Aclarion, Inc.
For the period ended Dec 31, 2025. Filed Mar 18, 2026.
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.
FY2025 · Filed Mar 18, 2026
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 2024-12-31; filed 2025-04-09.
0001683168-25-002351
Item 7. Management’s Discussion and Analysis of Financial Condition and Results of OperationsCurrent report: 10-K
Period ended 2025-12-31; filed 2026-03-18.
0001683168-26-001986
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 69 previous paragraphs and 96 current paragraphs.
38 unchanged; 12 reworded; 46 added; 19 removed; 0 previous and 0 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 (46)
Current report
The Company currently operates as a Delaware corporation, under the name Aclarion, Inc.
Current report
Total revenues.
Current report
Total revenues for the year ended December 31, 2025, were $75,730, which was an increase of $30,006 or 65.6%, from $45,724 for the year ended December 31, 2024. This increase in revenue was driven primarily by the growing volume of NOCISCAN® reports sold into the UK market following recent local coverage decisions. We expect this increase in revenue to continue as we bring on more insurance payors, and our scan volumes increase.
Current report
Cost of Revenue.
Current report
Sales and Marketing.
Current report
Sales and marketing expenses primarily consist of post-clearance clinical services related to the CLARITY Trial, product marketing consulting, travel and entertainment costs, and salaries and benefits. Sales and marketing expenses totaled $1,900,598 for the year ended December 31, 2025, compared to $976,554 for the year ended December 31, 2024, representing an increase of $924,044 or 94.6%.
Current report
The increase in sales and marketing expenses was primarily driven by higher post-clearance clinical services, which was $606,838 for the year ended December 31, 2025, compared to $300,794 for the same period in 2024, an increase of $306,044, reflecting costs associated with the initiation of the CLARITY Trial, for which the first patient enrolled in June 2025. With continued enrollment in the CLARITY Trial in 2026, we expect these expenses continue to increase. Product marketing consulting expenses increased by $277,410, to $362,640 for the year ended December 31, 2025, compared to $85,230 for the same period in 2024, reflecting expanded use of external marketing consultants. Salaries and benefits increased by $218,569 to $542,515 for the year ended December 31, 2025, compared to $323,946 for the same period in 2024, primarily due to accruals for incentive-based performance payouts and hiring of additional sales and marketing personnel in the United States and the United Kingdom. We expect salaries and benefits continue to increase as a result of planned hiring within our sales and marketing function. Travel and entertainment expenses increased by $104,997 to $228,834 for the year ended December 31, 2025, compared to $123,837 for the year ended December 31, 2024, primarily related to activities supporting local coverage determinations in the United Kingdom.
Current report
Research and Development.
Current report
Research and development expenses increased by $145,023, or 16.3%, to $1,033,789 for the year ended December 31, 2025, compared to $888,766 for the year ended December 31, 2024. The increase was primarily attributable to higher patent maintenance fees, which totaled $52,141 for the year ended December 31, 2025, compared to $0 for the same period in 2024, reflecting the Company’s efforts to advance protection of its intellectual property portfolio. In addition, bonus expense increased by $58,013 to $85,771 for the year ended December 31, 2025, compared to $27,758 in 2024, due to accruals for incentive-based performance payouts. Quality system and regulatory consulting expenses increased by $36,964 to $210,032 for the year ended December 31, 2025, compared to $173,068 for the same period in 2024, primarily as a result of expanded regulatory compliance and documentation activities. We expect research and development expenses to continue to increase as we continue the development of the Nociscan 3.0 product.
Current report
General and Administrative.
Current report
General and administrative expenses were $4,124,832 for the year ended December 31, 2025, compared to $3,608,793 for the year ended December 31, 2024, representing an increase of $516,039 or 14.3%. The increase was primarily driven by higher accruals under the Company’s 2025 incentive bonus program, which totaled $357,902 for the year ended December 31, 2025, compared to $216,409 in 2024, an increase of $141,493, due to incentive-based performance payout accruals. In addition, insurance expenses, primarily related to directors and officers (“D&O”) coverage, increased to $372,588 for the year ended December 31, 2025, from $289,798 in the prior-year period, an increase of $82,790, reflecting expanded policy coverage and higher renewal premiums. The Company also incurred litigation and financial accounting advisory expenses of $100,534 and $383,793, respectively, for the year ended December 31, 2025, compared to $0 and $208,752, respectively, for the same period in 2024, representing increases of $100,534 and $175,041, respectively. These increases were partially offset by a decrease of $118,182 in stock-based compensation expense, which totaled $105,368 for the year ended December 31, 2025, compared to $223,550 in 2024, primarily attributable to stock options that vested in the prior year.
Current report
Interest Expense.
Current report
Interest expense was $0 for the year ended December 31, 2025, compared to $535,470 for the year ended December 31, 2024. The decrease in interest expense was attributable to the retirement of all unsecured non-convertible notes in 2024.
Current report
Loss On Exchange Of Debt and Gain On Extinguishment Of Debt.
Current report
During the year ended December 31, 2024, the Company incurred losses on two transactions undertaken to reduce outstanding debt. The first transaction occurred between January 22 and January 29, 2024, when the Company entered into a series of exchange agreements with investors to issue an aggregate of 644,142 shares of common stock (71 shares as adjusted for 2025 Stock Splits) in exchange for $1,519,779 of principal and accrued interest on outstanding notes. This transaction accelerated the recognition of the related note discounts, resulting in a loss on exchange of debt of $1,073,317 for the year ended December 31,2024, compared to $0 for the year ended December 31, 2025.
Current report
The second transaction occurred on March 6, 2024, when the Company repaid $300,974 of principal and accrued interest on the notes. This transaction also accelerated the recognition of the related note discounts and resulted in a charge $111,928 for the year ended December 31, 2024. This charge was offset by a gain on settlement of debt of $117,985, resulting in a net gain on extinguishment of debt of $6,058 for the year ended December 31, 2024. In contrast, the Company recognized a gain of $73,272 for the year ended December 31, 2025, representing an increase in gain of $67,214, related to the retirement of an obligation associated with commitment shares.
Current report
The Company’s warrant and derivative liabilities are measured at fair value at each reporting date. For the year ended December 31, 2025, the Company recorded a favorable fair value adjustment of $11,806, compared to a favorable adjustment of $335,033 for the year ended December 31, 2024, representing a decrease in favorable adjustment of $323,227. The derivative liability was fully retired in 2024 in connection with the settlement of all unsecured non-convertible notes.
Current report
Penalties and Settlements.
Current report
In March 2025, the Company paid $687,500 to settle a dispute under the "fee tail" provision of a previously executed investment banking agreement. This payment was partially offset by a $14,875 favorable accounts payable settlement, resulting in penalties and settlements expense of $672,625 for the year ended December 31, 2025, compared to $212,453 for the year ended December 31, 2024, representing an increase of $460,172.
Current report
Interest Income.
Current report
Interest income was $411,061 for the year ended December 31, 2025, primarily reflecting interest income earned on money market deposits following the Company’s fundraising activities during 2025, compared to $318 for the year ended December 31, 2024, representing an increase of $410,743.
Current report
Net Loss.
Current report
As of December 31, 2025, we had cash and cash equivalents of $12,040,789, including $25,000 of restricted cash.
Current report
Subsequent to December 31, 2025, the Company completed a registered direct public offering of (i) 200,000 shares of the Company’s common stock, and (ii) pre-funded warrants (the “Pre-funded Warrants”) to purchase up to 1,800,000 shares of common stock, at an offering price of $5.18 per share. The purchase price of each Pre-funded Warrant was $5.17999, which represents the offering price per share of common stock, minus the exercise price of $.00001 per share. The Pre-funded Warrants are immediately exercisable. The aggregate gross proceeds to the Company from this offering were approximately $10.4 million, before deducting placement agent fees of 6% of the aggregate gross proceeds and other offering expenses payable by the Company. See Note 16 – Subsequent Events to our financial statements for more information.
Current report
During the year ended December 31, 2025, the Company used $7,164,204 in cash for operating activities, representing an increase in cash use of $1,892,595, compared to $5,271,609 used during the same period in 2024. The increase in cash used in operating activities was primarily attributable to a higher net loss after adjustments for non-cash items, partially offset by favorable changes in certain working capital accounts.
Current report
For the year ended December 31, 2025, the Company recognized a net loss after non-cash adjustments of $6,806,302, representing an increase of $2,098,937, compared to an adjusted net loss of $4,707,365 for the same period in 2024. The year-over-year increase in adjusted net loss was primarily due to lower non-cash addbacks in 2025, including the absence of non-cash adjustment related to the loss on exchange of debt, compared to a non-cash addback of $1,073,317 recorded in 2024, as the Company did not engage in comparable debt exchange or restructuring activities during 2025; the absence of amortization of deferred issuance costs, compared to non-cash addback of $471,387 recorded in 2024, reflecting the completion of the debt financing arrangement in the prior year; and the absence of non-cash expenses related to the equity line agreement, compared to $425,367 recorded in 2024, as the Company did not utilize the equity line of credit in 2025.
Current report
During the year ended December 31, 2025, the Company provided $16,057 in cash related to prepaids and other current assets, representing a decrease in cash used of $303,720, compared to $287,663 used during the same period in 2024. The decrease was primarily attributable to lower advance payments made to vendors and service providers, as well as a reduction in clinical prepayments, compared to the same period in 2024.
Current report
During the year ended December 31, 2025, cash used in investing activities was $203,902, a decrease in cash used of $118,035, compared to cash used of $321,937 during the same period in 2024, mainly due to lower expenditures related to patent and license filings, partially offset by purchases of computer equipment.
Current report
During the year ended December 31, 2025, the Company raised aggregate gross proceeds of $22,566,911 through a combination of financing transactions, including a register direct public offering of units totaling $14,554,545 consisting of common shares, Series A warrants, and Series B warrants; two registered direct offerings of common stock totaling $5,702,968; a registered direct offering of pre-funded warrants totaling $1,972,927; and the exercise of Series C Preferred warrants totaling $336,441.
Current report
January 2025 Registered Direct Public Offerings
Current report
On January 3, 2025, the Company sold in a registered direct offering an aggregate of 3,380,276 shares (374 shares post-2025 Stock Splits) of its common stock at a price of $0.142 per share ($1,284.39 post-2025 Stock Splits). The net proceeds to the Company of this offering were approximately $450,000.
Current report
On January 30, 2025, the Company sold in a registered direct offering an aggregate of 506,803 shares (18,770 shares post-Second 2025 Stock Split) of its common stock at a price of $9.25 per share ($249.75 post-March 2025 stock split). The net proceeds to the Company of this offering were $4.4 million.
Current report
Units Offering Of Common Stock And Warrants
Current report
On January 15, 2025, the Company sold, in an underwritten public offering, an aggregate of (i) 100,000 shares (11 shares post-2025 Stock Splits) of the Company’s common stock, (ii) 143,900,000 pre-funded warrants (the “Pre-Funded Warrants) (15,909 pre-funded warrants post-2025 Stock Splits) to purchase up to an aggregate of 143,900,000 common shares (15,909 shares post-2025 Stock Splits), (iii) 144,000,000 Series A Common Warrants (the “Series A Common Warrants”) (15,920 warrants post-2025 Stock Splits), and (iv) 144,000,000 Series B Common Warrants (the “Series B Common Warrants” and, together with the Series A Common Warrants, the “Common Warrants”) Each share or Pre-Funded Warrant, as applicable, was sold together with one Series A Common Warrant to purchase one share of Common Stock and one Series B Common Warrant to purchase one share of Common Stock.
Current report
The public offering price for each Unit (consisting of a common share (or Pre-Funded Warrant in lieu thereof) and accompanying Common Warrants was $0.10 ($904.50 post-2025 Stock Splits). In addition, the Company granted the underwriter an option to purchase up to an additional 21,000,000 shares (2,322 shares post-2025 Stock Splits) of our common stock (or Pre-Funded Warrants in lieu of shares of Common Stock), at the public offering price, less underwriting discounts and commissions, and up to an additional 21,000,000 (2,322 shares post-2025 Stock Splits) Series A Common Warrants and up to an additional 21,000,000 (2,322 post-2025 Stock Splits) Series B Common Warrants at a nominal price within 45 days from January 15, 2025, to cover over-allotment sales. The underwriter exercised its option to purchase 21,000,000 (2,322 post-2025 Stock Splits) Series A Common Warrants and 21,000,000 (2,322 post-2025 Stock Splits) Series B Common Warrants. The net proceeds to the Company of this offering were $13.4 million.
Current report
The Pre-Funded Warrants had an exercise price of $0.00001 ($.09 post-2025 Stock Splits) per share, were immediately exercisable and expired when exercised in full. All Pre-Funded Warrants have been exercised as of March 31, 2025. Each Series A Common Warrant will have an exercise price per share of $0.20 ($1,809.00 post-2025 Stock Splits) and will be exercisable beginning on the first trading day following the date on which Stockholder Approval is received and deemed effective (the “Initial Exercise Date” or the “Stockholder Approval Date”). The Series A Common Warrants will expire on the five-year anniversary of the Initial Exercise Date. The Series B Common Warrants will have an exercise price per share of $0.20 ($1,809.00 post-2025 Stock Splits) and will be exercisable beginning on the Initial Exercise Date. The Series B Common Warrants will expire on the two and one-half year anniversary of the Initial Exercise Date.
Current report
On March 5, 2025, the Company convened a Special Meeting of Stockholders. Stockholders approved the full issuance of shares of common stock issuable by the Company upon exercise of the Series A Common Warrants and the Series B Common Warrants. Following March 5, 2025, holders of Series B warrants have exercised substantially all of our outstanding Series B warrants using the alternative cashless exercise ("ACE") feature included in those warrants. The Company has issued approximately 14.7 million common shares (544 thousand shares adjusted for the Second 2025 Stock Split) in such Series B warrant exercises. No Series A warrants have been exercised as of December 31, 2025.
Current report
On January 22, 2025, the Company redeemed all Series B Preferred Stock and related accrued dividends with a cash payment of $1,213,590.
Current report
October 2025 Registered Direct Public Offering
Current report
On October 14, 2025, the Company sold, in a registered direct public offering, an aggregate of (i) 64,000 shares of the Company’s common stock, and (ii) pre-funded warrants (the “Pre-funded Warrants”) to purchase up to 236,000 shares of common stock, at an offering price of $8.36 per share. The Pre-funded Warrants were immediately exercisable, with exercise price of $.00001 per share. A holder of Pre-funded Warrants may not exercise the warrant if the holder, together with its affiliates, would beneficially own more than either 4.99% or 9.99% of the number of shares of the common stock outstanding immediately after giving effect to such exercise. A holder of Pre-funded Warrants may increase or decrease this percentage not in excess of 9.99% by providing at least 61 days’ prior notice to the Company.
Showing the first 40 of 46 passages. Open the source sections for the rest.
Removed paragraphs (19)
Previous report
We were formed under the name Nocimed, LLC, a limited liability company in January 2008, under the laws of the State of Delaware. In February 2015, Nocimed, LLC was converted into Nocimed, Inc., a Delaware corporation. On December 3, 2021, we changed our name to Aclarion, Inc. Our principal executive offices are located at 8181 Arista Place, Suite 100, Broomfield, Colorado 80021. Our main telephone number is (833) 275-2266. Our internet website is www.aclarion.com. The information contained in, or that can be accessed through, our website is not incorporated by reference and is not a part of this Annual Report on Form 10-K.
Previous report
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 report
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 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%.
Previous report
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 report
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 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.
Previous 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.
Previous 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.
Previous 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.
Previous report
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 report
Until our April 2022 IPO, we were a private company with no active public market for our common equity. Therefore, we had periodically determined the overall value of our company and the estimated per share fair value of our common equity at their various dates using contemporaneous valuations performed in accordance with the guidance outlined in the American Institute of CPA’s Practice Aid. Since a public trading market for our common stock has been established in connection with the completion of our IPO, the fair value of the Company’s common stock underlying its equity awards is the quoted market price of the Company’s common stock on the grant date.
Previous report
As of December 31, 2023, we had cash, including $10,000 of restricted cash, of $1,031,069.
Previous 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.
Previous 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.
Previous report
As of December 31, 2024, we had cash of $463,661, including $10,000 of restricted cash.
Previous report
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 report
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 report
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.
Reworded paragraphs (12)
Previous 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:
Current wording
Since our inception we have incurred significant operating losses. As of December 31, 2025, we had an accumulated deficit of $58,495,940. 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
Our primary near-term growth strategy is to secure payer contracts (including insurance companies, self- insured employers, Medicare, Medicaid, workmen’s compensation boards et. al.) to cover our Category III CPT codes. We believe that with favorable payer coverage, the Company has the opportunity to more efficiently engage physicians and imaging centers that will adopt our technology.
Current wording
Our primary near-term growth strategy is to secure payer contracts (including insurance companies, self- insured employers, Medicare, Medicaid, workmen’s compensation boards et. al.) to cover our Category III CPT codes and convert them into Category I CPT codes. We believe that with favorable payer coverage, the Company has the opportunity to more efficiently engage physicians and imaging centers that will adopt our technology.
Previous 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.
Current wording
As of December 31, 2025, we had cash and cash equivalents and restricted cash of $12,040,789. Subsequent to December 31, 2025, the Company raised additional capital through a registered direct offering (refer to Note 16 – Subsequent Events to our financial statements). We believe our current cash and cash equivalents and restricted cash will fund our operating expenses and capital expenditure requirements through the first quarter of 2028. 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
*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.
Current wording
Cost of revenue is comprised of hosting and software costs, field support, UCSF royalty cost, partner fees (Radnet), and credit card fees. Total cost of revenue was $68,902 for the year ended December 31, 2025, compared to $84,658 for the year ended December 31, 2024, a decrease of $15,756 or 18.6%. This decrease was primarily due to a reduced allocation of hosting fees to cost of revenue and a change in revenue mix that reduced partner fees.
Previous 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.
Current wording
Changes in Fair Value of Warrant and Derivative Liabilities.
Previous 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%).
Current wording
The Company reported a net loss of $7,233,629 for the year ended December 31, 2025, compared to a net loss of $6,992,927 for the year ended December 31, 2024, representing an increase in net loss of $240,702 or 3.4%.
Previous wording
The Company derives its revenues from one source, the delivery of Nociscan reports to medical professionals. Revenues are recognized when a contract with a customer exists, and the control of the promised services are transferred to our customers. The amount of revenue recognized reflects the consideration we expect to receive in exchange for those services. Substantially all our revenues are generated from contracts with customers in the United States.
Current wording
The Company derives its revenues from one source, the delivery of Nociscan reports to medical professionals. Revenues are recognized when a contract with a customer exists, and the control of the promised services are transferred to our customers. The amount of revenue recognized reflects the consideration the Company expects to receive in exchange for those services. Substantially all of our revenues are generated from contracts with customers in the United Kingdom and the United States.
Previous wording
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 wording
During the year ended December 31, 2025, the Company raised aggregate gross proceeds of $22,566,911 through a combination of financing transactions, including a registered direct public offering of units totaling $14,554,545 consisting of common shares, Series A warrants, and Series B warrants; two registered direct offerings of common stock totaling $5,702,968; a registered direct offering of pre-funded warrants totaling $1,972,957; and the exercise of Series C Preferred warrants totaling $336,441.
Previous wording
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.
Current wording
We believe our current cash will fund our operating expenses and capital expenditure requirements into the first quarter of 2028. Management is actively managing the cash position.
Previous wording
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 wording
Redemption Of Series B Preferred Stock
Previous wording
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 wording
During the year ended December 31, 2024, net cash provided by financing activities was $4,900,996 which included gross proceeds of $1,754,032 from our equity line, $2,691,391 from a February 27, 2024 public offering, $1,000,000 from sales of C-series preferred stock and warrants, and $529,254 from common stock and warrant RegA+ offering. Cash issuance costs related to all financing activities totaled $772,707. The Company used cash in the year 2024 to retire $300,973 of outstanding promissory debt.
Previous wording
Our prior office lease and sublease expired on June 30, 2022. The Company does not have any contractual obligations not otherwise on our balance sheet as of December 31, 2024.
Current wording
The Company does not have any contractual obligations, not otherwise on our balance sheet as of December 31, 2025.