these resources will be sufficient to meet
  the Company&#146;s operating and capital needs through 2015. </P>
<P align=justify>The Company intends to fund ongoing activities by utilizing
  current cash and cash equivalents and by raising additional capital though
  equity or debt financings. The Company is in the process of negotiating certain
  agreements subsequent to March 31, 2014, to raise additional capital as detailed
  in Note 10. There can be no assurance that the Company will be successful in
  raising additional capital or that such capital, if available, will be on terms
  that are acceptable to the Company. If the Company is unable to raise sufficient
  additional capital, the Company may be compelled to reduce the scope of its
  operations and planned capital expenditure or sell certain assets, including
  intellectual property assets. </P>
<P align=justify>The accompanying financial statements have been prepared on a
  going concern basis, which contemplates the realization of assets and the
  liabilities in the normal course of business. The Company is currently seeking
  additional financing subsequent to year end. See Note 11. However, given the
  Company&#146;s current cash and cash equivalents balance and the Company&#146;s planned
  operating activities, the Company&#146;s recurring losses raise substantial doubt
  about the Company&#146;s ability to continue as a going concern. Even if the Company
  is able to raise additional capital, the Company may never become profitable, or
  if the Company does attain profitable operations, the Company may not be able to
  sustain profitability and positive cash flows on a recurring basis. </P>
<P
align=justify><B>2.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
  SIGNIFICANT ACCOUNTING POLICIES </B></P>
<P align=justify><B>Basis of Presentation </B></P>
<P align=justify>The Company&#146;s annual financial statements have been presented
  in accordance with U.S. generally accepted accounting principles (&#147;U.S. GAAP&#148;)
  and the rules and regulations of the Securities and Exchange Commission (&#147;SEC&#148;)
  that are published at the time of preparation and that are effective or
  available on March 31, 2014. </P>
<P align=justify><B>Development Stage </B></P>
<P align=justify>The Company is considered a &#147;development stage&#148; entity, as it
  has not yet generated revenues from the sale of products. The Company has been
  researching and developing new technologies and product applications. The
  Company will continue as a development stage entity, including reporting
  &#147;inception to-date&#148; amounts and cumulative equity transactions, until such time,
  if any, as the Company generates revenue, and commences its planned principal
  operations.<B><I> </I></B></P>
<P align=center>71</P>
<HR style="PAGE-BREAK-AFTER: always" align=center width="100%" color=black
noShade SIZE=5>
<A name=page_MF-8></A> <BR>
<TABLE
style="BORDER-COLOR: black; FONT-SIZE: 10pt; BORDER-COLLAPSE: collapse; "
cellSpacing=0 cellPadding=0 width="100%" border=0>
  <TR vAlign=top>
    <TD align=left><B>HELIUS MEDICAL TECHNOLOGIES, INC. (FORMERLY
      NEUROHABILITATION CORPORATION)</B> </TD>
  </TR>
  <TR vAlign=top>
    <TD align=left>(A development stage company) </TD>
  </TR>
  <TR vAlign=top>
    <TD align=left><B>Notes to Financial Statements for the periods ended
      March 31, 2014 and 2013</B> </TD>
  </TR>
  <TR vAlign=top>
    <TD align=left>(Expressed in United States Dollars) </TD>
  </TR>
  <TR vAlign=top>
    <TD style="BORDER-BOTTOM: #000000 1px solid"
  align=left>&nbsp;</TD>
  </TR>
</TABLE>
<P align=justify><B>Use of Estimates </B></P>
<P align=justify>The preparation of financial statements in accordance with U.S.
  GAAP requires management to make estimates and assumptions that affect the
  reported amounts of assets and liabilities at the date of the financial
  statements and reported amounts of expenses during the reporting period.
  Significant estimates include valuation of non-monetary transactions,
  compensation for shares issued for services, valuation of options and valuation
  of income taxes. Actual outcomes could differ from these estimates. Financial
  statements include estimates which, by their nature, are uncertain. The impact
  of such estimates are pervasive throughout the financial statements, and may
  require accounting adjustments based on future occurrences. Revisions to
  accounting estimates are recognized in the period in which the estimate is
  revised and the revision affects both the current and future periods. </P>
<P align=justify><B>Cash and Cash Equivalents </B></P>
<P align=justify>All highly liquid investments with original maturities of three
  months or less are classified as cash equivalents. As at March 31, 2014, the
  Company does not have such investments. Cash and cash equivalents as at March
  31, 2014 only includes cash. </P>
<P align=justify><B>Patents </B></P>
<P align=justify>Costs related to patent development, filing, and maintenance
  are expensed as incurred since the underlying technology associated with these
  assets is purchased or incurred in connection with our research and development
  efforts and the future realizable value cannot be determined.</P>
<P align=justify><B>Concentrations of Credit Risk </B></P>
<P align=justify>The financial instrument which potentially subjects the Company
  to concentration of credit risk is cash. The Company placed its cash and cash
  equivalent with high credit quality financial institution. As of March 31, 2014,
  the Company had $nil in a bank beyond insured limits (March 31, 2013 -
  $nil).</P>
<P align=justify><B>Research and Development </B></P>
<P align=justify>Research and development costs are expensed as incurred. These
  costs include business development, and consulting and legal services.</P>
<P align=justify><B>Income Taxes </B></P>
<P align=justify>The Company has adopted ASC 740, &#147;<I>Income Taxes</I>&#148;, which
  requires the Company to recognize deferred tax liabilities and assets for the
  expected future tax consequences of events that have been recognized in the
  Company&#146;s financial statements or tax returns using the liability method. Under
  this method, deferred tax liabilities and assets are determined based on the
  temporary differences between the financial statements and tax bases of assets
  and liabilities using enacted tax rates in effect in the year in which the
  differences are expected to reverse. The effect on deferred tax assets and
  liabilities of a change in tax rates is recognized in the period that includes
  the enactment date. In addition, a valuation allowance is established to reduce
  any deferred tax asset for which it is determined that it is more likely than
  not that some portion of the deferred tax asset will not be realized. </P>
<P align=justify><B>Stock-Based Compensation </B></P>
<P align=justify>The Company applies the fair value method of accounting for all
  stock option awards, whereby the Company recognizes a compensation expense for
  all stock options awarded to employees, officers and consultants based on the
  fair value of the options on the date of grant, which is determined using the
  Black Scholes option pricing model. The options are expensed over the vesting
  period of the options. </P>
<P align=center>72</P>
<HR style="PAGE-BREAK-AFTER: always" align=center width="100%" color=black
noShade SIZE=5>
<A name=page_MF-9></A> <BR>
<TABLE
style="BORDER-COLOR: black; FONT-SIZE: 10pt; BORDER-COLLAPSE: collapse; "
cellSpacing=0 cellPadding=0 width="100%" border=0>
  <TR vAlign=top>
    <TD align=left><B>HELIUS MEDICAL TECHNOLOGIES, INC. (FORMERLY
      NEUROHABILITATION CORPORATION)</B> </TD>
  </TR>
  <TR vAlign=top>
    <TD align=left>(A development stage company) </TD>
  </TR>
  <TR vAlign=top>
    <TD align=left><B>Notes to Financial Statements for the periods ended
      March 31, 2014 and 2013</B> </TD>
  </TR>
  <TR vAlign=top>
    <TD align=left>(Expressed in United States Dollars) </TD>
  </TR>
  <TR vAlign=top>
    <TD style="BORDER-BOTTOM: #000000 1px solid"
  align=left>&nbsp;</TD>
  </TR>
</TABLE>
<P align=justify><B>Foreign Exchange </B></P>
<P align=justify>The Company&#146;s reporting and functional currency is the United
  States dollar as this is the principal currency of the economic environment in
  which the Company operates.</P>
<P align=justify>Non-monetary items, revenue and expenses that are measured in
  terms of historical cost in a foreign currency are translated using the exchange
  rates as at the dates of the initial transactions. Any monetary assets and
  liabilities that are in a different functional currency are translated at the
  rate prevailing at year end. </P>
<P align=justify><B>Net Loss Per Common Share </B></P>
<P align=justify>Basic net earnings (loss) per share is computed by dividing net
  earnings (loss) available to common shareholders by the weighted average number
  of outstanding common shares for the period, without consideration for common
  share equivalents. Diluted net loss per share is computed by dividing the net
  earnings (loss) attributable to common shareholders by the weighted average
  number of common share equivalents outstanding for the period determined using
  the treasury-stock method and the if-converted method, as applicable. As at
  March 31, 2014, there were 201,436 options (March 31, 2013 &#150; nil) outstanding
  which have not been included in the weighted average common shares outstanding
  as these were anti-dilutive.</P>
<P align=justify><B>Fair Value of Financial Assets and Liabilities </B></P>
<P align=justify>All financial assets and financial liabilities are initially
  recorded at fair value and designated upon inception into one of the following
  categories: held-to-maturity, available-for-sale, loans and receivables or held
  for trading. </P>
<P align=justify>Financial assets classified as held for trading are measured at
  fair value with unrealized gains and losses recognized through profit and loss.
  Available-for-sale instruments are measured at fair value with unrealized gains
  and losses recognized in other comprehensive income. Held-to-maturity
  instruments, loans and receivables and other financial liabilities are measured
  at amortized cost using the effective interest rate method. </P>
<P align=justify>The Company&#146;s financial instruments consist primarily of cash
  and cash equivalents, accounts payable and accrued liabilities, and convertible
  debenture. </P>
<P align=justify>The Company has implemented the following classifications for
  its financial instruments: </P>
<TABLE
style="BORDER-COLOR: black; FONT-SIZE: 10pt; BORDER-COLLAPSE: collapse; "
cellSpacing=0 cellPadding=0 width="100%" border=0 BCLLIST>
  <TR>
    <TD width="5%"  >&nbsp;</TD>
    <TD vAlign=top width="5%">a) </TD>
    <TD><P align=justify>Cash has been classified as held for trading;</P></TD>
  </TR>
  <TR>
    <TD width="5%" >&nbsp;</TD>
    <TD vAlign=top width="5%">b) </TD>
    <TD><P align=justify>Accounts payable and accrued liabilities and convertible
      debenture have been classified as other financial
      liabilities</P></TD>
  </TR>
</TABLE>
<P align=justify>ASC 820 establishes a fair value hierarchy based on the level
  of independent, objective evidence surrounding the inputs used to measure fair
  value. A financial instrument&#146;s categorization within the fair value hierarchy
  is based upon the lowest level of input that is significant to the fair value
  measurement. ASC 820 prioritizes the inputs into three levels that may be used
  to measure fair value; </P>
<P align=justify>Level 1- Quoted prices in active markets for identical assets
  or liabilities; </P>
<P align=justify>Level 2 &#150; Inputs other than quoted prices included within Level
  1 that are either directly or indirectly observable; and </P>
<P align=justify>Level 3 &#150; Unobservable inputs that are supported by little or
  no market activity, therefore requiring an entity to develop its own assumptions
  about the assumptions that market participants would use in pricing.</P>
<P align=justify>Cash and cash equivalents are measured using Level 1
  inputs.</P>
<P align=center>73</P>
<HR style="PAGE-BREAK-AFTER: always" align=center width="100%" color=black
noShade SIZE=5>
<A name=page_MF-10></A> <BR>
<TABLE
style="BORDER-COLOR: black; FONT-SIZE: 10pt; BORDER-COLLAPSE: collapse; "
cellSpacing=0 cellPadding=0 width="100%" border=0>
  <TR vAlign=top>
    <TD align=left><B>HELIUS MEDICAL TECHNOLOGIES, INC. (FORMERLY
      NEUROHABILITATION CORPORATION)</B> </TD>
  </TR>
  <TR vAlign=top>
    <TD align=left>(A development stage company) </TD>
  </TR>
  <TR vAlign=top>
    <TD align=left><B>Notes to Financial Statements for the periods ended
      March 31, 2014 and 2013</B> </TD>
  </TR>
  <TR vAlign=top>
    <TD align=left>(Expressed in United States Dollars) </TD>
  </TR>
  <TR vAlign=top>
    <TD style="BORDER-BOTTOM: #000000 1px solid"
  align=left>&nbsp;</TD>
  </TR>
</TABLE>
<P align=justify><B>Recent Accounting Pronouncements </B></P>
<P align=justify>The Company reviewed recently issued accounting pronouncements
  and concluded that they are either not applicable or not expected to have a
  significant impact on the Company&#146;s financial statements.</P>
<P
align=justify><B>3.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
  RECAPITALIZATION</B> </P>
<P align=justify>On June 13, 2014 the Company completed a recapitalization
  transaction where the Company acquired 100% of the issued and outstanding shares
  of NeuroHabilitation Corp. (&#147;Neuro&#148;). In exchange, the Company issued a total of
  35,300,083 shares to the shareholders of Neuro of which merged with a
  wholly-owned subsidiary of the Company, HMT Mergersub, for the purpose of a
  three-corner amalgamation. As a result, the former Neuro shareholders owned the
  majority of the outstanding shares of the Company upon completion of the
  transaction. The transaction is considered to be a recapitaliazation and
  continuation of Neuro and the prior net assets of Helius Medical Technologies,
  Inc. have been acquired by Neuro subsequent to March 31, 2014. The ongoing
  Company has adopted the name Helius Medical Technologies, Inc. These financial
  statements present the results of Neuro with the exception of common stock which
  has been retroactively restated to reflect the recapitalization (see Note 6). In
  connection with the recapitalization, the Company advanced Neuro an unsecured
  loan in the amount of $150,000 (the &#147;Bridge Loan&#148;). The Bridge Loan was for a
  term of one year commencing on May 30, 2014, and was payable in a lump sum at
  the end of the term. The Bridge Loan bears interest at a rate of 8% per annum. </P>
<P align=justify>In connection to the completion of the transaction, the Company
  completed a private placement of 15,240,000 units at CAD $0.50 per unit. Each
  unit consisted of one common share of the Company and one half of a warrant
  exercisable at CAD $1.00 for twenty-four months. The Company also paid aggregate
  finders&#146; fees of $412,200 and issued 824,000 finders&#146; warrants. Each finder&#146;s
  warrant is exercisable at CAD $1.00 per share for a period of two years. </P>
<P align=justify> The net assets acquired of Helius were as
  follows, </P>
<DIV align=center>
  <TABLE
style="BORDER-COLOR: black; FONT-SIZE: 10pt; BORDER-COLLAPSE: collapse; "
cellSpacing=0 cellPadding=0 width="60%" border=0>
    <TR vAlign=top>
      <TD align=left bgColor=#e6efff>Cash and cash equivalents </TD>
      <TD align=left width="1%"  bgColor=#e6efff>$</TD>
      <TD align=right width="22%" bgColor=#e6efff >&nbsp;23,904 </TD>
      <TD align=left width="2%"  bgColor=#e6efff>&nbsp;</TD>
    </TR>
    <TR vAlign=top>
      <TD align=left>Receivables </TD>
      <TD align=left width="1%" >&nbsp;</TD>
      <TD align=right width="22%" >151,644 </TD>
      <TD align=left width="2%" >&nbsp;</TD>
    </TR>
    <TR vAlign=top>
      <TD align=left bgColor=#e6efff>Prepaids </TD>
      <TD align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
      <TD align=right width="22%" bgColor=#e6efff >5,970 </TD>
      <TD align=left width="2%"  bgColor=#e6efff>&nbsp;</TD>
    </TR>
    <TR vAlign=top>
      <TD align=left>Accounts payable and accrued liabilities </TD>
      <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="1%"
    >&nbsp;</TD>
      <TD style="BORDER-BOTTOM: #000000 1px solid" align=right width="22%"
    >(18,628</TD>
      <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="2%"
    >) </TD>
    </TR>
    <TR vAlign=top>
      <TD align=left bgColor=#e6efff>&nbsp;</TD>
      <TD style="BORDER-BOTTOM: #000000 3px double" align=left width="1%"
     bgColor=#e6efff>$</TD>
      <TD style="BORDER-BOTTOM: #000000 3px double" align=right width="22%"
    bgColor=#e6efff >&nbsp;162,890 </TD>
      <TD style="BORDER-BOTTOM: #000000 3px double" align=left width="2%"
     bgColor=#e6efff>&nbsp;</TD>
    </TR>
  </TABLE>
</DIV>
<P
align=justify><B>4.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
  SHORT TERM LOAN </B></P>
<P align=justify>On December 9, 2013, the Company entered into a formal loan
  agreement with MPJ Healthcare LLC, a shareholder of the Company, to borrow up to
  $40,000. Expenses incurred on behalf of the Company were charged as drawdowns of
  this loan. During the year ended March 31, 2014, $29,107 was repaid, being
  expenses incurred of $26,876 for March 31, 2014 and $2,231 for March 31, 2013.
  The interest rate is 3% per annum. For the year ended March 31, 2014, interest
  expense of $225 was recorded (March 31, 2013 - $nil).</P>
<P
align=justify><B>5.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
  CONVERTIBLE DEBENTURE </B></P>
<P align=justify>On February 19, 2014, the Company entered into a securities
  purchase agreement where the Company agreed to sell and issue a note in a
  principal amount of up to $1,000,000 with annual simple interest at 8%. As at
  March 31, 2014, $366,905 had been received and $633,095 was received
  subsequently. The debenture matures on the earliest of (i) February 28, 2015 or
  such later date as agreed (ii) the closing of a transaction involving a change
  in control of the Company or (iii) the date of the closing of the Company&#146;s
  qualified financing being an aggregate amount of at least $2,000,000.</P>
<P align=center>74</P>
<HR style="PAGE-BREAK-AFTER: always" align=center width="100%" color=black
noShade SIZE=5>
<A name=page_MF-11></A> <BR>
<TABLE
style="BORDER-COLOR: black; FONT-SIZE: 10pt; BORDER-COLLAPSE: collapse; "
cellSpacing=0 cellPadding=0 width="100%" border=0>
  <TR vAlign=top>
    <TD align=left><B>HELIUS MEDICAL TECHNOLOGIES, INC. (FORMERLY
      NEUROHABILITATION CORPORATION)</B> </TD>
  </TR>
  <TR vAlign=top>
    <TD align=left>(A development stage company) </TD>
  </TR>
  <TR vAlign=top>
    <TD align=left><B>Notes to Financial Statements for the periods ended
      March 31, 2014 and 2013</B> </TD>
  </TR>
  <TR vAlign=top>
    <TD align=left>(Expressed in United States Dollars) </TD>
  </TR>
  <TR vAlign=top>
    <TD style="BORDER-BOTTOM: #000000 1px solid"
  align=left>&nbsp;</TD>
  </TR>
</TABLE>
<P align=justify>Upon completion of a qualified financing, the debenture shall
  automatically convert into equity securities of the Company at a price per share
  equal to 85% of the price per share of the qualified financing. If a qualified
  financing does not occur on or before the maturity date, at the option of the
  Company&#146;s board of directors, the outstanding balance of the debenture shall be
  converted into the Company&#146;s equity securities at a conversion price per common
  stock determined using a valuation of $8.5 million and the number of shares
  outstanding at that date.</P>
<P align=justify>In the event of a change in control of the Company, the Company
  shall pay the outstanding amount and an amount equal to 50% of the outstanding
  principal amount of the debenture in cancellation of the debenture.</P>
<P align=justify>The contingent conversion on completion of a qualified
  financing gives rise to a contingent beneficial conversion feature which will be
  calculated and adjusted if necessary on settlement of the contingency. There are
  no other beneficial conversion features or significant items that should be
  accounted for separately.</P>
<P align=justify>As of March 31, 2014, the outstanding balance is $366,905
  (March 31, 2013 - $nil) with interest of $1,119 (March 31, 2013 - $nil).</P>
<P
align=justify><B>6.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
  COMMON STOCK </B></P>
<P align=justify><B>Authorized </B></P>
<P align=justify>Unlimited Class A common shares without par value.</P>
<P align=justify>Each Class A common share is entitled to have the right to vote
  at any such meeting on the basis of one vote. Each Class A share held entitles
  the holder to receive dividends as declared by the directors. In the event of
  the liquidation, dissolution or winding-up of the Company other distribution of
  assets of the Company among its shareholders for the purposes of winding-up its
  affairs or upon a reduction of capital the holders of the Class A common shares
  shall, share equally, share for share, in the remaining assets and property of
  the Company.</P>
<P align=justify>Class B common shares and Class A preferred shares were deleted
  from the list of classes of shares the Company is authorized to issue by way of
  amendment to the Company&#146;s articles effective June 12, 2014. </P>
<P align=justify>The number of securities below reflects recapitalization and
  the exchange ratio retrospectively (see Note 3).</P>
<P align=justify>On January 22, 2013, the Company issued a total of 16,035,026
  shares to Advanced NeuroRehabilitation LLC for cash proceeds of $5,000 and an
  exclusive license right to Advanced NeuroRehabilitation&#146;s patent pending
  technology and know-how valued at $4.25 million per an independent valuation
  report. The valuation expert was engaged to assess the valuation of the costs
  incurred to date as well as the ongoing costs which would be required to bring
  the product to commercialization, discounted to the date of purchase. The
  statements regarding valuation of the exclusive license are extracted from the
  valuation expert&#146;s report. The Company recorded the $4.25 million exclusive
  license right as research and development expense per the Company&#146;s accounting
  policy. </P>
<P align=justify>On January 22, 2013, the Company also issued a total of
  16,035,026 shares to MPJ Healthcare LLC for cash proceeds of $5,000. In
  addition, the Company recorded $4.25 million of stock based compensation
  expense.</P>
<P align=justify>The articles of the Company are subject to a stockholders
  agreement, which places certain restrictions on the stock and stockholders.
  These include approvals prior to sale or transfer of stock, a right of first
  refusal to purchase stock held by the Company and a secondary right of refusal
  to stockholders, right of co-sale whereby certain stockholders be enabled to
  participate in a sale of other stockholders to obtain the same price, term and
  conditions on a pro-rata basis, rights of first offer of new security issuances
  to current stockholders on a pro-rata basis and certain other restrictions. </P>
<P align=center>75</P>
<HR style="PAGE-BREAK-AFTER: always" align=center width="100%" color=black
noShade SIZE=5>
<A name=page_MF-12></A> <BR>
<TABLE
style="BORDER-COLOR: black; FONT-SIZE: 10pt; BORDER-COLLAPSE: collapse; "
cellSpacing=0 cellPadding=0 width="100%" border=0>
  <TR vAlign=top>
    <TD align=left><B>HELIUS MEDICAL TECHNOLOGIES, INC. (FORMERLY
      NEUROHABILITATION CORPORATION)</B> </TD>
  </TR>
  <TR vAlign=top>
    <TD align=left>(A development stage company) </TD>
  </TR>
  <TR vAlign=top>
    <TD align=left><B>Notes to Financial Statements for the periods ended
      March 31, 2014 and 2013</B> </TD>
  </TR>
  <TR vAlign=top>
    <TD align=left>(Expressed in United States Dollars) </TD>
  </TR>
  <TR vAlign=top>
    <TD style="BORDER-BOTTOM: #000000 1px solid"
  align=left>&nbsp;</TD>
  </TR>
</TABLE>
<P align=justify>The stockholders of the Company, as at March 31, 2014, being
  Advanced NeuroRehabilitation LLC and MPJ Healthcare, LLC are also subject to a
  voting agreement which places additional restrictions on the stockholders,
  including the composition of the Board of Directors. Each stockholder agrees to
  vote to ensure the Board of Directors is set at seven directors, of which three
  individuals are designated by each of Advanced NeuroRehabilitation LLC and MPJ
  Healthcare LLC. Any common stock issued pursuant to the convertible debenture
  (Note 5) and stock options (Note 7) will be subject to the stockholders voting
  agreement. </P>
<P
align=justify><B>7.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
  STOCK OPTIONS</B></P>
<P align=justify>The Company has a stock option plan whereby the Company is
  authorized to grant options, performance share awards, or monetary payments
  based on the value of the stock to independent contractors enabling them to
  acquire up to a maximum of 201,436 of shares of the Company. Vesting and the
  term of an option is determined at the discretion of the Board of Directors of
  the Company.</P>
<P align=justify>On April 1, 2013, the Company granted a consultant company,
  58,000 options exercisable at $0.005 for 10 years upon completion of certain
  services in accordance with a consulting agreement to lead the design and
  manufacturing program of the Company&#146;s technology. On December 4, 2013, 40,816
  options vested, and the remaining 17,184 vested on March 4, 2014.</P>
<P align=justify>On October 30, 2013, the Company granted 143,436 options to a
  consultant company at $0.005 for 10 years. On February 11, 2014, 50% of these
  options vested upon completion of the first of two milestones. The remainder
  vested in April 2014. The remaining compensation related to the unvested options
  is estimated as $48,831. </P>
<P align=justify>As of March 31, 2014, the Company recognized a total of
  $807,157 in stock based compensation for consulting fees.</P>
<P align=justify>The continuity of stock options for the year ended March 31,
  2014 is as follows: </P>
<DIV align=center>
  <TABLE
style="BORDER-COLOR: black; FONT-SIZE: 10pt; BORDER-COLLAPSE: collapse; "
cellSpacing=0 cellPadding=0 width="70%" border=0>
    <TR vAlign=top>
      <TD style="BORDER-TOP: #000000 1px solid" align=left>&nbsp;</TD>
      <TD style="BORDER-TOP: #000000 1px solid" align=left width="1%">&nbsp;</TD>
      <TD width="22%" align=center nowrap style="BORDER-TOP: #000000 1px solid">&nbsp;</TD>
      <TD
width="2%" align=center nowrap style="BORDER-TOP: #000000 1px solid">&nbsp;</TD>
      <TD
width="1%" align=center nowrap style="BORDER-TOP: #000000 1px solid">&nbsp;</TD>
      <TD width="22%" align=center nowrap style="BORDER-TOP: #000000 1px solid">Options
        Outstanding </TD>
      <TD style="BORDER-TOP: #000000 1px solid" align=left
  width="2%">&nbsp;</TD>
    </TR>
    <TR vAlign=top>
      <TD align=left>&nbsp;</TD>
      <TD align=left width="1%">&nbsp;</TD>
      <TD width="22%" align=center nowrap>Number of </TD>
      <TD width="2%" align=center nowrap>&nbsp;</TD>
      <TD width="1%" align=center nowrap>&nbsp;</TD>
      <TD width="22%" align=center nowrap>Weighted Average </TD>
      <TD align=left width="2%">&nbsp;</TD>
    </TR>
    <TR vAlign=top>
      <TD style="BORDER-BOTTOM: #000000 1px solid" align=left>&nbsp;</TD>
      <TD style="BORDER-BOTTOM: #000000 1px solid" align=left
    width="1%">&nbsp;</TD>
      <TD
      width="22%" align=center nowrap style="BORDER-BOTTOM: #000000 1px solid">options </TD>
      <TD
    width="2%" align=center nowrap style="BORDER-BOTTOM: #000000 1px solid">&nbsp;</TD>
      <TD
    width="1%" align=center nowrap style="BORDER-BOTTOM: #000000 1px solid">&nbsp;</TD>
      <TD
      width="22%" align=center nowrap style="BORDER-BOTTOM: #000000 1px solid">Exercise Price </TD>
      <TD style="BORDER-BOTTOM: #000000 1px solid" align=left
    width="2%">&nbsp;</TD>
    </TR>
    <TR vAlign=top>
      <TD align=left bgColor=#e6efff>Balance on inception and March 31, </TD>
      <TD align=left width="1%" bgColor=#e6efff>&nbsp;</TD>
      <TD align=right width="22%" bgColor=#e6efff>- </TD>
      <TD align=left width="2%" bgColor=#e6efff>&nbsp;</TD>
      <TD align=left width="1%" bgColor=#e6efff>$</TD>
      <TD align=right width="22%" bgColor=#e6efff>&nbsp;- </TD>
      <TD align=left width="2%" bgColor=#e6efff>&nbsp;</TD>
    </TR>
    <TR vAlign=top>
      <TD align=left>2013 </TD>
      <TD align=left width="1%">&nbsp;</TD>
      <TD align=left width="22%">&nbsp;</TD>
      <TD align=left width="2%">&nbsp;</TD>
      <TD align=left width="1%">&nbsp;</TD>
      <TD align=left width="22%">&nbsp;</TD>
      <TD align=left width="2%">&nbsp;</TD>
    </TR>
    <TR vAlign=top>
      <TD align=left bgColor=#e6efff>Granted </TD>
      <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="1%"
    bgColor=#e6efff>&nbsp;</TD>
      <TD style="BORDER-BOTTOM: #000000 1px solid" align=right width="22%"
    bgColor=#e6efff>201,436 </TD>
      <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="2%"
    bgColor=#e6efff>&nbsp;</TD>
      <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="1%"
    bgColor=#e6efff>$</TD>
      <TD style="BORDER-BOTTOM: #000000 1px solid" align=right width="22%"
    bgColor=#e6efff>&nbsp;0.005 </TD>
      <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="2%"
    bgColor=#e6efff>&nbsp;</TD>
    </TR>
    <TR vAlign=top>
      <TD align=left>Balance, March 31, 2014 </TD>
      <TD style="BORDER-BOTTOM: #000000 3px double" align=left
    width="1%">&nbsp;</TD>
      <TD style="BORDER-BOTTOM: #000000 3px double" align=right
      width="22%">201,436 </TD>
      <TD style="BORDER-BOTTOM: #000000 3px double" align=left
    width="2%">&nbsp;</TD>
      <TD style="BORDER-BOTTOM: #000000 3px double" align=left width="1%">$</TD>
      <TD style="BORDER-BOTTOM: #000000 3px double" align=right
      width="22%">&nbsp;0.005 </TD>
      <TD style="BORDER-BOTTOM: #000000 3px double" align=left
    width="2%">&nbsp;</TD>
    </TR>
  </TABLE>
</DIV>
<P align=justify>The options outstanding and exercisable at March 31, 2014 are
  as follows: </P>
<DIV>
  <TABLE
style="BORDER-COLOR: black; FONT-SIZE: 10pt; BORDER-COLLAPSE: collapse; "
cellSpacing=0 cellPadding=0 width="100%" border=0>
    <TR vAlign=top>
      <TD align=left nowrap style="BORDER-TOP: #000000 1px solid">&nbsp;</TD>
      <TD width="1%" align=left nowrap style="BORDER-TOP: #000000 1px solid">&nbsp;</TD>
      <TD width="11%" align=center nowrap style="BORDER-TOP: #000000 1px solid">Options </TD>
      <TD
width="2%" align=center nowrap style="BORDER-TOP: #000000 1px solid">&nbsp;</TD>
      <TD
width="1%" align=center nowrap style="BORDER-TOP: #000000 1px solid">&nbsp;</TD>
      <TD width="11%" align=center nowrap style="BORDER-TOP: #000000 1px solid">&nbsp;</TD>
      <TD
width="2%" align=center nowrap style="BORDER-TOP: #000000 1px solid">&nbsp;</TD>
      <TD
width="1%" align=center nowrap style="BORDER-TOP: #000000 1px solid">&nbsp;</TD>
      <TD width="11%" align=center nowrap style="BORDER-TOP: #000000 1px solid">&nbsp;</TD>
      <TD
width="2%" align=center nowrap style="BORDER-TOP: #000000 1px solid">&nbsp;</TD>
      <TD
width="1%" align=center nowrap style="BORDER-TOP: #000000 1px solid">&nbsp;</TD>
      <TD width="11%" align=center nowrap style="BORDER-TOP: #000000 1px solid">&nbsp;</TD>
      <TD
width="2%" align=center nowrap style="BORDER-TOP: #000000 1px solid">&nbsp;</TD>
      <TD
width="1%" align=center nowrap style="BORDER-TOP: #000000 1px solid">&nbsp;</TD>
      <TD width="11%" align=center nowrap style="BORDER-TOP: #000000 1px solid">&nbsp;</TD>
      <TD
width="2%" align=center nowrap style="BORDER-TOP: #000000 1px solid">&nbsp;</TD>
      <TD
width="1%" align=center nowrap style="BORDER-TOP: #000000 1px solid">&nbsp;</TD>
      <TD width="11%" align=center nowrap style="BORDER-TOP: #000000 1px solid">&nbsp;</TD>
      <TD style="BORDER-TOP: #000000 1px solid" align=left
  width="2%">&nbsp;</TD>
    </TR>
    <TR vAlign=top>
      <TD align=left nowrap>&nbsp;</TD>
      <TD width="1%" align=left nowrap>&nbsp;</TD>
      <TD width="11%" align=center nowrap>outstanding </TD>
      <TD width="2%" align=center nowrap>&nbsp;</TD>
      <TD width="1%" align=center nowrap>&nbsp;</TD>
      <TD width="11%" align=center nowrap>&nbsp;</TD>
      <TD width="2%" align=center nowrap>&nbsp;</TD>
      <TD width="1%" align=center nowrap>&nbsp;</TD>
      <TD width="11%" align=center nowrap>&nbsp;</TD>
      <TD width="2%" align=center nowrap>&nbsp;</TD>
      <TD width="1%" align=center nowrap>&nbsp;</TD>
      <TD width="11%" align=center nowrap>Options exercisable </TD>
      <TD width="2%" align=center nowrap>&nbsp;</TD>
      <TD width="1%" align=center nowrap>&nbsp;</TD>
      <TD width="11%" align=center nowrap>&nbsp;</TD>
      <TD width="2%" align=center nowrap>&nbsp;</TD>
      <TD width="1%" align=center nowrap>&nbsp;</TD>
      <TD width="11%" align=center nowrap>&nbsp;</TD>
      <TD align=left width="2%">&nbsp;</TD>
    </TR>
    <TR vAlign=top>
      <TD align=left nowrap>&nbsp;</TD>
      <TD width="1%" align=left nowrap>&nbsp;</TD>
      <TD width="11%" align=center nowrap>remaining </TD>
      <TD width="2%" align=center nowrap>&nbsp;</TD>
      <TD width="1%" align=center nowrap>&nbsp;</TD>
      <TD width="11%" align=center nowrap>&nbsp;</TD>
      <TD width="2%" align=center nowrap>&nbsp;</TD>
      <TD width="1%" align=center nowrap>&nbsp;</TD>
      <TD width="11%" align=center nowrap>Aggregate </TD>
      <TD width="2%" align=center nowrap>&nbsp;</TD>
      <TD width="1%" align=center nowrap>&nbsp;</TD>
      <TD width="11%" align=center nowrap>Number of </TD>
      <TD width="2%" align=center nowrap>&nbsp;</TD>
      <TD width="1%" align=center nowrap>&nbsp;</TD>
      <TD width="11%" align=center nowrap>&nbsp;</TD>
      <TD width="2%" align=center nowrap>&nbsp;</TD>
      <TD width="1%" align=center nowrap>&nbsp;</TD>
      <TD width="11%" align=center nowrap>Aggregate </TD>
      <TD align=left width="2%">&nbsp;</TD>
    </TR>
    <TR vAlign=top>
      <TD align=center nowrap>Number of </TD>
      <TD width="1%" align=left nowrap>&nbsp;</TD>
      <TD width="11%" align=center nowrap>contractual </TD>
      <TD width="2%" align=center nowrap>&nbsp;</TD>
      <TD width="1%" align=center nowrap>&nbsp;</TD>
      <TD width="11%" align=center nowrap>Exercise </TD>
      <TD width="2%" align=center nowrap>&nbsp;</TD>
      <TD width="1%" align=center nowrap>&nbsp;</TD>
      <TD width="11%" align=center nowrap>Intrinsic </TD>
      <TD width="2%" align=center nowrap>&nbsp;</TD>
      <TD width="1%" align=center nowrap>&nbsp;</TD>
      <TD width="11%" align=center nowrap>shares </TD>
      <TD width="2%" align=center nowrap>&nbsp;</TD>
      <TD width="1%" align=center nowrap>&nbsp;</TD>
      <TD width="11%" align=center nowrap>Exercise </TD>
      <TD width="2%" align=center nowrap>&nbsp;</TD>
      <TD width="1%" align=center nowrap>&nbsp;</TD>
      <TD width="11%" align=center nowrap>Intrinsic </TD>
      <TD align=left width="2%">&nbsp;</TD>
    </TR>
    <TR vAlign=top>
      <TD align=center nowrap style="BORDER-BOTTOM: #000000 1px solid">shares </TD>
      <TD
    width="1%" align=left nowrap style="BORDER-BOTTOM: #000000 1px solid">&nbsp;</TD>
      <TD width="11%" align=center nowrap style="BORDER-BOTTOM: #000000 1px solid">life </TD>
      <TD
    width="2%" align=center nowrap style="BORDER-BOTTOM: #000000 1px solid">&nbsp;</TD>
      <TD
    width="1%" align=center nowrap style="BORDER-BOTTOM: #000000 1px solid">&nbsp;</TD>
      <TD
      width="11%" align=center nowrap style="BORDER-BOTTOM: #000000 1px solid">Price </TD>
      <TD
    width="2%" align=center nowrap style="BORDER-BOTTOM: #000000 1px solid">&nbsp;</TD>
      <TD
    width="1%" align=center nowrap style="BORDER-BOTTOM: #000000 1px solid">&nbsp;</TD>
      <TD
      width="11%" align=center nowrap style="BORDER-BOTTOM: #000000 1px solid">Value </TD>
      <TD
    width="2%" align=center nowrap style="BORDER-BOTTOM: #000000 1px solid">&nbsp;</TD>
      <TD
    width="1%" align=center nowrap style="BORDER-BOTTOM: #000000 1px solid">&nbsp;</TD>
      <TD
      width="11%" align=center nowrap style="BORDER-BOTTOM: #000000 1px solid">exercisable </TD>
      <TD
    width="2%" align=center nowrap style="BORDER-BOTTOM: #000000 1px solid">&nbsp;</TD>
      <TD
    width="1%" align=center nowrap style="BORDER-BOTTOM: #000000 1px solid">&nbsp;</TD>
      <TD
      width="11%" align=center nowrap style="BORDER-BOTTOM: #000000 1px solid">Price </TD>
      <TD
    width="2%" align=center nowrap style="BORDER-BOTTOM: #000000 1px solid">&nbsp;</TD>
      <TD
    width="1%" align=center nowrap style="BORDER-BOTTOM: #000000 1px solid">&nbsp;</TD>
      <TD
      width="11%" align=center nowrap style="BORDER-BOTTOM: #000000 1px solid">Value </TD>
      <TD style="BORDER-BOTTOM: #000000 1px solid" align=left
    width="2%">&nbsp;</TD>
    </TR>
    <TR vAlign=top>
      <TD style="BORDER-BOTTOM: #000000 1px solid" align=right
      bgColor=#e6efff>58,000 </TD>
      <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="1%"
    bgColor=#e6efff>&nbsp;</TD>
      <TD style="BORDER-BOTTOM: #000000 1px solid" align=right width="11%"
    bgColor=#e6efff>9.01 </TD>
      <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="2%"
    bgColor=#e6efff>&nbsp;</TD>
      <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="1%"
    bgColor=#e6efff>$</TD>
      <TD style="BORDER-BOTTOM: #000000 1px solid" align=right width="11%"
    bgColor=#e6efff>&nbsp;0.005 </TD>
      <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="2%"
    bgColor=#e6efff>&nbsp;</TD>
      <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="1%"
    bgColor=#e6efff>$</TD>
      <TD style="BORDER-BOTTOM: #000000 1px solid" align=right width="11%"
    bgColor=#e6efff>246,790 </TD>
      <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="2%"
    bgColor=#e6efff>&nbsp;</TD>
      <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="1%"
    bgColor=#e6efff>&nbsp;</TD>
      <TD style="BORDER-BOTTOM: #000000 1px solid" align=right width="11%"
    bgColor=#e6efff>58,000</TD>
      <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="2%"
    bgColor=#e6efff>&nbsp;</TD>
      <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="1%"
    bgColor=#e6efff>$</TD>
      <TD style="BORDER-BOTTOM: #000000 1px solid" align=right width="11%"
    bgColor=#e6efff>0.005 </TD>
      <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="2%"
    bgColor=#e6efff>&nbsp;</TD>
      <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="1%"
    bgColor=#e6efff>$</TD>
      <TD style="BORDER-BOTTOM: #000000 1px solid" align=right width="11%"
    bgColor=#e6efff>246,790 </TD>
      <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="2%"
    bgColor=#e6efff>&nbsp;</TD>
    </TR>
    <TR vAlign=top>
      <TD style="BORDER-BOTTOM: #000000 3px double" align=right>143,436 </TD>
      <TD style="BORDER-BOTTOM: #000000 3px double" align=left
    width="1%">&nbsp;</TD>
      <TD style="BORDER-BOTTOM: #000000 3px double" align=right width="11%">9.59 </TD>
      <TD style="BORDER-BOTTOM: #000000 3px double" align=left
    width="2%">&nbsp;</TD>
      <TD style="BORDER-BOTTOM: #000000 3px double" align=left width="1%">$</TD>
      <TD style="BORDER-BOTTOM: #000000 3px double" align=right
      width="11%">&nbsp;0.005 </TD>
      <TD style="BORDER-BOTTOM: #000000 3px double" align=left
    width="2%">&nbsp;</TD>
      <TD style="BORDER-BOTTOM: #000000 3px double" align=left width="1%">$</TD>
      <TD style="BORDER-BOTTOM: #000000 3px double" align=right
      width="11%">610,320 </TD>
      <TD style="BORDER-BOTTOM: #000000 3px double" align=left
    width="2%">&nbsp;</TD>
      <TD style="BORDER-BOTTOM: #000000 3px double" align=left
    width="1%">&nbsp;</TD>
      <TD style="BORDER-BOTTOM: #000000 3px double" align=right
      width="11%">71,718</TD>
      <TD style="BORDER-BOTTOM: #000000 3px double" align=left
    width="2%">&nbsp;</TD>
      <TD style="BORDER-BOTTOM: #000000 3px double" align=left width="1%">$</TD>
      <TD style="BORDER-BOTTOM: #000000 3px double" align=right
      width="11%">0.005 </TD>
      <TD style="BORDER-BOTTOM: #000000 3px double" align=left
    width="2%">&nbsp;</TD>
      <TD style="BORDER-BOTTOM: #000000 3px double" align=left width="1%">$</TD>
      <TD style="BORDER-BOTTOM: #000000 3px double" align=right
      width="11%">305,160 </TD>
      <TD style="BORDER-BOTTOM: #000000 3px double" align=left
    width="2%">&nbsp;</TD>
    </TR>
  </TABLE>
</DIV>
<P align=justify>The Company used the Black-Scholes option pricing model to
  estimate the fair value of the options as the fair value of the services
  provided could not be reliably calculated. The following weighted average
  assumptions were used:</P>
<P align=center>76</P>
<HR style="PAGE-BREAK-AFTER: always" align=center width="100%" color=black
noShade SIZE=5>
<A name=page_MF-13></A><BR>
<TABLE
style="BORDER-COLOR: black; FONT-SIZE: 10pt; BORDER-COLLAPSE: collapse; "
cellSpacing=0 cellPadding=0 width="100%" border=0>
  <TR vAlign=top>
    <TD align=left><B>HELIUS MEDICAL TECHNOLOGIES, INC. (FORMERLY
      NEUROHABILITATION CORPORATION)</B> </TD>
  </TR>
  <TR vAlign=top>
    <TD align=left>(A development stage company) </TD>
  </TR>
  <TR vAlign=top>
    <TD align=left><B>Notes to Financial Statements for the periods ended
      March 31, 2014 and 2013</B> </TD>
  </TR>
  <TR vAlign=top>
    <TD align=left>(Expressed in United States Dollars) </TD>
  </TR>
  <TR vAlign=top>
    <TD style="BORDER-BOTTOM: #000000 1px solid"
  align=left>&nbsp;</TD>
  </TR>
</TABLE>
<BR>
<DIV align=center>
  <TABLE
style="BORDER-COLOR: black; FONT-SIZE: 10pt; BORDER-COLLAPSE: collapse; "
cellSpacing=0 cellPadding=0 width="50%" border=0>
    <TR vAlign=top>
      <TD style="BORDER-TOP: #000000 1px solid; BORDER-BOTTOM: #000000 1px solid"
    align=left>&nbsp;</TD>
      <TD style="BORDER-TOP: #000000 1px solid; BORDER-BOTTOM: #000000 1px solid"
    align=left width="1%" >&nbsp;</TD>
      <TD style="BORDER-TOP: #000000 1px solid; BORDER-BOTTOM: #000000 1px solid"
    align=right width="22%" >2014 </TD>
      <TD style="BORDER-TOP: #000000 1px solid; BORDER-BOTTOM: #000000 1px solid"
    align=left width="2%" >&nbsp;</TD>
    </TR>
    <TR vAlign=top>
      <TD align=left bgColor=#e6efff>Risk-free interest rate (%) </TD>
      <TD align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
      <TD align=right width="22%" bgColor=#e6efff >1.55 </TD>
      <TD align=left width="2%"  bgColor=#e6efff>&nbsp;</TD>
    </TR>
    <TR vAlign=top>
      <TD align=left>Dividend yield (%) </TD>
      <TD align=left width="1%" >&nbsp;</TD>
      <TD align=right width="22%" >- </TD>
      <TD align=left width="2%" >&nbsp;</TD>
    </TR>
    <TR vAlign=top>
      <TD align=left bgColor=#e6efff>Expected volatility (%) </TD>
      <TD align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
      <TD align=right width="22%" bgColor=#e6efff >107.52 </TD>
      <TD align=left width="2%"  bgColor=#e6efff>&nbsp;</TD>
    </TR>
    <TR vAlign=top>
      <TD align=left>Expected option life (years) </TD>
      <TD align=left width="1%" >&nbsp;</TD>
      <TD align=right width="22%" >4.66 </TD>
      <TD align=left width="2%" >&nbsp;</TD>
    </TR>
    <TR>
      <TD bgColor=#e6efff>&nbsp;</TD>
      <TD width="1%"  bgColor=#e6efff>&nbsp;</TD>
      <TD width="22%" bgColor=#e6efff >&nbsp;</TD>
      <TD width="2%"  bgColor=#e6efff>&nbsp;</TD>
    </TR>
    <TR vAlign=top>
      <TD align=left>Fair value per option granted </TD>
      <TD align=left width="1%" >$</TD>
      <TD align=right width="22%" >&nbsp;4.26 </TD>
      <TD align=left width="2%" >&nbsp;</TD>
    </TR>
    <TR vAlign=top>
      <TD align=left bgColor=#e6efff>Far value per option of unvested options </TD>
      <TD align=left width="1%"  bgColor=#e6efff>$</TD>
      <TD align=right width="22%" bgColor=#e6efff >&nbsp;4.26 </TD>
      <TD align=left width="2%"
  bgColor=#e6efff>&nbsp;</TD>
    </TR>
  </TABLE>
</DIV>
<P align=justify>The Black-Scholes option pricing model was developed for use in
  estimating the fair value of share options that have no vesting provisions and
  are fully transferable. Also, option-pricing models require the use of estimates
  and assumptions including the expected volatility. The Company uses expected
  volatility rates which are based upon the average volatility rates of other
  companies in the same industry, due to the Company&#146;s limited history. The
  Company based the current stock price on the value per shares issued to date.
  Changes in the underlying assumptions can materially affect the fair value
  estimates. </P>
<P align=justify>(d)&nbsp;&nbsp;&nbsp; <B>Share Purchase Warrants </B></P>
<P align=justify>The Company does not have any share purchase warrants
  outstanding for the years ended March 31, 2014 and March 31, 2013. </P>
<P
align=justify><B>8.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
  INCOME TAXES </B></P>
<P align=justify>A reconciliation of income taxes at statutory rates with the
  reported taxes is follows:</P>
<TABLE
style="BORDER-COLOR: black; FONT-SIZE: 10pt; BORDER-COLLAPSE: collapse; "
cellSpacing=0 cellPadding=0 width="100%" border=0>
  <TR vAlign=top>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="1%"
    >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=center
      width="12%"><B>2014</B> </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=center width="2%"
    >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=center width="1%"
    >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=center
      width="12%"><B>2013</B> </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="2%"
    >&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left
      bgColor=#e6efff>Earnings (loss) for the year </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="1%"
     bgColor=#e6efff>$</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=right width="12%"
    bgColor=#e6efff>&nbsp;(1,067,284</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="2%"
     bgColor=#e6efff>) </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="1%"
     bgColor=#e6efff>$</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=right width="12%"
    bgColor=#e6efff>&nbsp;(8,517,850</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="2%"
     bgColor=#e6efff>) </TD>
  </TR>
  <TR>
    <TD>&nbsp;</TD>
    <TD width="1%" >&nbsp;</TD>
    <TD width="12%">&nbsp;</TD>
    <TD width="2%" >&nbsp;</TD>
    <TD width="1%" >&nbsp;</TD>
    <TD width="12%">&nbsp;</TD>
    <TD width="2%" >&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD align=left bgColor=#e6efff>Expected income tax (recovery) </TD>
    <TD align=left width="1%"  bgColor=#e6efff>$</TD>
    <TD align=right width="12%" bgColor=#e6efff>&nbsp;(270,000</TD>
    <TD align=left width="2%"  bgColor=#e6efff>) </TD>
    <TD align=left width="1%"  bgColor=#e6efff>$</TD>
    <TD align=right width="12%" bgColor=#e6efff>&nbsp;(2,151,000</TD>
    <TD align=left width="2%"  bgColor=#e6efff>) </TD>
  </TR>
  <TR vAlign=top>
    <TD align=left>Change in statutory rates and other </TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=right width="12%">(93,000</TD>
    <TD align=left width="2%" >) </TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=right width="12%">(745,000</TD>
    <TD align=left width="2%" >) </TD>
  </TR>
  <TR vAlign=top>
    <TD align=left bgColor=#e6efff>Permanent difference </TD>
    <TD align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=right width="12%" bgColor=#e6efff>275,000 </TD>
    <TD align=left width="2%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=right width="12%" bgColor=#e6efff>2,890,000 </TD>
    <TD align=left width="2%"  bgColor=#e6efff>&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left>Change in
      unrecognized deductible temporary differences </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="1%"
    >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=right
      width="12%">88,000 </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="2%"
    >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="1%"
    >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=right width="12%">6,000 </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="2%"
    >&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD style="BORDER-BOTTOM: #000000 3px double" align=left
      bgColor=#e6efff>Total income tax expense (recovery) </TD>
    <TD style="BORDER-BOTTOM: #000000 3px double" align=left width="1%"
     bgColor=#e6efff>$</TD>
    <TD style="BORDER-BOTTOM: #000000 3px double" align=right width="12%"
    bgColor=#e6efff>&nbsp;- </TD>
    <TD style="BORDER-BOTTOM: #000000 3px double" align=left width="2%"
     bgColor=#e6efff>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 3px double" align=left width="1%"
     bgColor=#e6efff>$</TD>
    <TD style="BORDER-BOTTOM: #000000 3px double" align=right width="12%"
    bgColor=#e6efff>&nbsp;- </TD>
    <TD style="BORDER-BOTTOM: #000000 3px double" align=left width="2%"
     bgColor=#e6efff>&nbsp;</TD>
  </TR>
</TABLE>
<P align=justify>The significant components of the Company&#146;s deferred assets and
  liabilities are as follows: </P>
<TABLE
style="BORDER-COLOR: black; FONT-SIZE: 10pt; BORDER-COLLAPSE: collapse; "
cellSpacing=0 cellPadding=0 width="100%" border=0>
  <TR vAlign=top>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="1%"
    >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=center
      width="12%"><B>2014</B> </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=center width="2%"
    >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=center width="1%"
    >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=center
      width="12%"><B>2013</B> </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="2%"
    >&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD align=left>Deferred Tax Assets </TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=left width="12%">&nbsp;</TD>
    <TD align=left width="2%" >&nbsp;</TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=left width="12%">&nbsp;</TD>
    <TD align=left width="2%" >&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD align=left bgColor=#e6efff>&nbsp;Non-capital losses </TD>
    <TD align=left width="1%"  bgColor=#e6efff>$</TD>
    <TD align=right width="12%" bgColor=#e6efff>&nbsp;94,000 </TD>
    <TD align=left width="2%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="1%"  bgColor=#e6efff>$</TD>
    <TD align=right width="12%" bgColor=#e6efff>&nbsp;6,000 </TD>
    <TD align=left width="2%"  bgColor=#e6efff>&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left>&nbsp;Deferred tax
      assets not recognized </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="1%"
    >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=right
      width="12%">(94,000</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="2%"
    >) </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="1%"
    >$</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=right
      width="12%">&nbsp;(6,000</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="2%"
    >) </TD>
  </TR>
  <TR vAlign=top>
    <TD style="BORDER-BOTTOM: #000000 3px double" align=left
      bgColor=#e6efff>Net deferred tax assets </TD>
    <TD style="BORDER-BOTTOM: #000000 3px double" align=left width="1%"
     bgColor=#e6efff>$</TD>
    <TD style="BORDER-BOTTOM: #000000 3px double" align=right width="12%"
    bgColor=#e6efff>&nbsp;- </TD>
    <TD style="BORDER-BOTTOM: #000000 3px double" align=left width="2%"
     bgColor=#e6efff>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 3px double" align=left width="1%"
     bgColor=#e6efff>$</TD>
    <TD style="BORDER-BOTTOM: #000000 3px double" align=right width="12%"
    bgColor=#e6efff>&nbsp;- </TD>
    <TD style="BORDER-BOTTOM: #000000 3px double" align=left width="2%"
     bgColor=#e6efff>&nbsp;</TD>
  </TR>
</TABLE>
<P align=justify>The Company has loss carryfowards of approximately $278,000 in
  the United States available for deduction against future taxable income which if
  they are not utilized, will expire through 2034.</P>
<P
align=justify><B>9.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
  COMMITMENTS AND CONTINGENCIES </B></P>
<TABLE
style="BORDER-COLOR: black; FONT-SIZE: 10pt; BORDER-COLLAPSE: collapse; "
cellSpacing=0 cellPadding=0 width="100%" border=0 BCLLIST>
  <TR>
    <TD vAlign=top width="5%">(a) </TD>
    <TD><P align=justify>The Company entered into a sub-license agreement with
      Advanced NeuroRehabilitation LLC for an exclusive right on Advanced
      NeuroRehabilitation LLC&#146;s patent pending technology, claims and knowhow.
      In addition to the issuance of 1,000,000 shares (Note 6), the Company
      agreed to pay a 4% royalty on net revenue on the sales of devices covered
      by the patent-pending technology and services related to the therapy or
      use of devices covered by the patent-pending
      technology.</P></TD>
  </TR>
</TABLE>
<P align=center>77</P>
<HR style="PAGE-BREAK-AFTER: always" align=center width="100%" color=black
noShade SIZE=5>
<A name=page_MF-14></A><BR>
<TABLE
style="BORDER-COLOR: black; FONT-SIZE: 10pt; BORDER-COLLAPSE: collapse; "
cellSpacing=0 cellPadding=0 width="100%" border=0>
  <TR vAlign=top>
    <TD align=left><B>HELIUS MEDICAL TECHNOLOGIES, INC. (FORMERLY
      NEUROHABILITATION CORPORATION)</B> </TD>
  </TR>
  <TR vAlign=top>
    <TD align=left>(A development stage company) </TD>
  </TR>
  <TR vAlign=top>
    <TD align=left><B>Notes to Financial Statements for the periods ended
      March 31, 2014 and 2013</B> </TD>
  </TR>
  <TR vAlign=top>
    <TD align=left>(Expressed in United States Dollars) </TD>
  </TR>
  <TR vAlign=top>
    <TD style="BORDER-BOTTOM: #000000 1px solid"
  align=left>&nbsp;</TD>
  </TR>
</TABLE>
<BR>
<TABLE
style="BORDER-COLOR: black; FONT-SIZE: 10pt; BORDER-COLLAPSE: collapse; "
cellSpacing=0 cellPadding=0 width="100%" border=0 BCLLIST>
  <TR>
    <TD vAlign=top width="5%">(b) </TD>
    <TD><P align=justify>The Company entered into a commercial
      development-to-supply program with Ximedia where Ximedia will design,
      develop and produce PoNS product solution suitable for clinical trial and
      commercial sale. Under the program, the Company is responsible for
      ensuring the device is in compliance from the legal and regulatory
      standpoint. The agreed budget for phase 1B of development is $499,000;
      phase 2 is $1,065,000; Phase 3 and 4 is $1,389,000 and 2nd software
      development cycle is $586,000, of which $171,781 was expensed as research
      and development during the year ended March 31, 2014. The estimated
      duration of the project is 10 months. The Company may cancel the project
      at anytime by providing written notice at least 30 days prior to the
      intended date of cancellation. As of March 31, 2014, the Company recorded
      a prepaid of $300,000 to Ximedica which will be applied at the end of the
      project. The total agreed budget is approximately $3.5 million with $3.3
      million to become payable.</P></TD>
  </TR>
  <TR>
    <TD width="5%">&nbsp;</TD>
    <TD>&nbsp;</TD>
  </TR>
  <TR>
    <TD vAlign=top width="5%">(c) </TD>
    <TD><P align=justify>The Company entered into an employment contract with the
      CEO of the Company with an annual salary of $250,000 until any qualified
      investments in the Company reaches $5 million, at which time the salary is
      increased to $300,000 annually.</P></TD>
  </TR>
  <TR>
    <TD width="5%">&nbsp;</TD>
    <TD>&nbsp;</TD>
  </TR>
  <TR>
    <TD vAlign=top width="5%">(d) </TD>
    <TD><P align=justify>On January 30, 2013, the Company entered into an
      independent contractor agreement with Clinvue, a company of which a
      shareholder owns 1/3 of the ownership, where Clinvue is to lead the design
      and manufacturing program of PoNS<SUP>TM</SUP>. As of March 31, 2014, the
      services were compensated by a grant of a total of 58,000 stock options
      exercisable at $0.005 per option for 10 years (Note 6). The estimated
      remaining costs to be incurred in the future under the contract are
      $100,000 and will be paid in cash.</P></TD>
  </TR>
  <TR>
    <TD width="5%">&nbsp;</TD>
    <TD>&nbsp;</TD>
  </TR>
  <TR>
    <TD vAlign=top width="5%">(e) </TD>
    <TD><P align=justify>On February 1, 2013, the Company entered into a Master
      Cooperative Research and Development Agreement (CRADA) with, Advanced
      NeuroRehabilitation, LLC as the background patent owner, Yuri P. Danilov,
      Mitchell E. Tyler, Kurt A. Kaczmarek, as the investors, the US Army
      Medical Material Agency (USAMMA) and the US Army Medical Material
      Development Activity (USAMMDA) pursuant to which USAMMA and USAMMDA on
      behalf of the US Government entered into an agreement with the Company for
      the in research and development of PoNS<SUP>TM </SUP>assisted physical
      therapy for the treatment of soldiers with balance and gait disorder,
      especially advancing the PoNS device through FDA approval. The agreement
      automatically expires on December 31, 2015 unless modified in writing by
      the parties. Both parties may unilaterally terminate the agreement at any
      time by giving the other party written notice, not less than 30 days prior
      to the desired termination date. In the event that the Company is not able
      or willing to commercialize the PoNS<SUP>TM </SUP>within a reasonable
      period of time from the expiration or termination of the agreement, the US
      Army Medical Research and Material Command (USAMRMC) will become the
      sponsor of the regulatory application for the PoNS<SUP>TM </SUP>technology
      until the application is cleared or approved by the FDA, at which point
      USAMRMC will transfer such clearance or approval to the Company.</P></TD>
  </TR>
  <TR>
    <TD width="5%">&nbsp;</TD>
    <TD>&nbsp;</TD>
  </TR>
  <TR>
    <TD vAlign=top width="5%">(f) </TD>
    <TD><P align=justify>On March 3, 2014, the Company entered into a letter of
      intent with Transmax Investing with an intent that Transmax Investing will
      effect a transaction with the Company whereby a certain financing will be
      conducted into the Company and a public listing of the Company on a
      recognized stock exchange.</P></TD>
  </TR>
</TABLE>
<P
align=justify><B>10.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
  RELATED PARTY TRANSACTIONS </B></P>
<P align=justify>For the year ended March 31, 2014, the Company was a party to
  the following related party transactions not disclosed elsewhere in these
  financial statements: </P>
<P align=justify>As of March 31, 2014, $ nil (March 31, 2013 - $2,231) in
  short-term loan payable is outstanding to a shareholder of the Company.</P>
<P align=justify>During the year ended March 31, 2014, the Company paid $20,833
  (March 31, 2013 - $nil) as wages to the CEO of the Company.</P>
<P align=justify>See also Notes 4 and 9.</P>
<P align=center>78</P>
<HR style="PAGE-BREAK-AFTER: always" align=center width="100%" color=black
noShade SIZE=5>
<A name=page_MF-15></A> <BR>
<TABLE
style="BORDER-COLOR: black; FONT-SIZE: 10pt; BORDER-COLLAPSE: collapse; "
cellSpacing=0 cellPadding=0 width="100%" border=0>
  <TR vAlign=top>
    <TD align=left><B>HELIUS MEDICAL TECHNOLOGIES, INC. (FORMERLY
      NEUROHABILITATION CORPORATION)</B> </TD>
  </TR>
  <TR vAlign=top>
    <TD align=left>(A development stage company) </TD>
  </TR>
  <TR vAlign=top>
    <TD align=left><B>Notes to Financial Statements for the periods ended
      March 31, 2014 and 2013</B> </TD>
  </TR>
  <TR vAlign=top>
    <TD align=left>(Expressed in United States Dollars) </TD>
  </TR>
  <TR vAlign=top>
    <TD style="BORDER-BOTTOM: #000000 1px solid"
  align=left>&nbsp;</TD>
  </TR>
</TABLE>
<P
align=justify><B>11.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
  SUBSEQUENT EVENTS </B></P>
<P align=justify>In April 2014, 201,436 shares were issued pursuant to the
  exercise of stock options for total proceeds of $1,007. </P>
<P align=justify>On May 27, 2014, the Company entered into a rental agreement
  for office space. The monthly rent is $3,896. The agreement expires on May 31,
  2015.</P>
<P align=justify>On June 4, 2014, the Company entered into an amendment letter
  for the convertible debenture. Pursuant to the amendment letter, if any
  qualified Financing being an aggregate amount of at least $2,000,000 occurs, the
  principal amount of the debenture shall be automatically converted into common
  shares of the Company at a price per share equal to CAD $0.425. Upon conversion
  of the debenture, the Company will issue a total of 2,564,705 common shares and
  will pay $11,131 in cash with respect to the accrued and unpaid interest
  outstanding. </P>
<P align=justify>Upon closing of the recapitalization (Note 3), the Company
  recorded a beneficial conversion feature of $192,353 determined using the
  intrinsic value method. Concurrently, the debenture was converted into 2,564,705
  common shares with a fair value of $1,180,713. Accreted interest of $180,254 was
  expensed upon conversion of the debenture and $11,131 of accrued interest was
  paid in July 2014. </P>
<P align=justify>On June 10, 2014, the Company entered into an advisory services
  agreement with Baron Global Financial Canada Ltd. (&#147;Baron&#148;) whereby Baron would
  provide exclusive corporate advisory services to the Company for a monthly fee
  of CAD $12,500 plus applicable taxes starting on July 1, 2014, for a period of
  12 months. </P>
<P align=justify>On June 19, 2014, the Company granted 3,520,000 options to
  directors, officers, and consultants exercisable at CAD $0.60 for 5 years. One
  third of these options vested immediately upon granting. The remaining two
  thirds of the options will vest on June 19, 2015, and June 19, 2016
  respectively. </P>
<P align=justify>On June 20, 2014, the Company entered into a consulting
  agreement with Sproatt Mountain Ventures Inc. (&#147;Sproatt&#148;) whereby Sproatt will
  provide investor relations services to increase market awareness of the Company.
  The Company will pay Sproatt a fee of CAD $12,000 per month plus applicable
  taxes and grant options entitling Sproatt to purchase 250,000 common shares at
  CAD $0.60 per share exercisable until June 20, 2019. The Sproatt options shall
  vest over 24 months, with one quarter of the options vesting at the end of each
  three month period from the date of grant. </P>
<P align=justify>On July 14, 2014, the Company entered into a consulting
  agreement with Dr. Brian Bapty whereby Dr. Bapty would provide consulting
  services to the Company for a monthly fee of CAD $6,000 plus applicable taxes,
  for a period of 12 months. The Company also issued to Dr. Bapty 100,000 stock
  options exercisable at CAD $2.52 for 3 years.</P>
<P align=justify>On July 15, 2014, the Company entered into a consulting
  agreement with the Montreal NeuroFeedback Centre (&#147;Neurofeedback&#148;) whereby
  Neurofeedback will assist with all aspects of a pilot cilincal trial of the
  PoNS<SUP>TM </SUP>device for a period of 12 months. Neurofeedback will charge
  CAD $100,000 over the 12 month period. </P>
<P align=justify>On December 8, 2014, the Company granted incentive stock
  options, exercisable to purchase up to an aggregate of 950,000 shares of the
  Company, to directors, officers, and consultants of the Company. All options are
  subject to any earlier termination in accordance with their terms. 450,000
  options vest immediately upon grant and are exercisable at a price of CAD $2.92.
  Another 100,000 options are also exercisable at a price of CAD $2.92, with
  one-third of such options vesting on the date of grant and another one-third
  vesting on first and second anniversary of the date of grant. The remaining
  400,000 options are exercisable at a price of CAD $2.96, with one-quarter of
  such options vesting on the date of grant and another one-quarter vesting on
  each six-month anniversary of the date of grant. </P>
<P align=justify>On January 5, 2015, Wicab, Inc. (&#147;Wicab&#148;) filed a complaint
  against two of the Company&#146;s directors, Yuri Danilov and Mitch Tyler, and
  Advanced Neurorehabilitation Corporation in U.S. District Court for the Western
  District of Wisconsin. The complaint contains various state and common law
  claims arising from Danilov&#146;s and Tyler&#146;s prior employment with Wicab and our
  two issued patents for the PoNS<SUP>TM</SUP> device. The complaint alleges,
  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 our two issued patents are therefore rightfully the property of
  Wicab.</P>
<P align=center>79</P>
<HR style="PAGE-BREAK-AFTER: always" align=center width="100%" color=black
noShade SIZE=5>
<A name=page_MF-16></A> <BR>
<TABLE
style="BORDER-COLOR: black; FONT-SIZE: 10pt; BORDER-COLLAPSE: collapse; "
cellSpacing=0 cellPadding=0 width="100%" border=0>
  <TR vAlign=top>
    <TD align=left><B>HELIUS MEDICAL TECHNOLOGIES, INC. (FORMERLY
      NEUROHABILITATION CORPORATION)</B> </TD>
  </TR>
  <TR vAlign=top>
    <TD align=left>(A development stage company) </TD>
  </TR>
  <TR vAlign=top>
    <TD align=left><B>Notes to Financial Statements for the periods ended
      March 31, 2014 and 2013</B> </TD>
  </TR>
  <TR vAlign=top>
    <TD align=left>(Expressed in United States Dollars) </TD>
  </TR>
  <TR vAlign=top>
    <TD style="BORDER-BOTTOM: #000000 1px solid"
  align=left>&nbsp;</TD>
  </TR>
</TABLE>
<P align=justify>The complaint seeks an unspecified amount of monetary damages,
  an injunction preventing the Company from using the ideas and inventions in the
  two patents, an order transferring ownership of the patents from the Company to
  Wicab, and recovery of costs and attorneys&#146; fees. </P>
<P align=justify>The Company believes the Wicab allegations are meritless, and
  we will vigorously defend against these claims. However, the lawsuit is at an
  early stage and the ultimate outcome of the matter remains uncertain. If we
  receive an adverse judgment, we may be prevented from further developing and
  marketing the PoNS<SUP>TM</SUP> device, and we may be required to pay Wicab&#146;s
  attorneys&#146; fees, costs and any damages, which could materially adversely affect
  our business, operating results and financial condition. </P>
<P align=justify>The Company has evaluated subsequent events through the
  issuance date of the financial statements. The Company is not aware of any
  additional significant subsequent events that occurred subsequent to the balance
  sheet date, but prior to the date of issuance that would have a material impact
  on the Company&#146;s financial statements. </P>
<P align=center>80</P>
<HR style="PAGE-BREAK-AFTER: always" align=center width="100%" color=black
noShade SIZE=5>
<A name=page_SF-1></A>

<A name=page_fa1></A>
<P align=center><B>HELIUS MEDICAL TECHNOLOGIES, INC. </B></P>
<P align=center><B>CONDENSED CONSOLIDATED FINANCIAL STATEMENTS </B></P>
<P align=center><B>Nine months ended December 31, 2014 </B></P>
<P align=center>(Expressed in United States Dollars) <BR>(Prepared in accordance
with generally accepted accounting principles <BR>used in the United States of
America (U.S. GAAP)) </P>
<P align=center>81</P>
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<P align=justify><B>Helius Medical Technologies, Inc.</B> <BR><B>Condensed
Consolidated Balance Sheets </B><BR>(Expressed in United States Dollars)
<BR><B>(Unaudited) </B><BR></P>
<TABLE
style="BORDER-COLOR: black; FONT-SIZE: 10pt; BORDER-COLLAPSE: collapse; "
cellSpacing=0 cellPadding=0 width="100%" border=0>

  <TR vAlign=top>
    <TD vAlign=bottom noWrap align=left>&nbsp; </TD>
    <TD vAlign=bottom noWrap align=left width="1%">&nbsp;</TD>
    <TD vAlign=bottom noWrap align=left width="12%">&nbsp; </TD>
    <TD vAlign=bottom noWrap align=left width="2%">&nbsp;</TD>
    <TD vAlign=bottom noWrap align=left width="1%">&nbsp;</TD>
    <TD vAlign=bottom noWrap align=right width="12%"><B>March 31,</B> </TD>
    <TD vAlign=bottom noWrap align=left width="2%">&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD vAlign=bottom noWrap align=left>&nbsp; </TD>
    <TD vAlign=bottom noWrap align=left width="1%">&nbsp;</TD>
    <TD vAlign=bottom noWrap align=right width="12%"><B>December 31,</B> </TD>
    <TD vAlign=bottom noWrap align=left width="2%">&nbsp;</TD>
    <TD vAlign=bottom noWrap align=left width="1%">&nbsp;</TD>
    <TD vAlign=bottom noWrap align=right width="12%"><B>2014</B> </TD>
    <TD vAlign=bottom noWrap align=left width="2%">&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD vAlign=bottom noWrap align=left>&nbsp; </TD>
    <TD vAlign=bottom noWrap align=left width="1%">&nbsp;</TD>
    <TD vAlign=bottom noWrap align=right width="12%"><B>2014</B> </TD>
    <TD vAlign=bottom noWrap align=left width="2%">&nbsp;</TD>
    <TD vAlign=bottom noWrap align=left width="1%">&nbsp;</TD>
    <TD vAlign=bottom noWrap align=right width="12%"><I>(audited)</I> </TD>
    <TD vAlign=bottom noWrap align=left width="2%">&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom noWrap
      align=left>&nbsp; </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom noWrap align=left
    width="1%"><B></B></TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom noWrap
    align=right width="12%">&nbsp;<STRONG>$</STRONG></TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom noWrap align=left
    width="2%">&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom noWrap align=left
    width="1%"><B></B></TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom noWrap
    align=right width="12%">&nbsp;<STRONG>$</STRONG></TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom noWrap align=left
    width="2%">&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD vAlign=bottom align=left bgColor=#e6efff><B>ASSETS</B> </TD>
    <TD vAlign=bottom align=left width="1%" bgColor=#e6efff>&nbsp;</TD>
    <TD vAlign=bottom align=left width="12%" bgColor=#e6efff>&nbsp; </TD>
    <TD vAlign=bottom align=left width="2%" bgColor=#e6efff>&nbsp;</TD>
    <TD vAlign=bottom align=left width="1%" bgColor=#e6efff>&nbsp;</TD>
    <TD vAlign=bottom align=left width="12%" bgColor=#e6efff>&nbsp; </TD>
    <TD vAlign=bottom align=left width="2%" bgColor=#e6efff>&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD vAlign=bottom align=left>Current assets </TD>
    <TD vAlign=bottom align=left width="1%">&nbsp;</TD>
    <TD vAlign=bottom align=left width="12%">&nbsp; </TD>
    <TD vAlign=bottom align=left width="2%">&nbsp;</TD>
    <TD vAlign=bottom align=left width="1%">&nbsp;</TD>
    <TD vAlign=bottom align=left width="12%">&nbsp; </TD>
    <TD vAlign=bottom align=left width="2%">&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD vAlign=bottom align=left bgColor=#e6efff>&nbsp; &nbsp; &nbsp;
      &nbsp;Cash and cash equivalents </TD>
    <TD vAlign=bottom align=left width="1%" bgColor=#e6efff>&nbsp;</TD>
    <TD vAlign=bottom align=right width="12%" bgColor=#e6efff>2,906,399 </TD>
    <TD vAlign=bottom align=left width="2%" bgColor=#e6efff>&nbsp;</TD>
    <TD vAlign=bottom align=left width="1%" bgColor=#e6efff>&nbsp;</TD>
    <TD vAlign=bottom align=right width="12%" bgColor=#e6efff>15,968 </TD>
    <TD vAlign=bottom align=left width="2%" bgColor=#e6efff>&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD vAlign=bottom align=left>&nbsp; &nbsp; &nbsp; &nbsp;Receivables </TD>
    <TD vAlign=bottom align=left width="1%">&nbsp;</TD>
    <TD vAlign=bottom align=right width="12%">3,679 </TD>
    <TD vAlign=bottom align=left width="2%">&nbsp;</TD>
    <TD vAlign=bottom align=left width="1%">&nbsp;</TD>
    <TD vAlign=bottom align=right width="12%">- </TD>
    <TD vAlign=bottom align=left width="2%">&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=left
    bgColor=#e6efff>&nbsp; &nbsp; &nbsp; &nbsp;Prepaid expenses (Note 7) </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=left
    width="1%" bgColor=#e6efff>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=right
    width="12%" bgColor=#e6efff>456,334 </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=left
    width="2%" bgColor=#e6efff>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=left
    width="1%" bgColor=#e6efff>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=right
    width="12%" bgColor=#e6efff>300,000 </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=left
    width="2%" bgColor=#e6efff>&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom
      align=left><B>Total current assets</B> </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=left
    width="1%">&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=right
    width="12%">3,366,412 </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=left
    width="2%">&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=left
    width="1%">&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=right
    width="12%">315,968 </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=left
    width="2%">&nbsp;</TD></TR>
  <TR>
    <TD vAlign=bottom bgColor=#e6efff>&nbsp; </TD>
    <TD vAlign=bottom width="1%" bgColor=#e6efff>&nbsp;</TD>
    <TD vAlign=bottom width="12%" bgColor=#e6efff>&nbsp; </TD>
    <TD vAlign=bottom width="2%" bgColor=#e6efff>&nbsp;</TD>
    <TD vAlign=bottom width="1%" bgColor=#e6efff>&nbsp;</TD>
    <TD vAlign=bottom width="12%" bgColor=#e6efff>&nbsp; </TD>
    <TD vAlign=bottom width="2%" bgColor=#e6efff>&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD vAlign=bottom align=left><B>TOTAL ASSETS</B> </TD>
    <TD vAlign=bottom align=left width="1%">&nbsp;</TD>
    <TD vAlign=bottom align=right width="12%">3,366,412 </TD>
    <TD vAlign=bottom align=left width="2%">&nbsp;</TD>
    <TD vAlign=bottom align=left width="1%">&nbsp;</TD>
    <TD vAlign=bottom align=right width="12%">315,968 </TD>
    <TD vAlign=bottom align=left width="2%">&nbsp;</TD></TR>
  <TR>
    <TD vAlign=bottom bgColor=#e6efff>&nbsp; </TD>
    <TD vAlign=bottom width="1%" bgColor=#e6efff>&nbsp;</TD>
    <TD vAlign=bottom width="12%" bgColor=#e6efff>&nbsp; </TD>
    <TD vAlign=bottom width="2%" bgColor=#e6efff>&nbsp;</TD>
    <TD vAlign=bottom width="1%" bgColor=#e6efff>&nbsp;</TD>
    <TD vAlign=bottom width="12%" bgColor=#e6efff>&nbsp; </TD>
    <TD vAlign=bottom width="2%" bgColor=#e6efff>&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD vAlign=bottom align=left><B>LIABILITIES</B> </TD>
    <TD vAlign=bottom align=left width="1%">&nbsp;</TD>
    <TD vAlign=bottom align=left width="12%">&nbsp; </TD>
    <TD vAlign=bottom align=left width="2%">&nbsp;</TD>
    <TD vAlign=bottom align=left width="1%">&nbsp;</TD>
    <TD vAlign=bottom align=left width="12%">&nbsp; </TD>
    <TD vAlign=bottom align=left width="2%">&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD vAlign=bottom align=left bgColor=#e6efff>Current liabilities </TD>
    <TD vAlign=bottom align=left width="1%" bgColor=#e6efff>&nbsp;</TD>
    <TD vAlign=bottom align=left width="12%" bgColor=#e6efff>&nbsp; </TD>
    <TD vAlign=bottom align=left width="2%" bgColor=#e6efff>&nbsp;</TD>
    <TD vAlign=bottom align=left width="1%" bgColor=#e6efff>&nbsp;</TD>
    <TD vAlign=bottom align=left width="12%" bgColor=#e6efff>&nbsp; </TD>
    <TD vAlign=bottom align=left width="2%" bgColor=#e6efff>&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD vAlign=bottom align=left>&nbsp; &nbsp; &nbsp; &nbsp;Accounts payable
      and accrued liabilities </TD>
    <TD vAlign=bottom align=left width="1%">&nbsp;</TD>
    <TD vAlign=bottom align=right width="12%">1,210,244 </TD>
    <TD vAlign=bottom align=left width="2%">&nbsp;</TD>
    <TD vAlign=bottom align=left width="1%">&nbsp;</TD>
    <TD vAlign=bottom align=right width="12%">215,921 </TD>
    <TD vAlign=bottom align=left width="2%">&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=left
    bgColor=#e6efff>&nbsp; &nbsp; &nbsp; &nbsp;Convertible debenture (Note 4)
    </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=left
    width="1%" bgColor=#e6efff>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=right
    width="12%" bgColor=#e6efff>- </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=left
    width="2%" bgColor=#e6efff>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=left
    width="1%" bgColor=#e6efff>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=right
    width="12%" bgColor=#e6efff>368,024 </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=left
    width="2%" bgColor=#e6efff>&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD vAlign=bottom align=left>&nbsp; </TD>
    <TD vAlign=bottom align=left width="1%">&nbsp;</TD>
    <TD vAlign=bottom align=right width="12%">1,210,244 </TD>
    <TD vAlign=bottom align=left width="2%">&nbsp;</TD>
    <TD vAlign=bottom align=left width="1%">&nbsp;</TD>
    <TD vAlign=bottom align=right width="12%">583,945 </TD>
    <TD vAlign=bottom align=left width="2%">&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD vAlign=bottom align=left bgColor=#e6efff>&nbsp; &nbsp; &nbsp;
      &nbsp;Derivative liability (Note 2) </TD>
    <TD vAlign=bottom align=left width="1%" bgColor=#e6efff>&nbsp;</TD>
    <TD vAlign=bottom align=right width="12%" bgColor=#e6efff>2,095,228 </TD>
    <TD vAlign=bottom align=left width="2%" bgColor=#e6efff>&nbsp;</TD>
    <TD vAlign=bottom align=left width="1%" bgColor=#e6efff>&nbsp;</TD>
    <TD vAlign=bottom align=right width="12%" bgColor=#e6efff>- </TD>
    <TD vAlign=bottom align=left width="2%" bgColor=#e6efff>&nbsp;</TD></TR>
  <TR>
    <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom>&nbsp; </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom
    width="1%">&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom
      width="12%">&nbsp; </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom
    width="2%">&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom
    width="1%">&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom
      width="12%">&nbsp; </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom
    width="2%">&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=left
    bgColor=#e6efff><B>TOTAL LIABILITIES</B> </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=left
    width="1%" bgColor=#e6efff>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=right
    width="12%" bgColor=#e6efff>3,305,472 </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=left
    width="2%" bgColor=#e6efff>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=left
    width="1%" bgColor=#e6efff>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=right
    width="12%" bgColor=#e6efff>583,945 </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=left
    width="2%" bgColor=#e6efff>&nbsp;</TD></TR>
  <TR>
    <TD vAlign=bottom>&nbsp; </TD>
    <TD vAlign=bottom width="1%">&nbsp;</TD>
    <TD vAlign=bottom width="12%">&nbsp; </TD>
    <TD vAlign=bottom width="2%">&nbsp;</TD>
    <TD vAlign=bottom width="1%">&nbsp;</TD>
    <TD vAlign=bottom width="12%">&nbsp; </TD>
    <TD vAlign=bottom width="2%">&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD vAlign=bottom align=left bgColor=#e6efff><B>CAPITAL (DEFICIT)</B> </TD>
    <TD vAlign=bottom align=left width="1%" bgColor=#e6efff>&nbsp;</TD>
    <TD vAlign=bottom align=left width="12%" bgColor=#e6efff>&nbsp; </TD>
    <TD vAlign=bottom align=left width="2%" bgColor=#e6efff>&nbsp;</TD>
    <TD vAlign=bottom align=left width="1%" bgColor=#e6efff>&nbsp;</TD>
    <TD vAlign=bottom align=left width="12%" bgColor=#e6efff>&nbsp; </TD>
    <TD vAlign=bottom align=left width="2%" bgColor=#e6efff>&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD vAlign=bottom
      align=left>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Common stock
      (Unlimited Class A common shares
      authorized);&nbsp;<BR>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(63,104,788
      shares outstanding at December 31 and 32,070,052
      at&nbsp;<BR>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;March 31, 2014)
      (Note 5) </TD>
    <TD vAlign=bottom align=left width="1%">&nbsp;</TD>
    <TD vAlign=bottom align=right width="12%">16,064,493 </TD>
    <TD vAlign=bottom align=left width="2%">&nbsp;</TD>
    <TD vAlign=bottom align=left width="1%">&nbsp;</TD>
    <TD vAlign=bottom align=right width="12%">8,510,000 </TD>
    <TD vAlign=bottom align=left width="2%">&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD vAlign=bottom align=left bgColor=#e6efff>&nbsp; &nbsp; &nbsp;
      &nbsp;Additional paid-in capital (Note 5) </TD>
    <TD vAlign=bottom align=left width="1%" bgColor=#e6efff>&nbsp;</TD>
    <TD vAlign=bottom align=right width="12%" bgColor=#e6efff>3,132,654 </TD>
    <TD vAlign=bottom align=left width="2%" bgColor=#e6efff>&nbsp;</TD>
    <TD vAlign=bottom align=left width="1%" bgColor=#e6efff>&nbsp;</TD>
    <TD vAlign=bottom align=right width="12%" bgColor=#e6efff>807,157 </TD>
    <TD vAlign=bottom align=left width="2%" bgColor=#e6efff>&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD vAlign=bottom align=left>&nbsp; &nbsp; &nbsp; &nbsp;Accumulated other
      comprehensive income </TD>
    <TD vAlign=bottom align=left width="1%">&nbsp;</TD>
    <TD vAlign=bottom align=right width="12%">(395,030</TD>
    <TD vAlign=bottom align=left width="2%">) </TD>
    <TD vAlign=bottom align=left width="1%">&nbsp;</TD>
    <TD vAlign=bottom align=right width="12%">- </TD>
    <TD vAlign=bottom align=left width="2%">&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=left
    bgColor=#e6efff>&nbsp; &nbsp; &nbsp; &nbsp;Accumulated deficit </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=left
    width="1%" bgColor=#e6efff>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=right
    width="12%" bgColor=#e6efff>(18,741,177</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=left
    width="2%" bgColor=#e6efff>) </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=left
    width="1%" bgColor=#e6efff>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=right
    width="12%" bgColor=#e6efff>(9,585,134</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=left
    width="2%" bgColor=#e6efff>) </TD></TR>
  <TR vAlign=top>
    <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom
      align=left><B>TOTAL SHAREHOLDERS&#146; EQUITY (CAPITAL DEFICIT)</B> </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=left
    width="1%">&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=right
    width="12%">60,940 </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=left
    width="2%">&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=left
    width="1%">&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=right
    width="12%">(267,977</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=left
    width="2%">) </TD></TR>
  <TR>
    <TD vAlign=bottom bgColor=#e6efff>&nbsp; </TD>
    <TD vAlign=bottom width="1%" bgColor=#e6efff>&nbsp;</TD>
    <TD vAlign=bottom width="12%" bgColor=#e6efff>&nbsp; </TD>
    <TD vAlign=bottom width="2%" bgColor=#e6efff>&nbsp;</TD>
    <TD vAlign=bottom width="1%" bgColor=#e6efff>&nbsp;</TD>
    <TD vAlign=bottom width="12%" bgColor=#e6efff>&nbsp; </TD>
    <TD vAlign=bottom width="2%" bgColor=#e6efff>&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD style="BORDER-BOTTOM: #000000 2px solid" vAlign=bottom
      align=left><B>TOTAL LIABILITIES &amp; CAPITAL (DEFICIT)</B> </TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid" vAlign=bottom align=left
    width="1%">&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid" vAlign=bottom align=right
    width="12%">3,366,412 </TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid" vAlign=bottom align=left
    width="2%">&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid" vAlign=bottom align=left
    width="1%">&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid" vAlign=bottom align=right
    width="12%">315,968 </TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid" vAlign=bottom align=left
    width="2%">&nbsp;</TD></TR></TABLE>
<P align=justify>Nature and continuance of operations (Note 1) <BR>Commitment
and contingencies (Note 7) <BR>Subsequent events (Note 10) </P>
<P align=justify>These financial statements are authorized for issue by the
Board of Directors:</P>
<TABLE
style="BORDER-COLOR: black; FONT-SIZE: 10pt; BORDER-COLLAPSE: collapse; "
cellSpacing=0 cellPadding=0 width="100%" border=0>

  <TR vAlign=top>
    <TD align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=center
      width="18%"><I>"Philippe Deschamps "</I> </TD>
    <TD align=left width="18%">Director&nbsp;&nbsp;</TD>
    <TD align=left width="10%">&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=center
      width="18%"><I>"Savio Chiu "</I> </TD>
    <TD align=left width="18%">Director&nbsp;&nbsp;</TD>
    <TD align=left width="10%">&nbsp;</TD></TR></TABLE>
<P align=center>(The accompanying notes are an integral part of these financial
statements.) </P>
<P align=center>82</P>
<HR style="PAGE-BREAK-AFTER: always" align=center width="100%" color=black
noShade SIZE=5>
<A name=page_fa3></A>
<P align=justify><B>Helius Medical Technologies Inc. </B><BR><B>Condensed
Consolidated Statements of Loss and Comprehensive Loss </B><BR>(Expressed in
United States Dollars)<B> </B><BR><B>(Unaudited) </B><BR></P>
<TABLE
style="BORDER-COLOR: black; FONT-SIZE: 10pt; BORDER-COLLAPSE: collapse; "
cellSpacing=0 cellPadding=0 width="100%" border=0>

  <TR vAlign=top>
    <TD vAlign=bottom noWrap align=left>&nbsp; </TD>
    <TD vAlign=bottom noWrap align=left width="1%">&nbsp;</TD>
    <TD vAlign=bottom noWrap align=center width="23%" colSpan=4><B>Three
      Months Ended</B> </TD>
    <TD vAlign=bottom noWrap align=center width="2%">&nbsp;</TD>
    <TD vAlign=bottom noWrap align=center width="1%">&nbsp;</TD>
    <TD vAlign=bottom noWrap align=center width="23%" colSpan=4><B>Nine Months
      Ended</B> </TD>
    <TD vAlign=bottom noWrap align=left width="2%">&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD vAlign=bottom noWrap align=left>&nbsp; </TD>
    <TD vAlign=bottom noWrap align=left width="1%">&nbsp;</TD>
    <TD vAlign=bottom noWrap align=center width="23%" colSpan=4><B>December
      31</B> </TD>
    <TD vAlign=bottom noWrap align=center width="2%">&nbsp;</TD>
    <TD vAlign=bottom noWrap align=center width="1%">&nbsp;</TD>
    <TD vAlign=bottom noWrap align=center width="23%" colSpan=4><B>December
      31</B> </TD>
    <TD vAlign=bottom noWrap align=left width="2%">&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD vAlign=bottom noWrap align=left>&nbsp; </TD>
    <TD vAlign=bottom noWrap align=left width="1%">&nbsp;</TD>
    <TD vAlign=bottom noWrap align=center width="10%"><B>2014</B> </TD>
    <TD vAlign=bottom noWrap align=center width="2%">&nbsp;</TD>
    <TD vAlign=bottom noWrap align=center width="1%">&nbsp;</TD>
    <TD vAlign=bottom noWrap align=center width="10%"><B>2013</B> </TD>
    <TD vAlign=bottom noWrap align=center width="2%">&nbsp;</TD>
    <TD vAlign=bottom noWrap align=center width="1%">&nbsp;</TD>
    <TD vAlign=bottom noWrap align=center width="10%"><B>2014</B> </TD>
    <TD vAlign=bottom noWrap align=center width="2%">&nbsp;</TD>
    <TD vAlign=bottom noWrap align=center width="1%">&nbsp;</TD>
    <TD vAlign=bottom noWrap align=center width="10%"><B>2013</B> </TD>
    <TD vAlign=bottom noWrap align=left width="2%">&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom noWrap
      align=left>&nbsp; </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom noWrap align=left
    width="1%"><B></B></TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom noWrap
    align=center width="10%"><STRONG>$</STRONG>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom noWrap
    align=center width="2%">&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom noWrap
    align=center width="1%"><B></B></TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom noWrap
    align=center width="10%"><STRONG>$</STRONG>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom noWrap
    align=center width="2%">&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom noWrap
    align=center width="1%"><B></B></TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom noWrap
    align=center width="10%"><STRONG>$</STRONG>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom noWrap
    align=center width="2%">&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom noWrap
    align=center width="1%"><B></B></TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom noWrap
    align=center width="10%"><STRONG>$</STRONG>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom noWrap align=left
    width="2%">&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD vAlign=bottom align=left bgColor=#e6efff><B>Operating Expenses</B> </TD>
    <TD vAlign=bottom align=left width="1%" bgColor=#e6efff>&nbsp;</TD>
    <TD vAlign=bottom align=left width="10%" bgColor=#e6efff>&nbsp; </TD>
    <TD vAlign=bottom align=left width="2%" bgColor=#e6efff>&nbsp;</TD>
    <TD vAlign=bottom align=left width="1%" bgColor=#e6efff>&nbsp;</TD>
    <TD vAlign=bottom align=left width="10%" bgColor=#e6efff>&nbsp; </TD>
    <TD vAlign=bottom align=left width="2%" bgColor=#e6efff>&nbsp;</TD>
    <TD vAlign=bottom align=left width="1%" bgColor=#e6efff>&nbsp;</TD>
    <TD vAlign=bottom align=left width="10%" bgColor=#e6efff>&nbsp; </TD>
    <TD vAlign=bottom align=left width="2%" bgColor=#e6efff>&nbsp;</TD>
    <TD vAlign=bottom align=left width="1%" bgColor=#e6efff>&nbsp;</TD>
    <TD vAlign=bottom align=left width="10%" bgColor=#e6efff>&nbsp; </TD>
    <TD vAlign=bottom align=left width="2%" bgColor=#e6efff>&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD vAlign=bottom align=left>Advertising, marketing, &amp; IR </TD>
    <TD vAlign=bottom align=left width="1%">&nbsp;</TD>
    <TD vAlign=bottom align=right width="10%">175,325 </TD>
    <TD vAlign=bottom align=left width="2%">&nbsp;</TD>
    <TD vAlign=bottom align=left width="1%">&nbsp;</TD>
    <TD vAlign=bottom align=right width="10%">- </TD>
    <TD vAlign=bottom align=left width="2%">&nbsp;</TD>
    <TD vAlign=bottom align=left width="1%">&nbsp;</TD>
    <TD vAlign=bottom align=right width="10%">579,507 </TD>
    <TD vAlign=bottom align=left width="2%">&nbsp;</TD>
    <TD vAlign=bottom align=left width="1%">&nbsp;</TD>
    <TD vAlign=bottom align=right width="10%">- </TD>
    <TD vAlign=bottom align=left width="2%">&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD vAlign=bottom align=left bgColor=#e6efff>Audit &amp; accounting </TD>
    <TD vAlign=bottom align=left width="1%" bgColor=#e6efff>&nbsp;</TD>
    <TD vAlign=bottom align=right width="10%" bgColor=#e6efff>4,457 </TD>
    <TD vAlign=bottom align=left width="2%" bgColor=#e6efff>&nbsp;</TD>
    <TD vAlign=bottom align=left width="1%" bgColor=#e6efff>&nbsp;</TD>
    <TD vAlign=bottom align=right width="10%" bgColor=#e6efff>- </TD>
    <TD vAlign=bottom align=left width="2%" bgColor=#e6efff>&nbsp;</TD>
    <TD vAlign=bottom align=left width="1%" bgColor=#e6efff>&nbsp;</TD>
    <TD vAlign=bottom align=right width="10%" bgColor=#e6efff>45,938 </TD>
    <TD vAlign=bottom align=left width="2%" bgColor=#e6efff>&nbsp;</TD>
    <TD vAlign=bottom align=left width="1%" bgColor=#e6efff>&nbsp;</TD>
    <TD vAlign=bottom align=right width="10%" bgColor=#e6efff>- </TD>
    <TD vAlign=bottom align=left width="2%" bgColor=#e6efff>&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD vAlign=bottom align=left>Consulting fees </TD>
    <TD vAlign=bottom align=left width="1%">&nbsp;</TD>
    <TD vAlign=bottom align=right width="10%">1,694,685 </TD>
    <TD vAlign=bottom align=left width="2%">&nbsp;</TD>
    <TD vAlign=bottom align=left width="1%">&nbsp;</TD>
    <TD vAlign=bottom align=right width="10%">260,355 </TD>
    <TD vAlign=bottom align=left width="2%">&nbsp;</TD>
    <TD vAlign=bottom align=left width="1%">&nbsp;</TD>
    <TD vAlign=bottom align=right width="10%">2,336,051 </TD>
    <TD vAlign=bottom align=left width="2%">&nbsp;</TD>
    <TD vAlign=bottom align=left width="1%">&nbsp;</TD>
    <TD vAlign=bottom align=right width="10%">260,656 </TD>
    <TD vAlign=bottom align=left width="2%">&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD vAlign=bottom align=left bgColor=#e6efff>Insurance </TD>
    <TD vAlign=bottom align=left width="1%" bgColor=#e6efff>&nbsp;</TD>
    <TD vAlign=bottom align=right width="10%" bgColor=#e6efff>22,287 </TD>
    <TD vAlign=bottom align=left width="2%" bgColor=#e6efff>&nbsp;</TD>
    <TD vAlign=bottom align=left width="1%" bgColor=#e6efff>&nbsp;</TD>
    <TD vAlign=bottom align=right width="10%" bgColor=#e6efff>- </TD>
    <TD vAlign=bottom align=left width="2%" bgColor=#e6efff>&nbsp;</TD>
    <TD vAlign=bottom align=left width="1%" bgColor=#e6efff>&nbsp;</TD>
    <TD vAlign=bottom align=right width="10%" bgColor=#e6efff>52,060 </TD>
    <TD vAlign=bottom align=left width="2%" bgColor=#e6efff>&nbsp;</TD>
    <TD vAlign=bottom align=left width="1%" bgColor=#e6efff>&nbsp;</TD>
    <TD vAlign=bottom align=right width="10%" bgColor=#e6efff>- </TD>
    <TD vAlign=bottom align=left width="2%" bgColor=#e6efff>&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD vAlign=bottom align=left>Legal fees </TD>
    <TD vAlign=bottom align=left width="1%">&nbsp;</TD>
    <TD vAlign=bottom align=right width="10%">500,028 </TD>
    <TD vAlign=bottom align=left width="2%">&nbsp;</TD>
    <TD vAlign=bottom align=left width="1%">&nbsp;</TD>
    <TD vAlign=bottom align=right width="10%">5,230 </TD>
    <TD vAlign=bottom align=left width="2%">&nbsp;</TD>
    <TD vAlign=bottom align=left width="1%">&nbsp;</TD>
    <TD vAlign=bottom align=right width="10%">1,064,453 </TD>
    <TD vAlign=bottom align=left width="2%">&nbsp;</TD>
    <TD vAlign=bottom align=left width="1%">&nbsp;</TD>
    <TD vAlign=bottom align=right width="10%">9,405 </TD>
    <TD vAlign=bottom align=left width="2%">&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD vAlign=bottom align=left bgColor=#e6efff>Meals &amp; travel </TD>
    <TD vAlign=bottom align=left width="1%" bgColor=#e6efff>&nbsp;</TD>
    <TD vAlign=bottom align=right width="10%" bgColor=#e6efff>102,098 </TD>
    <TD vAlign=bottom align=left width="2%" bgColor=#e6efff>&nbsp;</TD>
    <TD vAlign=bottom align=left width="1%" bgColor=#e6efff>&nbsp;</TD>
    <TD vAlign=bottom align=right width="10%" bgColor=#e6efff>8,549 </TD>
    <TD vAlign=bottom align=left width="2%" bgColor=#e6efff>&nbsp;</TD>
    <TD vAlign=bottom align=left width="1%" bgColor=#e6efff>&nbsp;</TD>
    <TD vAlign=bottom align=right width="10%" bgColor=#e6efff>209,150 </TD>
    <TD vAlign=bottom align=left width="2%" bgColor=#e6efff>&nbsp;</TD>
    <TD vAlign=bottom align=left width="1%" bgColor=#e6efff>&nbsp;</TD>
    <TD vAlign=bottom align=right width="10%" bgColor=#e6efff>15,151 </TD>
    <TD vAlign=bottom align=left width="2%" bgColor=#e6efff>&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD vAlign=bottom align=left>Office &amp; general </TD>
    <TD vAlign=bottom align=left width="1%">&nbsp;</TD>
    <TD vAlign=bottom align=right width="10%">45,466 </TD>
    <TD vAlign=bottom align=left width="2%">&nbsp;</TD>
    <TD vAlign=bottom align=left width="1%">&nbsp;</TD>
    <TD vAlign=bottom align=right width="10%">1,506 </TD>
    <TD vAlign=bottom align=left width="2%">&nbsp;</TD>
    <TD vAlign=bottom align=left width="1%">&nbsp;</TD>
    <TD vAlign=bottom align=right width="10%">149,637 </TD>
    <TD vAlign=bottom align=left width="2%">&nbsp;</TD>
    <TD vAlign=bottom align=left width="1%">&nbsp;</TD>
    <TD vAlign=bottom align=right width="10%">5,778 </TD>
    <TD vAlign=bottom align=left width="2%">&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD vAlign=bottom align=left bgColor=#e6efff>Professional fees </TD>
    <TD vAlign=bottom align=left width="1%" bgColor=#e6efff>&nbsp;</TD>
    <TD vAlign=bottom align=right width="10%" bgColor=#e6efff>- </TD>
    <TD vAlign=bottom align=left width="2%" bgColor=#e6efff>&nbsp;</TD>
    <TD vAlign=bottom align=left width="1%" bgColor=#e6efff>&nbsp;</TD>
    <TD vAlign=bottom align=right width="10%" bgColor=#e6efff>- </TD>
    <TD vAlign=bottom align=left width="2%" bgColor=#e6efff>&nbsp;</TD>
    <TD vAlign=bottom align=left width="1%" bgColor=#e6efff>&nbsp;</TD>
    <TD vAlign=bottom align=right width="10%" bgColor=#e6efff>14,125 </TD>
    <TD vAlign=bottom align=left width="2%" bgColor=#e6efff>&nbsp;</TD>
    <TD vAlign=bottom align=left width="1%" bgColor=#e6efff>&nbsp;</TD>
    <TD vAlign=bottom align=right width="10%" bgColor=#e6efff>- </TD>
    <TD vAlign=bottom align=left width="2%" bgColor=#e6efff>&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD vAlign=bottom align=left>Research &amp; development </TD>
    <TD vAlign=bottom align=left width="1%">&nbsp;</TD>
    <TD vAlign=bottom align=right width="10%">952,343 </TD>
    <TD vAlign=bottom align=left width="2%">&nbsp;</TD>
    <TD vAlign=bottom align=left width="1%">&nbsp;</TD>
    <TD vAlign=bottom align=right width="10%">57,957 </TD>
    <TD vAlign=bottom align=left width="2%">&nbsp;</TD>
    <TD vAlign=bottom align=left width="1%">&nbsp;</TD>
    <TD vAlign=bottom align=right width="10%">2,668,529 </TD>
    <TD vAlign=bottom align=left width="2%">&nbsp;</TD>
    <TD vAlign=bottom align=left width="1%">&nbsp;</TD>
    <TD vAlign=bottom align=right width="10%">173,872 </TD>
    <TD vAlign=bottom align=left width="2%">&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD vAlign=bottom align=left bgColor=#e6efff>Transfer agent &amp;
      regulatory </TD>
    <TD vAlign=bottom align=left width="1%" bgColor=#e6efff>&nbsp;</TD>
    <TD vAlign=bottom align=right width="10%" bgColor=#e6efff>17,242 </TD>
    <TD vAlign=bottom align=left width="2%" bgColor=#e6efff>&nbsp;</TD>
    <TD vAlign=bottom align=left width="1%" bgColor=#e6efff>&nbsp;</TD>
    <TD vAlign=bottom align=right width="10%" bgColor=#e6efff>- </TD>
    <TD vAlign=bottom align=left width="2%" bgColor=#e6efff>&nbsp;</TD>
    <TD vAlign=bottom align=left width="1%" bgColor=#e6efff>&nbsp;</TD>
    <TD vAlign=bottom align=right width="10%" bgColor=#e6efff>76,215 </TD>
    <TD vAlign=bottom align=left width="2%" bgColor=#e6efff>&nbsp;</TD>
    <TD vAlign=bottom align=left width="1%" bgColor=#e6efff>&nbsp;</TD>
    <TD vAlign=bottom align=right width="10%" bgColor=#e6efff>- </TD>
    <TD vAlign=bottom align=left width="2%" bgColor=#e6efff>&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom
      align=left>Wages and salaries </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=left
    width="1%">&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=right
    width="10%">603,492 </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=left
    width="2%">&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=left
    width="1%">&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=right
    width="10%">- </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=left
    width="2%">&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=left
    width="1%">&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=right
    width="10%">1,253,494 </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=left
    width="2%">&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=left
    width="1%">&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=right
    width="10%">- </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=left
    width="2%">&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD vAlign=bottom align=left bgColor=#e6efff><B>Loss</B> </TD>
    <TD vAlign=bottom align=left width="1%" bgColor=#e6efff>&nbsp;</TD>
    <TD vAlign=bottom align=right width="10%" bgColor=#e6efff>(4,117,423</TD>
    <TD vAlign=bottom align=left width="2%" bgColor=#e6efff>) </TD>
    <TD vAlign=bottom align=left width="1%" bgColor=#e6efff>&nbsp;</TD>
    <TD vAlign=bottom align=right width="10%" bgColor=#e6efff>(333,597</TD>
    <TD vAlign=bottom align=left width="2%" bgColor=#e6efff>) </TD>
    <TD vAlign=bottom align=left width="1%" bgColor=#e6efff>&nbsp;</TD>
    <TD vAlign=bottom align=right width="10%" bgColor=#e6efff>(8,449,159</TD>
    <TD vAlign=bottom align=left width="2%" bgColor=#e6efff>) </TD>
    <TD vAlign=bottom align=left width="1%" bgColor=#e6efff>&nbsp;</TD>
    <TD vAlign=bottom align=right width="10%" bgColor=#e6efff>(464,862</TD>
    <TD vAlign=bottom align=left width="2%" bgColor=#e6efff>) </TD></TR>
  <TR>
    <TD vAlign=bottom>&nbsp; </TD>
    <TD vAlign=bottom width="1%">&nbsp;</TD>
    <TD vAlign=bottom width="10%">&nbsp; </TD>
    <TD vAlign=bottom width="2%">&nbsp;</TD>
    <TD vAlign=bottom width="1%">&nbsp;</TD>
    <TD vAlign=bottom width="10%">&nbsp; </TD>
    <TD vAlign=bottom width="2%">&nbsp;</TD>
    <TD vAlign=bottom width="1%">&nbsp;</TD>
    <TD vAlign=bottom width="10%">&nbsp; </TD>
    <TD vAlign=bottom width="2%">&nbsp;</TD>
    <TD vAlign=bottom width="1%">&nbsp;</TD>
    <TD vAlign=bottom width="10%">&nbsp; </TD>
    <TD vAlign=bottom width="2%">&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD vAlign=bottom align=left bgColor=#e6efff><B>Other items</B> </TD>
    <TD vAlign=bottom align=left width="1%" bgColor=#e6efff>&nbsp;</TD>
    <TD vAlign=bottom align=left width="10%" bgColor=#e6efff>&nbsp; </TD>
    <TD vAlign=bottom align=left width="2%" bgColor=#e6efff>&nbsp;</TD>
    <TD vAlign=bottom align=left width="1%" bgColor=#e6efff>&nbsp;</TD>
    <TD vAlign=bottom align=left width="10%" bgColor=#e6efff>&nbsp; </TD>
    <TD vAlign=bottom align=left width="2%" bgColor=#e6efff>&nbsp;</TD>
    <TD vAlign=bottom align=left width="1%" bgColor=#e6efff>&nbsp;</TD>
    <TD vAlign=bottom align=left width="10%" bgColor=#e6efff>&nbsp; </TD>
    <TD vAlign=bottom align=left width="2%" bgColor=#e6efff>&nbsp;</TD>
    <TD vAlign=bottom align=left width="1%" bgColor=#e6efff>&nbsp;</TD>
    <TD vAlign=bottom align=left width="10%" bgColor=#e6efff>&nbsp; </TD>
    <TD vAlign=bottom align=left width="2%" bgColor=#e6efff>&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD vAlign=bottom align=left>Interest expense </TD>
    <TD vAlign=bottom align=left width="1%">&nbsp;</TD>
    <TD vAlign=bottom align=right width="10%">- </TD>
    <TD vAlign=bottom align=left width="2%">&nbsp;</TD>
    <TD vAlign=bottom align=left width="1%">&nbsp;</TD>
    <TD vAlign=bottom align=right width="10%">(55</TD>
    <TD vAlign=bottom align=left width="2%">) </TD>
    <TD vAlign=bottom align=left width="1%">&nbsp;</TD>
    <TD vAlign=bottom align=right width="10%">(176,488</TD>
    <TD vAlign=bottom align=left width="2%">) </TD>
    <TD vAlign=bottom align=left width="1%">&nbsp;</TD>
    <TD vAlign=bottom align=right width="10%">(55</TD>
    <TD vAlign=bottom align=left width="2%">) </TD></TR>
  <TR vAlign=top>
    <TD vAlign=bottom align=left bgColor=#e6efff>Interest income </TD>
    <TD vAlign=bottom align=left width="1%" bgColor=#e6efff>&nbsp;</TD>
    <TD vAlign=bottom align=right width="10%" bgColor=#e6efff>2,845 </TD>
    <TD vAlign=bottom align=left width="2%" bgColor=#e6efff>&nbsp;</TD>
    <TD vAlign=bottom align=left width="1%" bgColor=#e6efff>&nbsp;</TD>
    <TD vAlign=bottom align=right width="10%" bgColor=#e6efff>- </TD>
    <TD vAlign=bottom align=left width="2%" bgColor=#e6efff>&nbsp;</TD>
    <TD vAlign=bottom align=left width="1%" bgColor=#e6efff>&nbsp;</TD>
    <TD vAlign=bottom align=right width="10%" bgColor=#e6efff>20,036 </TD>
    <TD vAlign=bottom align=left width="2%" bgColor=#e6efff>&nbsp;</TD>
    <TD vAlign=bottom align=left width="1%" bgColor=#e6efff>&nbsp;</TD>
    <TD vAlign=bottom align=right width="10%" bgColor=#e6efff>- </TD>
    <TD vAlign=bottom align=left width="2%" bgColor=#e6efff>&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD vAlign=bottom align=left>Change in fair value of derivative liability
    </TD>
    <TD vAlign=bottom align=left width="1%">&nbsp;</TD>
    <TD vAlign=bottom align=right width="10%">(55,589</TD>
    <TD vAlign=bottom align=left width="2%">) </TD>
    <TD vAlign=bottom align=left width="1%">&nbsp;</TD>
    <TD vAlign=bottom align=left width="10%">&nbsp; </TD>
    <TD vAlign=bottom align=left width="2%">&nbsp;</TD>
    <TD vAlign=bottom align=left width="1%">&nbsp;</TD>
    <TD vAlign=bottom align=right width="10%">(818,382</TD>
    <TD vAlign=bottom align=left width="2%">) </TD>
    <TD vAlign=bottom align=left width="1%">&nbsp;</TD>
    <TD vAlign=bottom align=left width="10%">&nbsp; </TD>
    <TD vAlign=bottom align=left width="2%">&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=left
    bgColor=#e6efff>Foreign exchange gain (loss) </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=left
    width="1%" bgColor=#e6efff>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=right
    width="10%" bgColor=#e6efff>687,148 </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=left
    width="2%" bgColor=#e6efff>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=left
    width="1%" bgColor=#e6efff>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=right
    width="10%" bgColor=#e6efff>- </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=left
    width="2%" bgColor=#e6efff>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=left
    width="1%" bgColor=#e6efff>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=right
    width="10%" bgColor=#e6efff>267,950 </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=left
    width="2%" bgColor=#e6efff>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=left
    width="1%" bgColor=#e6efff>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=right
    width="10%" bgColor=#e6efff>- </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=left
    width="2%" bgColor=#e6efff>&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD vAlign=bottom align=left>&nbsp; </TD>
    <TD vAlign=bottom align=left width="1%">&nbsp;</TD>
    <TD vAlign=bottom align=right width="10%">634,404 </TD>
    <TD vAlign=bottom align=left width="2%">&nbsp;</TD>
    <TD vAlign=bottom align=left width="1%">&nbsp;</TD>
    <TD vAlign=bottom align=right width="10%">(55</TD>
    <TD vAlign=bottom align=left width="2%">) </TD>
    <TD vAlign=bottom align=left width="1%">&nbsp;</TD>
    <TD vAlign=bottom align=right width="10%">(706,884</TD>
    <TD vAlign=bottom align=left width="2%">) </TD>
    <TD vAlign=bottom align=left width="1%">&nbsp;</TD>
    <TD vAlign=bottom align=right width="10%">(55</TD>
    <TD vAlign=bottom align=left width="2%">) </TD></TR>
  <TR>
    <TD vAlign=bottom bgColor=#e6efff>&nbsp; </TD>
    <TD vAlign=bottom width="1%" bgColor=#e6efff>&nbsp;</TD>
    <TD vAlign=bottom width="10%" bgColor=#e6efff>&nbsp; </TD>
    <TD vAlign=bottom width="2%" bgColor=#e6efff>&nbsp;</TD>
    <TD vAlign=bottom width="1%" bgColor=#e6efff>&nbsp;</TD>
    <TD vAlign=bottom width="10%" bgColor=#e6efff>&nbsp; </TD>
    <TD vAlign=bottom width="2%" bgColor=#e6efff>&nbsp;</TD>
    <TD vAlign=bottom width="1%" bgColor=#e6efff>&nbsp;</TD>
    <TD vAlign=bottom width="10%" bgColor=#e6efff>&nbsp; </TD>
    <TD vAlign=bottom width="2%" bgColor=#e6efff>&nbsp;</TD>
    <TD vAlign=bottom width="1%" bgColor=#e6efff>&nbsp;</TD>
    <TD vAlign=bottom width="10%" bgColor=#e6efff>&nbsp; </TD>
    <TD vAlign=bottom width="2%" bgColor=#e6efff>&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom
      align=left><B>Net loss for the period</B> </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=left
    width="1%">&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=right
    width="10%">(3,483,019</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=left
    width="2%">) </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=left
    width="1%">&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=right
    width="10%">(333,652</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=left
    width="2%">) </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=left
    width="1%">&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=right
    width="10%">(9,156,043</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=left
    width="2%">) </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=left
    width="1%">&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=right
    width="10%">(464,917</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=left
    width="2%">) </TD></TR>
  <TR>
    <TD vAlign=bottom bgColor=#e6efff>&nbsp; </TD>
    <TD vAlign=bottom width="1%" bgColor=#e6efff>&nbsp;</TD>
    <TD vAlign=bottom width="10%" bgColor=#e6efff>&nbsp; </TD>
    <TD vAlign=bottom width="2%" bgColor=#e6efff>&nbsp;</TD>
    <TD vAlign=bottom width="1%" bgColor=#e6efff>&nbsp;</TD>
    <TD vAlign=bottom width="10%" bgColor=#e6efff>&nbsp; </TD>
    <TD vAlign=bottom width="2%" bgColor=#e6efff>&nbsp;</TD>
    <TD vAlign=bottom width="1%" bgColor=#e6efff>&nbsp;</TD>
    <TD vAlign=bottom width="10%" bgColor=#e6efff>&nbsp; </TD>
    <TD vAlign=bottom width="2%" bgColor=#e6efff>&nbsp;</TD>
    <TD vAlign=bottom width="1%" bgColor=#e6efff>&nbsp;</TD>
    <TD vAlign=bottom width="10%" bgColor=#e6efff>&nbsp; </TD>
    <TD vAlign=bottom width="2%" bgColor=#e6efff>&nbsp;</TD></TR>
  <TR>
    <TD vAlign=bottom>&nbsp; </TD>
    <TD vAlign=bottom width="1%">&nbsp;</TD>
    <TD vAlign=bottom width="10%">&nbsp; </TD>
    <TD vAlign=bottom width="2%">&nbsp;</TD>
    <TD vAlign=bottom width="1%">&nbsp;</TD>
    <TD vAlign=bottom width="10%">&nbsp; </TD>
    <TD vAlign=bottom width="2%">&nbsp;</TD>
    <TD vAlign=bottom width="1%">&nbsp;</TD>
    <TD vAlign=bottom width="10%">&nbsp; </TD>
    <TD vAlign=bottom width="2%">&nbsp;</TD>
    <TD vAlign=bottom width="1%">&nbsp;</TD>
    <TD vAlign=bottom width="10%">&nbsp; </TD>
    <TD vAlign=bottom width="2%">&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD vAlign=bottom align=left bgColor=#e6efff><B>Other comprehensive income
      (loss)</B> </TD>
    <TD vAlign=bottom align=left width="1%" bgColor=#e6efff>&nbsp;</TD>
    <TD vAlign=bottom align=left width="10%" bgColor=#e6efff>&nbsp; </TD>
    <TD vAlign=bottom align=left width="2%" bgColor=#e6efff>&nbsp;</TD>
    <TD vAlign=bottom align=left width="1%" bgColor=#e6efff>&nbsp;</TD>
    <TD vAlign=bottom align=left width="10%" bgColor=#e6efff>&nbsp; </TD>
    <TD vAlign=bottom align=left width="2%" bgColor=#e6efff>&nbsp;</TD>
    <TD vAlign=bottom align=left width="1%" bgColor=#e6efff>&nbsp;</TD>
    <TD vAlign=bottom align=left width="10%" bgColor=#e6efff>&nbsp; </TD>
    <TD vAlign=bottom align=left width="2%" bgColor=#e6efff>&nbsp;</TD>
    <TD vAlign=bottom align=left width="1%" bgColor=#e6efff>&nbsp;</TD>
    <TD vAlign=bottom align=left width="10%" bgColor=#e6efff>&nbsp; </TD>
    <TD vAlign=bottom align=left width="2%" bgColor=#e6efff>&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom
      align=left>Translation adjustments </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=left
    width="1%">&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=right
    width="10%">(707,875</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=left
    width="2%">) </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=left
    width="1%">&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=right
    width="10%">- </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=left
    width="2%">&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=left
    width="1%">&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=right
    width="10%">(395,030</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=left
    width="2%">) </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=left
    width="1%">&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=right
    width="10%">- </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=left
    width="2%">&nbsp;</TD></TR>
  <TR>
    <TD vAlign=bottom bgColor=#e6efff>&nbsp; </TD>
    <TD vAlign=bottom width="1%" bgColor=#e6efff>&nbsp;</TD>
    <TD vAlign=bottom width="10%" bgColor=#e6efff>&nbsp; </TD>
    <TD vAlign=bottom width="2%" bgColor=#e6efff>&nbsp;</TD>
    <TD vAlign=bottom width="1%" bgColor=#e6efff>&nbsp;</TD>
    <TD vAlign=bottom width="10%" bgColor=#e6efff>&nbsp; </TD>
    <TD vAlign=bottom width="2%" bgColor=#e6efff>&nbsp;</TD>
    <TD vAlign=bottom width="1%" bgColor=#e6efff>&nbsp;</TD>
    <TD vAlign=bottom width="10%" bgColor=#e6efff>&nbsp; </TD>
    <TD vAlign=bottom width="2%" bgColor=#e6efff>&nbsp;</TD>
    <TD vAlign=bottom width="1%" bgColor=#e6efff>&nbsp;</TD>
    <TD vAlign=bottom width="10%" bgColor=#e6efff>&nbsp; </TD>
    <TD vAlign=bottom width="2%" bgColor=#e6efff>&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom
      align=left><B>Comprehensive loss for the period</B> </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=left
    width="1%">&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=right
    width="10%">(4,190,894</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=left
    width="2%">) </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=left
    width="1%">&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=right
    width="10%">(333,652</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=left
    width="2%">) </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=left
    width="1%">&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=right
    width="10%">(9,551,073</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=left
    width="2%">) </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=left
    width="1%">&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=right
    width="10%">(464,917</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=left
    width="2%">) </TD></TR>
  <TR>
    <TD style="BORDER-BOTTOM: #000000 2px solid" vAlign=bottom
      bgColor=#e6efff>&nbsp; </TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid" vAlign=bottom width="1%"
    bgColor=#e6efff>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid" vAlign=bottom width="10%"
    bgColor=#e6efff>&nbsp; </TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid" vAlign=bottom width="2%"
    bgColor=#e6efff>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid" vAlign=bottom width="1%"
    bgColor=#e6efff>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid" vAlign=bottom width="10%"
    bgColor=#e6efff>&nbsp; </TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid" vAlign=bottom width="2%"
    bgColor=#e6efff>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid" vAlign=bottom width="1%"
    bgColor=#e6efff>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid" vAlign=bottom width="10%"
    bgColor=#e6efff>&nbsp; </TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid" vAlign=bottom width="2%"
    bgColor=#e6efff>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid" vAlign=bottom width="1%"
    bgColor=#e6efff>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid" vAlign=bottom width="10%"
    bgColor=#e6efff>&nbsp; </TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid" vAlign=bottom width="2%"
    bgColor=#e6efff>&nbsp;</TD></TR>
  <TR>
    <TD vAlign=bottom>&nbsp; </TD>
    <TD vAlign=bottom width="1%">&nbsp;</TD>
    <TD vAlign=bottom width="10%">&nbsp; </TD>
    <TD vAlign=bottom width="2%">&nbsp;</TD>
    <TD vAlign=bottom width="1%">&nbsp;</TD>
    <TD vAlign=bottom width="10%">&nbsp; </TD>
    <TD vAlign=bottom width="2%">&nbsp;</TD>
    <TD vAlign=bottom width="1%">&nbsp;</TD>
    <TD vAlign=bottom width="10%">&nbsp; </TD>
    <TD vAlign=bottom width="2%">&nbsp;</TD>
    <TD vAlign=bottom width="1%">&nbsp;</TD>
    <TD vAlign=bottom width="10%">&nbsp; </TD>
    <TD vAlign=bottom width="2%">&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD style="BORDER-BOTTOM: #000000 2px solid" vAlign=bottom align=left
    bgColor=#e6efff><B>Basic and diluted loss per common stock</B> </TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid" vAlign=bottom align=left
    width="1%" bgColor=#e6efff>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid" vAlign=bottom align=right
    width="10%" bgColor=#e6efff>(0.06</TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid" vAlign=bottom align=left
    width="2%" bgColor=#e6efff>) </TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid" vAlign=bottom align=left
    width="1%" bgColor=#e6efff>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid" vAlign=bottom align=right
    width="10%" bgColor=#e6efff>(0.01</TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid" vAlign=bottom align=left
    width="2%" bgColor=#e6efff>) </TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid" vAlign=bottom align=left
    width="1%" bgColor=#e6efff>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid" vAlign=bottom align=right
    width="10%" bgColor=#e6efff>(0.17</TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid" vAlign=bottom align=left
    width="2%" bgColor=#e6efff>) </TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid" vAlign=bottom align=left
    width="1%" bgColor=#e6efff>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid" vAlign=bottom align=right
    width="10%" bgColor=#e6efff>(0.01</TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid" vAlign=bottom align=left
    width="2%" bgColor=#e6efff>) </TD></TR>
  <TR>
    <TD vAlign=bottom>&nbsp; </TD>
    <TD vAlign=bottom width="1%">&nbsp;</TD>
    <TD vAlign=bottom width="10%">&nbsp; </TD>
    <TD vAlign=bottom width="2%">&nbsp;</TD>
    <TD vAlign=bottom width="1%">&nbsp;</TD>
    <TD vAlign=bottom width="10%">&nbsp; </TD>
    <TD vAlign=bottom width="2%">&nbsp;</TD>
    <TD vAlign=bottom width="1%">&nbsp;</TD>
    <TD vAlign=bottom width="10%">&nbsp; </TD>
    <TD vAlign=bottom width="2%">&nbsp;</TD>
    <TD vAlign=bottom width="1%">&nbsp;</TD>
    <TD vAlign=bottom width="10%">&nbsp; </TD>
    <TD vAlign=bottom width="2%">&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD style="BORDER-BOTTOM: #000000 2px solid" vAlign=bottom align=left
    bgColor=#e6efff><B>Weighted average number of common</B> <B>stock
      outstanding &#150; basic &amp; diluted</B> </TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid" vAlign=bottom align=left
    width="1%" bgColor=#e6efff>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid" vAlign=bottom align=right
    width="10%" bgColor=#e6efff>63,104,788 </TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid" vAlign=bottom align=left
    width="2%" bgColor=#e6efff>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid" vAlign=bottom align=left
    width="1%" bgColor=#e6efff>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid" vAlign=bottom align=right
    width="10%" bgColor=#e6efff>32,070,052 </TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid" vAlign=bottom align=left
    width="2%" bgColor=#e6efff>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid" vAlign=bottom align=left
    width="1%" bgColor=#e6efff>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid" vAlign=bottom align=right
    width="10%" bgColor=#e6efff>55,066,317 </TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid" vAlign=bottom align=left
    width="2%" bgColor=#e6efff>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid" vAlign=bottom align=left
    width="1%" bgColor=#e6efff>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid" vAlign=bottom align=right
    width="10%" bgColor=#e6efff>32,070,052 </TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid" vAlign=bottom align=left
    width="2%" bgColor=#e6efff>&nbsp;</TD></TR></TABLE>
<P align=center>(The accompanying notes are an integral part of these financial
statements.) </P>
<P align=center>83</P>
<HR style="PAGE-BREAK-AFTER: always" align=center width="100%" color=black
noShade SIZE=5>
<A name=page_fa4></A>
<P align=justify><B>Helius </B><B>Medical</B><B> </B><B>Technologies</B><B> Inc.
</B><BR><B>Condensed</B><B> </B><B>Consolidated</B><B> </B><B>Statements</B><B>
of </B><B>Capital</B><B> </B><B>(Deficit)</B><B> </B><BR>(Expressed in United
States Dollars)<B> </B><BR><B>(Unaudited)</B><B> </B><BR></P>
<TABLE
style="BORDER-COLOR: black; FONT-SIZE: 10pt; BORDER-COLLAPSE: collapse; "
cellSpacing=0 cellPadding=0 width="100%" border=0>

  <TR vAlign=top>
    <TD style="BORDER-TOP: #000000 1px solid" vAlign=bottom noWrap
      align=left>&nbsp; </TD>
    <TD style="BORDER-TOP: #000000 1px solid" vAlign=bottom noWrap align=left
    width="1%" >&nbsp;</TD>
    <TD style="BORDER-TOP: #000000 1px solid" vAlign=bottom noWrap align=left
    width="8%">&nbsp; </TD>
    <TD style="BORDER-TOP: #000000 1px solid" vAlign=bottom noWrap align=left
    width="2%" >&nbsp;</TD>
    <TD style="BORDER-TOP: #000000 1px solid" vAlign=bottom noWrap align=left
    width="1%" >&nbsp;</TD>
    <TD style="BORDER-TOP: #000000 1px solid" vAlign=bottom noWrap align=left
    width="8%">&nbsp; </TD>
    <TD style="BORDER-TOP: #000000 1px solid" vAlign=bottom noWrap align=left
    width="2%" >&nbsp;</TD>
    <TD style="BORDER-TOP: #000000 1px solid" vAlign=bottom noWrap align=left
    width="1%" >&nbsp;</TD>
    <TD style="BORDER-TOP: #000000 1px solid" vAlign=bottom noWrap align=left
    width="8%">&nbsp; </TD>
    <TD style="BORDER-TOP: #000000 1px solid" vAlign=bottom noWrap align=left
    width="2%" >&nbsp;</TD>
    <TD style="BORDER-TOP: #000000 1px solid" vAlign=bottom noWrap align=left
    width="1%" >&nbsp;</TD>
    <TD style="BORDER-TOP: #000000 1px solid" vAlign=bottom noWrap align=left
    width="8%">&nbsp; </TD>
    <TD style="BORDER-TOP: #000000 1px solid" vAlign=bottom noWrap align=left
    width="2%" >&nbsp;</TD>
    <TD style="BORDER-TOP: #000000 1px solid" vAlign=bottom noWrap align=left
    width="1%" >&nbsp;</TD>
    <TD style="BORDER-TOP: #000000 1px solid" vAlign=bottom noWrap align=right
    width="8%"><B>Accumulated</B> </TD>
    <TD style="BORDER-TOP: #000000 1px solid" vAlign=bottom noWrap align=left
    width="2%" >&nbsp;</TD>
    <TD style="BORDER-TOP: #000000 1px solid" vAlign=bottom noWrap align=left
    width="1%" >&nbsp;</TD>
    <TD style="BORDER-TOP: #000000 1px solid" vAlign=bottom noWrap align=left
    width="8%">&nbsp; </TD>
    <TD style="BORDER-TOP: #000000 1px solid" vAlign=bottom noWrap align=left
    width="2%" >&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD vAlign=bottom noWrap align=left>&nbsp; </TD>
    <TD vAlign=bottom noWrap align=left width="1%" >&nbsp;</TD>
    <TD vAlign=bottom noWrap align=left width="8%">&nbsp; </TD>
    <TD vAlign=bottom noWrap align=left width="2%" >&nbsp;</TD>
    <TD vAlign=bottom noWrap align=left width="1%" >&nbsp;</TD>
    <TD vAlign=bottom noWrap align=left width="8%">&nbsp; </TD>
    <TD vAlign=bottom noWrap align=left width="2%" >&nbsp;</TD>
    <TD vAlign=bottom noWrap align=left width="1%" >&nbsp;</TD>
    <TD vAlign=bottom noWrap align=right width="8%"><B>Additional</B> </TD>
    <TD vAlign=bottom noWrap align=left width="2%" >&nbsp;</TD>
    <TD vAlign=bottom noWrap align=left width="1%" >&nbsp;</TD>
    <TD vAlign=bottom noWrap align=left width="8%">&nbsp; </TD>
    <TD vAlign=bottom noWrap align=left width="2%" >&nbsp;</TD>
    <TD vAlign=bottom noWrap align=left width="1%" >&nbsp;</TD>
    <TD vAlign=bottom noWrap align=right width="8%"><B>other</B> </TD>
    <TD vAlign=bottom noWrap align=left width="2%" >&nbsp;</TD>
    <TD vAlign=bottom noWrap align=left width="1%" >&nbsp;</TD>
    <TD vAlign=bottom noWrap align=left width="8%">&nbsp; </TD>
    <TD vAlign=bottom noWrap align=left width="2%" >&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD vAlign=bottom noWrap align=left>&nbsp; </TD>
    <TD vAlign=bottom noWrap align=left width="1%" >&nbsp;</TD>
    <TD vAlign=bottom noWrap align=right width="8%"><B>Common</B> </TD>
    <TD vAlign=bottom noWrap align=left width="2%" >&nbsp;</TD>
    <TD vAlign=bottom noWrap align=left width="1%" >&nbsp;</TD>
    <TD vAlign=bottom noWrap align=left width="8%">&nbsp; </TD>
    <TD vAlign=bottom noWrap align=left width="2%" >&nbsp;</TD>
    <TD vAlign=bottom noWrap align=left width="1%" >&nbsp;</TD>
    <TD vAlign=bottom noWrap align=right width="8%"><B>Paid-In</B> </TD>
    <TD vAlign=bottom noWrap align=left width="2%" >&nbsp;</TD>
    <TD vAlign=bottom noWrap align=left width="1%" >&nbsp;</TD>
    <TD vAlign=bottom noWrap align=right width="8%"><B>Accumulated</B> </TD>
    <TD vAlign=bottom noWrap align=left width="2%" >&nbsp;</TD>
    <TD vAlign=bottom noWrap align=left width="1%" >&nbsp;</TD>
    <TD vAlign=bottom noWrap align=right width="8%"><B>comprehensive</B> </TD>
    <TD vAlign=bottom noWrap align=left width="2%" >&nbsp;</TD>
    <TD vAlign=bottom noWrap align=left width="1%" >&nbsp;</TD>
    <TD vAlign=bottom noWrap align=right width="8%"><B>Capital</B> </TD>
    <TD vAlign=bottom noWrap align=left width="2%" >&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD vAlign=bottom align=left>&nbsp; </TD>
    <TD vAlign=bottom align=left width="1%" >&nbsp;</TD>
    <TD vAlign=bottom align=right width="8%"><B>Stock</B> </TD>
    <TD vAlign=bottom align=left width="2%" >&nbsp;</TD>
    <TD vAlign=bottom align=left width="1%" >&nbsp;</TD>
    <TD vAlign=bottom align=right width="8%"><B>Amount</B> </TD>
    <TD vAlign=bottom align=left width="2%" >&nbsp;</TD>
    <TD vAlign=bottom align=left width="1%" >&nbsp;</TD>
    <TD vAlign=bottom align=right width="8%"><B>Capital</B> </TD>
    <TD vAlign=bottom align=left width="2%" >&nbsp;</TD>
    <TD vAlign=bottom align=left width="1%" >&nbsp;</TD>
    <TD vAlign=bottom align=right width="8%"><B>Deficit</B> </TD>
    <TD vAlign=bottom align=left width="2%" >&nbsp;</TD>
    <TD vAlign=bottom align=left width="1%" >&nbsp;</TD>
    <TD vAlign=bottom align=right width="8%"><B>income (loss)</B> </TD>
    <TD vAlign=bottom align=left width="2%" >&nbsp;</TD>
    <TD vAlign=bottom align=left width="1%" >&nbsp;</TD>
    <TD vAlign=bottom align=right width="8%"><B>(Deficit)</B> </TD>
    <TD vAlign=bottom align=left width="2%" >&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom
      align=left>&nbsp; </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=left
    width="1%" >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=left
    width="8%">&nbsp; </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=left
    width="2%" >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=left
    width="1%" ><B></B></TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=right
    width="8%">&nbsp;<STRONG>$</STRONG></TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=left
    width="2%" >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=left
    width="1%" ><B></B></TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=right
    width="8%">&nbsp;<STRONG>$</STRONG></TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=left
    width="2%" >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=left
    width="1%" ><B></B></TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=right
    width="8%">&nbsp;<STRONG>$</STRONG></TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=left
    width="2%" >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=left
    width="1%" ><B></B></TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=right
    width="8%">&nbsp;<STRONG>$</STRONG></TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=left
    width="2%" >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=left
    width="1%" ><B></B></TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=right
    width="8%">&nbsp;<STRONG>$</STRONG></TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=left
    width="2%" >&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD vAlign=bottom align=left bgColor=#e6efff><B>Balance &#150; March 31,
      2014</B> </TD>
    <TD vAlign=bottom align=left width="1%"
    bgColor=#e6efff>&nbsp;</TD>
    <TD vAlign=bottom align=right width="8%" bgColor=#e6efff><B>32,070,052</B>
    </TD>
    <TD vAlign=bottom align=left width="2%"
    bgColor=#e6efff>&nbsp;</TD>
    <TD vAlign=bottom align=left width="1%"
    bgColor=#e6efff>&nbsp;</TD>
    <TD vAlign=bottom align=right width="8%" bgColor=#e6efff><B>8,510,000</B>
    </TD>
    <TD vAlign=bottom align=left width="2%"
    bgColor=#e6efff>&nbsp;</TD>
    <TD vAlign=bottom align=left width="1%"
    bgColor=#e6efff>&nbsp;</TD>
    <TD vAlign=bottom align=right width="8%" bgColor=#e6efff><B>807,157</B>
</TD>
    <TD vAlign=bottom align=left width="2%"
    bgColor=#e6efff>&nbsp;</TD>
    <TD vAlign=bottom align=left width="1%"
    bgColor=#e6efff>&nbsp;</TD>
    <TD vAlign=bottom align=right width="8%"
    bgColor=#e6efff><B>(9,585,134</B></TD>
    <TD vAlign=bottom align=left width="2%"
      bgColor=#e6efff><B>)</B> </TD>
    <TD vAlign=bottom align=left width="1%"
    bgColor=#e6efff>&nbsp;</TD>
    <TD vAlign=bottom align=right width="8%" bgColor=#e6efff><B>-</B> </TD>
    <TD vAlign=bottom align=left width="2%"
    bgColor=#e6efff>&nbsp;</TD>
    <TD vAlign=bottom align=left width="1%"
    bgColor=#e6efff>&nbsp;</TD>
    <TD vAlign=bottom align=right width="8%"
bgColor=#e6efff><B>(267,977</B></TD>
    <TD vAlign=bottom align=left width="2%"
      bgColor=#e6efff><B>)</B> </TD></TR>
  <TR vAlign=top>
    <TD vAlign=bottom align=left>Stock-based compensation on 2,300,000 options
      granted and fully- vested (Note 6) </TD>
    <TD vAlign=bottom align=left width="1%" >&nbsp;</TD>
    <TD vAlign=bottom align=right width="8%">- </TD>
    <TD vAlign=bottom align=left width="2%" >&nbsp;</TD>
    <TD vAlign=bottom align=left width="1%" >&nbsp;</TD>
    <TD vAlign=bottom align=right width="8%">- </TD>
    <TD vAlign=bottom align=left width="2%" >&nbsp;</TD>
    <TD vAlign=bottom align=left width="1%" >&nbsp;</TD>
    <TD vAlign=bottom align=right width="8%">50,303 </TD>
    <TD vAlign=bottom align=left width="2%" >&nbsp;</TD>
    <TD vAlign=bottom align=left width="1%" >&nbsp;</TD>
    <TD vAlign=bottom align=right width="8%">- </TD>
    <TD vAlign=bottom align=left width="2%" >&nbsp;</TD>
    <TD vAlign=bottom align=left width="1%" >&nbsp;</TD>
    <TD vAlign=bottom align=right width="8%">- </TD>
    <TD vAlign=bottom align=left width="2%" >&nbsp;</TD>
    <TD vAlign=bottom align=left width="1%" >&nbsp;</TD>
    <TD vAlign=bottom align=right width="8%">50,303 </TD>
    <TD vAlign=bottom align=left width="2%" >&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD vAlign=bottom align=left bgColor=#e6efff>Shares issued to consultant
      for option exercise (Note 6) </TD>
    <TD vAlign=bottom align=left width="1%"
    bgColor=#e6efff>&nbsp;</TD>
    <TD vAlign=bottom align=right width="8%" bgColor=#e6efff>2,300,000 </TD>
    <TD vAlign=bottom align=left width="2%"
    bgColor=#e6efff>&nbsp;</TD>
    <TD vAlign=bottom align=left width="1%"
    bgColor=#e6efff>&nbsp;</TD>
    <TD vAlign=bottom align=right width="8%" bgColor=#e6efff>717 </TD>
    <TD vAlign=bottom align=left width="2%"
    bgColor=#e6efff>&nbsp;</TD>
    <TD vAlign=bottom align=left width="1%"
    bgColor=#e6efff>&nbsp;</TD>
    <TD vAlign=bottom align=right width="8%" bgColor=#e6efff>- </TD>
    <TD vAlign=bottom align=left width="2%"
    bgColor=#e6efff>&nbsp;</TD>
    <TD vAlign=bottom align=left width="1%"
    bgColor=#e6efff>&nbsp;</TD>
    <TD vAlign=bottom align=right width="8%" bgColor=#e6efff>- </TD>
    <TD vAlign=bottom align=left width="2%"
    bgColor=#e6efff>&nbsp;</TD>
    <TD vAlign=bottom align=left width="1%"
    bgColor=#e6efff>&nbsp;</TD>
    <TD vAlign=bottom align=right width="8%" bgColor=#e6efff>- </TD>
    <TD vAlign=bottom align=left width="2%"
    bgColor=#e6efff>&nbsp;</TD>
    <TD vAlign=bottom align=left width="1%"
    bgColor=#e6efff>&nbsp;</TD>
    <TD vAlign=bottom align=right width="8%" bgColor=#e6efff>717 </TD>
    <TD vAlign=bottom align=left width="2%"
    bgColor=#e6efff>&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD vAlign=bottom align=left>Shares issued to consultant for option
      exercise (Note 6) </TD>
    <TD vAlign=bottom align=left width="1%" >&nbsp;</TD>
    <TD vAlign=bottom align=right width="8%">930,031 </TD>
    <TD vAlign=bottom align=left width="2%" >&nbsp;</TD>
    <TD vAlign=bottom align=left width="1%" >&nbsp;</TD>
    <TD vAlign=bottom align=right width="8%">290 </TD>
    <TD vAlign=bottom align=left width="2%" >&nbsp;</TD>
    <TD vAlign=bottom align=left width="1%" >&nbsp;</TD>
    <TD vAlign=bottom align=right width="8%">- </TD>
    <TD vAlign=bottom align=left width="2%" >&nbsp;</TD>
    <TD vAlign=bottom align=left width="1%" >&nbsp;</TD>
    <TD vAlign=bottom align=right width="8%">- </TD>
    <TD vAlign=bottom align=left width="2%" >&nbsp;</TD>
    <TD vAlign=bottom align=left width="1%" >&nbsp;</TD>
    <TD vAlign=bottom align=right width="8%">- </TD>
    <TD vAlign=bottom align=left width="2%" >&nbsp;</TD>
    <TD vAlign=bottom align=left width="1%" >&nbsp;</TD>
    <TD vAlign=bottom align=right width="8%">290 </TD>
    <TD vAlign=bottom align=left width="2%" >&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD vAlign=bottom align=left bgColor=#e6efff>Fair value of options
      allocated to share capital on exercise of options </TD>
    <TD vAlign=bottom align=left width="1%"
    bgColor=#e6efff>&nbsp;</TD>
    <TD vAlign=bottom align=right width="8%" bgColor=#e6efff>- </TD>
    <TD vAlign=bottom align=left width="2%"
    bgColor=#e6efff>&nbsp;</TD>
    <TD vAlign=bottom align=left width="1%"
    bgColor=#e6efff>&nbsp;</TD>
    <TD vAlign=bottom align=right width="8%" bgColor=#e6efff>857,460 </TD>
    <TD vAlign=bottom align=left width="2%"
    bgColor=#e6efff>&nbsp;</TD>
    <TD vAlign=bottom align=left width="1%"
    bgColor=#e6efff>&nbsp;</TD>
    <TD vAlign=bottom align=right width="8%" bgColor=#e6efff>(857,460</TD>
    <TD vAlign=bottom align=left width="2%"  bgColor=#e6efff>)
</TD>
    <TD vAlign=bottom align=left width="1%"
    bgColor=#e6efff>&nbsp;</TD>
    <TD vAlign=bottom align=right width="8%" bgColor=#e6efff>- </TD>
    <TD vAlign=bottom align=left width="2%"
    bgColor=#e6efff>&nbsp;</TD>
    <TD vAlign=bottom align=left width="1%"
    bgColor=#e6efff>&nbsp;</TD>
    <TD vAlign=bottom align=right width="8%" bgColor=#e6efff>- </TD>
    <TD vAlign=bottom align=left width="2%"
    bgColor=#e6efff>&nbsp;</TD>
    <TD vAlign=bottom align=left width="1%"
    bgColor=#e6efff>&nbsp;</TD>
    <TD vAlign=bottom align=right width="8%" bgColor=#e6efff>- </TD>
    <TD vAlign=bottom align=left width="2%"
    bgColor=#e6efff>&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD vAlign=bottom align=left>Recapitalization of Helius Medical
      Technologies, Inc. (Note 3) </TD>
    <TD vAlign=bottom align=left width="1%" >&nbsp;</TD>
    <TD vAlign=bottom align=right width="8%">10,000,000 </TD>
    <TD vAlign=bottom align=left width="2%" >&nbsp;</TD>
    <TD vAlign=bottom align=left width="1%" >&nbsp;</TD>
    <TD vAlign=bottom align=right width="8%">- </TD>
    <TD vAlign=bottom align=left width="2%" >&nbsp;</TD>
    <TD vAlign=bottom align=left width="1%" >&nbsp;</TD>
    <TD vAlign=bottom align=right width="8%">162,890 </TD>
    <TD vAlign=bottom align=left width="2%" >&nbsp;</TD>
    <TD vAlign=bottom align=left width="1%" >&nbsp;</TD>
    <TD vAlign=bottom align=right width="8%">- </TD>
    <TD vAlign=bottom align=left width="2%" >&nbsp;</TD>
    <TD vAlign=bottom align=left width="1%" >&nbsp;</TD>
    <TD vAlign=bottom align=right width="8%">- </TD>
    <TD vAlign=bottom align=left width="2%" >&nbsp;</TD>
    <TD vAlign=bottom align=left width="1%" >&nbsp;</TD>
    <TD vAlign=bottom align=right width="8%">162,890 </TD>
    <TD vAlign=bottom align=left width="2%" >&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD vAlign=bottom align=left bgColor=#e6efff>Issuance of common stock for
      private placement (Note 5) </TD>
    <TD vAlign=bottom align=left width="1%"
    bgColor=#e6efff>&nbsp;</TD>
    <TD vAlign=bottom align=right width="8%" bgColor=#e6efff>15,240,000 </TD>
    <TD vAlign=bottom align=left width="2%"

    bgColor=#e6efff>&nbsp;</TD>
    <TD vAlign=bottom align=left width="1%"
    bgColor=#e6efff>&nbsp;</TD>
    <TD vAlign=bottom align=right width="8%" bgColor=#e6efff>6,178,606 </TD>
    <TD vAlign=bottom align=left width="2%"
    bgColor=#e6efff>&nbsp;</TD>
    <TD vAlign=bottom align=left width="1%"
    bgColor=#e6efff>&nbsp;</TD>
    <TD vAlign=bottom align=right width="8%" bgColor=#e6efff>837,396 </TD>
    <TD vAlign=bottom align=left width="2%"
    bgColor=#e6efff>&nbsp;</TD>
    <TD vAlign=bottom align=left width="1%"
    bgColor=#e6efff>&nbsp;</TD>
    <TD vAlign=bottom align=right width="8%" bgColor=#e6efff>- </TD>
    <TD vAlign=bottom align=left width="2%"
    bgColor=#e6efff>&nbsp;</TD>
    <TD vAlign=bottom align=left width="1%"
    bgColor=#e6efff>&nbsp;</TD>
    <TD vAlign=bottom align=right width="8%" bgColor=#e6efff>- </TD>
    <TD vAlign=bottom align=left width="2%"
    bgColor=#e6efff>&nbsp;</TD>
    <TD vAlign=bottom align=left width="1%"
    bgColor=#e6efff>&nbsp;</TD>
    <TD vAlign=bottom align=right width="8%" bgColor=#e6efff>7,016,002 </TD>
    <TD vAlign=bottom align=left width="2%"
    bgColor=#e6efff>&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD vAlign=bottom align=left>Share issuance cost (Note 5) </TD>
    <TD vAlign=bottom align=left width="1%" >&nbsp;</TD>
    <TD vAlign=bottom align=right width="8%">- </TD>
    <TD vAlign=bottom align=left width="2%" >&nbsp;</TD>
    <TD vAlign=bottom align=left width="1%" >&nbsp;</TD>
    <TD vAlign=bottom align=right width="8%">(482,680</TD>
    <TD vAlign=bottom align=left width="2%" >) </TD>
    <TD vAlign=bottom align=left width="1%" >&nbsp;</TD>
    <TD vAlign=bottom align=right width="8%">102,874 </TD>
    <TD vAlign=bottom align=left width="2%" >&nbsp;</TD>
    <TD vAlign=bottom align=left width="1%" >&nbsp;</TD>
    <TD vAlign=bottom align=right width="8%">- </TD>
    <TD vAlign=bottom align=left width="2%" >&nbsp;</TD>
    <TD vAlign=bottom align=left width="1%" >&nbsp;</TD>
    <TD vAlign=bottom align=right width="8%">- </TD>
    <TD vAlign=bottom align=left width="2%" >&nbsp;</TD>
    <TD vAlign=bottom align=left width="1%" >&nbsp;</TD>
    <TD vAlign=bottom align=right width="8%">(379,806</TD>
    <TD vAlign=bottom align=left width="2%" >) </TD></TR>
  <TR vAlign=top>
    <TD vAlign=bottom align=left bgColor=#e6efff>Beneficial conversion feature
      (Note 4) </TD>
    <TD vAlign=bottom align=left width="1%"
    bgColor=#e6efff>&nbsp;</TD>
    <TD vAlign=bottom align=right width="8%" bgColor=#e6efff>- </TD>
    <TD vAlign=bottom align=left width="2%"
    bgColor=#e6efff>&nbsp;</TD>
    <TD vAlign=bottom align=left width="1%"
    bgColor=#e6efff>&nbsp;</TD>
    <TD vAlign=bottom align=right width="8%" bgColor=#e6efff>- </TD>
    <TD vAlign=bottom align=left width="2%"
    bgColor=#e6efff>&nbsp;</TD>
    <TD vAlign=bottom align=left width="1%"
    bgColor=#e6efff>&nbsp;</TD>
    <TD vAlign=bottom align=right width="8%" bgColor=#e6efff>176,488 </TD>
    <TD vAlign=bottom align=left width="2%"
    bgColor=#e6efff>&nbsp;</TD>
    <TD vAlign=bottom align=left width="1%"
    bgColor=#e6efff>&nbsp;</TD>
    <TD vAlign=bottom align=right width="8%" bgColor=#e6efff>- </TD>
    <TD vAlign=bottom align=left width="2%"
    bgColor=#e6efff>&nbsp;</TD>
    <TD vAlign=bottom align=left width="1%"
    bgColor=#e6efff>&nbsp;</TD>
    <TD vAlign=bottom align=right width="8%" bgColor=#e6efff>- </TD>
    <TD vAlign=bottom align=left width="2%"
    bgColor=#e6efff>&nbsp;</TD>
    <TD vAlign=bottom align=left width="1%"
    bgColor=#e6efff>&nbsp;</TD>
    <TD vAlign=bottom align=right width="8%" bgColor=#e6efff>176,488 </TD>
    <TD vAlign=bottom align=left width="2%"
    bgColor=#e6efff>&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD vAlign=bottom align=left>Stock-based compensation on 3,770,000 options
      granted (Note 6) </TD>
    <TD vAlign=bottom align=left width="1%" >&nbsp;</TD>
    <TD vAlign=bottom align=right width="8%">- </TD>
    <TD vAlign=bottom align=left width="2%" >&nbsp;</TD>
    <TD vAlign=bottom align=left width="1%" >&nbsp;</TD>
    <TD vAlign=bottom align=right width="8%">- </TD>
    <TD vAlign=bottom align=left width="2%" >&nbsp;</TD>
    <TD vAlign=bottom align=left width="1%" >&nbsp;</TD>
    <TD vAlign=bottom align=right width="8%">1,455,056 </TD>
    <TD vAlign=bottom align=left width="2%" >&nbsp;</TD>
    <TD vAlign=bottom align=left width="1%" >&nbsp;</TD>
    <TD vAlign=bottom align=right width="8%">- </TD>
    <TD vAlign=bottom align=left width="2%" >&nbsp;</TD>
    <TD vAlign=bottom align=left width="1%" >&nbsp;</TD>
    <TD vAlign=bottom align=right width="8%">- </TD>
    <TD vAlign=bottom align=left width="2%" >&nbsp;</TD>
    <TD vAlign=bottom align=left width="1%" >&nbsp;</TD>
    <TD vAlign=bottom align=right width="8%">1,455,056 </TD>
    <TD vAlign=bottom align=left width="2%" >&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD vAlign=bottom align=left bgColor=#e6efff>Conversion of debenture (Note
      4) </TD>
    <TD vAlign=bottom align=left width="1%"
    bgColor=#e6efff>&nbsp;</TD>
    <TD vAlign=bottom align=right width="8%" bgColor=#e6efff>2,564,705 </TD>
    <TD vAlign=bottom align=left width="2%"
    bgColor=#e6efff>&nbsp;</TD>
    <TD vAlign=bottom align=left width="1%"
    bgColor=#e6efff>&nbsp;</TD>
    <TD vAlign=bottom align=right width="8%" bgColor=#e6efff>1,000,100 </TD>
    <TD vAlign=bottom align=left width="2%"
    bgColor=#e6efff>&nbsp;</TD>
    <TD vAlign=bottom align=left width="1%"
    bgColor=#e6efff>&nbsp;</TD>
    <TD vAlign=bottom align=right width="8%" bgColor=#e6efff>- </TD>
    <TD vAlign=bottom align=left width="2%"
    bgColor=#e6efff>&nbsp;</TD>
    <TD vAlign=bottom align=left width="1%"
    bgColor=#e6efff>&nbsp;</TD>
    <TD vAlign=bottom align=right width="8%" bgColor=#e6efff>- </TD>
    <TD vAlign=bottom align=left width="2%"
    bgColor=#e6efff>&nbsp;</TD>
    <TD vAlign=bottom align=left width="1%"
    bgColor=#e6efff>&nbsp;</TD>
    <TD vAlign=bottom align=right width="8%" bgColor=#e6efff>- </TD>
    <TD vAlign=bottom align=left width="2%"
    bgColor=#e6efff>&nbsp;</TD>
    <TD vAlign=bottom align=left width="1%"
    bgColor=#e6efff>&nbsp;</TD>
    <TD vAlign=bottom align=right width="8%" bgColor=#e6efff>1,000,100 </TD>
    <TD vAlign=bottom align=left width="2%"
    bgColor=#e6efff>&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD vAlign=bottom align=left>Stock-based compensation on 100,000 options
      granted (Note 6) </TD>
    <TD vAlign=bottom align=left width="1%" >&nbsp;</TD>
    <TD vAlign=bottom align=right width="8%">- </TD>
    <TD vAlign=bottom align=left width="2%" >&nbsp;</TD>
    <TD vAlign=bottom align=left width="1%" >&nbsp;</TD>
    <TD vAlign=bottom align=right width="8%">- </TD>
    <TD vAlign=bottom align=left width="2%" >&nbsp;</TD>
    <TD vAlign=bottom align=left width="1%" >&nbsp;</TD>
    <TD vAlign=bottom align=right width="8%">88,127 </TD>
    <TD vAlign=bottom align=left width="2%" >&nbsp;</TD>
    <TD vAlign=bottom align=left width="1%" >&nbsp;</TD>
    <TD vAlign=bottom align=right width="8%">- </TD>
    <TD vAlign=bottom align=left width="2%" >&nbsp;</TD>
    <TD vAlign=bottom align=left width="1%" >&nbsp;</TD>
    <TD vAlign=bottom align=right width="8%">- </TD>
    <TD vAlign=bottom align=left width="2%" >&nbsp;</TD>
    <TD vAlign=bottom align=left width="1%" >&nbsp;</TD>
    <TD vAlign=bottom align=right width="8%">88,127 </TD>
    <TD vAlign=bottom align=left width="2%" >&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD vAlign=bottom align=left bgColor=#e6efff>Stock-based compensation on
      100,000 options granted (Note 6) </TD>
    <TD vAlign=bottom align=left width="1%"
    bgColor=#e6efff>&nbsp;</TD>
    <TD vAlign=bottom align=right width="8%" bgColor=#e6efff>- </TD>
    <TD vAlign=bottom align=left width="2%"
    bgColor=#e6efff>&nbsp;</TD>
    <TD vAlign=bottom align=left width="1%"
    bgColor=#e6efff>&nbsp;</TD>
    <TD vAlign=bottom align=right width="8%" bgColor=#e6efff>- </TD>
    <TD vAlign=bottom align=left width="2%"
    bgColor=#e6efff>&nbsp;</TD>
    <TD vAlign=bottom align=left width="1%"
    bgColor=#e6efff>&nbsp;</TD>
    <TD vAlign=bottom align=right width="8%" bgColor=#e6efff>93,326 </TD>
    <TD vAlign=bottom align=left width="2%"
    bgColor=#e6efff>&nbsp;</TD>
    <TD vAlign=bottom align=left width="1%"
    bgColor=#e6efff>&nbsp;</TD>
    <TD vAlign=bottom align=right width="8%" bgColor=#e6efff>- </TD>
    <TD vAlign=bottom align=left width="2%"
    bgColor=#e6efff>&nbsp;</TD>
    <TD vAlign=bottom align=left width="1%"
    bgColor=#e6efff>&nbsp;</TD>
    <TD vAlign=bottom align=right width="8%" bgColor=#e6efff>- </TD>
    <TD vAlign=bottom align=left width="2%"
    bgColor=#e6efff>&nbsp;</TD>
    <TD vAlign=bottom align=left width="1%"
    bgColor=#e6efff>&nbsp;</TD>
    <TD vAlign=bottom align=right width="8%" bgColor=#e6efff>93,326 </TD>
    <TD vAlign=bottom align=left width="2%"
    bgColor=#e6efff>&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD vAlign=bottom align=left>Stock-based compensation on 400,000 options
      granted (Note 6) </TD>
    <TD vAlign=bottom align=left width="1%" >&nbsp;</TD>
    <TD vAlign=bottom align=right width="8%">- </TD>
    <TD vAlign=bottom align=left width="2%" >&nbsp;</TD>
    <TD vAlign=bottom align=left width="1%" >&nbsp;</TD>
    <TD vAlign=bottom align=right width="8%">- </TD>
    <TD vAlign=bottom align=left width="2%" >&nbsp;</TD>
    <TD vAlign=bottom align=left width="1%" >&nbsp;</TD>
    <TD vAlign=bottom align=right width="8%">244,024 </TD>
    <TD vAlign=bottom align=left width="2%" >&nbsp;</TD>
    <TD vAlign=bottom align=left width="1%" >&nbsp;</TD>
    <TD vAlign=bottom align=right width="8%">- </TD>
    <TD vAlign=bottom align=left width="2%" >&nbsp;</TD>
    <TD vAlign=bottom align=left width="1%" >&nbsp;</TD>
    <TD vAlign=bottom align=right width="8%">- </TD>
    <TD vAlign=bottom align=left width="2%" >&nbsp;</TD>
    <TD vAlign=bottom align=left width="1%" >&nbsp;</TD>
    <TD vAlign=bottom align=right width="8%">244,024 </TD>
    <TD vAlign=bottom align=left width="2%" >&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD vAlign=bottom align=left bgColor=#e6efff>Fair value of vested
      non-employee options reallocated to derivative liability </TD>
    <TD vAlign=bottom align=left width="1%"
    bgColor=#e6efff>&nbsp;</TD>
    <TD vAlign=bottom align=right width="8%" bgColor=#e6efff>- </TD>
    <TD vAlign=bottom align=left width="2%"
    bgColor=#e6efff>&nbsp;</TD>
    <TD vAlign=bottom align=left width="1%"
    bgColor=#e6efff>&nbsp;</TD>
    <TD vAlign=bottom align=right width="8%" bgColor=#e6efff>- </TD>
    <TD vAlign=bottom align=left width="2%"
    bgColor=#e6efff>&nbsp;</TD>
    <TD vAlign=bottom align=left width="1%"
    bgColor=#e6efff>&nbsp;</TD>
    <TD vAlign=bottom align=right width="8%" bgColor=#e6efff>(27,527</TD>
    <TD vAlign=bottom align=left width="2%"  bgColor=#e6efff>)
</TD>
    <TD vAlign=bottom align=left width="1%"
    bgColor=#e6efff>&nbsp;</TD>
    <TD vAlign=bottom align=right width="8%" bgColor=#e6efff>- </TD>
    <TD vAlign=bottom align=left width="2%"
    bgColor=#e6efff>&nbsp;</TD>
    <TD vAlign=bottom align=left width="1%"
    bgColor=#e6efff>&nbsp;</TD>
    <TD vAlign=bottom align=right width="8%" bgColor=#e6efff>- </TD>
    <TD vAlign=bottom align=left width="2%"
    bgColor=#e6efff>&nbsp;</TD>
    <TD vAlign=bottom align=left width="1%"
    bgColor=#e6efff>&nbsp;</TD>
    <TD vAlign=bottom align=right width="8%" bgColor=#e6efff>(27,527</TD>
    <TD vAlign=bottom align=left width="2%"  bgColor=#e6efff>)
  </TD></TR>
  <TR vAlign=top>
    <TD vAlign=bottom align=left>Net loss for the period </TD>
    <TD vAlign=bottom align=left width="1%" >&nbsp;</TD>
    <TD vAlign=bottom align=right width="8%">- </TD>
    <TD vAlign=bottom align=left width="2%" >&nbsp;</TD>
    <TD vAlign=bottom align=left width="1%" >&nbsp;</TD>
    <TD vAlign=bottom align=right width="8%">- </TD>
    <TD vAlign=bottom align=left width="2%" >&nbsp;</TD>
    <TD vAlign=bottom align=left width="1%" >&nbsp;</TD>
    <TD vAlign=bottom align=right width="8%">- </TD>
    <TD vAlign=bottom align=left width="2%" >&nbsp;</TD>
    <TD vAlign=bottom align=left width="1%" >&nbsp;</TD>
    <TD vAlign=bottom align=right width="8%">(9,156,043</TD>
    <TD vAlign=bottom align=left width="2%" >) </TD>
    <TD vAlign=bottom align=left width="1%" >&nbsp;</TD>
    <TD vAlign=bottom align=right width="8%">- </TD>
    <TD vAlign=bottom align=left width="2%" >&nbsp;</TD>
    <TD vAlign=bottom align=left width="1%" >&nbsp;</TD>
    <TD vAlign=bottom align=right width="8%">(9,156,043</TD>
    <TD vAlign=bottom align=left width="2%" >) </TD></TR>
  <TR vAlign=top>
    <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=left
    bgColor=#e6efff>Comprehensive loss </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=left
    width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=right
    width="8%" bgColor=#e6efff>- </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=left
    width="2%"  bgColor=#e6efff>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=left
    width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=right
    width="8%" bgColor=#e6efff>- </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=left
    width="2%"  bgColor=#e6efff>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=left
    width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=right
    width="8%" bgColor=#e6efff>- </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=left
    width="2%"  bgColor=#e6efff>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=left
    width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=right
    width="8%" bgColor=#e6efff>- </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=left
    width="2%"  bgColor=#e6efff>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=left
    width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=right
    width="8%" bgColor=#e6efff>(395,030</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=left
    width="2%"  bgColor=#e6efff>) </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=left
    width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=right
    width="8%" bgColor=#e6efff>(395,030</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=left
    width="2%"  bgColor=#e6efff>) </TD></TR>
  <TR vAlign=top>
    <TD style="BORDER-BOTTOM: #000000 3px double" vAlign=bottom
      align=left><B>Balance &#150; December 31, 2014</B> </TD>
    <TD style="BORDER-BOTTOM: #000000 3px double" vAlign=bottom align=left
    width="1%" >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 3px double" vAlign=bottom align=right
    width="8%"><B>63,104,788</B> </TD>
    <TD style="BORDER-BOTTOM: #000000 3px double" vAlign=bottom align=left
    width="2%" >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 3px double" vAlign=bottom align=left
    width="1%" >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 3px double" vAlign=bottom align=right
    width="8%"><B>16,064,493</B> </TD>
    <TD style="BORDER-BOTTOM: #000000 3px double" vAlign=bottom align=left
    width="2%" >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 3px double" vAlign=bottom align=left
    width="1%" >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 3px double" vAlign=bottom align=right
    width="8%"><B>3,132,654</B> </TD>
    <TD style="BORDER-BOTTOM: #000000 3px double" vAlign=bottom align=left
    width="2%" >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 3px double" vAlign=bottom align=left
    width="1%" >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 3px double" vAlign=bottom align=right
    width="8%"><B>(18,741,177</B></TD>
    <TD style="BORDER-BOTTOM: #000000 3px double" vAlign=bottom align=left
    width="2%" ><B>)</B> </TD>
    <TD style="BORDER-BOTTOM: #000000 3px double" vAlign=bottom align=left
    width="1%" >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 3px double" vAlign=bottom align=right
    width="8%"><B>(395,030</B></TD>
    <TD style="BORDER-BOTTOM: #000000 3px double" vAlign=bottom align=left
    width="2%" ><B>)</B> </TD>
    <TD style="BORDER-BOTTOM: #000000 3px double" vAlign=bottom align=left
    width="1%" >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 3px double" vAlign=bottom align=right
    width="8%"><B>60,940</B> </TD>
    <TD style="BORDER-BOTTOM: #000000 3px double" vAlign=bottom align=left
    width="2%" >&nbsp;</TD></TR></TABLE>
<P align=center>(The accompanying notes are an integral part of these financial
statements. )</P>
<P align=center>84</P>
<HR style="PAGE-BREAK-AFTER: always" align=center width="100%" color=black
noShade SIZE=5>
<A name=page_fa5></A>
<P align=justify><B>Helius Medical Technologies, Inc. </B><BR><B>Condensed
Interim Consolidated Statements of Cash Flows </B><BR>(Expressed in United
States Dollars)<B> </B><BR><B>(Unaudited) </B><BR></P>
<TABLE
style="BORDER-COLOR: black; FONT-SIZE: 10pt; BORDER-COLLAPSE: collapse; "
cellSpacing=0 cellPadding=0 width="100%" border=0>

  <TR vAlign=top>
    <TD vAlign=bottom noWrap align=left>&nbsp; </TD>
    <TD vAlign=bottom noWrap align=left width="1%">&nbsp;</TD>
    <TD vAlign=bottom noWrap align=center width="27%" colSpan=4><B>Nine Months
      Ended</B> </TD>
    <TD vAlign=bottom noWrap align=left width="2%">&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD vAlign=bottom noWrap align=left>&nbsp; </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom noWrap align=left
    width="1%">&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom noWrap
    align=center width="27%" colSpan=4><B>December 31</B> </TD>
    <TD vAlign=bottom noWrap align=left width="2%">&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD vAlign=bottom noWrap align=left>&nbsp; </TD>
    <TD vAlign=bottom noWrap align=left width="1%">&nbsp;</TD>
    <TD vAlign=bottom noWrap align=right width="12%"><B>2014</B> </TD>
    <TD vAlign=bottom noWrap align=left width="2%">&nbsp;</TD>
    <TD vAlign=bottom noWrap align=left width="1%">&nbsp;</TD>
    <TD vAlign=bottom noWrap align=right width="12%"><B>2013</B> </TD>
    <TD vAlign=bottom noWrap align=left width="2%">&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD vAlign=bottom align=left>&nbsp; </TD>
    <TD vAlign=bottom align=left width="1%"><B></B></TD>
    <TD vAlign=bottom align=right width="12%">&nbsp;<STRONG>$</STRONG></TD>
    <TD vAlign=bottom align=left width="2%">&nbsp;</TD>
    <TD vAlign=bottom align=left width="1%"><B></B></TD>
    <TD vAlign=bottom align=right width="12%">&nbsp;<STRONG>$</STRONG></TD>
    <TD vAlign=bottom align=left width="2%">&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD vAlign=bottom align=left bgColor=#e6efff><B>Cash flows from operating
      activities</B> </TD>
    <TD vAlign=bottom align=left width="1%" bgColor=#e6efff>&nbsp;</TD>
    <TD vAlign=bottom align=left width="12%" bgColor=#e6efff>&nbsp; </TD>
    <TD vAlign=bottom align=left width="2%" bgColor=#e6efff>&nbsp;</TD>
    <TD vAlign=bottom align=left width="1%" bgColor=#e6efff>&nbsp;</TD>
    <TD vAlign=bottom align=left width="12%" bgColor=#e6efff>&nbsp; </TD>
    <TD vAlign=bottom align=left width="2%" bgColor=#e6efff>&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD vAlign=bottom align=left>Net loss for the period </TD>
    <TD vAlign=bottom align=left width="1%">&nbsp;</TD>
    <TD vAlign=bottom align=right width="12%">(9,156,043</TD>
    <TD vAlign=bottom align=left width="2%">) </TD>
    <TD vAlign=bottom align=left width="1%">&nbsp;</TD>
    <TD vAlign=bottom align=right width="12%">(464,917</TD>
    <TD vAlign=bottom align=left width="2%">) </TD></TR>
  <TR vAlign=top>
    <TD vAlign=bottom align=left bgColor=#e6efff>Adjustments for: </TD>
    <TD vAlign=bottom align=left width="1%" bgColor=#e6efff>&nbsp;</TD>
    <TD vAlign=bottom align=left width="12%" bgColor=#e6efff>&nbsp; </TD>
    <TD vAlign=bottom align=left width="2%" bgColor=#e6efff>&nbsp;</TD>
    <TD vAlign=bottom align=left width="1%" bgColor=#e6efff>&nbsp;</TD>
    <TD vAlign=bottom align=left width="12%" bgColor=#e6efff>&nbsp; </TD>
    <TD vAlign=bottom align=left width="2%" bgColor=#e6efff>&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD vAlign=bottom align=left>&nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp;
      &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp;
      &nbsp;Change in fair value of derivative liability </TD>
    <TD vAlign=bottom align=left width="1%">&nbsp;</TD>
    <TD vAlign=bottom align=right width="12%">818,382 </TD>
    <TD vAlign=bottom align=left width="2%">&nbsp;</TD>
    <TD vAlign=bottom align=left width="1%">&nbsp;</TD>
    <TD vAlign=bottom align=right width="12%">- </TD>
    <TD vAlign=bottom align=left width="2%">&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD vAlign=bottom align=left bgColor=#e6efff>&nbsp; &nbsp; &nbsp; &nbsp;
      &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp;
      &nbsp; &nbsp; &nbsp;Accretion of beneficial conversion feature </TD>
    <TD vAlign=bottom align=left width="1%" bgColor=#e6efff>&nbsp;</TD>
    <TD vAlign=bottom align=right width="12%" bgColor=#e6efff>176,488 </TD>
    <TD vAlign=bottom align=left width="2%" bgColor=#e6efff>&nbsp;</TD>
    <TD vAlign=bottom align=left width="1%" bgColor=#e6efff>&nbsp;</TD>
    <TD vAlign=bottom align=right width="12%" bgColor=#e6efff>- </TD>
    <TD vAlign=bottom align=left width="2%" bgColor=#e6efff>&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD vAlign=bottom align=left>&nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp;
      &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp;
      &nbsp;Stock-based compensation </TD>
    <TD vAlign=bottom align=left width="1%">&nbsp;</TD>
    <TD vAlign=bottom align=right width="12%">3,180,155 </TD>
    <TD vAlign=bottom align=left width="2%">&nbsp;</TD>
    <TD vAlign=bottom align=left width="1%">&nbsp;</TD>
    <TD vAlign=bottom align=right width="12%">434,228 </TD>
    <TD vAlign=bottom align=left width="2%">&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD vAlign=bottom align=left bgColor=#e6efff>&nbsp; &nbsp; &nbsp; &nbsp;
      &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp;
      &nbsp; &nbsp; &nbsp;Unrealized foreign exchange </TD>
    <TD vAlign=bottom align=left width="1%" bgColor=#e6efff>&nbsp;</TD>
    <TD vAlign=bottom align=right width="12%" bgColor=#e6efff>(222,244</TD>
    <TD vAlign=bottom align=left width="2%" bgColor=#e6efff>) </TD>
    <TD vAlign=bottom align=left width="1%" bgColor=#e6efff>&nbsp;</TD>
    <TD vAlign=bottom align=right width="12%" bgColor=#e6efff>- </TD>
    <TD vAlign=bottom align=left width="2%" bgColor=#e6efff>&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD vAlign=bottom align=left>Changes in non-cash working capital items:
</TD>
    <TD vAlign=bottom align=left width="1%">&nbsp;</TD>
    <TD vAlign=bottom align=left width="12%">&nbsp; </TD>
    <TD vAlign=bottom align=left width="2%">&nbsp;</TD>
    <TD vAlign=bottom align=left width="1%">&nbsp;</TD>
    <TD vAlign=bottom align=left width="12%">&nbsp; </TD>
    <TD vAlign=bottom align=left width="2%">&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD vAlign=bottom align=left bgColor=#e6efff>&nbsp; &nbsp; &nbsp; &nbsp;
      &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp;
      &nbsp; &nbsp; &nbsp;Receivables </TD>
    <TD vAlign=bottom align=left width="1%" bgColor=#e6efff>&nbsp;</TD>
    <TD vAlign=bottom align=right width="12%" bgColor=#e6efff>(2,035</TD>
    <TD vAlign=bottom align=left width="2%" bgColor=#e6efff>) </TD>
    <TD vAlign=bottom align=left width="1%" bgColor=#e6efff>&nbsp;</TD>
    <TD vAlign=bottom align=right width="12%" bgColor=#e6efff>- </TD>
    <TD vAlign=bottom align=left width="2%" bgColor=#e6efff>&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD vAlign=bottom align=left>&nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp;
      &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp;
      &nbsp;Accounts payable </TD>
    <TD vAlign=bottom align=left width="1%">&nbsp;</TD>
    <TD vAlign=bottom align=right width="12%">975,694 </TD>
    <TD vAlign=bottom align=left width="2%">&nbsp;</TD>
    <TD vAlign=bottom align=left width="1%">&nbsp;</TD>
    <TD vAlign=bottom align=right width="12%">3,707 </TD>
    <TD vAlign=bottom align=left width="2%">&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD vAlign=bottom align=left bgColor=#e6efff>&nbsp; &nbsp; &nbsp; &nbsp;
      &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp;
      &nbsp; &nbsp; &nbsp;Prepaid expenses </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=left
    width="1%" bgColor=#e6efff>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=right
    width="12%" bgColor=#e6efff>(150,364</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=left
    width="2%" bgColor=#e6efff>) </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=left
    width="1%" bgColor=#e6efff>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=right
    width="12%" bgColor=#e6efff>- </TD>
    <TD vAlign=bottom align=left width="2%" bgColor=#e6efff>&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD vAlign=bottom align=left><B>Net cash used in operating activities</B>
    </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=left
    width="1%">&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=right
    width="12%"><B>(4,379,967</B></TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=left
    width="2%"><B>)</B> </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=left
    width="1%">&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=right
    width="12%"><B>(26,982</B></TD>
    <TD vAlign=bottom align=left width="2%"><B>)</B> </TD></TR>
  <TR>
    <TD vAlign=bottom bgColor=#e6efff>&nbsp; </TD>
    <TD vAlign=bottom width="1%" bgColor=#e6efff>&nbsp;</TD>
    <TD vAlign=bottom width="12%" bgColor=#e6efff>&nbsp; </TD>
    <TD vAlign=bottom width="2%" bgColor=#e6efff>&nbsp;</TD>
    <TD vAlign=bottom width="1%" bgColor=#e6efff>&nbsp;</TD>
    <TD vAlign=bottom width="12%" bgColor=#e6efff>&nbsp; </TD>
    <TD vAlign=bottom width="2%" bgColor=#e6efff>&nbsp;</TD></TR>
  <TR>
    <TD vAlign=bottom>&nbsp; </TD>
    <TD vAlign=bottom width="1%">&nbsp;</TD>
    <TD vAlign=bottom width="12%">&nbsp; </TD>
    <TD vAlign=bottom width="2%">&nbsp;</TD>
    <TD vAlign=bottom width="1%">&nbsp;</TD>
    <TD vAlign=bottom width="12%">&nbsp; </TD>
    <TD vAlign=bottom width="2%">&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD vAlign=bottom align=left bgColor=#e6efff><B>Cash flows from financing
      activities</B> </TD>
    <TD vAlign=bottom align=left width="1%" bgColor=#e6efff>&nbsp;</TD>
    <TD vAlign=bottom align=left width="12%" bgColor=#e6efff>&nbsp; </TD>
    <TD vAlign=bottom align=left width="2%" bgColor=#e6efff>&nbsp;</TD>
    <TD vAlign=bottom align=left width="1%" bgColor=#e6efff>&nbsp;</TD>
    <TD vAlign=bottom align=left width="12%" bgColor=#e6efff>&nbsp; </TD>
    <TD vAlign=bottom align=left width="2%" bgColor=#e6efff>&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD vAlign=bottom align=left>Issuance of share capital </TD>
    <TD vAlign=bottom align=left width="1%">&nbsp;</TD>
    <TD vAlign=bottom align=right width="12%">7,017,009 </TD>
    <TD vAlign=bottom align=left width="2%">&nbsp;</TD>
    <TD vAlign=bottom align=left width="1%">&nbsp;</TD>
    <TD vAlign=bottom align=right width="12%">- </TD>
    <TD vAlign=bottom align=left width="2%">&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD vAlign=bottom align=left bgColor=#e6efff>Share Issue costs </TD>
    <TD vAlign=bottom align=left width="1%" bgColor=#e6efff>&nbsp;</TD>
    <TD vAlign=bottom align=right width="12%" bgColor=#e6efff>(379,806</TD>
    <TD vAlign=bottom align=left width="2%" bgColor=#e6efff>) </TD>
    <TD vAlign=bottom align=left width="1%" bgColor=#e6efff>&nbsp;</TD>
    <TD vAlign=bottom align=left width="12%" bgColor=#e6efff>&nbsp; </TD>
    <TD vAlign=bottom align=left width="2%" bgColor=#e6efff>&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD vAlign=bottom align=left>Loans from shareholders </TD>
    <TD vAlign=bottom align=left width="1%">&nbsp;</TD>
    <TD vAlign=bottom align=right width="12%">- </TD>
    <TD vAlign=bottom align=left width="2%">&nbsp;</TD>
    <TD vAlign=bottom align=left width="1%">&nbsp;</TD>
    <TD vAlign=bottom align=right width="12%">26,876 </TD>
    <TD vAlign=bottom align=left width="2%">&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD vAlign=bottom align=left bgColor=#e6efff>Convertible debenture
      proceeds </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=left
    width="1%" bgColor=#e6efff>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=right
    width="12%" bgColor=#e6efff>633,195 </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=left
    width="2%" bgColor=#e6efff>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=left
    width="1%" bgColor=#e6efff>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=right
    width="12%" bgColor=#e6efff>- </TD>
    <TD vAlign=bottom align=left width="2%" bgColor=#e6efff>&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD vAlign=bottom align=left><B>Net cash provided by financing
      activities</B> </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=left
    width="1%">&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=right
    width="12%"><B>7,270,398</B> </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=left
    width="2%">&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=left
    width="1%">&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=right
    width="12%"><B>26,876</B> </TD>
    <TD vAlign=bottom align=left width="2%">&nbsp;</TD></TR>
  <TR>
    <TD vAlign=bottom bgColor=#e6efff>&nbsp; </TD>
    <TD vAlign=bottom width="1%" bgColor=#e6efff>&nbsp;</TD>
    <TD vAlign=bottom width="12%" bgColor=#e6efff>&nbsp; </TD>
    <TD vAlign=bottom width="2%" bgColor=#e6efff>&nbsp;</TD>
    <TD vAlign=bottom width="1%" bgColor=#e6efff>&nbsp;</TD>
    <TD vAlign=bottom width="12%" bgColor=#e6efff>&nbsp; </TD>
    <TD vAlign=bottom width="2%" bgColor=#e6efff>&nbsp;</TD></TR>
  <TR>
    <TD vAlign=bottom>&nbsp; </TD>
    <TD vAlign=bottom width="1%">&nbsp;</TD>
    <TD vAlign=bottom width="12%">&nbsp; </TD>
    <TD vAlign=bottom width="2%">&nbsp;</TD>
    <TD vAlign=bottom width="1%">&nbsp;</TD>
    <TD vAlign=bottom width="12%">&nbsp; </TD>
    <TD vAlign=bottom width="2%">&nbsp;</TD></TR>
  <TR>
    <TD vAlign=bottom bgColor=#e6efff>&nbsp; </TD>
    <TD vAlign=bottom width="1%" bgColor=#e6efff>&nbsp;</TD>
    <TD vAlign=bottom width="12%" bgColor=#e6efff>&nbsp; </TD>
    <TD vAlign=bottom width="2%" bgColor=#e6efff>&nbsp;</TD>
    <TD vAlign=bottom width="1%" bgColor=#e6efff>&nbsp;</TD>
    <TD vAlign=bottom width="12%" bgColor=#e6efff>&nbsp; </TD>
    <TD vAlign=bottom width="2%" bgColor=#e6efff>&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD vAlign=bottom align=left><B>Net change in cash and cash
      equivalents</B> </TD>
    <TD vAlign=bottom align=left width="1%">&nbsp;</TD>
    <TD vAlign=bottom align=right width="12%">2,890,431 </TD>
    <TD vAlign=bottom align=left width="2%">&nbsp;</TD>
    <TD vAlign=bottom align=left width="1%">&nbsp;</TD>
    <TD vAlign=bottom align=right width="12%">(106</TD>
    <TD vAlign=bottom align=left width="2%">) </TD></TR>
  <TR>
    <TD vAlign=bottom bgColor=#e6efff>&nbsp; </TD>
    <TD vAlign=bottom width="1%" bgColor=#e6efff>&nbsp;</TD>
    <TD vAlign=bottom width="12%" bgColor=#e6efff>&nbsp; </TD>
    <TD vAlign=bottom width="2%" bgColor=#e6efff>&nbsp;</TD>
    <TD vAlign=bottom width="1%" bgColor=#e6efff>&nbsp;</TD>
    <TD vAlign=bottom width="12%" bgColor=#e6efff>&nbsp; </TD>
    <TD vAlign=bottom width="2%" bgColor=#e6efff>&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD vAlign=bottom align=left><B>Cash and cash equivalents, beginning of
      the period</B> </TD>
    <TD vAlign=bottom align=left width="1%">&nbsp;</TD>
    <TD vAlign=bottom align=right width="12%">15,968 </TD>
    <TD vAlign=bottom align=left width="2%">&nbsp;</TD>
    <TD vAlign=bottom align=left width="1%">&nbsp;</TD>
    <TD vAlign=bottom align=right width="12%">217 </TD>
    <TD vAlign=bottom align=left width="2%">&nbsp;</TD></TR>
  <TR>
    <TD vAlign=bottom bgColor=#e6efff>&nbsp; </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom width="1%"
    bgColor=#e6efff>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom width="12%"
    bgColor=#e6efff>&nbsp; </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom width="2%"
    bgColor=#e6efff>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom width="1%"
    bgColor=#e6efff>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom width="12%"
    bgColor=#e6efff>&nbsp; </TD>
    <TD vAlign=bottom width="2%" bgColor=#e6efff>&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD vAlign=bottom align=left><B>Cash and cash equivalents, end of the
      period</B> </TD>
    <TD style="BORDER-BOTTOM: #000000 3px double" vAlign=bottom align=left
    width="1%">&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 3px double" vAlign=bottom align=right
    width="12%"><B>2,906,399</B> </TD>
    <TD style="BORDER-BOTTOM: #000000 3px double" vAlign=bottom align=left
    width="2%">&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 3px double" vAlign=bottom align=left
    width="1%">&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 3px double" vAlign=bottom align=right
    width="12%"><B>111</B> </TD>
    <TD vAlign=bottom align=left width="2%">&nbsp;</TD></TR>
  <TR>
    <TD vAlign=bottom bgColor=#e6efff>&nbsp; </TD>
    <TD vAlign=bottom width="1%" bgColor=#e6efff>&nbsp;</TD>
    <TD vAlign=bottom width="12%" bgColor=#e6efff>&nbsp; </TD>
    <TD vAlign=bottom width="2%" bgColor=#e6efff>&nbsp;</TD>
    <TD vAlign=bottom width="1%" bgColor=#e6efff>&nbsp;</TD>
    <TD vAlign=bottom width="12%" bgColor=#e6efff>&nbsp; </TD>
    <TD vAlign=bottom width="2%" bgColor=#e6efff>&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD vAlign=bottom align=left><B>Supplemental information of cash flows</B>
    </TD>
    <TD vAlign=bottom align=left width="1%">&nbsp;</TD>
    <TD vAlign=bottom align=left width="12%">&nbsp; </TD>
    <TD vAlign=bottom align=left width="2%">&nbsp;</TD>
    <TD vAlign=bottom align=left width="1%">&nbsp;</TD>
    <TD vAlign=bottom align=left width="12%">&nbsp; </TD>
    <TD vAlign=bottom align=left width="2%">&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD vAlign=bottom align=left bgColor=#e6efff>Interest paid in cash </TD>
    <TD vAlign=bottom align=left width="1%" bgColor=#e6efff>&nbsp;</TD>
    <TD vAlign=bottom align=right width="12%" bgColor=#e6efff>11,144 </TD>
    <TD vAlign=bottom align=left width="2%" bgColor=#e6efff>&nbsp;</TD>
    <TD vAlign=bottom align=left width="1%" bgColor=#e6efff>&nbsp;</TD>
    <TD vAlign=bottom align=right width="12%" bgColor=#e6efff>- </TD>
    <TD vAlign=bottom align=left width="2%" bgColor=#e6efff>&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD vAlign=bottom align=left>Income taxes paid in cash </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=left
    width="1%">&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=right
    width="12%">- </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=left
    width="2%">&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=left
    width="1%">&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=right
    width="12%">- </TD>
    <TD vAlign=bottom align=left width="2%">&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD vAlign=bottom align=left bgColor=#e6efff>&nbsp; </TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid" vAlign=bottom align=left
    width="1%" bgColor=#e6efff>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid" vAlign=bottom align=right
    width="12%" bgColor=#e6efff><B>11,144</B> </TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid" vAlign=bottom align=left
    width="2%" bgColor=#e6efff>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid" vAlign=bottom align=left
    width="1%" bgColor=#e6efff>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid" vAlign=bottom align=right
    width="12%" bgColor=#e6efff><B>-</B> </TD>
    <TD vAlign=bottom align=left width="2%"
  bgColor=#e6efff>&nbsp;</TD></TR></TABLE>
<P align=justify>Supplemental Cash Flow Information &#150; Note 9 </P>
<P align=center>(The accompanying notes are an integral part of these financial
statements.)<B> </B></P>
<P align=center>85</P>
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<TABLE
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cellSpacing=0 cellPadding=0 width="100%" border=0>

  <TR vAlign=top>
    <TD align=left><B>Helius Medical Technologies, Inc.</B> </TD></TR>
  <TR vAlign=top>
    <TD align=left><B>Notes to Condensed Consolidated Financial Statements for
      the nine months ended December 31, 2014</B> </TD></TR>
  <TR vAlign=top>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left>(Expressed in
      United States Dollars) </TD></TR></TABLE><BR>
<TABLE
style="BORDER-COLOR: black; FONT-SIZE: 10pt; BORDER-COLLAPSE: collapse; "
cellSpacing=0 cellPadding=0 width="100%" border=0 BCLLIST>

  <TR>
    <TD vAlign=top width="5%"><B>1.</B> </TD>
    <TD>
      <P align=justify><B>NATURE AND CONTINUANCE OF
  OPERATIONS</B></P></TD></TR></TABLE>
<P align=justify>Helius Medical Technologies, Inc. (&#147;Helius&#148; or the &#147;Company&#148;)
is in the development stage and engaged primarily in the medical technology
industry focused on neurological wellness. The Company&#146;s planned principal
operations include the development, licensing and acquisition of unique and
non-invasive platform technologies to amplify the brain&#146;s ability to heal
itself. </P>
<P align=justify>The Company was incorporated in British Columbia, Canada, on
March 13, 2014. On May 28, 2014, the Company completed a continuation via a plan
of arrangement whereby the Company moved from being a corporation governed by
the British Columbia Corporations Act to a corporation governed by the Wyoming
Business Corporations Act. The Company&#146;s head office is located at 41 University
Drive, Suite 400, Newtown, PA, USA 18940. </P>
<P align=justify>The Company is listed on the Canadian Securities Exchange (the
&#147;CSE&#148;) and began trading on June 23, 2014, under the ticker symbol &#147;HSM&#148;. </P>
<P align=justify>On June 13, 2014, the Company completed its acquisition of 100%
of the issued and outstanding shares of Neurohabilitation Corporation (&#147;Neuro&#148;),
a private company incorporated in Delaware, USA, on January 22, 2013. Prior to
the transaction, Helius was a non-operating public shell company. Accordingly,
for financial reporting purposes, this transaction was deemed to be a capital
transaction in substance and recorded as a reverse recapitalization of Neuro
whereby Neuro is deemed to be the continuing, surviving entity for accounting
purposes, but through reorganization, has deemed to have adopted the capital
structure of Helius. Because the acquisition was considered a reverse
recapitalization for accounting purposes, the combined historical financial
statements of Neuro became the historical financial statements and from the
completion of the acquisition on June 13, 2014, the financial statements have
been prepared on a consolidated basis. The assets and liabilities of Neuro have
been brought forward at their book value and no goodwill has been recognized in
connection with the transaction. </P>
<P align=justify>The Company had a wholly-owned subsidiary, 0995162 B.C. Ltd,
which was dissolved on October 23, 2014. On December 17, 2014, Neuro
incorporated a wholly-owned subsidiary, Helius Medical Technologies (Canada),
Inc. (&#147;Helius Canada&#148;). The financial information is presented in United States
Dollars.</P>
<TABLE
style="BORDER-COLOR: black; FONT-SIZE: 10pt; BORDER-COLLAPSE: collapse; "
cellSpacing=0 cellPadding=0 width="100%" border=0 BCLLIST>

  <TR>
    <TD vAlign=top width="5%"><B>2.</B> </TD>
    <TD>
      <P align=justify><B>SIGNIFICANT ACCOUNTING
POLICIES</B></P></TD></TR></TABLE>
<P align=justify><B>Basis of Presentation and Liquidity </B></P>
<P align=justify>The Company&#146;s condensed interim consolidated financial
statements have been presented in accordance with U.S. generally accepted
accounting principles (&#147;U.S. GAAP&#148;) and the rules and regulations of the
Securities and Exchange Commission (&#147;SEC&#148;) that are published at the time of
preparation and that are effective or available on December 31, 2014. The
Company believes that all necessary adjustments, which consisted only of normal
recurring items, have been included in the accompanying financial statements to
present fairly the results of the interim periods. These condensed interim
consolidated financial statements should be read in conjunction with the
Company&#146;s annual consolidated financial statements for the year ended March 31,
2014. The Company has incurred losses since inception and, as of December 31,
2014, the Company has working capital of $2,156,168 (March 31, 2014 &#150;
($267,977)) and an accumulated deficit of $18,797,753 (March 31, 2014 -
$9,585,134). Until the Company generates a level of revenue to support its cost
structure, the Company expects to continue to incur substantial operating losses
and net cash outflows. While the Company had cash and cash equivalents of
$2,906,399 as of December 31, 2014 (March 31, 2014 - $15,968), management does
not believe these resources will be sufficient to meet the Company&#146;s operating
and capital needs through 2015. This material uncertainty gives rise to
substantial doubt about the Company&#146;s ability to continue as a going concern.
</P>
<P align=justify>The Company intends to fund ongoing activities by utilizing
current cash and cash equivalents and by raising additional capital though
equity or debt financings. There can be no assurance that the Company will be
successful in raising additional capital or that such capital, if available,
will be on terms that are acceptable to the Company. If the Company is unable to
raise sufficient additional capital, the Company may be compelled to reduce the
scope of its operations and planned capital expenditure or sell certain assets,
including intellectual property asset. However, given the Company&#146;s current cash
and cash equivalents balance along with the Company&#146;s planned operating
activities, there is substantial doubt about the Company&#146;s ability to continue
as a going concern. </P>
<P align=center>86</P>
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noShade SIZE=5>
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<TABLE
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cellSpacing=0 cellPadding=0 width="100%" border=0>

  <TR vAlign=top>
    <TD align=left><B>Helius Medical Technologies, Inc.</B> </TD></TR>
  <TR vAlign=top>
    <TD align=left><B>Notes to Condensed Consolidated Financial Statements for
      the nine months ended December 31, 2014</B> </TD></TR>
  <TR vAlign=top>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left>(Expressed in
      United States Dollars) </TD></TR></TABLE>
<P align=justify><B>Use of Estimates </B></P>
<P align=justify>The preparation of financial statements in accordance with U.S.
GAAP requires management to make estimates and assumptions that affect the
reported amounts of assets and liabilities at the date of the financial
statements and reported amounts of expenses during the reporting period.
Significant estimates include valuation of share-based payment transactions,
compensation expense related to shares issued for services, valuation of options
and warrants and deferred income tax asset valuation allowances. Actual outcomes
could differ from these estimates. Financial statements include estimates which,
by their nature, are uncertain. The impacts of such estimates are pervasive
throughout the financial statements, and may require accounting adjustments
based on future occurrences. Revisions to accounting estimates are recognized in
the period in which the estimate is revised and the revision affects both the
current and future periods. </P>
<P align=justify><B>Principles of Consolidation </B></P>
<P align=justify>The consolidated financial statements include the historic
accounts of Neuro and are consolidated with Helius and its subsidiaries
beginning June 13, 2014. All intercompany balances and transactions have been
eliminated in consolidation.</P>
<P align=justify><B>Cash and Cash Equivalents </B></P>
<P align=justify>Cash and cash equivalents comprise cash at banks and on hand,
and short-term highly liquid investments that are readily convertible to known
amounts of cash and which are subject to an insignificant risk of changes in
value. The short-term investments are readily redeemable term deposits held at
the bank and are recorded at fair value. As at December 31, 2014, the short-term
investments include $2,180,311 of principal and $2,520 of interest. The sole
short-term investment denominated in Canadian funds has an annual yield of 1.28%
.. The remaining four short-term investments denominated in US funds have an
annual yield of 0.25% each. </P>
<P align=justify><B>Stock-Based Compensation </B></P>
<P align=justify>The Company accounts for all stock-based payments and awards
under the fair value based method. The Company recognizes its stock-based
compensation using the accelerated attribution method. </P>
<P align=justify>Stock-based payments to non-employees are measured at the fair
value of the consideration received, or the fair value of the equity instruments
issued, or liabilities incurred, whichever is more reliably measurable. The fair
value of stock-based payments to non-employees is periodically re-measured until
the counterparty performance is complete, and any change therein is recognized
over the vesting period of the award and in the same manner as if the Company
had paid cash instead of paying with or using equity based instruments. The fair
value of the stock-based payments to non-employees that are fully vested and
non-forfeitable as at the grant date is measured and recognized at that
date.</P>
<P align=justify>The Company accounts for the granting of share purchase options
to employees using the fair value method whereby all awards to employees will be
recorded at fair value on the date of the grant. The fair value of all share
purchase options are expensed over their vesting period with a corresponding
increase to additional capital surplus. Upon exercise of share purchase options,
the consideration paid by the option holder, together with the amount previously
recognized in additional paid-in capital is recorded as an increase to share
capital. Share purchase options granted to employees are accounted for as
liabilities when they contain conditions or other features that are indexed to
other than a market, performance or service condition.</P>
<P align=justify>The Company uses the Black-Scholes option pricing model to
calculate the fair value of share purchase options. Option pricing models
require the input of highly subjective assumptions, including the expected price
volatility. Changes in these assumptions can materially affect the fair value
estimate. </P>
<P align=justify><B>Foreign Exchange </B></P>
<P align=justify>The functional currency of the Company and Helius Canada is the
Canadian Dollar and the functional currency of Neuro is the United States
Dollars. The Company&#146;s reporting currency is the US dollar. </P>
<P align=center>87</P>
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noShade SIZE=5>
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<TABLE
style="BORDER-COLOR: black; FONT-SIZE: 10pt; BORDER-COLLAPSE: collapse; "
cellSpacing=0 cellPadding=0 width="100%" border=0>

  <TR vAlign=top>
    <TD align=left><B>Helius Medical Technologies, Inc.</B> </TD></TR>
  <TR vAlign=top>
    <TD align=left><B>Notes to Condensed Consolidated Financial Statements for
      the nine months ended December 31, 2014</B> </TD></TR>
  <TR vAlign=top>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left>(Expressed in
      United States Dollars) </TD></TR></TABLE><BR>
<P align=justify>The assets and liabilities of the Company and Helius Canada are
translated into U.S. dollars using year-end exchange rates; income and expenses
are translated using the average exchange rates for the reporting period.
Unrealized foreign currency translation adjustments are deferred in accumulated
other comprehensive loss, a separate component of shareholders&#146; equity. The
foreign exchange adjustment in the books of Neuro relating to inter-company
advances from Helius that are denominated in Canadian dollars is recorded in the
Statement of Loss. At December 31, 2014, Neuro recorded a foreign exchange gain
of $217,133 in respect of this adjustment and which is reflected in the
consolidated statement of loss for the nine months ended December 31, 2014.</P>
<P align=justify><B>Net Loss per Common Share </B></P>
<P align=justify>Basic net earnings (loss) per share is computed by dividing net
earnings (loss) available to common stockholders by the weighted average number
of outstanding common stock for the period, without consideration for common
stock equivalents. Diluted net income (loss) per common share includes both the
weighted-average number of common shares outstanding for the period plus the
potentially dilutive securities from stock options and warrants outstanding
determined using the treasury-stock method and the if-converted method, as
applicable. As at December 31, 2014, there were 4,820,000 options (March 31,
2014 &#150; 3,230,031) outstanding and 8,444,400 warrants (March 31, 2014 &#150; nil)
outstanding which have not been included in the weighted average common stock
outstanding as these were anti-dilutive.</P>
<P align=justify><B>Fair Value of Financial Assets and Liabilities </B></P>
<P align=justify>The Company&#146;s financial instruments consist primarily of cash
and cash equivalents, accounts payable and accrued liabilities. The book values
of these instruments approximate their fair values due to the immediate or
short-term nature of those instruments. </P>
<P align=justify>ASC 820 establishes a fair value hierarchy based on the level
of independent, objective evidence surrounding the inputs used to measure fair
value. A financial instrument&#146;s categorization within the fair value hierarchy
is based upon the lowest level of input that is significant to the fair value
measurement. ASC 820 prioritizes the inputs into three levels that may be used
to measure fair value; </P>
<P align=justify>Level 1- Quoted prices in active markets for identical assets
or liabilities; </P>
<P align=justify>Level 2 &#150; Inputs other than quoted prices included within Level
1 that are either directly or indirectly observable; and </P>
<P align=justify>Level 3 &#150; Unobservable inputs that are supported by little or
no market activity, therefore requiring an entity to develop its own assumptions
about the assumptions that market participants would use in pricing.</P>
<P align=justify>Cash and cash equivalents are measured using Level 1
inputs.</P>
<P align=justify>The Company had certain Level 3 liabilities required to be
recorded at fair value on a recurring basis in accordance with US GAAP as at
December 31, 2014. As at December 31, 2014, the Company&#146;s Level 3 liabilities
consisted of the grant of share purchase options granted to non-employees. The
resulting Level 3 liabilities have no active market and are required to be
measured at their fair value each reporting period based on information that is
unobservable. </P>
<P align=justify>A summary of the Company&#146;s Level 3 liabilities for the nine
months ended December 31, 2014 and March 31, 2014 are as follows: </P>
<TABLE
style="BORDER-COLOR: black; FONT-SIZE: 10pt; BORDER-COLLAPSE: collapse; "
cellSpacing=0 cellPadding=0 width="100%" border=0>

  <TR vAlign=top>
    <TD style="BORDER-TOP: #000000 2px solid" vAlign=bottom noWrap
      align=left>&nbsp; </TD>
    <TD style="BORDER-TOP: #000000 2px solid" vAlign=bottom noWrap align=left
    width="1%" >&nbsp;</TD>
    <TD style="BORDER-TOP: #000000 2px solid" vAlign=bottom noWrap align=right
    width="12%">December 31,2014 </TD>
    <TD style="BORDER-TOP: #000000 2px solid" vAlign=bottom noWrap align=left
    width="2%" >&nbsp;</TD>
    <TD style="BORDER-TOP: #000000 2px solid" vAlign=bottom noWrap align=left
    width="1%" >&nbsp;</TD>
    <TD style="BORDER-TOP: #000000 2px solid" vAlign=bottom noWrap align=right
    width="12%">March 31, 2014 </TD>
    <TD style="BORDER-TOP: #000000 2px solid" vAlign=bottom noWrap align=left
    width="2%" >&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom noWrap
      align=left>&nbsp; </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom noWrap align=left
    width="1%" ></TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom noWrap
    align=right width="12%">&nbsp;$</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom noWrap align=left
    width="2%" >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom noWrap align=left
    width="1%" ></TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom noWrap
    align=right width="12%">&nbsp;$</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom noWrap align=left
    width="2%" >&nbsp;</TD></TR>
  <TR>
    <TD vAlign=bottom>&nbsp; </TD>
    <TD vAlign=bottom width="1%" >&nbsp;</TD>
    <TD vAlign=bottom width="12%">&nbsp; </TD>
    <TD vAlign=bottom width="2%" >&nbsp;</TD>
    <TD vAlign=bottom width="1%" >&nbsp;</TD>
    <TD vAlign=bottom width="12%">&nbsp; </TD>
    <TD vAlign=bottom width="2%" >&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD vAlign=bottom align=left bgColor=#e6efff>Non-employee options (Note
      6(a)) </TD>
    <TD vAlign=bottom align=left width="1%"
    bgColor=#e6efff>&nbsp;</TD>
    <TD vAlign=bottom align=left width="12%" bgColor=#e6efff>&nbsp; </TD>
    <TD vAlign=bottom align=left width="2%"
    bgColor=#e6efff>&nbsp;</TD>
    <TD vAlign=bottom align=left width="1%"
    bgColor=#e6efff>&nbsp;</TD>
    <TD vAlign=bottom align=left width="12%" bgColor=#e6efff>&nbsp; </TD>
    <TD vAlign=bottom align=left width="2%"
    bgColor=#e6efff>&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD vAlign=bottom align=left>Beginning fair value </TD>
    <TD vAlign=bottom align=left width="1%" >&nbsp;</TD>
    <TD vAlign=bottom align=right width="12%">- </TD>
    <TD vAlign=bottom align=left width="2%" >&nbsp;</TD>
    <TD vAlign=bottom align=left width="1%" >&nbsp;</TD>
    <TD vAlign=bottom align=right width="12%">- </TD>
    <TD vAlign=bottom align=left width="2%" >&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD vAlign=bottom align=left bgColor=#e6efff>Issuance </TD>
    <TD vAlign=bottom align=left width="1%"
    bgColor=#e6efff>&nbsp;</TD>
    <TD vAlign=bottom align=right width="12%" bgColor=#e6efff>1,249,319 </TD>
    <TD vAlign=bottom align=left width="2%"
    bgColor=#e6efff>&nbsp;</TD>
    <TD vAlign=bottom align=left width="1%"
    bgColor=#e6efff>&nbsp;</TD>
    <TD vAlign=bottom align=right width="12%" bgColor=#e6efff>- </TD>
    <TD vAlign=bottom align=left width="2%"
    bgColor=#e6efff>&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD vAlign=bottom align=left>Reallocation of vested non-employee options
    </TD>
    <TD vAlign=bottom align=left width="1%" >&nbsp;</TD>
    <TD vAlign=bottom align=right width="12%">27,527 </TD>
    <TD vAlign=bottom align=left width="2%" >&nbsp;</TD>
    <TD vAlign=bottom align=left width="1%" >&nbsp;</TD>
    <TD vAlign=bottom align=right width="12%">- </TD>
    <TD vAlign=bottom align=left width="2%" >&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=left
    bgColor=#e6efff>Change in fair value </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=left
    width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=right
    width="12%" bgColor=#e6efff>818,382 </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=left
    width="2%"  bgColor=#e6efff>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=left
    width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=right
    width="12%" bgColor=#e6efff>- </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=left
    width="2%"  bgColor=#e6efff>&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom
      align=left>Ending fair value of Level 3 liability </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=left
    width="1%" >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=right
    width="12%">2,095,228 </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=left
    width="2%" >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=left
    width="1%" >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=right
    width="12%">- </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=left
    width="2%" >&nbsp;</TD></TR></TABLE>
<P align=center>88</P>
<HR style="PAGE-BREAK-AFTER: always" align=center width="100%" color=black
noShade SIZE=5>
<A name=page_fa9></A>
<TABLE
style="BORDER-COLOR: black; FONT-SIZE: 10pt; BORDER-COLLAPSE: collapse; "
cellSpacing=0 cellPadding=0 width="100%" border=0>

  <TR vAlign=top>
    <TD align=left><B>Helius Medical Technologies, Inc.</B> </TD></TR>
  <TR vAlign=top>
    <TD align=left><B>Notes to Condensed Consolidated Financial Statements for
      the nine months ended December 31, 2014</B> </TD></TR>
  <TR vAlign=top>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left>(Expressed in
      United States Dollars) </TD></TR></TABLE><BR>
<P align=justify>Certain assets and liabilities are measured at fair value on a
nonrecurring basis; that is, the instruments are not measured at fair value on
an ongoing basis but are subject to fair value adjustments only in certain
circumstances (for example, when there is evidence of impairment). There were no
assets or liabilities measured at fair value on a nonrecurring basis during the
periods ended December 31, 2014 and March 31, 2014. </P>
<P align=justify><B>Derivative Liabilities </B></P>
<P align=justify>The Company evaluates its financial instruments and other
contracts to determine if those contracts or embedded components of those
contracts qualify as derivatives to be separately accounted for in accordance
with ASC 815. The result of this accounting treatment is that the fair value of
the embedded derivative is marked-to-market at each balance sheet date and
recorded as a liability and the change in fair value is recorded in the
consolidated statement of loss. Upon conversion or exercise of a derivative
instrument, the instrument is marked to fair value at the conversion date and
then that fair value is reclassified to equity. </P>
<P align=justify>The classification of derivative instruments, including whether
such instruments should be recorded as liabilities or as equity, is re-assessed
at the end of each reporting period. Derivative instruments that become subject
to reclassification are reclassified at the fair value of the instrument on the
reclassification date. Derivative instrument liabilities will be classified in
the balance sheet as current or non-current based on whether or not settlement
of the derivative instrument is expected within 12 months of the balance sheet
date. </P>
<P align=justify>The Company uses the Black-Scholes option valuation model to
value derivative liabilities. This model uses Level 3 inputs in the fair value
hierarchy established by ASC 820 Fair Value Measurement. </P>
<P align=justify><B>Recent Accounting Pronouncements </B></P>
<P align=justify>In June 2014, the FASB issued ASU No. 2014-10, "Development
Stage Entities" (&#147;ASU 2014-10&#148;) which removes the definition of a development
stage entity from the Master Glossary of the Accounting Standards Codification,
thereby removing the financial reporting distinction between development stage
entities and other reporting entities from U.S. GAAP. In addition, the update
eliminates the requirements for development stage entities to (1) present
inception-to-date information in the statements of income, cash flows, and
shareholder equity, (2) label the financial statements as those of a development
stage entity, (3) disclose a description of the development stage activities in
which the entity is engaged, and (4) disclose in the first year in which the
entity is no longer a development stage entity that in prior years it had been
in the development stage. ASU No. 2014-10 is effective for fiscal years and
interim periods beginning after December 15, 2014, with early adoption
permissible. Effective for the six months ended September 30, 2014, the Company
early adopted ASU 2014-10 allowing the financial statements to be cast without
the inception to date information and without references to the development
stage.</P>
<P align=justify>The amendments also clarify that the guidance in Topic 275,
<I>Risks and Uncertainties</I>, is applicable to entities that have not
commenced planned principal operations. The central feature of the guidance
disclosure requirements is that required disclosures are limited to matters
significant to a particular entity. The disclosures focus primarily on risks and
uncertainties that could significantly affect the amounts reported in the
financial statements in the near term or the near-term functioning of the
reporting entity. </P>
<TABLE
style="BORDER-COLOR: black; FONT-SIZE: 10pt; BORDER-COLLAPSE: collapse; "
cellSpacing=0 cellPadding=0 width="100%" border=0 BCLLIST>

  <TR>
    <TD vAlign=top width="5%"><B>3.</B> </TD>
    <TD>
      <P align=justify><B>RECAPITALIZATION</B></P></TD></TR></TABLE>
<P align=justify>On June 13, 2014 the Company completed a recapitalization
transaction where the Company acquired 100% of the issued and outstanding shares
of Neuro. In exchange, the Company issued a total of 32,070,052 shares to the
shareholders of Neuro which merged with a wholly-owned subsidiary of the
Company, HMT Mergersub, for the purpose of the three-corner amalgamation. As a
result, the former Neuro shareholders owned the majority of the outstanding
shares of the Company upon completion of the transaction. Prior to the
recapitalization transaction, the Company did not meet the definition of a
business. Thus, the transaction is considered to be a capital transaction of
Neuro accompanied by a recapitalization.</P>
<P align=center>89</P>
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noShade SIZE=5>
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<TABLE
style="BORDER-COLOR: black; FONT-SIZE: 10pt; BORDER-COLLAPSE: collapse; "
cellSpacing=0 cellPadding=0 width="100%" border=0>

  <TR vAlign=top>
    <TD align=left><B>Helius Medical Technologies, Inc.</B> </TD></TR>
  <TR vAlign=top>
    <TD align=left><B>Notes to Condensed Consolidated Financial Statements for
      the nine months ended December 31, 2014</B> </TD></TR>
  <TR vAlign=top>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left>(Expressed in
      United States Dollars) </TD></TR></TABLE><BR>
<P align=justify>The ongoing Company has adopted the name Helius Medical
Technologies, Inc. These financial statements present the results of Neuro with
the exception of common stock which has been retroactively restated to reflect
the Recapitalization (see Note 6). In connection with the Recapitalization, the
Company advanced Neuro an unsecured loan in the amount of $150,000 (the &#147;Bridge
Loan&#148;). The Bridge Loan was for a term of one year commencing on May 30, 2014,
and was payable in a lump sum at the end of the term. The Bridge Loan bears
interest at a rate of 8% per annum. </P>
<P align=justify>The net assets of Helius acquired were as follows, </P>
<TABLE
style="BORDER-COLOR: black; FONT-SIZE: 10pt; BORDER-COLLAPSE: collapse; "
cellSpacing=0 cellPadding=0 width="100%" border=0>

  <TR vAlign=top>
    <TD vAlign=bottom noWrap align=left bgColor=#e6efff>Cash and cash
      equivalents </TD>
    <TD vAlign=bottom noWrap align=left width="1%" bgColor=#e6efff>$</TD>
    <TD vAlign=bottom noWrap align=right width="12%"
      bgColor=#e6efff>&nbsp;23,904 </TD>
    <TD vAlign=bottom noWrap align=left width="2%"
bgColor=#e6efff>&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD vAlign=bottom noWrap align=left>Receivables </TD>
    <TD vAlign=bottom noWrap align=left width="1%">&nbsp;</TD>
    <TD vAlign=bottom noWrap align=right width="12%">1,644 </TD>
    <TD vAlign=bottom noWrap align=left width="2%">&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD vAlign=bottom align=left bgColor=#e6efff>Bridge loan </TD>
    <TD vAlign=bottom align=left width="1%" bgColor=#e6efff>&nbsp;</TD>
    <TD vAlign=bottom align=right width="12%" bgColor=#e6efff>150,000 </TD>
    <TD vAlign=bottom align=left width="2%" bgColor=#e6efff>&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD vAlign=bottom align=left>Prepaid expenses </TD>
    <TD vAlign=bottom align=left width="1%">&nbsp;</TD>
    <TD vAlign=bottom align=right width="12%">5,970 </TD>
    <TD vAlign=bottom align=left width="2%">&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD vAlign=bottom align=left bgColor=#e6efff>Accounts payable and accrued
      liabilities </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=left
    width="1%" bgColor=#e6efff>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=right
    width="12%" bgColor=#e6efff>(18,628</TD>
    <TD vAlign=bottom align=left width="2%" bgColor=#e6efff>) </TD></TR>
  <TR vAlign=top>
    <TD vAlign=bottom align=left>&nbsp; </TD>
    <TD style="BORDER-BOTTOM: #000000 3px double" vAlign=bottom align=left
    width="1%">$</TD>
    <TD style="BORDER-BOTTOM: #000000 3px double" vAlign=bottom align=right
    width="12%">&nbsp;162,890 </TD>
    <TD vAlign=bottom align=left width="2%">&nbsp;</TD></TR></TABLE>
<P align=justify>There were 10,000,000 common shares outstanding in Helius
(&#147;Helius shares&#148;) at the time the recapitalization transaction was executed.
Previously issued financial statements ascribed a fair value of $4,603,500 to
these shares along with a corresponding charge to deficit in the amount of
$4,440,610 for a net recapitalization value of $162,890. However, under US GAAP,
a recapitalization transaction is accounted for on the carryover basis without a
fair value ascribed to the shares of the legal acquirer / accounting acquiree.
Therefore, these financial statements have been adjusted from that of prior
reporting to exclude the fair value of $4,603,500 attributed to the Helius
shares and to exclude the charge to deficit of $4,440,610. Instead, the
recapitalization transaction reflects a credit to additional paid-in capital of
$162,890, the carrying value of the net assets of Helius at the time of the
reverse merger.</P>
<P align=justify>In connection to the completion of the transaction, the Company
completed a private placement of 15,240,000 units at CAD $0.50 per unit for a
total of $7,016,002 (CAD $7,620,000). (Note 5) Each unit consisted of one common
share of the Company and one-half of a share purchase warrant. Each whole share
purchase warrant is exercisable at CAD $1.00 for a period of twenty-four months.
</P>
<P align=justify>The Company also paid aggregate finders&#146; fees of $379,806 (CAD
$412,200) and issued 824,400 finders&#146; warrants. Each finder&#146;s warrant is
exercisable at CAD $1.00 per share for a period of two years. </P>
<TABLE
style="BORDER-COLOR: black; FONT-SIZE: 10pt; BORDER-COLLAPSE: collapse; "
cellSpacing=0 cellPadding=0 width="100%" border=0 BCLLIST>

  <TR>
    <TD vAlign=top width="5%"><B>4.</B> </TD>
    <TD>
      <P align=justify><B>CONVERTIBLE DEBENTURE</B></P></TD></TR></TABLE>
<P align=justify>On February 19, 2014, the Company entered into a securities
purchase agreement where the Company agreed to sell and issue a note with annual
simple interest at 8% (the &#147;Debenture&#148;). A total of $1,000,100 in principal had
been received. On June 4, 2014, the Debenture matured on the closing of the
Company&#146;s qualified financing being an aggregate amount of at least $2,000,000.
Upon completion of the qualified financing, the Debenture automatically
converted into equity securities of the Company at a price per share equal to
85% of the price per share of the qualified financing.</P>
<P align=justify>Upon conversion of the Debenture, the Company issued a total of
2,564,705 common shares. In addition, the Company paid the Debenture holders
$11,131 with respect to the accrued and unpaid interest outstanding. </P>
<P align=justify>The conversion option of the Debenture was accounted for as a
contingent beneficial conversion feature valued at $176,488 which was recorded
as interest expense in the Statement of Loss and Comprehensive Loss for the
period ended December 31, 2014. </P>
<P align=center>90</P>
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style="BORDER-COLOR: black; FONT-SIZE: 10pt; BORDER-COLLAPSE: collapse; "
cellSpacing=0 cellPadding=0 width="100%" border=0>

  <TR vAlign=top>
    <TD align=left><B>Helius Medical Technologies, Inc.</B> </TD></TR>
  <TR vAlign=top>
    <TD align=left><B>Notes to Condensed Consolidated Financial Statements for
      the nine months ended December 31, 2014</B> </TD></TR>
  <TR vAlign=top>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left>(Expressed in
      United States Dollars) </TD></TR></TABLE><BR>
<TABLE
style="BORDER-COLOR: black; FONT-SIZE: 10pt; BORDER-COLLAPSE: collapse; "
cellSpacing=0 cellPadding=0 width="100%" border=0 BCLLIST>

  <TR>
    <TD vAlign=top width="5%"><B>5.</B> </TD>
    <TD>
      <P align=justify><B>COMMON STOCK</B></P></TD></TR></TABLE>
<P align=justify>Authorized:</P>
<P align=justify>Unlimited Class A common stock without par value. </P>
<P align=justify>Each Class A common share is entitled to have the right to vote
at any shareholder meeting on the basis of one vote. Each Class A share held
entitles the holder to receive dividends as declared by the directors. In the
event of the liquidation, dissolution or winding-up of the Company other
distribution of assets of the Company among its shareholders for the purposes of
winding-up its affairs or upon a reduction of capital the holders of the Class A
common shares shall, share equally, share for share, in the remaining assets and
property of the Company.</P>
<P align=justify>Class B common shares and Class A preferred shares were deleted
from the list of classes of shares the Company is authorized to issue by way of
amendment to the Company&#146;s articles effective June 12, 2014. </P>
<P align=justify><I>Prior to the Recapitalization </I></P>
<P align=justify>The number of securities below reflects the Recapitalization
and the exchange ratio retrospectively.</P>
<P align=justify>On January 22, 2013, the Company issued a total of 16,035,026
shares to Advanced NeuroRehabilitation LLC (&#147;ANR&#148;) for cash proceeds of $5,000
and an exclusive license right to ANR&#146;s patent pending technology and knowhow
valued at $4.25 million per an independent valuation report. The valuation
expert was engaged to assess the valuation of the costs incurred to date as well
as the ongoing costs which would be required to bring the product to
commercialization, discounted to the date of purchase. The Company recorded the
$4.25 million exclusive license right as research and development expense per
the Company&#146;s accounting policy.</P>
<P align=justify>On January 22, 2013, the Company also issued a total of
16,035,026 shares to MPJ Healthcare LLC for cash proceeds of $5,000. In
addition, the Company recorded $4.25 million of stock based compensation
expense.</P>
<P align=justify>On May 1, 2014, 2,300,000 options were exercised for 2,300,000
common shares for total proceeds of $717. On May 11, 2014, 930,031 options were
exercised for 930,031 common shares for total proceeds of $290. </P>
<P align=justify><I>After the Recapitalization </I></P>
<P align=justify>Upon completion of the Recapitalization, the Company issued a
total of 32,070,052 shares to the shareholders of Neuro. (Note 3) </P>
<P align=justify>In connection with the Recapitalization, the Company also
closed a non-brokered private placement (the &#147;Private Placement&#148;) at CAD $0.50
per unit of 15,240,000 units raising $7,016,002 (CAD $7.62 million) on May 30,
2014 (Note 3). Each unit consists of one common stock of the Company and one
half of a warrant of the Company where one full warrant is exercisable for 2
years at CAD $1.00 into one common stock. The fair value of the warrants issued
was determined using the Black Scholes model and the Company used the relative
fair value method to allocate $837,396 of the gross proceeds to Additional
Paid-in Capital to account for the warrants issued.</P>
<P align=justify>As at December 31, 2014, the Company has 63,104,788 shares
issued and outstanding and 24,052,540 common stock held in escrow. All of the
common stock in escrow will be released at a rate of 15% every six months. </P>
<P align=center>91</P>
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noShade SIZE=5>
<A name=page_fa12></A><TABLE
style="BORDER-COLOR: black; FONT-SIZE: 10pt; BORDER-COLLAPSE: collapse; "
cellSpacing=0 cellPadding=0 width="100%" border=0>

  <TR vAlign=top>
    <TD align=left><B>Helius Medical Technologies, Inc.</B> </TD></TR>
  <TR vAlign=top>
    <TD align=left><B>Notes to Condensed Consolidated Financial Statements for
      the nine months ended December 31, 2014</B> </TD></TR>
  <TR vAlign=top>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left>(Expressed in
      United States Dollars) </TD></TR></TABLE><BR>
<TABLE
style="BORDER-COLOR: black; FONT-SIZE: 10pt; BORDER-COLLAPSE: collapse; "
cellSpacing=0 cellPadding=0 width="100%" border=0>

  <TR vAlign=top>
    <TD align=left ><B>6.</B> </TD>
    <TD align=left width="95%"><B>SHARE BASED PAYMENTS</B> </TD></TR>
  <TR>
    <TD align=left  >&nbsp;</TD>
    <TD align=left width="95%" >&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD align=left >(a) </TD>
    <TD align=left width="95%"><B>Stock options</B> </TD></TR></TABLE>
<P align=justify>The number of securities below reflects the Recapitalization
and the exchange ratio retrospectively.</P>
<P align=justify>The Company has a stock option plan whereby the Company is
authorized to grant up to 12,108,016 options. Vesting and the term of an option
is determined at the discretion of the Board of Directors of the Company.</P>
<P align=justify>On April 1, 2013, the Company granted a consultant company
930,031 options for 10 years upon completion of certain services in accordance
with a consulting agreement to lead the design and manufacturing program of the
Company&#146;s technology. On December 4, 2013, 40,816 options vested. On May 11,
2014, all these options had vested and were exercised for 930,031 common
shares.</P>
<P align=justify>On October 30, 2013, the Company granted 2,300,000 options
exercisable for 10 years to a consultant company for strategic business advisory
services which are to vest upon completion of two milestones. On February 11,
2014, 1,150,000 options were vested upon completion of the first of the two
milestones. On April 28, 2014, the remaining 1,150,000 options were vested upon
completion of the second milestone. On May 1, 2014, all 2,300,000 options were
exercised for 2,300,000 shares.</P>
<P align=justify>On June 19, 2014, the Company granted 3,520,000 options to
directors, officers, and consultants exercisable at CAD $0.60 for 5 years. One
third of these options vested immediately upon granting. The remaining two
thirds of the options will vest on June 19, 2015, and June 19, 2016
respectively. </P>
<P align=justify>On June 20, 2014, the Company granted 250,000 options to an
investor relations consultant exercisable at CAD $0.60 for 5 years. 12.5% of
these options vested immediately upon granting. The remaining 87.5% will vest at
a rate of 12.5% every three months beginning September 20, 2014. </P>
<P align=justify>On July 14, 2014, the Company granted 100,000 options to a
consultant exercisable at CAD $2.52 for 3 years. 25% of these options vested
immediately upon granting. The remaining options will vest at a rate of 25% on
September 30, 2014, December 31, 2014, and March 31, 2015, respectively.</P>
<P align=justify>On December 8, 2014, the Company granted 450,000 options to
members of its scientific advisory board exercisable at CAD $2.92 for 5 years.
All of these options vested immediately upon granting. </P>
<P align=justify>On December 8, 2014, the Company granted 100,000 options to a
new director exercisable at CAD $2.92 for 5 years. One third of these options
vested immediately upon granting. The remaining two thirds of the options will
vest on December 8, 2015, and December 8, 2016 respectively. </P>
<P align=justify>On December 8, 2014, the Company granted 400,000 options to its
new Chief Medical Officer exercisable at CAD $2.96 for 5 years. 25% of these
options vested immediately upon granting. The remaining options will vest at a
rate of 25% on June 8, 2015, December 8, 2015, and June 8, 2016, respectively.
</P>
<P align=justify>The continuity of stock options for the period ended December
31, 2014 is as follows: </P>
<TABLE
style="BORDER-COLOR: black; FONT-SIZE: 10pt; BORDER-COLLAPSE: collapse; "
cellSpacing=0 cellPadding=0 width="100%" border=0>

  <TR vAlign=top>
    <TD style="BORDER-TOP: #000000 2px solid" vAlign=bottom noWrap
      align=left>&nbsp; </TD>
    <TD style="BORDER-TOP: #000000 2px solid" vAlign=bottom noWrap align=left
    width="1%" >&nbsp;</TD>
    <TD style="BORDER-TOP: #000000 2px solid" vAlign=bottom noWrap align=center
    width="12%">&nbsp; </TD>
    <TD style="BORDER-TOP: #000000 2px solid" vAlign=bottom noWrap align=center
    width="2%" >&nbsp;</TD>
    <TD style="BORDER-TOP: #000000 2px solid" vAlign=bottom noWrap align=center
    width="1%" >&nbsp;</TD>
    <TD style="BORDER-TOP: #000000 2px solid" vAlign=bottom noWrap align=center
    width="12%">Weighted Average </TD>
    <TD style="BORDER-TOP: #000000 2px solid" vAlign=bottom noWrap align=left
    width="2%" >&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD vAlign=bottom noWrap align=left>&nbsp; </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom noWrap align=left
    width="1%" >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom noWrap
    align=center width="12%">Number </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom noWrap
    align=center width="2%" >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom noWrap
    align=center width="1%" >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom noWrap
    align=center width="12%">Exercise Price (CAD) </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom noWrap align=left
    width="2%" >&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD vAlign=bottom align=left bgColor=#e6efff>Balance, March 31, 2014 </TD>
    <TD vAlign=bottom align=left width="1%"
    bgColor=#e6efff>&nbsp;</TD>
    <TD vAlign=bottom align=right width="12%" bgColor=#e6efff>3,230,031 </TD>
    <TD vAlign=bottom align=left width="2%"
    bgColor=#e6efff>&nbsp;</TD>
    <TD vAlign=bottom align=left width="1%"  bgColor=#e6efff>$</TD>
    <TD vAlign=bottom align=right width="12%" bgColor=#e6efff>&nbsp;0.00 </TD>
    <TD vAlign=bottom align=left width="2%"
    bgColor=#e6efff>&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD vAlign=bottom align=left>Granted </TD>
    <TD vAlign=bottom align=left width="1%" >&nbsp;</TD>
    <TD vAlign=bottom align=right width="12%">4,820,000 </TD>
    <TD vAlign=bottom align=left width="2%" >&nbsp;</TD>
    <TD vAlign=bottom align=left width="1%" >$</TD>
    <TD vAlign=bottom align=right width="12%">&nbsp;1.10 </TD>
    <TD vAlign=bottom align=left width="2%" >&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD vAlign=bottom align=left bgColor=#e6efff>Exercised </TD>
    <TD vAlign=bottom align=left width="1%"
    bgColor=#e6efff>&nbsp;</TD>
    <TD vAlign=bottom align=right width="12%" bgColor=#e6efff>(3,230,031</TD>
    <TD vAlign=bottom align=left width="2%"  bgColor=#e6efff>)
</TD>
    <TD vAlign=bottom align=left width="1%"  bgColor=#e6efff>$</TD>
    <TD vAlign=bottom align=right width="12%" bgColor=#e6efff>&nbsp;0.00 </TD>
    <TD vAlign=bottom align=left width="2%"
    bgColor=#e6efff>&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD style="BORDER-BOTTOM: #000000 2px solid" vAlign=bottom
      align=left>Balance, December 31, 2014 </TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid" vAlign=bottom align=left
    width="1%" >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid" vAlign=bottom align=right
    width="12%">4,820,000 </TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid" vAlign=bottom align=left
    width="2%" >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid" vAlign=bottom align=left
    width="1%" >$</TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid" vAlign=bottom align=right
    width="12%">&nbsp;1.10 </TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid" vAlign=bottom align=left
    width="2%" >&nbsp;</TD></TR></TABLE>
<P align=center>92</P>
<HR style="PAGE-BREAK-AFTER: always" align=center width="100%" color=black
noShade SIZE=5>
<A name=page_fa13></A>
<TABLE
style="BORDER-COLOR: black; FONT-SIZE: 10pt; BORDER-COLLAPSE: collapse; "
cellSpacing=0 cellPadding=0 width="100%" border=0>

  <TR vAlign=top>
    <TD align=left><B>Helius Medical Technologies, Inc.</B> </TD></TR>
  <TR vAlign=top>
    <TD align=left><B>Notes to Condensed Consolidated Financial Statements for
      the nine months ended December 31, 2014</B> </TD></TR>
  <TR vAlign=top>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left>(Expressed in
      United States Dollars) </TD></TR></TABLE><BR>
<P align=justify>The options outstanding and exercisable at December 31, 2014
are as follows: </P>
<DIV>
<TABLE
style="BORDER-COLOR: black; FONT-SIZE: 10pt; BORDER-COLLAPSE: collapse; "
cellSpacing=0 cellPadding=0 width="100%" border=0>

  <TR vAlign=top>
    <TD style="BORDER-TOP: #000000 2px solid" vAlign=bottom noWrap
      align=center>&nbsp; </TD>
    <TD style="BORDER-TOP: #000000 2px solid" vAlign=bottom noWrap align=center
    width="1%">&nbsp;</TD>
    <TD style="BORDER-TOP: #000000 2px solid" vAlign=bottom noWrap align=center
    width="8%">&nbsp; </TD>
    <TD style="BORDER-TOP: #000000 2px solid" vAlign=bottom noWrap align=center
    width="2%">&nbsp;</TD>
    <TD style="BORDER-TOP: #000000 2px solid" vAlign=bottom noWrap align=center
    width="1%">&nbsp;</TD>
    <TD style="BORDER-TOP: #000000 2px solid" vAlign=bottom noWrap align=center
    width="8%">&nbsp; </TD>
    <TD style="BORDER-TOP: #000000 2px solid" vAlign=bottom noWrap align=center
    width="2%">&nbsp;</TD>
    <TD style="BORDER-TOP: #000000 2px solid" vAlign=bottom noWrap align=center
    width="1%">&nbsp;</TD>
    <TD style="BORDER-TOP: #000000 2px solid" vAlign=bottom noWrap align=center
    width="8%">&nbsp; </TD>
    <TD style="BORDER-TOP: #000000 2px solid" vAlign=bottom noWrap align=center
    width="2%">&nbsp;</TD>
    <TD style="BORDER-TOP: #000000 2px solid" vAlign=bottom noWrap align=center
    width="1%">&nbsp;</TD>
    <TD style="BORDER-TOP: #000000 2px solid" vAlign=bottom noWrap align=center
    width="8%">&nbsp; </TD>
    <TD style="BORDER-TOP: #000000 2px solid" vAlign=bottom noWrap align=center
    width="2%">&nbsp;</TD>
    <TD style="BORDER-TOP: #000000 2px solid" vAlign=bottom noWrap align=center
    width="1%">&nbsp;</TD>
    <TD style="BORDER-TOP: #000000 2px solid" vAlign=bottom noWrap align=center
    width="19%" colSpan=4>Options exercisable </TD>
    <TD style="BORDER-TOP: #000000 2px solid" vAlign=bottom noWrap align=center
    width="2%">&nbsp;</TD>
    <TD style="BORDER-TOP: #000000 2px solid" vAlign=bottom noWrap align=center
    width="1%">&nbsp;</TD>
    <TD style="BORDER-TOP: #000000 2px solid" vAlign=bottom noWrap align=center
    width="8%">&nbsp; </TD>
    <TD style="BORDER-TOP: #000000 2px solid" vAlign=bottom noWrap align=left
    width="2%">&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD vAlign=bottom noWrap align=center>&nbsp; </TD>
    <TD vAlign=bottom noWrap align=center width="1%">&nbsp;</TD>
    <TD vAlign=bottom noWrap align=center width="8%">Options </TD>
    <TD vAlign=bottom noWrap align=center width="2%">&nbsp;</TD>
    <TD vAlign=bottom noWrap align=center width="1%">&nbsp;</TD>
    <TD vAlign=bottom noWrap align=center width="8%">&nbsp; </TD>
    <TD vAlign=bottom noWrap align=center width="2%">&nbsp;</TD>
    <TD vAlign=bottom noWrap align=center width="1%">&nbsp;</TD>
    <TD vAlign=bottom noWrap align=center width="8%">Grant </TD>
    <TD vAlign=bottom noWrap align=center width="2%">&nbsp;</TD>
    <TD vAlign=bottom noWrap align=center width="1%">&nbsp;</TD>
    <TD vAlign=bottom noWrap align=center width="8%">&nbsp;</TD>
    <TD vAlign=bottom noWrap align=center width="2%">&nbsp;</TD>
    <TD vAlign=bottom noWrap align=center width="1%">&nbsp;</TD>
    <TD vAlign=bottom noWrap align=center width="8%">&nbsp; </TD>
    <TD vAlign=bottom noWrap align=center width="2%">&nbsp;</TD>
    <TD vAlign=bottom noWrap align=center width="1%">&nbsp;</TD>
    <TD vAlign=bottom noWrap align=center width="8%">&nbsp; </TD>
    <TD vAlign=bottom noWrap align=center width="2%">&nbsp;</TD>
    <TD vAlign=bottom noWrap align=center width="1%">&nbsp;</TD>
    <TD vAlign=bottom noWrap align=center width="8%">&nbsp; </TD>
    <TD vAlign=bottom noWrap align=left width="2%">&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD vAlign=bottom noWrap align=center>&nbsp; </TD>
    <TD vAlign=bottom noWrap align=center width="1%">&nbsp;</TD>
    <TD vAlign=bottom noWrap align=center width="8%">outstanding </TD>
    <TD vAlign=bottom noWrap align=center width="2%">&nbsp;</TD>
    <TD vAlign=bottom noWrap align=center width="1%">&nbsp;</TD>
    <TD vAlign=bottom noWrap align=center width="8%">&nbsp; </TD>
    <TD vAlign=bottom noWrap align=center width="2%">&nbsp;</TD>
    <TD vAlign=bottom noWrap align=center width="1%">&nbsp;</TD>
    <TD vAlign=bottom noWrap align=center width="8%">date </TD>
    <TD vAlign=bottom noWrap align=center width="2%">&nbsp;</TD>
    <TD vAlign=bottom noWrap align=center width="1%">&nbsp;</TD>
    <TD vAlign=bottom noWrap align=center width="8%">Aggregate </TD>
    <TD vAlign=bottom noWrap align=center width="2%">&nbsp;</TD>
    <TD vAlign=bottom noWrap align=center width="1%">&nbsp;</TD>
    <TD vAlign=bottom noWrap align=center width="8%">&nbsp; </TD>
    <TD vAlign=bottom noWrap align=center width="2%">&nbsp;</TD>
    <TD vAlign=bottom noWrap align=center width="1%">&nbsp;</TD>
    <TD vAlign=bottom noWrap align=center width="8%">&nbsp; </TD>
    <TD vAlign=bottom noWrap align=center width="2%">&nbsp;</TD>
    <TD vAlign=bottom noWrap align=center width="1%">&nbsp;</TD>
    <TD vAlign=bottom noWrap align=center width="8%">&nbsp;</TD>
    <TD vAlign=bottom noWrap align=left width="2%">&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD align=center vAlign=bottom nowrap>&nbsp; </TD>
    <TD width="1%" align=center vAlign=bottom nowrap>&nbsp;</TD>
    <TD width="8%" align=center vAlign=bottom nowrap>remaining </TD>
    <TD width="2%" align=center vAlign=bottom nowrap>&nbsp;</TD>
    <TD width="1%" align=center vAlign=bottom nowrap>&nbsp;</TD>
    <TD width="8%" align=center vAlign=bottom nowrap>Exercise </TD>
    <TD width="2%" align=center vAlign=bottom nowrap>&nbsp;</TD>
    <TD width="1%" align=center vAlign=bottom nowrap>&nbsp;</TD>
    <TD width="8%" align=center vAlign=bottom nowrap>fair </TD>
    <TD width="2%" align=center vAlign=bottom nowrap>&nbsp;</TD>
    <TD width="1%" align=center vAlign=bottom nowrap>&nbsp;</TD>
    <TD width="8%" align=center vAlign=bottom nowrap>Intrinsic </TD>
    <TD width="2%" align=center vAlign=bottom nowrap>&nbsp;</TD>
    <TD width="1%" align=center vAlign=bottom nowrap>&nbsp;</TD>
    <TD width="8%" align=center vAlign=bottom nowrap>Number of </TD>
    <TD width="2%" align=center vAlign=bottom nowrap>&nbsp;</TD>
    <TD width="1%" align=center vAlign=bottom nowrap>&nbsp;</TD>
    <TD width="8%" align=center vAlign=bottom nowrap>Exercise </TD>
    <TD width="2%" align=center vAlign=bottom nowrap>&nbsp;</TD>
    <TD width="1%" align=center vAlign=bottom nowrap>&nbsp;</TD>
    <TD width="8%" align=center vAlign=bottom nowrap>Aggregate </TD>
    <TD vAlign=bottom align=left width="2%">&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD align=center vAlign=bottom nowrap>Number of </TD>
    <TD width="1%" align=center vAlign=bottom nowrap>&nbsp;</TD>
    <TD width="8%" align=center vAlign=bottom nowrap>contractual life </TD>
    <TD width="2%" align=center vAlign=bottom nowrap>&nbsp;</TD>
    <TD width="1%" align=center vAlign=bottom nowrap>&nbsp;</TD>
    <TD width="8%" align=center vAlign=bottom nowrap>Price </TD>
    <TD width="2%" align=center vAlign=bottom nowrap>&nbsp;</TD>
    <TD width="1%" align=center vAlign=bottom nowrap>&nbsp;</TD>
    <TD width="8%" align=center vAlign=bottom nowrap>value </TD>
    <TD width="2%" align=center vAlign=bottom nowrap>&nbsp;</TD>
    <TD width="1%" align=center vAlign=bottom nowrap>&nbsp;</TD>
    <TD width="8%" align=center vAlign=bottom nowrap>Value </TD>
    <TD width="2%" align=center vAlign=bottom nowrap>&nbsp;</TD>
    <TD width="1%" align=center vAlign=bottom nowrap>&nbsp;</TD>
    <TD width="8%" align=center vAlign=bottom nowrap>shares </TD>
    <TD width="2%" align=center vAlign=bottom nowrap>&nbsp;</TD>
    <TD width="1%" align=center vAlign=bottom nowrap>&nbsp;</TD>
    <TD width="8%" align=center vAlign=bottom nowrap>Price </TD>
    <TD width="2%" align=center vAlign=bottom nowrap>&nbsp;</TD>
    <TD width="1%" align=center vAlign=bottom nowrap>&nbsp;</TD>
    <TD width="8%" align=center vAlign=bottom nowrap>Intrinsic Value</TD>
    <TD vAlign=bottom align=left width="2%">&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD
      align=center vAlign=bottom nowrap style="BORDER-BOTTOM: #000000 1px solid">shares </TD>
    <TD
    width="1%" align=center vAlign=bottom nowrap style="BORDER-BOTTOM: #000000 1px solid">&nbsp;</TD>
    <TD
    width="8%" align=center vAlign=bottom nowrap style="BORDER-BOTTOM: #000000 1px solid">(years) </TD>
    <TD
    width="2%" align=center vAlign=bottom nowrap style="BORDER-BOTTOM: #000000 1px solid">&nbsp;</TD>
    <TD
    width="1%" align=center vAlign=bottom nowrap style="BORDER-BOTTOM: #000000 1px solid">&nbsp;</TD>
    <TD
    width="8%" align=center vAlign=bottom nowrap style="BORDER-BOTTOM: #000000 1px solid">(CAD) </TD>
    <TD
    width="2%" align=center vAlign=bottom nowrap style="BORDER-BOTTOM: #000000 1px solid">&nbsp;</TD>
    <TD
    width="1%" align=center vAlign=bottom nowrap style="BORDER-BOTTOM: #000000 1px solid">&nbsp;</TD>
    <TD
    width="8%" align=center vAlign=bottom nowrap style="BORDER-BOTTOM: #000000 1px solid">(CAD) </TD>
    <TD
    width="2%" align=center vAlign=bottom nowrap style="BORDER-BOTTOM: #000000 1px solid">&nbsp;</TD>
    <TD
    width="1%" align=center vAlign=bottom nowrap style="BORDER-BOTTOM: #000000 1px solid">&nbsp;</TD>
    <TD
    width="8%" align=center vAlign=bottom nowrap style="BORDER-BOTTOM: #000000 1px solid">(CAD) </TD>
    <TD
    width="2%" align=center vAlign=bottom nowrap style="BORDER-BOTTOM: #000000 1px solid">&nbsp;</TD>
    <TD
    width="1%" align=center vAlign=bottom nowrap style="BORDER-BOTTOM: #000000 1px solid">&nbsp;</TD>
    <TD
    width="8%" align=center vAlign=bottom nowrap style="BORDER-BOTTOM: #000000 1px solid">exercisable </TD>
    <TD
    width="2%" align=center vAlign=bottom nowrap style="BORDER-BOTTOM: #000000 1px solid">&nbsp;</TD>
    <TD
    width="1%" align=center vAlign=bottom nowrap style="BORDER-BOTTOM: #000000 1px solid">&nbsp;</TD>
    <TD
    width="8%" align=center vAlign=bottom nowrap style="BORDER-BOTTOM: #000000 1px solid">(CAD) </TD>
    <TD
    width="2%" align=center vAlign=bottom nowrap style="BORDER-BOTTOM: #000000 1px solid">&nbsp;</TD>
    <TD
    width="1%" align=center vAlign=bottom nowrap style="BORDER-BOTTOM: #000000 1px solid">&nbsp;</TD>
    <TD
    width="8%" align=center vAlign=bottom nowrap style="BORDER-BOTTOM: #000000 1px solid">(CAD) </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=left
    width="2%">&nbsp;</TD></TR>
  <TR>
    <TD vAlign=bottom>&nbsp; </TD>
    <TD vAlign=bottom width="1%">&nbsp;</TD>
    <TD vAlign=bottom width="8%">&nbsp; </TD>
    <TD vAlign=bottom width="2%">&nbsp;</TD>
    <TD vAlign=bottom width="1%">&nbsp;</TD>
    <TD vAlign=bottom width="8%">&nbsp; </TD>
    <TD vAlign=bottom width="2%">&nbsp;</TD>
    <TD vAlign=bottom width="1%">&nbsp;</TD>
    <TD vAlign=bottom width="8%">&nbsp; </TD>
    <TD vAlign=bottom width="2%">&nbsp;</TD>
    <TD vAlign=bottom width="1%">&nbsp;</TD>
    <TD vAlign=bottom width="8%">&nbsp; </TD>
    <TD vAlign=bottom width="2%">&nbsp;</TD>
    <TD vAlign=bottom width="1%">&nbsp;</TD>
    <TD vAlign=bottom width="8%">&nbsp; </TD>
    <TD vAlign=bottom width="2%">&nbsp;</TD>
    <TD vAlign=bottom width="1%">&nbsp;</TD>
    <TD vAlign=bottom width="8%">&nbsp; </TD>
    <TD vAlign=bottom width="2%">&nbsp;</TD>
    <TD vAlign=bottom width="1%">&nbsp;</TD>
    <TD vAlign=bottom width="8%">&nbsp; </TD>
    <TD vAlign=bottom width="2%">&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD vAlign=bottom align=right bgColor=#e6efff>3,520,000 </TD>
    <TD vAlign=bottom align=left width="1%" bgColor=#e6efff>&nbsp;</TD>
    <TD vAlign=bottom align=right width="8%" bgColor=#e6efff>4.47 </TD>
    <TD vAlign=bottom align=left width="2%" bgColor=#e6efff>&nbsp;</TD>
    <TD vAlign=bottom align=left width="1%" bgColor=#e6efff>$</TD>
    <TD vAlign=bottom align=right width="8%" bgColor=#e6efff>&nbsp;0.60 </TD>
    <TD vAlign=bottom align=left width="2%" bgColor=#e6efff>&nbsp;</TD>
    <TD vAlign=bottom align=left width="1%" bgColor=#e6efff>$</TD>
    <TD vAlign=bottom align=right width="8%" bgColor=#e6efff>&nbsp;0.40 </TD>
    <TD vAlign=bottom align=left width="2%" bgColor=#e6efff>&nbsp;</TD>
    <TD vAlign=bottom align=left width="1%" bgColor=#e6efff>&nbsp;</TD>
    <TD vAlign=bottom align=right width="8%" bgColor=#e6efff>7,708,800 </TD>
    <TD vAlign=bottom align=left width="2%" bgColor=#e6efff>&nbsp;</TD>
    <TD vAlign=bottom align=left width="1%" bgColor=#e6efff>&nbsp;</TD>
    <TD vAlign=bottom align=right width="8%" bgColor=#e6efff>1,173,337 </TD>
    <TD vAlign=bottom align=left width="2%" bgColor=#e6efff>&nbsp;</TD>
    <TD vAlign=bottom align=left width="1%" bgColor=#e6efff>$</TD>
    <TD vAlign=bottom align=right width="8%" bgColor=#e6efff>&nbsp;0.60 </TD>
    <TD vAlign=bottom align=left width="2%" bgColor=#e6efff>&nbsp;</TD>
    <TD vAlign=bottom align=left width="1%" bgColor=#e6efff>&nbsp;</TD>
    <TD vAlign=bottom align=right width="8%" bgColor=#e6efff>2,569,609 </TD>
    <TD vAlign=bottom align=left width="2%" bgColor=#e6efff>&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD vAlign=bottom align=right>250,000 </TD>
    <TD vAlign=bottom align=left width="1%">&nbsp;</TD>
    <TD vAlign=bottom align=right width="8%">4.47 </TD>
    <TD vAlign=bottom align=left width="2%">&nbsp;</TD>
    <TD vAlign=bottom align=left width="1%">$</TD>
    <TD vAlign=bottom align=right width="8%">&nbsp;0.60 </TD>
    <TD vAlign=bottom align=left width="2%">&nbsp;</TD>
    <TD vAlign=bottom align=left width="1%">$</TD>
    <TD vAlign=bottom align=right width="8%">&nbsp;0.40 </TD>
    <TD vAlign=bottom align=left width="2%">&nbsp;</TD>
    <TD vAlign=bottom align=left width="1%">&nbsp;</TD>
    <TD vAlign=bottom align=right width="8%">547,500 </TD>
    <TD vAlign=bottom align=left width="2%">&nbsp;</TD>
    <TD vAlign=bottom align=left width="1%">&nbsp;</TD>
    <TD vAlign=bottom align=right width="8%">93,750 </TD>
    <TD vAlign=bottom align=left width="2%">&nbsp;</TD>
    <TD vAlign=bottom align=left width="1%">$</TD>
    <TD vAlign=bottom align=right width="8%">&nbsp;0.60 </TD>
    <TD vAlign=bottom align=left width="2%">&nbsp;</TD>
    <TD vAlign=bottom align=left width="1%">&nbsp;</TD>
    <TD vAlign=bottom align=right width="8%">205,313 </TD>
    <TD vAlign=bottom align=left width="2%">&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD vAlign=bottom align=right bgColor=#e6efff>100,000 </TD>
    <TD vAlign=bottom align=left width="1%" bgColor=#e6efff>&nbsp;</TD>
    <TD vAlign=bottom align=right width="8%" bgColor=#e6efff>2.54 </TD>
    <TD vAlign=bottom align=left width="2%" bgColor=#e6efff>&nbsp;</TD>
    <TD vAlign=bottom align=left width="1%" bgColor=#e6efff>$</TD>
    <TD vAlign=bottom align=right width="8%" bgColor=#e6efff>&nbsp;2.52 </TD>
    <TD vAlign=bottom align=left width="2%" bgColor=#e6efff>&nbsp;</TD>
    <TD vAlign=bottom align=left width="1%" bgColor=#e6efff>$</TD>
    <TD vAlign=bottom align=right width="8%" bgColor=#e6efff>&nbsp;1.37 </TD>
    <TD vAlign=bottom align=left width="2%" bgColor=#e6efff>&nbsp;</TD>
    <TD vAlign=bottom align=left width="1%" bgColor=#e6efff>&nbsp;</TD>
    <TD vAlign=bottom align=right width="8%" bgColor=#e6efff>27,000 </TD>
    <TD vAlign=bottom align=left width="2%" bgColor=#e6efff>&nbsp;</TD>
    <TD vAlign=bottom align=left width="1%" bgColor=#e6efff>&nbsp;</TD>
    <TD vAlign=bottom align=right width="8%" bgColor=#e6efff>75,000 </TD>
    <TD vAlign=bottom align=left width="2%" bgColor=#e6efff>&nbsp;</TD>
    <TD vAlign=bottom align=left width="1%" bgColor=#e6efff>$</TD>
    <TD vAlign=bottom align=right width="8%" bgColor=#e6efff>&nbsp;2.52 </TD>
    <TD vAlign=bottom align=left width="2%" bgColor=#e6efff>&nbsp;</TD>
    <TD vAlign=bottom align=left width="1%" bgColor=#e6efff>&nbsp;</TD>
    <TD vAlign=bottom align=right width="8%" bgColor=#e6efff>20,250 </TD>
    <TD vAlign=bottom align=left width="2%" bgColor=#e6efff>&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD vAlign=bottom align=right>450,000 </TD>
    <TD vAlign=bottom align=left width="1%">&nbsp;</TD>
    <TD vAlign=bottom align=right width="8%">4.94 </TD>
    <TD vAlign=bottom align=left width="2%">&nbsp;</TD>
    <TD vAlign=bottom align=left width="1%">$</TD>
    <TD vAlign=bottom align=right width="8%">&nbsp;2.92 </TD>
    <TD vAlign=bottom align=left width="2%">&nbsp;</TD>
    <TD vAlign=bottom align=left width="1%">$</TD>
    <TD vAlign=bottom align=right width="8%">&nbsp;2.75 </TD>
    <TD vAlign=bottom align=left width="2%">&nbsp;</TD>
    <TD vAlign=bottom align=left width="1%">&nbsp;</TD>
    <TD vAlign=bottom align=right width="8%">- </TD>
    <TD vAlign=bottom align=left width="2%">&nbsp;</TD>
    <TD vAlign=bottom align=left width="1%">&nbsp;</TD>
    <TD vAlign=bottom align=right width="8%">450,000 </TD>
    <TD vAlign=bottom align=left width="2%">&nbsp;</TD>
    <TD vAlign=bottom align=left width="1%">$</TD>
    <TD vAlign=bottom align=right width="8%">&nbsp;2.92 </TD>
    <TD vAlign=bottom align=left width="2%">&nbsp;</TD>
    <TD vAlign=bottom align=left width="1%">&nbsp;</TD>
    <TD vAlign=bottom align=right width="8%">- </TD>
    <TD vAlign=bottom align=left width="2%">&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD vAlign=bottom align=right bgColor=#e6efff>100,000 </TD>
    <TD vAlign=bottom align=left width="1%" bgColor=#e6efff>&nbsp;</TD>
    <TD vAlign=bottom align=right width="8%" bgColor=#e6efff>4.94 </TD>
    <TD vAlign=bottom align=left width="2%" bgColor=#e6efff>&nbsp;</TD>
    <TD vAlign=bottom align=left width="1%" bgColor=#e6efff>$</TD>
    <TD vAlign=bottom align=right width="8%" bgColor=#e6efff>&nbsp;2.92 </TD>
    <TD vAlign=bottom align=left width="2%" bgColor=#e6efff>&nbsp;</TD>
    <TD vAlign=bottom align=left width="1%" bgColor=#e6efff>$</TD>
    <TD vAlign=bottom align=right width="8%" bgColor=#e6efff>&nbsp;2.82 </TD>
    <TD vAlign=bottom align=left width="2%" bgColor=#e6efff>&nbsp;</TD>
    <TD vAlign=bottom align=left width="1%" bgColor=#e6efff>&nbsp;</TD>
    <TD vAlign=bottom align=right width="8%" bgColor=#e6efff>- </TD>
    <TD vAlign=bottom align=left width="2%" bgColor=#e6efff>&nbsp;</TD>
    <TD vAlign=bottom align=left width="1%" bgColor=#e6efff>&nbsp;</TD>
    <TD vAlign=bottom align=right width="8%" bgColor=#e6efff>33,334 </TD>
    <TD vAlign=bottom align=left width="2%" bgColor=#e6efff>&nbsp;</TD>
    <TD vAlign=bottom align=left width="1%" bgColor=#e6efff>$</TD>
    <TD vAlign=bottom align=right width="8%" bgColor=#e6efff>&nbsp;2.92 </TD>
    <TD vAlign=bottom align=left width="2%" bgColor=#e6efff>&nbsp;</TD>
    <TD vAlign=bottom align=left width="1%" bgColor=#e6efff>&nbsp;</TD>
    <TD vAlign=bottom align=right width="8%" bgColor=#e6efff>- </TD>
    <TD vAlign=bottom align=left width="2%" bgColor=#e6efff>&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD style="BORDER-BOTTOM: #000000 2px solid" vAlign=bottom
      align=right>400,000 </TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid" vAlign=bottom align=left
    width="1%">&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid" vAlign=bottom align=right
    width="8%">4.94 </TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid" vAlign=bottom align=left
    width="2%">&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid" vAlign=bottom align=left
    width="1%">$</TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid" vAlign=bottom align=right
    width="8%">&nbsp;2.96 </TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid" vAlign=bottom align=left
    width="2%">&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid" vAlign=bottom align=left
    width="1%">$</TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid" vAlign=bottom align=right
    width="8%">&nbsp;2.37 </TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid" vAlign=bottom align=left
    width="2%">&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid" vAlign=bottom align=left
    width="1%">&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid" vAlign=bottom align=right
    width="8%">- </TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid" vAlign=bottom align=left
    width="2%">&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid" vAlign=bottom align=left
    width="1%">&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid" vAlign=bottom align=right
    width="8%">100,000 </TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid" vAlign=bottom align=left
    width="2%">&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid" vAlign=bottom align=left
    width="1%">$</TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid" vAlign=bottom align=right
    width="8%">&nbsp;2.96 </TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid" vAlign=bottom align=left
    width="2%">&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid" vAlign=bottom align=left
    width="1%">&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid" vAlign=bottom align=right
    width="8%">- </TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid" vAlign=bottom align=left
    width="2%">&nbsp;</TD></TR></TABLE></DIV>
<P align=justify><I>Non-Employee Stock Options</I></P>
<P align=justify>In accordance with the guidance of ASC 815-40-15, stock options
awarded to non-employees that are performing services for Neuro are required to
be accounted for as derivative liabilities once the services have been performed
and the options have vested because they are considered not to be indexed to the
Company&#146;s stock due to their exercise price being denominated in a currency
other than Neuro&#146;s functional currency. Stock options awarded to non-employees
that are not vested are accounted for as equity awards until the terms
associated with their vesting requirements have been met.</P>
<P align=justify>The non-employee stock options are accounted for at their
respective fair values and are summarized as follows for the nine months ended
December 31, 2014 and 2013: </P>
<TABLE
style="BORDER-COLOR: black; FONT-SIZE: 10pt; BORDER-COLLAPSE: collapse; "
cellSpacing=0 cellPadding=0 width="100%" border=0>

  <TR vAlign=top>
    <TD style="BORDER-TOP: #000000 2px solid" vAlign=bottom noWrap
      align=left>&nbsp; </TD>
    <TD style="BORDER-TOP: #000000 2px solid" vAlign=bottom noWrap align=left
    width="1%" >&nbsp;</TD>
    <TD style="BORDER-TOP: #000000 2px solid" vAlign=bottom noWrap align=right
    width="12%">2014 </TD>
    <TD style="BORDER-TOP: #000000 2px solid" vAlign=bottom noWrap align=left
    width="2%" >&nbsp;</TD>
    <TD style="BORDER-TOP: #000000 2px solid" vAlign=bottom noWrap align=left
    width="1%" >&nbsp;</TD>
    <TD style="BORDER-TOP: #000000 2px solid" vAlign=bottom noWrap align=right
    width="12%">2013 </TD>
    <TD style="BORDER-TOP: #000000 2px solid" vAlign=bottom noWrap align=left
    width="2%" >&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom noWrap
      align=left>&nbsp; </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom noWrap align=left
    width="1%" ></TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom noWrap
    align=right width="12%">&nbsp;$</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom noWrap align=left
    width="2%" >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom noWrap align=left
    width="1%" ></TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom noWrap
    align=right width="12%">&nbsp;$</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom noWrap align=left
    width="2%" >&nbsp;</TD></TR>
  <TR>
    <TD vAlign=bottom>&nbsp; </TD>
    <TD vAlign=bottom width="1%" >&nbsp;</TD>
    <TD vAlign=bottom width="12%">&nbsp; </TD>
    <TD vAlign=bottom width="2%" >&nbsp;</TD>
    <TD vAlign=bottom width="1%" >&nbsp;</TD>
    <TD vAlign=bottom width="12%">&nbsp; </TD>
    <TD vAlign=bottom width="2%" >&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD vAlign=bottom align=left bgColor=#e6efff>Fair value of non-employee
      options, beginning of the period </TD>
    <TD vAlign=bottom align=left width="1%"
    bgColor=#e6efff>&nbsp;</TD>
    <TD vAlign=bottom align=right width="12%" bgColor=#e6efff>- </TD>
    <TD vAlign=bottom align=left width="2%"
    bgColor=#e6efff>&nbsp;</TD>
    <TD vAlign=bottom align=left width="1%"
    bgColor=#e6efff>&nbsp;</TD>
    <TD vAlign=bottom align=right width="12%" bgColor=#e6efff>- </TD>
    <TD vAlign=bottom align=left width="2%"
    bgColor=#e6efff>&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD vAlign=bottom align=left>Fair value of non-employee options, at
      issuance </TD>

    <TD vAlign=bottom align=left width="1%" >&nbsp;</TD>
    <TD vAlign=bottom align=right width="12%">1,249,319 </TD>
    <TD vAlign=bottom align=left width="2%" >&nbsp;</TD>
    <TD vAlign=bottom align=left width="1%" >&nbsp;</TD>
    <TD vAlign=bottom align=right width="12%">- </TD>
    <TD vAlign=bottom align=left width="2%" >&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD vAlign=bottom align=left bgColor=#e6efff>Reallocation of vested
      non-employee options </TD>
    <TD vAlign=bottom align=left width="1%"
    bgColor=#e6efff>&nbsp;</TD>
    <TD vAlign=bottom align=right width="12%" bgColor=#e6efff>27,527 </TD>
    <TD vAlign=bottom align=left width="2%"
    bgColor=#e6efff>&nbsp;</TD>
    <TD vAlign=bottom align=left width="1%"
    bgColor=#e6efff>&nbsp;</TD>
    <TD vAlign=bottom align=left width="12%" bgColor=#e6efff>&nbsp; </TD>
    <TD vAlign=bottom align=left width="2%"
    bgColor=#e6efff>&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD vAlign=bottom align=left>Change in fair value of non-employee stock
      options during the period </TD>
    <TD vAlign=bottom align=left width="1%" >&nbsp;</TD>
    <TD vAlign=bottom align=right width="12%">818,382 </TD>
    <TD vAlign=bottom align=left width="2%" >&nbsp;</TD>
    <TD vAlign=bottom align=left width="1%" >&nbsp;</TD>
    <TD vAlign=bottom align=right width="12%">- </TD>
    <TD vAlign=bottom align=left width="2%" >&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD align=left vAlign=bottom bgcolor="#E6EFFF" style="BORDER-BOTTOM: #000000 2px solid">Fair
      value of non-employee options, end of the period </TD>
    <TD
    width="1%" align=left vAlign=bottom bgcolor="#E6EFFF" style="BORDER-BOTTOM: #000000 2px solid" >&nbsp;</TD>
    <TD
    width="12%" align=right vAlign=bottom bgcolor="#E6EFFF" style="BORDER-BOTTOM: #000000 2px solid">2,095,228 </TD>
    <TD
    width="2%" align=left vAlign=bottom bgcolor="#E6EFFF" style="BORDER-BOTTOM: #000000 2px solid" >&nbsp;</TD>
    <TD
    width="1%" align=left vAlign=bottom bgcolor="#E6EFFF" style="BORDER-BOTTOM: #000000 2px solid" >&nbsp;</TD>
    <TD
    width="12%" align=right vAlign=bottom bgcolor="#E6EFFF" style="BORDER-BOTTOM: #000000 2px solid">- </TD>
    <TD
    width="2%" align=left vAlign=bottom bgcolor="#E6EFFF" style="BORDER-BOTTOM: #000000 2px solid" >&nbsp;</TD></TR></TABLE>
<P align=justify>The non-employee options are required to be re-valued with the
change in fair value of the liability recorded as a gain or loss on the change
of fair value of derivative liability and included in other items in the
Company&#146;s Consolidated Statements of Loss at the end of each reporting period.
The fair value of the options will continue to be classified as a liability
until such time as they are exercised, expire or there is an amendment to the
respective agreements that renders these financial instruments to be no longer
classified as a liability.</P>
<P align=center>93</P>
<HR style="PAGE-BREAK-AFTER: always" align=center width="100%" color=black
noShade SIZE=5>
<A name=page_fa14></A>
<TABLE
style="BORDER-COLOR: black; FONT-SIZE: 10pt; BORDER-COLLAPSE: collapse; "
cellSpacing=0 cellPadding=0 width="100%" border=0>

  <TR vAlign=top>
    <TD align=left><B>Helius Medical Technologies, Inc.</B> </TD></TR>
  <TR vAlign=top>
    <TD align=left><B>Notes to Condensed Consolidated Financial Statements for
      the nine months ended December 31, 2014</B> </TD></TR>
  <TR vAlign=top>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left>(Expressed in
      United States Dollars) </TD></TR></TABLE><BR>
<P align=justify>Share-based payments are classified in the Company&#146;s Statement
of Loss as follows for the nine months ended December 31, 2014 and 2013: </P>
<TABLE
style="BORDER-COLOR: black; FONT-SIZE: 10pt; BORDER-COLLAPSE: collapse; "
cellSpacing=0 cellPadding=0 width="100%" border=0>

  <TR vAlign=top>
    <TD style="BORDER-TOP: #000000 2px solid" vAlign=bottom noWrap
      align=left>&nbsp; </TD>
    <TD style="BORDER-TOP: #000000 2px solid" vAlign=bottom noWrap align=left
    width="1%">&nbsp;</TD>
    <TD style="BORDER-TOP: #000000 2px solid" vAlign=bottom noWrap align=right
    width="12%">2014 </TD>
    <TD style="BORDER-TOP: #000000 2px solid" vAlign=bottom noWrap align=left
    width="2%">&nbsp;</TD>
    <TD style="BORDER-TOP: #000000 2px solid" vAlign=bottom noWrap align=left
    width="1%">&nbsp;</TD>
    <TD style="BORDER-TOP: #000000 2px solid" vAlign=bottom noWrap align=right
    width="12%">2013 </TD>
    <TD style="BORDER-TOP: #000000 2px solid" vAlign=bottom noWrap align=left
    width="2%">&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom noWrap
      align=left>&nbsp; </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom noWrap align=left
    width="1%"></TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom noWrap
    align=right width="12%">&nbsp;$</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom noWrap align=left
    width="2%">&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom noWrap align=left
    width="1%"></TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom noWrap
    align=right width="12%">&nbsp;$</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom noWrap align=left
    width="2%">&nbsp;</TD></TR>
  <TR>
    <TD vAlign=bottom>&nbsp; </TD>
    <TD vAlign=bottom width="1%">&nbsp;</TD>
    <TD vAlign=bottom width="12%">&nbsp; </TD>
    <TD vAlign=bottom width="2%">&nbsp;</TD>
    <TD vAlign=bottom width="1%">&nbsp;</TD>
    <TD vAlign=bottom width="12%">&nbsp; </TD>
    <TD vAlign=bottom width="2%">&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD vAlign=bottom align=left bgColor=#e6efff>Consulting fees </TD>
    <TD vAlign=bottom align=left width="1%" bgColor=#e6efff>&nbsp;</TD>
    <TD vAlign=bottom align=right width="12%" bgColor=#e6efff>2,201,708 </TD>
    <TD vAlign=bottom align=left width="2%" bgColor=#e6efff>&nbsp;</TD>
    <TD vAlign=bottom align=left width="1%" bgColor=#e6efff>&nbsp;</TD>
    <TD vAlign=bottom align=right width="12%" bgColor=#e6efff>260,356 </TD>
    <TD vAlign=bottom align=left width="2%" bgColor=#e6efff>&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD vAlign=bottom align=left>Research and development </TD>
    <TD vAlign=bottom align=left width="1%">&nbsp;</TD>
    <TD vAlign=bottom align=right width="12%">50,303 </TD>
    <TD vAlign=bottom align=left width="2%">&nbsp;</TD>
    <TD vAlign=bottom align=left width="1%">&nbsp;</TD>
    <TD vAlign=bottom align=right width="12%">173,872 </TD>
    <TD vAlign=bottom align=left width="2%">&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=left
    bgColor=#e6efff>Wages and salaries </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=left
    width="1%" bgColor=#e6efff>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=right
    width="12%" bgColor=#e6efff>928,144 </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=left
    width="2%" bgColor=#e6efff>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=left
    width="1%" bgColor=#e6efff>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=right
    width="12%" bgColor=#e6efff>- </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=left
    width="2%" bgColor=#e6efff>&nbsp;</TD></TR>
  <TR>
    <TD vAlign=bottom>&nbsp; </TD>
    <TD vAlign=bottom width="1%">&nbsp;</TD>
    <TD vAlign=bottom width="12%">&nbsp; </TD>
    <TD vAlign=bottom width="2%">&nbsp;</TD>
    <TD vAlign=bottom width="1%">&nbsp;</TD>
    <TD vAlign=bottom width="12%">&nbsp; </TD>
    <TD vAlign=bottom width="2%">&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD style="BORDER-BOTTOM: #000000 2px solid" vAlign=bottom align=left
    bgColor=#e6efff>&nbsp; </TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid" vAlign=bottom align=left
    width="1%" bgColor=#e6efff>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid" vAlign=bottom align=right
    width="12%" bgColor=#e6efff>3,180,155 </TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid" vAlign=bottom align=left
    width="2%" bgColor=#e6efff>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid" vAlign=bottom align=left
    width="1%" bgColor=#e6efff>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid" vAlign=bottom align=right
    width="12%" bgColor=#e6efff>434,228 </TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid" vAlign=bottom align=left
    width="2%" bgColor=#e6efff>&nbsp;</TD></TR></TABLE>
<P align=justify>At December 31, 2014, the aggregate unamortized compensation
cost to be recognized over the remaining respective vesting terms is $2,315,126.
</P>
<P align=justify>The Company used the Black Scholes option pricing model to
estimate the fair value of the options as the fair value of the services
provided could not be reliably calculated. The following assumptions were
used:</P>
<TABLE
style="BORDER-COLOR: black; FONT-SIZE: 10pt; BORDER-COLLAPSE: collapse; "
cellSpacing=0 cellPadding=0 width="100%" border=0>

  <TR vAlign=top>
    <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom noWrap
      align=left>&nbsp; </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom noWrap align=left
    width="1%" >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom noWrap
    align=right width="12%">December 31, 2014 </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom noWrap align=left
    width="2%" >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom noWrap align=left
    width="1%" >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom noWrap
    align=right width="12%">December 31, 2013 </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom noWrap align=left
    width="2%" >&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD vAlign=bottom noWrap align=left bgColor=#e6efff>Stock Price </TD>
    <TD vAlign=bottom noWrap align=left width="1%"
      bgColor=#e6efff>$</TD>
    <TD vAlign=bottom noWrap align=right width="12%"
      bgColor=#e6efff>&nbsp;0.50 &#150; 2.79 </TD>
    <TD vAlign=bottom noWrap align=left width="2%"
      bgColor=#e6efff>&nbsp;</TD>
    <TD vAlign=bottom noWrap align=left width="1%"
      bgColor=#e6efff>&nbsp;</TD>
    <TD vAlign=bottom noWrap align=right width="12%" bgColor=#e6efff>0.27 </TD>
    <TD vAlign=bottom noWrap align=left width="2%"
      bgColor=#e6efff>&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD vAlign=bottom align=left>Exercise Price </TD>
    <TD vAlign=bottom align=left width="1%" >$</TD>
    <TD vAlign=bottom align=right width="12%">&nbsp;0.60 &#150; 2.92 </TD>
    <TD vAlign=bottom align=left width="2%" >&nbsp;</TD>
    <TD vAlign=bottom align=left width="1%" >&nbsp;</TD>
    <TD vAlign=bottom align=right width="12%">0.0003 </TD>
    <TD vAlign=bottom align=left width="2%" >&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD vAlign=bottom align=left bgColor=#e6efff>Risk-free interest rate (%)
    </TD>
    <TD vAlign=bottom align=left width="1%"
    bgColor=#e6efff>&nbsp;</TD>
    <TD vAlign=bottom align=right width="12%" bgColor=#e6efff>1.21 &#150; 1.49 </TD>
    <TD vAlign=bottom align=left width="2%"
    bgColor=#e6efff>&nbsp;</TD>
    <TD vAlign=bottom align=left width="1%"
    bgColor=#e6efff>&nbsp;</TD>
    <TD vAlign=bottom align=right width="12%" bgColor=#e6efff>1.20 &#150; 1.65 </TD>
    <TD vAlign=bottom align=left width="2%"
    bgColor=#e6efff>&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD vAlign=bottom align=left>Dividend yield (%) </TD>
    <TD vAlign=bottom align=left width="1%" >&nbsp;</TD>
    <TD vAlign=bottom align=right width="12%">0.00 </TD>
    <TD vAlign=bottom align=left width="2%" >&nbsp;</TD>
    <TD vAlign=bottom align=left width="1%" >&nbsp;</TD>
    <TD vAlign=bottom align=right width="12%">0.00 </TD>
    <TD vAlign=bottom align=left width="2%" >&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD vAlign=bottom align=left bgColor=#e6efff>Expected volatility (%) </TD>
    <TD vAlign=bottom align=left width="1%"
    bgColor=#e6efff>&nbsp;</TD>
    <TD vAlign=bottom align=right width="12%" bgColor=#e6efff>94.88 &#150; 192.99
    </TD>
    <TD vAlign=bottom align=left width="2%"
    bgColor=#e6efff>&nbsp;</TD>
    <TD vAlign=bottom align=left width="1%"
    bgColor=#e6efff>&nbsp;</TD>
    <TD vAlign=bottom align=right width="12%" bgColor=#e6efff>97.73 &#150; 116.82
    </TD>
    <TD vAlign=bottom align=left width="2%"
    bgColor=#e6efff>&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD vAlign=bottom align=left>Expected option life (years) </TD>
    <TD vAlign=bottom align=left width="1%" >&nbsp;</TD>
    <TD vAlign=bottom align=right width="12%">3.00 &#150; 5.00 </TD>
    <TD vAlign=bottom align=left width="2%" >&nbsp;</TD>
    <TD vAlign=bottom align=left width="1%" >&nbsp;</TD>
    <TD vAlign=bottom align=right width="12%">4.33 &#150; 5.00 </TD>
    <TD vAlign=bottom align=left width="2%"
>&nbsp;</TD></TR></TABLE>
<P align=justify>The Black Scholes option pricing model was developed for use in
estimating the fair value of share options that have no vesting provisions and
are fully transferable. Also, option-pricing models require the use of estimates
and assumptions including the expected volatility. The Company uses expected
volatility rates which are based upon the average volatility rates of other
companies in the same industry, due to the Company&#146;s limited history. The
Company based the current stock price on the value per shares issued to date.
Changes in the underlying assumptions can materially affect the fair value
estimates. </P>
<TABLE
style="BORDER-COLOR: black; FONT-SIZE: 10pt; BORDER-COLLAPSE: collapse; "
cellSpacing=0 cellPadding=0 width="100%" border=0 BCLLIST>

  <TR>
    <TD vAlign=top width="5%">(b) </TD>
    <TD>
      <P align=justify><B>Share Purchase Warrants</B></P></TD></TR></TABLE>
<P align=justify>The Company closed its Private Placement at CAD $0.50 per unit
of 15,240,000 units raising CAD $7.62 million on May 30, 2014. Each unit
consists of one common stock of the Company and one half of a warrant of the
Company where one full warrant is exercisable for 2 years at CAD $1.00 into one
common share.</P>
<P align=justify>The proceeds of the private placement were allocated between
the common shares and the warrants on a relative fair value basis with an amount
of $837,396 allocated to the warrants. In addition, the Company issued 824,400
finder&#146;s warrants exercisable at CAD $1.00 for 2 years. The fair value of the
finders&#146; warrants was determined to be $102, 874.</P>
<P align=center>94</P>
<HR style="PAGE-BREAK-AFTER: always" align=center width="100%" color=black
noShade SIZE=5>
<A name=page_fa15></A>
<TABLE
style="BORDER-COLOR: black; FONT-SIZE: 10pt; BORDER-COLLAPSE: collapse; "
cellSpacing=0 cellPadding=0 width="100%" border=0>

  <TR vAlign=top>
    <TD align=left><B>Helius Medical Technologies, Inc.</B> </TD></TR>
  <TR vAlign=top>
    <TD align=left><B>Notes to Condensed Consolidated Financial Statements for
      the nine months ended December 31, 2014</B> </TD></TR>
  <TR vAlign=top>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left>(Expressed in
      United States Dollars) </TD></TR></TABLE><BR>
<P align=justify>The fair values attributable to the warrants were determined by
using the Black Scholes model based on the following assumptions: </P>
<TABLE
style="BORDER-COLOR: black; FONT-SIZE: 10pt; BORDER-COLLAPSE: collapse; "
cellSpacing=0 cellPadding=0 width="100%" border=0>

  <TR vAlign=top>
    <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom noWrap
      align=left>&nbsp; </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom noWrap align=left
    width="1%">&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom noWrap
    align=right width="12%">December 31, 2014 </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom noWrap align=left
    width="2%">&nbsp;</TD></TR>
  <TR>
    <TD vAlign=bottom noWrap>&nbsp; </TD>
    <TD vAlign=bottom noWrap width="1%">&nbsp;</TD>
    <TD vAlign=bottom noWrap width="12%">&nbsp; </TD>
    <TD vAlign=bottom noWrap width="2%">&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD vAlign=bottom align=left bgColor=#e6efff>Stock price </TD>
    <TD vAlign=bottom align=left width="1%" bgColor=#e6efff>&nbsp;</TD>
    <TD vAlign=bottom align=right width="12%" bgColor=#e6efff>CAD$0.50 </TD>
    <TD vAlign=bottom align=left width="2%" bgColor=#e6efff>&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD vAlign=bottom align=left>Exercise price </TD>
    <TD vAlign=bottom align=left width="1%">&nbsp;</TD>
    <TD vAlign=bottom align=right width="12%">CAD$1.00 </TD>
    <TD vAlign=bottom align=left width="2%">&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD vAlign=bottom align=left bgColor=#e6efff>Risk-free interest rate (%)
    </TD>
    <TD vAlign=bottom align=left width="1%" bgColor=#e6efff>&nbsp;</TD>
    <TD vAlign=bottom align=right width="12%" bgColor=#e6efff>1.48 </TD>
    <TD vAlign=bottom align=left width="2%" bgColor=#e6efff>&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD vAlign=bottom align=left>Dividend yield (%) </TD>
    <TD vAlign=bottom align=left width="1%">&nbsp;</TD>
    <TD vAlign=bottom align=right width="12%">- </TD>
    <TD vAlign=bottom align=left width="2%">&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD vAlign=bottom align=left bgColor=#e6efff>Expected volatility (%) </TD>
    <TD vAlign=bottom align=left width="1%" bgColor=#e6efff>&nbsp;</TD>
    <TD vAlign=bottom align=right width="12%" bgColor=#e6efff>83.79 </TD>
    <TD vAlign=bottom align=left width="2%" bgColor=#e6efff>&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD vAlign=bottom align=left>Expected option life (years) </TD>
    <TD vAlign=bottom align=left width="1%">&nbsp;</TD>
    <TD vAlign=bottom align=right width="12%">1.41 </TD>
    <TD vAlign=bottom align=left width="2%">&nbsp;</TD></TR></TABLE>
<P align=justify>The continuity of warrants for the period ended December 31,
2014 is as follows: </P>
<TABLE
style="BORDER-COLOR: black; FONT-SIZE: 10pt; BORDER-COLLAPSE: collapse; "
cellSpacing=0 cellPadding=0 width="100%" border=0>

  <TR vAlign=top>
    <TD style="BORDER-TOP: #000000 1px solid" vAlign=bottom noWrap
      align=left>&nbsp; </TD>
    <TD style="BORDER-TOP: #000000 1px solid" vAlign=bottom noWrap align=left
    width="1%">&nbsp;</TD>
    <TD style="BORDER-TOP: #000000 1px solid" vAlign=bottom noWrap align=center
    width="11%">Number of </TD>
    <TD style="BORDER-TOP: #000000 1px solid" vAlign=bottom noWrap align=center
    width="2%">&nbsp;</TD>
    <TD style="BORDER-TOP: #000000 1px solid" vAlign=bottom noWrap align=center
    width="1%">&nbsp;</TD>
    <TD style="BORDER-TOP: #000000 1px solid" vAlign=bottom noWrap align=center
    width="17%">Warrants Outstanding </TD>
  <TD style="BORDER-TOP: #000000 1px solid" vAlign=bottom noWrap align=left
    width="2%">&nbsp;</TD></TR>

  <TR vAlign=top>
    <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom noWrap
      align=left>&nbsp; </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom noWrap align=left
    width="1%">&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom noWrap
    align=center width="11%">warrants </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom noWrap
    align=center width="2%">&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom noWrap
    align=center width="1%">&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom noWrap
    align=center width="17%">Weighted Average
    Exercise Price </TD>
  <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom noWrap align=left
    width="2%">&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD vAlign=bottom align=left bgColor=#e6efff>Balance, March 31, 2014 </TD>
    <TD vAlign=bottom align=left width="1%" bgColor=#e6efff>&nbsp;</TD>
    <TD vAlign=bottom align=right width="11%" bgColor=#e6efff>- </TD>
    <TD vAlign=bottom align=left width="2%" bgColor=#e6efff>&nbsp;</TD>
    <TD vAlign=bottom align=left width="1%" bgColor=#e6efff>$</TD>
    <TD vAlign=bottom align=right width="17%" bgColor=#e6efff>&nbsp;- </TD>
    <TD vAlign=bottom align=left width="2%" bgColor=#e6efff>&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD vAlign=bottom align=left>Granted </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=left
    width="1%">&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=right
    width="11%">8,444,400 </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=left
    width="2%">&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=left
    width="1%">$</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=right
    width="17%">&nbsp;CAD 1.00 </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=left
    width="2%">&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD vAlign=bottom align=left bgColor=#e6efff>Balance, December 31, 2014</TD>
    <TD style="BORDER-BOTTOM: #000000 3px double" vAlign=bottom align=left
    width="1%" bgColor=#e6efff>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 3px double" vAlign=bottom align=right
    width="11%" bgColor=#e6efff>8,444,400 </TD>
    <TD style="BORDER-BOTTOM: #000000 3px double" vAlign=bottom align=left
    width="2%" bgColor=#e6efff>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 3px double" vAlign=bottom align=left
    width="1%" bgColor=#e6efff>$</TD>
    <TD style="BORDER-BOTTOM: #000000 3px double" vAlign=bottom align=right
    width="17%" bgColor=#e6efff>&nbsp;CAD 1.00 </TD>
    <TD style="BORDER-BOTTOM: #000000 3px double" vAlign=bottom align=left
    width="2%" bgColor=#e6efff>&nbsp;</TD></TR></TABLE>
<P align=justify>The warrants outstanding and exercisable at December 31, 2014
are as follows: </P>
<TABLE
style="BORDER-COLOR: black; FONT-SIZE: 10pt; BORDER-COLLAPSE: collapse; "
cellSpacing=0 cellPadding=0 width="100%" border=0>

  <TR vAlign=top>
    <TD style="BORDER-TOP: #000000 1px solid" vAlign=bottom noWrap align=left
    >&nbsp; </TD>
    <TD style="BORDER-TOP: #000000 1px solid" vAlign=bottom noWrap align=left
    width="1%" >&nbsp;</TD>
    <TD style="BORDER-TOP: #000000 1px solid" vAlign=bottom noWrap align=left
    width="14%">&nbsp; </TD>
    <TD style="BORDER-TOP: #000000 1px solid" vAlign=bottom noWrap align=left
    width="2%" >&nbsp;</TD>
    <TD style="BORDER-TOP: #000000 1px solid" vAlign=bottom noWrap align=left
    width="1%" >&nbsp;</TD>
    <TD style="BORDER-TOP: #000000 1px solid" vAlign=bottom noWrap align=center
    width="14%">Grant date </TD>
    <TD style="BORDER-TOP: #000000 1px solid" vAlign=bottom noWrap align=center
    width="2%" >&nbsp;</TD>
    <TD style="BORDER-TOP: #000000 1px solid" vAlign=bottom noWrap align=center
    width="1%" >&nbsp;</TD>
    <TD style="BORDER-TOP: #000000 1px solid" vAlign=bottom noWrap align=center
    width="14%">&nbsp; </TD>
    <TD style="BORDER-TOP: #000000 1px solid" vAlign=bottom noWrap align=left
    width="2%" >&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD vAlign=bottom noWrap align=left >Number of warrants
      outstanding </TD>
    <TD vAlign=bottom noWrap align=left width="1%" >&nbsp;</TD>
    <TD vAlign=bottom noWrap align=left width="14%">&nbsp; </TD>
    <TD vAlign=bottom noWrap align=left width="2%" >&nbsp;</TD>
    <TD vAlign=bottom noWrap align=left width="1%" >&nbsp;</TD>
    <TD vAlign=bottom noWrap align=center width="14%">Fair value </TD>
    <TD vAlign=bottom noWrap align=center width="2%" >&nbsp;</TD>
    <TD vAlign=bottom noWrap align=center width="1%" >&nbsp;</TD>
    <TD vAlign=bottom noWrap align=center width="14%">&nbsp; </TD>
    <TD vAlign=bottom noWrap align=left width="2%" >&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=left
    >&nbsp; </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=left
    width="1%" >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=right
    width="14%">Exercise Price (CAD) </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=left
    width="2%" >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=left
    width="1%" >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=center
    width="14%">(CAD) </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=center
    width="2%" >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=center
    width="1%" >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=center
    width="14%">Expiry Date </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=left
    width="2%" >&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD vAlign=bottom align=right bgColor=#e6efff >7,620,000&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; </TD>
    <TD vAlign=bottom align=left width="1%"  bgColor=#e6efff>$</TD>
    <TD vAlign=bottom align=right width="14%" bgColor=#e6efff>1.00 </TD>
    <TD vAlign=bottom align=left width="2%"
    bgColor=#e6efff>&nbsp;</TD>
    <TD vAlign=bottom align=left width="1%"  bgColor=#e6efff>$</TD>
    <TD vAlign=bottom align=right width="14%" bgColor=#e6efff>0.1355 </TD>
    <TD vAlign=bottom align=left width="2%"
    bgColor=#e6efff>&nbsp;</TD>
    <TD vAlign=bottom align=left width="1%"
    bgColor=#e6efff>&nbsp;</TD>
    <TD vAlign=bottom align=right width="14%" bgColor=#e6efff>May 30, 2016 </TD>
    <TD vAlign=bottom align=left width="2%"
    bgColor=#e6efff>&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD vAlign=bottom align=right >824,400&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; </TD>
    <TD vAlign=bottom align=left width="1%" >$</TD>
    <TD vAlign=bottom align=right width="14%">1.00 </TD>
    <TD vAlign=bottom align=left width="2%" >&nbsp;</TD>
    <TD vAlign=bottom align=left width="1%" >$</TD>
    <TD vAlign=bottom align=right width="14%">0.1355 </TD>
    <TD vAlign=bottom align=left width="2%" >&nbsp;</TD>
    <TD vAlign=bottom align=left width="1%" >&nbsp;</TD>
    <TD vAlign=bottom align=right width="14%">May 30, 2016 </TD>
    <TD vAlign=bottom align=left width="2%"
>&nbsp;</TD></TR></TABLE><BR>
<TABLE
style="BORDER-COLOR: black; FONT-SIZE: 10pt; BORDER-COLLAPSE: collapse; "
cellSpacing=0 cellPadding=0 width="100%" border=0 BCLLIST>

  <TR>
    <TD vAlign=top width="5%"><B>7.</B> </TD>
    <TD>
      <P align=justify><B>COMMITMENTS AND
CONTINGENCIES</B></P></TD></TR></TABLE><BR>
<TABLE
style="BORDER-COLOR: black; FONT-SIZE: 10pt; BORDER-COLLAPSE: collapse; "
cellSpacing=0 cellPadding=0 width="100%" border=0 BCLLIST>

  <TR>
    <TD vAlign=top width="5%">(a) </TD>
    <TD>
      <P align=justify>The Company entered into a license agreement with ANR for
      an exclusive right on ANR&#146;s patent pending technology, claims and knowhow.
      In addition to the issuance of 16,035,026 shares (Note 5), the Company
      agreed to pay a 4% royalty on net revenue on the sales of devices covered
      by the patent-pending technology and services related to the therapy or
      use of devices covered by the patent-pending technology.</P></TD></TR>
  <TR>
    <TD width="5%">&nbsp;</TD>
    <TD>&nbsp;</TD></TR>
  <TR>
    <TD vAlign=top width="5%">(b) </TD>
    <TD>
      <P align=justify>The Company entered into a commercial
      development-to-supply program with Ximedia where Ximedia will design,
      develop and produce PoNS product solution suitable for clinical trial and
      commercial sale. Under the program, the Company is responsible for
      ensuring the device is in compliance with relevant laws and regulations.
      The agreed budget for phase 1B of development is $499,000; phase 2 is
      $1,065,000; Phase 3 and 4 is $1,389,000 and 2<SUP>nd </SUP>software
      development cycle is $586,000, of which $2,398,191 was expensed as
      research and development since inception to December 31, 2014. The
      estimated duration of the project is 10 months. Invoices are to be issued
      monthly for work in progress. The Company can cancel the project at
      anytime with a written notice at least 30 days prior to the intended date
      of cancellation. As of December 31, 2014, the Company recorded a prepaid
      of $300,000 to Ximedica which will be applied at the end of the
      project.</P></TD></TR></TABLE>
<P align=center>95</P>
<HR style="PAGE-BREAK-AFTER: always" align=center width="100%" color=black
noShade SIZE=5>
<A name=page_fa16></A><TABLE
style="BORDER-COLOR: black; FONT-SIZE: 10pt; BORDER-COLLAPSE: collapse; "
cellSpacing=0 cellPadding=0 width="100%" border=0>

  <TR vAlign=top>
    <TD align=left><B>Helius Medical Technologies, Inc.</B> </TD></TR>
  <TR vAlign=top>
    <TD align=left><B>Notes to Condensed Consolidated Financial Statements for
      the nine months ended December 31, 2014</B> </TD></TR>
  <TR vAlign=top>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left>(Expressed in
      United States Dollars) </TD></TR></TABLE><BR>
<TABLE
style="BORDER-COLOR: black; FONT-SIZE: 10pt; BORDER-COLLAPSE: collapse; "
cellSpacing=0 cellPadding=0 width="100%" border=0 BCLLIST>

  <TR>
    <TD vAlign=top width="5%"><B>8.</B> </TD>
    <TD>
      <P align=justify><B>RELATED PARTY TRANSACTIONS</B></P></TD></TR></TABLE>
<P align=justify>For the period ended December 31, 2014, the Company was a party
to the following related party transactions not disclosed elsewhere in these
financial statements: </P>
<P align=justify>During the period ended December 31, 2014, the Company paid
$6,790 (December 31, 2013 - $nil) in consulting fees to a former director of the
Company. </P>
<P align=justify>During the period ended December 31, 2014, the Company paid
$16,000 (December 31, 2013 - $nil) in consulting fees to directors of the
Company. </P>
<P align=justify>During the period ended December 31, 2014, the Company paid
$67,898 (December 31, 2013 - $nil) to a company acting as the Company&#146;s
corporate advisor and Chief Financial Officer. </P>
<P align=justify>During the period ended December 31, 2014, the Company recorded
$928,144 (December 31, 2013 - $nil) in stock based compensation for officers and
directors of the Company.</P>
<P align=justify>See also Notes 5 and 7.</P>
<TABLE
style="BORDER-COLOR: black; FONT-SIZE: 10pt; BORDER-COLLAPSE: collapse; "
cellSpacing=0 cellPadding=0 width="100%" border=0 BCLLIST>

  <TR>
    <TD vAlign=top width="5%"><B>9.</B> </TD>
    <TD>
      <P align=justify><B>SUPPLEMENTAL CASH FLOW
  INFORMATION</B></P></TD></TR></TABLE>
<P align=justify>Investing and financing activities that affect recognized
assets or liabilities but that do not result in cash receipts or cash payments
are excluded from the consolidated statements of cash flows. During the nine
months ended December 31, 2014, the following transactions were excluded from
the condensed consolidated statement of cash flows: </P>
<TABLE
style="BORDER-COLOR: black; FONT-SIZE: 10pt; BORDER-COLLAPSE: collapse; "
cellSpacing=0 cellPadding=0 width="100%" border=0 BCLLIST>

  <TR>
    <TD width="5%"  >&nbsp;</TD>
    <TD vAlign=top width="5%">(a) </TD>
    <TD>
      <P align=justify>The Company issued 2,564,705 common shares valued at
      $1,000,100 based on the carrying value of the convertible debenture upon
      its conversion. (Note 4)</P></TD></TR>
  <TR>
    <TD width="5%" >&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD>&nbsp;</TD></TR>
  <TR>
    <TD width="5%" >&nbsp;</TD>
    <TD vAlign=top width="5%">(b) </TD>
    <TD>
      <P align=justify>The Company recorded a beneficial conversion feature of
      $176,488 in respect of a qualifying transaction recorded in connection
      with the convertible debenture ( Note 4)</P></TD></TR>
  <TR>
    <TD width="5%" >&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD>&nbsp;</TD></TR>
  <TR>
    <TD width="5%" >&nbsp;</TD>
    <TD vAlign=top width="5%">(c) </TD>
    <TD>
      <P align=justify>The Company recorded a credit to additional paid-in
      capital of $162,890 representing the carrying values of the net assets
      acquired in a reverse merger recapitalization transaction. (Note
  3).</P></TD></TR></TABLE><BR>
<TABLE
style="BORDER-COLOR: black; FONT-SIZE: 10pt; BORDER-COLLAPSE: collapse; "
cellSpacing=0 cellPadding=0 width="100%" border=0 BCLLIST>

  <TR>
    <TD vAlign=top width="5%"><B>10.</B> </TD>
    <TD>
      <P align=justify><B>SUBSEQUENT EVENTS</B></P></TD></TR></TABLE><BR>
<TABLE
style="BORDER-COLOR: black; FONT-SIZE: 10pt; BORDER-COLLAPSE: collapse; "
cellSpacing=0 cellPadding=0 width="100%" border=0 BCLLIST>

  <TR>
    <TD width="5%"  >&nbsp;</TD>
    <TD vAlign=top width="5%">a) </TD>
    <TD>
      <P align=justify>On January 5, 2015, Wicab, Inc. (&#147;Wicab&#148;) filed a
      complaint against the Company, two of its directors, Yuri Danilov and
      Mitch Tyler, and ANR in the U.S. District Court for the Western District
      of Wisconsin. The complaint contained various state and common law claims
      arising from Danilov&#146;s and Tyler&#146;s prior employment with Wicab and the
      Company&#146;s two issued patents for the PoNS&#153; device. 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 Company&#146;s two issued patents are
      therefore rightfully the property of Wicab. The complaint sought an
      unspecified amount of monetary damages, an injunction preventing the
      Company from using the ideas and inventions in the two patents, an order
      transferring ownership of the patents from the Company to Wicab, and
      recovery of costs and attorneys&#146; fees. The complaint was voluntarily
      dismissed without prejudice on January 14,
2015.</P></TD></TR></TABLE>
<P align=center>96</P>
<HR style="PAGE-BREAK-AFTER: always" align=center width="100%" color=black
noShade SIZE=5>
<A name=page_fa17></A><TABLE
style="BORDER-COLOR: black; FONT-SIZE: 10pt; BORDER-COLLAPSE: collapse; "
cellSpacing=0 cellPadding=0 width="100%" border=0>

  <TR vAlign=top>
    <TD align=left><B>Helius Medical Technologies, Inc.</B> </TD></TR>
  <TR vAlign=top>
    <TD align=left><B>Notes to Condensed Consolidated Financial Statements for
      the nine months ended December 31, 2014</B> </TD></TR>
  <TR vAlign=top>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left>(Expressed in
      United States Dollars) </TD></TR></TABLE><BR>
<TABLE
style="BORDER-COLOR: black; FONT-SIZE: 10pt; BORDER-COLLAPSE: collapse; "
cellSpacing=0 cellPadding=0 width="100%" border=0 BCLLIST>

  <TR>
    <TD width="5%"  >&nbsp;</TD>
    <TD vAlign=top width="5%">b) </TD>
    <TD>
      <P align=justify>On January 27, 2015, the Company received a demand letter
      containing allegations that it had entered into a consulting arrangement
      with the complainants and breached certain of its terms, and used certain
      intellectual property in the form of business and marketing plans
      allegedly prepared by the complainants, and seeking damages. The Company
      believes the probability of material economic outlay for these allegations
      is remote.</P></TD></TR>
  <TR>
    <TD width="5%" >&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD>&nbsp;</TD></TR>
  <TR>
    <TD width="5%" >&nbsp;</TD>
    <TD vAlign=top width="5%">c) </TD>
    <TD>
      <P align=justify>On March 16, 2015, the Company granted 100,000 stock
      options to a director. All options are subject to any earlier termination
      in accordance with their terms. The options are exercisable at a price of
      CAD $3.20, with one-third of such options vesting on the date of grant,
      antoher one-third vesting on the 1<SUP>st </SUP>anniversary of the date of
      grant and the final one-third vesting on the 2<SUP>nd </SUP>anniversary of
      the date of grant.</P></TD></TR></TABLE>
<P align=justify>The Company is not currently the subject of a lawsuit in
connection with these allegations.</P>
<P align=justify>The Company has evaluated subsequent events through May 4,
2015, the date the financial statements were available to be issued. The Company
is not aware of any additional significant subsequent events that occurred
subsequent to the balance sheet date, but prior to the date of issuance that
would have a material impact on the Company&#146;s financial statements. </P>
<P align=center>97</P>
<HR style="PAGE-BREAK-AFTER: always" align=center width="100%" color=black
noShade SIZE=5>
<A name=page_65></A><BR>
<TABLE
style="BORDER-COLOR: black; FONT-SIZE: 10pt; BORDER-COLLAPSE: collapse; "
cellSpacing=0 cellPadding=0 width="100%" border=0>

  <TR vAlign=top>
    <TD align=left>
      <P align=justify>ITEM 14. </P></TD>
    <TD align=left width="92%">
      <P align=justify>CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON
      ACCOUNTING AND FINANCIAL DISCLOSURE. </P></TD></TR></TABLE>
<p align="justify">On February 19, 2015, the Board of Directors  approved the dismissal of Davidson &amp; Company LLP, or Davidson, as our  independent registered public accounting firm, effective February 19, 2015. </p>
<p align="justify">
  Davidson&rsquo;s report on our annual financial statements for  the fiscal year ended March 31, 2014 and the period from January 22, 2013 to  March 31, 2013 did not contain an adverse opinion or a disclaimer of opinion,  nor was it qualified or modified as to uncertainty, audit scope, or accounting  principles.</p>
<p align="justify">
  During the fiscal year ended March 31, 2014  and for the period from January 22, 2013  (date of inception) to March 31, 2013 as well as the subsequent interim period  through February 19, 2015, there have been no disagreements (as defined in Item  304(a)(1)(iv) of Regulation S-K and the related instructions) between us and  Davidson on any matter of accounting principles or practices, financial  statement disclosures, or auditing scope or procedure, which disagreements, if  not resolved to the satisfaction of Davidson, would have caused it to make  reference to the subject of such disagreements in connection with any report  prepared by Davidson. Further, there  have been no reportable events (as described in Item 304(a)(1)(v) of Regulation  S-K). </p>
<p align="justify">
  On February 19, 2015, the Board of Directors  approved the engagement of BDO Canada LLP, or BDO Canada, as our independent  registered public accounting firm to perform independent audit services. Neither the we, nor anyone on our behalf, has  consulted BDO Canada regarding the application of accounting principles related  to a specified transaction, either completed or proposed, or the type of audit  opinion that might be rendered on the our financial statements or as to any  disagreement or reportable event as described in Item 304(a)(1)(iv) and Item  304(a)(1)(v), respectively, of Regulation S-K. </p>

<TABLE width="100%" border=0 cellPadding=0
cellSpacing=0
style="BORDER-COLOR: black; FONT-SIZE: 10pt; BORDER-COLLAPSE: collapse; ">
  <TR vAlign=top>
    <TD align=left><P align=justify>ITEM 15. </P></TD>
    <TD align=left width="92%"><P align=justify>FINANCIAL STATEMENTS AND EXHIBITS. </P></TD>
  </TR>
</TABLE>
<P align=justify>(a)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; List separately
all financial statements filed. </P>
<P align=justify>The information required by this item is contained in Item 13
to this registration statement and is incorporated herein by reference. </P>
<P align=justify>(b)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Exhibits. </P>
<DIV>
<TABLE
style="BORDER-COLOR: black; FONT-SIZE: 10pt; BORDER-COLLAPSE: collapse; "
borderColor=#000000 cellSpacing=0 cellPadding=6 width="100%" border=1>

  <TR vAlign=top>
    <TD align=left><B><U>Exhibit</U></B> <BR><B><U>No.</U></B> </TD>
    <TD align=left width="90%"><BR><B><U>Description of Exhibit</U></B> </TD></TR>
  <TR vAlign=top>
    <TD align=left>2.1 </TD>
    <TD align=left width="90%">
      <P align=justify>Agreement and Plan of Merger among Helius Medical
      Technologies, Inc., HMT Mergersub, Inc. and NeuroHabilitation Corporation,
      dated June 6, 2014 (incorporated by reference to Exhibit 10.6 to the Form
      S-1 filed with the Securities and Exchange Commission on July 14, 2014)      </P></TD></TR>
  <TR vAlign=top>
    <TD align=left>3.1 </TD>
    <TD align=left width="90%">
      <P align=justify>Articles of Continuation (incorporated by reference to
      Exhibit 3.1 to the Form S-1 filed with the Securities and Exchange
      Commission on July 14, 2014) </P></TD></TR>
  <TR vAlign=top>
    <TD align=left>3.2 </TD>
    <TD align=left width="90%">
      <P align=justify>Articles of Amendment filed with the Wyoming Secretary of
      State on July 3, 2014 (incorporated by reference to Exhibit 3.2 to the
      Form S-1 filed with the Securities and Exchange Commission on July 14,
      2014) </P></TD></TR>
  <TR vAlign=top>
    <TD align=left> <a href="exhibit3-3.htm">3.3</a> </TD>
    <TD align=left> <a href="exhibit3-3.htm">Articles of Amendment filed with the Wyoming  Secretary of State on April 27, 2015</a> </TD>
  </TR>
  <TR vAlign=top>
    <TD align=left>3.4 </TD>
    <TD align=left width="90%">
      <P align=justify>Bylaws (incorporated by reference to Exhibit 3.3 to the
      Form S-1 filed with the Securities and Exchange Commission on July 14,
      2014) </P></TD></TR>
  <TR vAlign=top>
    <TD align=left>3.5 </TD>
    <TD align=left width="90%">
      <P align=justify>First Amendment to the Bylaws (incorporated by reference
      to Exhibit 3.4 to the Amendment to Form S-1 filed with the Securities and
      Exchange Commission on September 23, 2014) </P></TD></TR>
  <TR vAlign=top>
    <TD align=left> <a href="exhibit3-6.htm">3.6</a> </TD>
    <TD align=left> <a href="exhibit3-6.htm">Second Amendment to the Bylaws</a> </TD>
  </TR>
  <TR vAlign=top>
    <TD align=left>10.1 </TD>
    <TD align=left width="90%">
      <P align=justify>2014 Stock Incentive Plan (incorporated by reference to
      Exhibit 4.1 to the Form S-1 filed with the Securities and Exchange
      Commission on July 14, 2014) </P></TD></TR>
  <TR vAlign=top>
    <TD align=left>10.2 </TD>
    <TD align=left width="90%">
      <P align=justify>Employment Agreement between Helius Medical Technologies,
      Inc. and Philippe Deschamps, dated June 13, 2014 (incorporated by
      reference to Exhibit 99.1 to the Form S-1 filed with the Securities and
      Exchange Commission on July 14, 2014) </P></TD></TR>
  <TR vAlign=top>
    <TD align=left>10.3 </TD>
    <TD align=left width="90%">
      <P align=justify>Amendment Agreement to the Employment Agreement between
      Helius Medical Technologies, Inc. and Philippe Deschamps, dated September
      1, 2014 (incorporated by reference to Exhibit 99.5 to the Amendment to
      Form S-1 filed with the Securities and Exchange Commission on September
      23, 2014) </P></TD></TR>
  <TR vAlign=top>
    <TD align=left> 10.4 </TD>
    <TD align=left> Employment Agreement between Helius Medical Technologies, Inc. and Jonathan Sackier, dated December 1, 2014
      (incorporated by reference to Exhibit 10.4 to the Form  10-12G filed with the Securities and Exchange Commission on April 15, 2015) </TD>
  </TR>
  <TR vAlign=top>
    <TD align=left>10.5 </TD>
    <TD align=left width="90%">
      <P align=justify>Consulting Agreement between NeuroHabilitation
      Corporation and Yuri Danilov, dated July 1, 2014 (incorporated by
      reference to Exhibit 99.4 to the Amendment to Form S-1 filed with the
      Securities and Exchange Commission on September 23, 2014) </P></TD></TR>
  <TR vAlign=top>
    <TD align=left>10.6</TD>
    <TD align=left width="90%">
      <P align=justify>Consulting Agreement between NeuroHabilitation
      Corporation and Mitch Tyler, dated December 10, 2014 (incorporated by
      reference to Exhibit 10.5 to the Form 10-12G filed with the
  Securities and Exchange Commission on February 6, 2015) </P></TD></TR></TABLE>
</DIV>
<P align=center>98</P>
<HR style="PAGE-BREAK-AFTER: always" align=center width="100%" color=black
noShade SIZE=5>
<A name=page_66></A><BR>
<DIV>
<TABLE
style="BORDER-COLOR: black; FONT-SIZE: 10pt; BORDER-COLLAPSE: collapse; "
borderColor=#000000 cellSpacing=0 cellPadding=6 width="100%" border=1 BCLLIST>

  <TR>
    <TD vAlign=top width="10%">10.7</TD>
    <TD align=left >
      <P align=justify>Advisory Agreement between Helius Medical Technologies,
      Inc. and Baron Global Financial Canada Ltd., dated June 13, 2014
      (incorporated by reference to Exhibit 99.2 to the Form S-1 filed with the
      Securities and Exchange Commission on July 14, 2014)</P></TD></TR>
  <TR>
    <TD vAlign=top width="10%">10.8</TD>
    <TD align=left >
      <P align=justify>License Agreement between Advanced NeuroRehabilitation,
      LLC and Yuri Danilov, Mitchell Tyler, Kurt Kaczmarek and John Klus, dated
      June 29, 2011 (incorporated by reference to Exhibit 10.8 to the Amendment
      to Form S-1 filed with the Securities and Exchange Commission on September
      23, 2014)</P></TD></TR>
  <TR>
    <TD vAlign=top width="10%">10.9</TD>
    <TD align=left >
      <P align=justify>Amended and Restated Patent Sub-License Agreement between
      Advanced NeuroRehabilitation, LLC and NeuroHabilitation Corporation,
      having an effective date of January 22, 2013 (incorporated by reference to
      Exhibit 10.1 to the Form S-1 filed with the Securities and Exchange
      Commission on July 14, 2014)</P></TD></TR>
  <TR>
    <TD vAlign=top width="10%">10.10</TD>
    <TD align=left >
      <P align=justify>Second Amended and Restated Patent Sub-License Agreement
      between Advanced NeuroRehabilitation, LLC and NeuroHabilitation
      Corporation, dated June 6, 2014, but having an effective date of January
      22, 2013 (incorporated by reference to Exhibit 10.7 to the Form S-1 filed
      with the Securities and Exchange Commission on July 14, 2014)</P></TD></TR>
  <TR>
    <TD vAlign=top width="10%">10.11</TD>
    <TD align=left >
      <P align=justify>Master Cooperative Research and Development Agreement
      between NeuroHabilitation Corporation, Advanced NeuroRehabilitation, LLC,
      Yuri Danilov, Mitchell Tyler, Kurt Kaczmarek and U.S. Army Medical
      Material Agency and U.S. Army Medical Material Development Activity, dated
      effective February 1, 2013 (incorporated by reference to Exhibit 10.2 to
      the Form S-1 filed with the Securities and Exchange Commission on July 14,
      2014)</P></TD></TR>
  <TR>
    <TD vAlign=top width="10%">10.12</TD>
    <TD align=left >
      <P align=justify>Notice of Modification No. 1 to Cooperative Research and
      Development Agreement between NeuroHabilitation Corporation, Advanced
      NeuroRehabilitation, LLC, Yuri Danilov, Mitchell Tyler, Kurt Kaczmarek and
      U.S. Army Medical Material Agency and U.S. Army Medical Material
      Development Activity, dated April 29, 2014 (incorporated by reference to
      Exhibit 10.5 to the Form S-1 filed with the Securities and Exchange
      Commission on July 14, 2014)</P></TD></TR>
  <TR>
    <TD vAlign=top width="10%">10.13</TD>
    <TD align=left >
      <P align=justify>Notice of Modification No. 2 to Cooperative Research and
      Development Agreement between NeuroHabilitation Corporation, Advanced
      NeuroRehabilitation, LLC, Yuri Danilov, Mitchell Tyler, Kurt Kaczmarek and
      U.S. Army Medical Material Agency and U.S. Army Medical Material
    Development Activity, dated January 12, 2015. (incorporated by
      reference to Exhibit 10.12 to the Form 10-12G filed with the
    Securities and Exchange Commission on February 6, 2015) </P></TD></TR>
  <TR>
    <TD vAlign=top width="10%">10.14</TD>
    <TD align=left >
      <P align=justify>Design and Manufacturing Consultant Agreement between
      NeuroHabilitation Corporation and Clinvue, LLC, dated January 30, 2013
      (incorporated by reference to Exhibit 10.3 to the Form S-1 filed with the
      Securities and Exchange Commission on July 14, 2014)</P></TD></TR>
  <TR>
    <TD vAlign=top width="10%">10.15</TD>
    <TD align=left >
      <P align=justify>Commercial Development-to-Supply Program between
      NeuroHabilitation Corporation and Ximedica, dated October 25, 2013
      (incorporated by reference to Exhibit 10.4 to the Form S-1 filed with the
      Securities and Exchange Commission on July 14, 2014)</P></TD></TR>
  <TR>
    <TD vAlign=top> 16.1 </TD>
    <TD align=left > Letter from Davidson &amp; Company LLP, dated April 15, 2015
      (incorporated by reference to Exhibit 16.1 to the Form  10-12G filed with the Securities and Exchange Commission on April 15, 2015) </TD>
  </TR>
  <TR>
    <TD vAlign=top width="10%">21.1 </TD>
    <TD align=left >
      <P>Subsidiaries of Helius Medical Technologies, Inc.:</P>

      <P>1. NeuroHabilitation Corporation is a wholly owned subsidiary of Helius
        Medical Technologies, Inc.</P>

      <P>2. Helius Medical Technologies (Canada), Inc. is a wholly owned
        subsidiary of Helius Medical Technologies,
      Inc.</P></TD>
  </TR></TABLE>
</DIV>
<P align=center>99</P>
<HR style="PAGE-BREAK-AFTER: always" align=center width="100%" color=black
noShade SIZE=5>
<A name=page_67></A>
<P align=center>SIGNATURES </P>
<P align=justify>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Pursuant to the requirements of Section 12 of the
Securities Exchange Act of 1934, the registrant has duly caused this
registration statement to be signed on its behalf by the undersigned, thereunto
duly authorized.</P>
<P style="MARGIN-LEFT: 50%" align=justify>HELIUS MEDICAL TECHNOLOGIES, INC. </P>
<P style="MARGIN-LEFT: 50%" align=justify>&nbsp;</P>
<TABLE
style="BORDER-COLOR: black; FONT-SIZE: 10pt; BORDER-COLLAPSE: collapse; "
cellSpacing=0 cellPadding=0 width="100%" border=0>

  <TR vAlign=top>
    <TD align=left >&nbsp;</TD>
    <TD align=left width="5%" >By: </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="45%"
    >/s/ Philippe Deschamps </TD></TR>
  <TR vAlign=top>
    <TD align=left >&nbsp;</TD>
    <TD align=left width="5%" >&nbsp; </TD>
    <TD align=left width="45%" >Philippe Deschamps </TD></TR>
  <TR vAlign=top>
    <TD align=left >&nbsp;</TD>
    <TD align=left width="5%" >&nbsp; </TD>
    <TD align=left width="45%" >President, Chief Executive
      Officer and a Director </TD></TR></TABLE>
<P align=justify>Date: May 4, 2015  </P>
<P align=center>100</P>
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</DOCUMENT>
<DOCUMENT>
<TYPE>EX-3.3
<SEQUENCE>2
<FILENAME>exhibit3-3.htm
<DESCRIPTION>EXHIBIT 3.3
<TEXT>
<HTML>
<HEAD>
   <TITLE>Helius Medical Technologies, Inc.: Exhibit 3.3 - Filed by newsfilecorp.com</TITLE>
</HEAD>

<BODY style="font-size:10pt;">

<HR noshade align="center" width=100% size=3 color="black">
<!--$$/page=--><A name=page_1></A>
<P align=justify><B>Wyoming Secretary of State </B><BR><B>State Capitol
Building, Room 110 </B><BR><B>Cheyenne, WY 82002-0020 </B><BR></P>
<P align=center><B>ARTICLES OF AMENDMENT </B></P>
<P align=justify style="text-indent: 5%">Pursuant to the provisions of the Wyoming Business Corporation
Act (the &#147;<B><I>Act</I></B>&#148;), the shareholders and board of directors of Helius
Medical Technologies, Inc., a Wyoming corporation (the
&#147;<B><I>Corporation</I></B>&#148;), hereby present these Articles of Amendment to its
Articles of Incorporation, pursuant to Wyo. Stat. 17-16-1006, on behalf of the
Corporation. The Corporation&#146;s Articles of Incorporation were filed with the
Wyoming Secretary of State on June 2, 2014 and Articles of Amendment were filed
with the Wyoming Secretary of State on June 30, 2014 (the &#147;<B><I>Articles of
Incorporation</I></B>&#148;), and the Corporation has been assigned filing number
2014-000665988. </P>
<P align=justify style="text-indent: 5%">1.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; The name of the Corporation: Helius Medical Technologies,
Inc.</P>
<P align=justify style="text-indent: 5%">2.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Article 12 of the Articles of Incorporation is hereby
deleted in its entirety and replaced with the following: </P>
<P align=justify style="text-indent: 5%">&#147;<B>12. QUORUM FOR SHAREHOLDER VOTE</B>. Shares entitled to
vote as a separate voting group may take action on a matter at a shareholder
meeting only if a quorum of those shares are present in person or by proxy with
respect to the matter. At least 33 1/3 of the total outstanding shares of the
Corporation entitled to vote as a separate voting group, present in person or by
proxy, shall constitute a quorum at any meeting of shareholders, except as
otherwise set forth in these Articles of Incorporation or as required by the
Act.&#148; </P>
<P align=justify style="text-indent: 5%">3.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; The date of the amendment&#146;s adoption: April 20, 2015.</P>
<P align=justify style="text-indent: 5%">4.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; The amendment was duly approved by at least a majority of
the shareholders and all of the board of directors of the Corporation in the
manner required by the Act and by the Corporation&#146;s Articles of
Incorporation.</P>
<P align=justify style="text-indent: 5%">DATED: April 20, 2015 </P>
<TABLE
style="BORDER-COLOR: black; FONT-SIZE: 10pt; BORDER-COLLAPSE: collapse; "
cellSpacing=0 cellPadding=0 width="100%" border=0>

  <TR vAlign=top>
    <TD noWrap align=left >&nbsp;&nbsp; </TD>
    <TD noWrap align=left width="3%">By: </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" noWrap align=left
      width="47%">&nbsp; &nbsp;/s/ Philippe Deschamps </TD></TR>
  <TR vAlign=top>
    <TD noWrap align=left >&nbsp;</TD>
    <TD noWrap align=left width="3%">&nbsp; </TD>
    <TD noWrap align=left width="47%">Philippe Deschamps </TD></TR>
  <TR vAlign=top>
    <TD noWrap align=left >&nbsp;</TD>
    <TD noWrap align=left width="3%">&nbsp; </TD>
    <TD noWrap align=left width="47%">President and CEO </TD></TR>
  <TR>
    <TD noWrap >&nbsp;</TD>
    <TD noWrap width="3%">&nbsp; </TD>
    <TD noWrap width="47%">&nbsp; </TD></TR>
  <TR>
    <TD noWrap >&nbsp;</TD>
    <TD noWrap width="3%">&nbsp; </TD>
    <TD noWrap width="47%">&nbsp; </TD></TR>
  <TR vAlign=top>
    <TD noWrap align=left >&nbsp;</TD>
    <TD noWrap align=left width="50%" colSpan=2>Contact person as to this
      filing: Amanda Tseng </TD></TR>
  <TR vAlign=top>
    <TD noWrap align=left >&nbsp;</TD>
    <TD noWrap align=left width="50%" colSpan=2>Daytime phone number: (778)
      331-2091 </TD></TR>
  <TR vAlign=top>
    <TD noWrap align=left >&nbsp;</TD>
    <TD noWrap align=left width="50%" colSpan=2>E-mail:
      amanda.tseng@barongroupintl.com </TD></TR></TABLE><BR>
<HR align=center width="100%" color=black noShade SIZE=5>

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</DOCUMENT>
<DOCUMENT>
<TYPE>EX-3.6
<SEQUENCE>3
<FILENAME>exhibit3-6.htm
<DESCRIPTION>EXHIBIT 3.6
<TEXT>
<HTML>
<HEAD>
   <TITLE>Helius Medical Technologies, Inc.: Exhibit 3.6 - Filed by newsfilecorp.com</TITLE>
</HEAD>

<BODY style="font-size:10pt;">

<HR noshade align="center" width=100% size=3 color="black">
<!--$$/page=--><A name=page_1></A>
<P align=center><B>AMENDMENT NO.2 TO BYLAWS </B><BR><B>OF </B><BR><B>HELIUS
MEDICAL TECHNOLOGIES, INC. </B><BR><B>(a Wyoming corporation) </B><BR></P>
<P align=justify style="text-indent: 5%">Pursuant to the provisions of the Wyoming Business Corporation
Act, the Bylaws of Helius Medical Technologies, Inc. (the &#147;<U>Company</U>&#148;), and
the Articles of Incorporation of the Company (the &#147;<U>Articles</U>&#148;), the Bylaws
of the Company as currently in effect are hereby amended as follows: </P>
<P align=justify style="text-indent: 5%">1. &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The second sentence of Section 2.8 of the Bylaws stating
that &#147;At least two (2) Shareholders representing at least five percent (5%) of
the outstanding shares of the Company entitled to vote as a separate voting
group at such meeting, represented in person or by proxy, shall constitute a
quorum at any meeting of Shareholders, except as otherwise provided by the Act&#148;
is hereby amended and restated in its entirety to read as follows: </P>
<P style="MARGIN-LEFT: 10%" align=justify>&#147;At least 33 1/3 of the total
outstanding shares of the Company entitled to vote as a separate voting group,
present in person or by proxy, shall constitute a quorum at any meeting of
Shareholders, except as otherwise set forth in the Company&#146;s Articles of
Incorporation or as required by the Act&#148;. </P>
<P align=justify style="text-indent: 5%">3.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; This Amendment was approved by the unanimous written consent
of the board of directors of the Company in accordance with Article XIV of the
Company&#146;s Bylaws. </P>
<P align=justify style="text-indent: 5%">4. &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Except as expressly amended by this Amendment, the Bylaws
shall remain in full force and effect. </P>
<P align=center>[Signature page to follow] </P>
<HR style="PAGE-BREAK-AFTER: always" align=center width="100%" color=black
noShade SIZE=5>

<p style="text-indent:5%"><b>IN WITNESS WHEREOF, </b>this Amendment is  hereby executed effective as of April 27, 2015.</p>
<TABLE width="100%" border=0 cellPadding=0
cellSpacing=0
style="BORDER-COLOR: black; FONT-SIZE: 10pt; BORDER-COLLAPSE: collapse; ">
  <TR vAlign=top>
    <TD noWrap align=left >&nbsp;</TD>
    <TD noWrap align=left colSpan=2><p><b>HELIUS MEDICAL  TECHNOLOGIES, INC.</b></p></TD>
  </TR>
  <TR vAlign=top>
    <TD noWrap align=left >&nbsp;</TD>
    <TD noWrap align=left colSpan=2>&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD noWrap align=left >&nbsp;</TD>
    <TD noWrap align=left colSpan=2>&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD noWrap align=left >&nbsp;</TD>
    <TD colSpan=2 align=left noWrap style="BORDER-BOTTOM: #000000 1px solid">/s/ Amanda Tseng</TD>
  </TR>
  <TR vAlign=top>
    <TD noWrap align=left >&nbsp;</TD>
    <TD noWrap align=left width="50%" colSpan=2>Amanda Tseng, Corporate Secretary and CFO</TD>
  </TR>
</TABLE>
<br>
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end
</TEXT>
</DOCUMENT>
</SEC-DOCUMENT>
