Aclarion, Inc.
For the period ended Dec 31, 2024. Filed Apr 9, 2025.
View on SEC.govAbout this filing
A company's yearly report to the SEC, with audited financial statements. It is the fullest account a company gives of its business, its finances and the risks it sees.
FY2024 · Filed Apr 9, 2025
ACON$1.66+6.4%Stored close · as of Nov 6, 2026
What changed in Management’s Discussion and Analysis?
Read the current filingPrevious report: 10-K
Period ended 2023-12-31; filed 2024-03-28.
0001683168-24-001821
Item 7. Management’s Discussion and Analysis of Financial Condition and Results of OperationsCurrent report: 10-K
Period ended 2024-12-31; filed 2025-04-09.
0001683168-25-002351
Item 7. Management’s Discussion and Analysis of Financial Condition and Results of OperationsThe baseline is this issuer’s latest earlier reporting period of the same form that was filed before the current report. A previous 10-Q is a different quarter, not a year-over-year comparison. Amendments are excluded.
Compared 63 previous paragraphs and 69 current paragraphs.
40 unchanged; 15 reworded; 11 added; 8 removed; 0 previous and 3 current paragraphs rearranged.
Tables are not compared: 3 previous and 3 current tables excluded. Dates, whitespace, punctuation and numbering changes are ignored; changes to financial figures remain significant.
A changed paragraph is not evidence that risk increased or decreased. An unchanged paragraph does not establish that risk stayed the same.
Added paragraphs (11)
Current report
Research and Development. Research and development expense is primarily related to personnel and quality and regulatory systems. Total expenses were fairly consistent year-over-year with $888,766 for the year ended December 31, 2024, compared to $873,336 for the year ended December 31, 2023, an increase of $15,430 or 1.8%.
Current report
Gain (Loss) on Settlement of Debt. During the year ended December 31, 2024, the Company negotiated favorable discounts to outstanding accounts payable in the amount of $117,985. This gain was offset almost entirely by the accelerated amortization of note discounts of $111,927 related to the payoff in cash of the Series C Notes Payable in March 2024. The net gain for the year ended December 31, 2024, was $6,058.
Current report
Gain (Loss) on Exchange of Debt. During the year ended December 31, 2024, the Company recorded a loss of $1,066,732 in the first quarter related to the accelerated amortization of note discounts triggered by the exchange of principal and accrued interest on the Senior Notes Payable for shares of common stock. Additionally, in the third quarter of 2024, the Company recorded a loss of $6,585 related to the accelerated amortization of note discounts triggered by the exchange of principal and accrued interest on the Series B Notes Payable for newly issued Series B convertible preferred stock described in Note 10 to our financial statements -- Short Term Notes, Convertible Debt, and Derivative Liabilities.
Current report
Gain (Loss) on Issuance of Warrants. During the year ended December 31, 2023, the Company incurred issuance costs of $72,862 relating to the Series C Notes Payable warrants which were recorded as a day 1 expense due to the liability classification of such warrants.
Current report
Penalties and Settlements. During the year ended December 31, 2024, the Company recorded a $25,000 settlement charge related to the timely registration of Series C Notes Payable commitment shares, and a $187,453 charge recognizing the forward element related to equity line commitment shares.
Current report
During the year ended December 31, 2024, we raised an aggregate of $6.6 million of gross proceeds and reduced debt and accrued interest by $2.7 million.
Current report
Gross proceeds raised in the year 2024 included $1.8 million from our equity line, $3.0 million from a February 27, 2024 public offering, $1.0 million from our sale of Series C Preferred Stock, $0.5 million from three Regulation A+ offerings, and $0.3 million from an at-the-market offering.
Current report
The Company retired $2.7 million of outstanding debt through a combination of a $1.5 million conversion of debt to common stock, a $0.9 million exchange of debt for Series B Preferred Stock, and a cash payoff of $0.3 million.
Current report
Subsequent to December 31, 2024, the Company raised an aggregate of $20.1 million of gross proceeds through a combination of a public offering of units ($14.6 million) consisting of common shares, A warrants, and B warrants, two registered direct offerings ($5.2 million) of common stock, and the exercise of Series C Preferred warrants ($0.3 million). See Note 17 – Subsequent Events to our financial statements for more information.
Current report
During the year ended December 31, 2024, net cash provided by financing activities was $5,026,138, which included gross proceeds of $1,754,032 from our equity line, $3,001,495 from a February 27, 2024, public offering, $1,000,000 from our sale of Series C Preferred Stock, $529,254 from three Regulation A+ offerings, and $288,294 from an at-the-market offering. Cash issuance costs related to all financing activities totaled $1,254,964. The Company used cash in the year 2024 to retire $300,973 of outstanding debt.
Current report
We will remain an emerging growth company until the earliest of (1) the last day of the fiscal year (a) following the fifth anniversary of the completion of our IPO, (b) in which we have total annual gross revenue of at least $1.235 billion or (c) in which we are deemed to be a large accelerated filer, which means the market value of our common stock that is held by non-affiliates exceeds $700 million as of the prior December 31st, and (2) the date on which we have issued more than $1.0 billion in non-convertible debt during the prior three-year period.
Removed paragraphs (8)
Previous report
Research and Development. Research and development expenses were $873,336 for the year ended December 31, 2023, compared to $1,067,992 for the year ended December 31, 2022, a decrease of $194,656 or 18.2%. This decrease was primarily due to a $123,828 contract milestone payment to UCSF in April 2022, related to the initial public offering, and reduced expense in 2023 clinical services.
Previous report
Going Concern
Previous report
As of December 31, 2023, we had cash of approximately $1.0 million. Subsequent to December 31, 2023, the Company raised capital using an equity line and a secondary public offering (refer to Note 17 – Subsequent Events to our financial statements). We believe our current cash will fund our operating expenses and capital expenditure requirements into the third quarter of 2024, approaching our final maturity repayment of our unsecured non-convertible note, which is due in September 2024. The Company has based these estimates, however, on assumptions that may prove to be wrong, and could spend available financial resources much faster than we currently expect. The Company will need to raise additional funds to continue funding our technology development and commercialization efforts over the following twelve months. Management has plans to secure such additional funding.
Previous report
As a result of the Company’s recurring losses from operations, and the need for additional financing to fund its operating and capital requirements, there is uncertainty regarding the Company’s ability to maintain liquidity sufficient to operate its business effectively, which raises substantial doubt as to the Company’s ability to continue as a going concern.
Previous report
To date, we have financed our operations primarily through private placements of preferred shares and debt financing, PPP loans that were forgiven, an equity line, an initial public offering on April 21, 2022, and a secondary public offering on February 27, 2024.
Previous report
Through December 31, 2023, we raised an aggregate of $32,603,097 of gross proceeds from $19,319,098 of preferred and common stock, $2,928,541 from the sale of convertible notes that were later converted to equity, $370,191 of PPP loans that were forgiven, $8,527,318 of net proceeds from the April 2022 IPO, and $1,457,949 of net proceeds from an equity line.
Previous report
We issued a $2,000,000 promissory note in June 2021 that was repaid in April 2022.
Previous report
On May 16, 2023, the Company entered into a securities purchase agreement with accredited investors for an unsecured non-convertible note financing. The Company received $1,250,000 of gross proceeds, with out-of-pocket issuance costs of $203,575. On September 1, 2023, the Company closed the second tranche of this financing. The Company received an additional $750,000 of gross proceeds, with out-of-pocket issuance costs of $92,738. On November 1, 2023, the Company entered into a securities purchase agreement with accredited investors for an unsecured non-convertible note financing. The Company received an additional $250,000 of gross proceeds, with out-of-pocket issuance costs of $65,363.
Reworded paragraphs (15)
Previous wording
To date, we have financed our operations primarily through private placements of preferred shares and debt financing, PPP loans that were forgiven, an equity line, an initial public offering on April 21, 2022, and a secondary public offering on February 27, 2024.
Current wording
To date, we have financed our operations primarily through private placements and public offerings of our equity and debt securities.
Previous wording
Since our inception we have incurred significant operating losses. As of December 31, 2023, we had an accumulated deficit of approximately $44.3 million. Our ability to generate product revenue sufficient to achieve profitability will depend heavily on the successful commercialization and continued development of our SaaS platform. We expect that our expenses and capital requirements will increase substantially in connection with our ongoing activities, particularly if and as we:
Current wording
Since our inception we have incurred significant operating losses. As of December 31, 2024, we had an accumulated deficit of $51.3 million. Our ability to generate product revenue sufficient to achieve profitability will depend heavily on the successful commercialization and continued development of our SaaS platform. We expect that our expenses and capital requirements will increase substantially in connection with our ongoing activities, particularly if and as we:
Previous wording
As of December 31, 2023, we had cash of approximately $1.0 million. Subsequent to December 31, 2023, the Company raised capital using an equity line and a secondary public offering (refer to Note 17 – Subsequent Events to our financial statements). We believe our current cash will fund our operating expenses and capital expenditure requirements into the third quarter of 2024, approaching our final maturity repayment of our unsecured non-convertible note, which is due in September 2024. We have based this estimate on assumptions that may prove to be wrong, and we could exhaust our available capital resources sooner than we expect. See “Liquidity and capital resources.” To finance our operations beyond that point, we will need to raise additional capital, which cannot be assured. If we are unable to raise additional capital in sufficient amounts or on terms acceptable to us, we may have to significantly delay, scale back, or discontinue the commercialization or further development of our SaaS platform.
Current wording
As of December 31, 2024, we had cash of approximately $0.46 million. Subsequent to December 31, 2024, the Company raised capital with two registered direct offerings and one underwritten public offering (refer to Note 17 – Subsequent Events to our financial statements). We believe our current cash will fund our operating expenses and capital expenditure requirements into the third quarter of 2026. We have based this estimate on assumptions that may prove to be wrong, and we could exhaust our available capital resources sooner than we expect. See “Liquidity and capital resources.” To finance our operations beyond that point, we will need to raise additional capital, which cannot be assured. If we are unable to raise additional capital in sufficient amounts or on terms acceptable to us, we may have to significantly delay, scale back, or discontinue the commercialization or further development of our SaaS platform.
Previous wording
Total revenues. Total revenue for the year ended December 31, 2023, was $75,404, which was an increase of $14,960 from $60,444 for the year ended December 31, 2022. This increase was primarily due to growing utilization of Nociscan in third-party clinical studies. Volumes and pricing were generally consistent in each year.
Current wording
Total revenues. Total revenue for the year ended December 31, 2024, was $45,724, which was an decrease of $29,680 from $75,404 for the year ended December 31, 2023. This decrease was primarily due to the reduced utilization of Nociscan in third-party clinical studies, offset in part by and increase in patient-pay volumes.
Previous wording
*Cost of Revenue.*Cost of Revenue is comprised of hosting and software costs, field support, UCSF royalty cost, NuVasive commission of 6%, partner fees (Radnet), and credit card fees. Total Cost of Revenue was $75,728 for the year ended December 31, 2023, compared to $65,298 for the year ended December 31, 2022, an increase of 16.0%. This increase was primarily due to higher year-over-year scan volumes and related Nociscan report output.
Current wording
*Cost of Revenue.*Cost of Revenue is comprised of hosting and software costs, field support, UCSF royalty cost, NuVasive commission of 6% (expired in 2023), partner fees (Radnet), and credit card fees. Total Cost of Revenue was $84,658 for the year ended December 31, 2024, compared to $75,728 for the year ended December 31, 2023, an increase of 11.8%. While Nociscan report volumes decreased from the year 2023 to 2024, the increase in Cost of Revenue was primarily due to a higher mix of Nociscan volume in Radnet accounts, which are subject to partner fees.
Previous wording
Sales and Marketing. Sales and marketing expenses were $757,004 for the year ended December 31, 2023, compared to $498,003 for the year ended December 31, 2022, an increase of $259,001 or 52.0%. This increase was driven primarily by additional vesting of restricted stock units to our increased number of Key Opinion Leaders.
Current wording
Sales and Marketing. Sales and marketing expenses were $976,554 for the year ended December 31, 2024, compared to $757,004 for the year ended December 31, 2023, an increase of $219,550 or 29.0%. This increase was driven primarily by the initiation of the Clarity clinical study in 2024 and co-marketing agreements in select markets, offset in part by the conclusion in 2024 of restricted stock unit vesting expense related to our Key Opinion Leaders.
Previous wording
General and Administrative. General and administrative expenses were $3,245,317 for the year ended December 31, 2023, a decrease of $745,402 or 18.7%, from $3,990,719 for the year ended December 31, 2022. This decrease in general and administrative expenses was driven primarily by a higher 2022 compensation expense related to the vesting of the Executive Chairman’s and executive’s outstanding common stock options, offset in part by higher legal and accounting fees in 2023.
Current wording
General and Administrative. General and administrative expenses were $3,608,793 for the year ended December 31, 2024, an increase of $363,476 or 11.2%, from $3,245,317 for the year ended December 31, 2023. This increase in general and administrative expenses was driven by increased investor relation services, non-cash expense related to the equity line of credit, and a higher bonus accrual, offset in part by lower Director & Officer insurance premiums in 2024.
Previous wording
Interest Expense. Total Interest expense was $608,288 for the year ended December 31, 2023, a decrease of $899,258, from the $1,507,546 for the year ended December 31, 2022. This decrease was driven primarily by the $1.3 million beneficial conversion rate charged to interest expense in 2022 for the conversion of all accrued interest on the Company's outstanding secured promissory notes into common shares and common stock warrants in connection with the April 2022, initial public offering. The 2023 interest expense was primarily due to the amortization of the note discount associated with the unsecured non-convertible promissory notes described in Note 11 to our financial statements -- Short Term Notes, Convertible Debt, and Derivative Liabilities.
Current wording
Interest Expense. Total Interest expense was $535,470 for the year ended December 31, 2024, a decrease of $72,818, from the $608,288 for the year ended December 31, 2023. Interest expense was primarily the amortization of note discounts associated with the unsecured non-convertible promissory notes described in Note 10 to our financial statements -- Short Term Notes, Convertible Debt, and Derivative Liabilities. In 2024, the company retired all notes payable through cash payoff or exchange for common and/or preferred stock.
Previous wording
Changes in Fair Value of Warrant and Derivative Liabilities. In the year ended December 31, 2023, the Company recorded $646,319 of changes in the fair value of the warrant and derivative liabilities associated with unsecured non-convertible promissory notes described in Note 4 -- Fair Value Measurements and Note 11 -- Short Term Notes, Convertible Debt, and Derivative Liabilities to our financial statements.
Current wording
Changes in Fair Value of Warrant and Derivative Liabilities. In the year ended December 31, 2024, the Company recorded a favorable change of $335,033 in the fair value of the warrant and derivative liabilities associated with unsecured non-convertible promissory notes described in Note 3 -- Fair Value Measurements and Note 10 -- Short Term Notes, Convertible Debt, and Derivative Liabilities to our financial statements. The favorable change in fair value of the warrant and derivative liabilities recorded in the year ended December 31, 2023, was $646,319.
Previous wording
Other Net Expenses. During the year ended December 31, 2023, Other Net expenses were $562, which included bank interest, government fees, and realized exchange rate gain (losses).
Current wording
Other Net Expenses. During the year ended December 31, 2024, Other Net income was $269, which included bank interest, government fees, and realized exchange rate gain (losses). During the year ended December 31, 2023, the company recorded expense of $562.
Previous wording
Net income (loss). The Company experienced a net loss of $4,911,374 for the year ended December 31, 2023, compared to a net loss of $7,068,593 for the year ended December 31, 2022. In general, the year ended December 31, 2023 excluded two significant expenses that were present during the year 2022, that being the compensation expense related to the vesting of the Executive Chairman’s and other executive’s outstanding common stock options, and the $1.3 million beneficial conversion rate charged to interest expense for the conversion of all accrued interest on the Company's outstanding secured promissory notes into common shares and common stock warrants in connection with the April, 2022, initial public offering.
Current wording
Net income (loss). The Company experienced a net loss of $6,992,927 for the year ended December 31, 2024, compared to a net loss of $4,911,374 for the year ended December 31, 2023, an increase of $2,081,552 (42%).
Previous wording
As of December 31, 2023, we had cash, including $10,000 of restricted cash, of $1,031,069. Subsequent to December 31, 2023, the Company entered into a series of Exchange Agreements with accredited investors and issued additional common shares using the equity line. Additionally, the Company completed a secondary public offering in February 2024. See Note 17 – Subsequent Events to our financial statements for more information. We believe our current cash will fund our operating expenses and capital expenditure requirements into the third quarter of 2024, approaching our final maturity repayment of our unsecured non-convertible note, which is due in September 2024. Management is actively managing our cash position and working to secure longer-term funding in the first quarter of 2024.
Current wording
As of December 31, 2023, we had cash, including $10,000 of restricted cash, of $1,031,069.
Previous wording
During the year ended December 31, 2023, net cash used in operating activities was $3,646,947. This use of cash consisted primarily of compensation and benefit expense, officers’ liability insurance, consulting, tax and audit fees, and maintain our quality system. Cash outlays in the year 2023 were relatively lower than the year 2022 due to longer procure-to-pay cycles. During the twelve months ended December 31, 2022, operating activities used $4,949,112, consisting primarily of compensation and benefit expense, consulting, and professional fees.
Current wording
During the year ended December 31, 2024, net cash used in operating activities was $5,271,609. This use of cash consisted primarily of compensation and benefit expense, consulting, tax and audit fees, officers’ liability insurance, and maintaining our quality system. Cash outlays in the year 2024 were relatively higher than the year 2023 due to an increase in annual prepayments, settlement of long-standing accounts payable, and shorter procure-to-pay cycles. During the twelve months ended December 31, 2023, operating activities used $3,646,947, consisting primarily of compensation and benefit expense, consulting, and professional fees.
Previous wording
During the year ended December 31, 2023, and 2022, investing activities used $119,522 and $207,870 of cash, respectively. These investing activities consisted almost entirely of patent and license maintenance.
Current wording
During the year ended December 31, 2024, and 2023, investing activities used $321,937 and $119,522 of cash, respectively. These investing activities consisted almost entirely of patent and license maintenance.
Previous wording
During the year ended December 31, 2023, net cash provided by financing activities was $3,314,732, which included $2,250,000 of proceeds from unsecured non-convertible note financings, 1,462,949 of proceeds from an equity line, and $398,217 of cash issuance costs related to both the equity line and debt. During the year ended December 31, 2022, net cash provided by financing activities was $6,187,258, which included $8,552,318 of initial public offering proceeds (net of underwriter compensation and deductions but excluding $25,000 pre-payment in 2021), $2,000,000 repayment of promissory notes, and $365,060 of IPO issuance costs.
Current wording
During the year ended December 31, 2023, net cash provided by financing activities was $3,314,732, which included $2,250,000 of proceeds from unsecured non-convertible note financings, $1,462,949 of proceeds from an equity line, and $398,217 of cash issuance costs related to both the equity line and debt.
Rearranged current paragraphs (3)
Current report — wording carried from elsewhere
To date, we have financed our operations primarily through private placements and public offerings of our equity and debt securities.
Current report — wording carried from elsewhere
As of December 31, 2024, we had cash of $463,661, including $10,000 of restricted cash.
Current report — wording carried from elsewhere
We believe our current cash will fund our operating expenses and capital expenditure requirements into the third quarter of 2026. Management is actively managing our cash position and continually working to secure long-term funding.