Aclarion, Inc.
For the period ended Mar 31, 2026. Filed May 13, 2026.
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A company's report for each of its first three quarters. The financial statements are not audited. It shows how the business has moved since the last annual report, and what management says changed.
Mar 31, 2026 · Filed May 13, 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-Q
Period ended 2025-09-30; filed 2025-11-12.
0001683168-25-008169
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of OperationsCurrent report: 10-Q
Period ended 2026-03-31; filed 2026-05-13.
0001683168-26-003822
Item 2. 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 105 previous paragraphs and 80 current paragraphs.
34 unchanged; 16 reworded; 30 added; 51 removed; 4 previous and 0 current paragraphs rearranged.
Tables are not compared: 3 previous and 2 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 (30)
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 $908,797 for the three months ended March 31, 2026, compared to $302,584 for the three months ended March 31, 2025, representing an increase of $606,213 or 200.3%.
Current report
The increase in sales and marketing expenses was primarily driven by higher post-clearance clinical services, which was $191,021 for the three months ended March 31, 2026, compared to $150,532 for the same period in 2025, an increase of $40,489, 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 will continue to increase for the remainder of 2026.
Current report
Salaries and benefits increased by $228,171 to $303,844 for the three months ended March 31, 2026, compared to $75,673 for the same period in 2025, 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 to continue to increase as a result of planned hiring within our sales and marketing functions during 2026.
Current report
Travel and entertainment expenses increased by $23,982 to $65,595 for the three months ended March 31, 2026, compared to $41,613 for the same period in 2025, primarily due to activities supporting local coverage determinations in the United Kingdom and increased travel by salespeople.
Current report
Research and development expenses increased by $117,227, or 59.1%, to $315,417 for the three months ended March 31, 2026, compared to $198,190 for the three months ended March 31, 2025.
Current report
The increase was primarily driven by higher patent maintenance fees, which totaled $40,879 for the three months ended March 31, 2026, compared to $314 for the same period in 2025, an increase of $40,565. This rise reflects the Company’s ongoing efforts to strengthen and expand protection of its intellectual property portfolio.
Current report
Bonus expense increased by $24,050 for the three months ended March 31, 2026, from $0 in the corresponding prior-year period, due to accruals for incentive-based compensation.
Current report
In addition, quality system and regulatory consulting expenses increased by $16,109 to $60,681 for the three months ended March 31, 2026, compared to $44,572 for the same period in 2025, 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 expenses were $1,766,477 for the three months ended March 31, 2026, compared to $986,663 for the three months ended March 31, 2025, representing an increase of $779,814 or 79.0%.
Current report
The increase was primarily driven by investor relations expenses of $360,550 for the three months ended March 31, 2026, compared to $37,358 in the corresponding prior-year period, representing an increase of $323,192, primarily reflecting expanded investor outreach activities and increased use of third-party investor relations service providers.
Current report
The Company recorded accruals under its 2026 incentive bonus program totaling $111,875 for the three months ended March 31, 2026, compared to the absence of any bonus accruals in the corresponding prior-year period.
Current report
For the three months ended March 31, 2026, legal expenses were $215,492 compared to $88,805 in the same period in 2025, an increase of $126,687 primarily due to increased legal and advisory fees associated with corporate governance and shareholder-related matters.
Current report
Delaware franchise tax expense increased to $237,000 for the three months ended March 31, 2026, from $8,947 in the prior-year period, an increase of $228,053, primarily due to changes in the Company’s capital structure and the methodology used to calculate the Company’s Delaware franchise tax obligation.
Current report
These increases were partially offset by a decrease of $51,203 in stock-based compensation expense, which totaled $4,694 for the three months ended March 31, 2026, compared to $55,897 for the same period in 2025, primarily attributable to stock options that vested in the prior year.
Current report
Gain On Extinguishment Of Debt.
Current report
Gain on extinguishment of debt was $0 for the three months ended March 31, 2026, compared to $73,272 in the corresponding prior-year period, reflecting the absence of debt extinguishment activity in the current period. The prior-year gain primarily related to the retirement of an obligation associated with commitment shares.
Current report
The Company’s warrant liabilities are measured at fair value at each reporting date. For the three months ended March 31, 2026, the Company recorded a favorable fair value adjustment of $18, compared to $11,721 in the corresponding prior-year period, representing a decrease of $11,703, primarily due to the settlement of warrants in the prior period, resulting in fewer outstanding warrant liabilities subject to remeasurement in the current period.
Current report
Penalties and settlements expense were $0 for the three months ended March 31, 2026, compared to $672,500 in the corresponding prior-year period, reflecting the absence of settlement-related charges in the current period. The prior-year expense primarily related to a payment to settle a dispute under the “fee tail” provision of a previously executed investment banking agreement, partially offset by a favorable accounts payable settlement.
Current report
Interest Income.
Current report
Interest income was $133,035 for the three months ended March 31, 2026, compared to $42,163 in the corresponding prior-year period, representing an increase of $90,872, primarily reflecting higher average cash balances following the Company’s fundraising activities and related interest earned on money market deposits.
Current report
The Company accounts for stock-based awards in accordance with provisions of ASC Topic 718, Compensation—Stock Compensation, under which the Company recognizes the grant-date fair value of stock-based awards issued to employees and nonemployee board members as compensation expense on a straight-line basis over the vesting period of the award, while awards containing a performance condition are recognized as expense when the achievement of the performance criteria is achieved. The Company uses the Black-Scholes option pricing model to determine the grant-date fair value of stock options. The Company records expense for forfeitures in the periods they occur.
Current report
The Company believes its current cash resources are sufficient to fund its operating expenses and capital expenditure requirements for at least twelve months from the issuance date of these condensed financial statements and into the second half of 2027. Management continues to actively monitor and manage the Company’s cash position.
Current report
During the three months ended March 31, 2026, the Company used $2,641,845 in cash for operating activities, compared to $2,510,782 for the same period in 2025, representing an increase in cash used of $131,063. The increase was primarily driven by a higher net loss after adjusting for non-cash items, partially offset by favorable changes in working capital.
Current report
Net loss after non-cash adjustments was $2,787,990 for the three months ended March 31, 2026, compared to $1,831,734 for the same period in 2025, an increase of $956,256. This increase was primarily attributable to a higher net loss of $816,139 and lower non-cash adjustments in the current period. The prior-year period included higher non-cash charges, including share-based compensation of $55,897, non-cash settlements of $58,272, and warrant amendment costs of $48,087, which did not recur in the current period. In addition, the change in fair value of warrants and derivative liabilities resulted in a smaller non-cash gain in 2026 compared to 2025. These factors were partially offset by a modest increase in depreciation and amortization.
Current report
Changes in working capital partially offset the increase in cash used in operating activities. Prepaid expenses and other current assets decreased, resulting in a source of cash of $20,243 for the three months ended March 31, 2026, compared to the use of cash of $40,841 for the same period in 2025. Accounts receivable increased, resulting in a use of cash of $10,903 for the three months ended March 31, 2026, compared to $849 for the same period in 2025. These changes were partially offset by an increase in accounts payable, which provided $242,195 of cash for the three months ended March 31, 2026, compared to a use of $15,334 for the same period in 2025. In addition, accrued and other liabilities decreased by $105,390 for the three months ended March 31, 2026, compared to a decrease of $622,024 for the same period in 2025.
Current report
The Company expects that cash used in operating activities may increase in future periods as it continues to develop its business. Potential increases in cash usage may be driven by higher legal and professional fees, increased investor outreach programs, and expanded sales and marketing activities. In addition, as the Company advances its commercialization efforts, operating expenses may increase to support these activities, which could result in higher cash utilization.
Current report
Net cash used in investing activities decreased to $49,345 for the three months ended March 31, 2026, compared to $78,288 for the same period in 2025, representing a decrease in cash used of $28,943. Cash used in investing activities in both periods related to capitalized patent costs. The decrease was primarily due to lower expenditures related to patent and license filings in the current period compared to the prior-year period.
Current report
Net cash provided by financing activities decreased to $9,680,377 for the three months ended March 31, 2026, compared to $16,885,681 for the three months ended March 31, 2025, representing a decrease of $7,205,304.
Current report
The decrease in financing cash flows was primarily attributable to lower aggregate proceeds from public and registered direct offerings for the three months ended March 31, 2026, compared to the same period in 2025.
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 (51)
Previous report
Sales and marketing expenses include post-market clinical and reimbursement consulting, salaries, website support, press releases, conferences, travel, and shared-based compensation. Sales and marketing expenses were $632,409 for the three months ended September 30, 2025, compared to $232,775 for the same period in 2024, an increase of $399,634 or 171.7%. For the three months ended September 30, 2025, post-market clinical expenses were $197,227, compared to $78,657 for the same period in 2024, an increase of $118,570, primarily due to initiation the Clarity trial with the first patient enrolled in June 2025. Product marketing consulting expenses were $190,242 for the three months ended September 30, 2025, compared to $10,755 for the same period in 2024, an increase of $179,487, reflecting expanded use of external consultants. Bonus expense increased by $53,245 for the three months ended September 30, 2025, compared to $0 for the same period in 2024, due to accruals for incentive-based performance payouts. Travel expenses $35,087 for the three months ended September 30, 2025, compared to $13,381 for the same period in 2024, an increase $21,706, primarily to support the local coverage decisions in the UK market. These increases were partially offset by a $17,091 decrease in restricted stock vesting expense for the three months ended September 30, 2025, as no restricted stock expense was recognized, compared to $17,091 for the corresponding period in 2024, resulted from the expiration of previously granted restricted stock awards.
Previous report
Research and development expenses were $302,037 for the three months ended September 30, 2025, compared to $195,797 for the three months ended September 30, 2024, representing an increase of $106,240 or 54.3%. For the three months ended September 30, 2025, patent maintenance fees were $29,951, compared to $0 for the same period in 2024, an increase of $29,951, as the Company advanced protection of its intellectual property portfolio. For the three months ended September 30, 2025, bonus expense was $44,343, compared to a reversal of $1,451 for the same period in 2024, an increase of $45,794, due to accruals for incentive-based performance payouts. Quality system and regulatory consulting expenses were $45,377 for the three months ended September 30, 2025, compared to $26,229 for the same period in 2024, and increase of $19,148, driven by expanded regulatory compliance and documentation activities.
Previous report
General and administrative expenses were $900,904 for the three months ended September 30, 2025, compared to $860,461 for the same period in 2024, an increase of $40,443 or 4.7%. For the three months ended September 30, 2025, the Company accrued $138,739 in bonus under its 2025 incentive program, compared to no bonus accrual for the corresponding period in 2024. In addition, for the three months ended September 30, 2025, the Company incurred $99,375 in insurance costs related to directors and officers (“D&O”) coverage, compared to $72,434 for the same period in 2024, an increase of $26,941, primarily due to expanded policy coverage and higher renewal premiums. These increases were partially offset by $141,959 decrease in investor relations expenses, which totaled $31,009 for the three months ended September 30, 2025, compared to $172,968 for the same period in 2024, primarily attributable to reduced retail marketing and external communications consulting.
Previous report
Other Income (Expense).
Previous report
For the three months ended September 30, 2025, the Company recognized $124,755 in interest income on money market deposits, attributable to funds raised during the first quarter ended March 31, 2025. No interest income was recognized during the comparable period in 2024.
Previous report
For the three months ended September 30, 2025, the Company did not recognize any interest expense or discount amortization, compared to $11,300 and $60,277, respectively, for the same period in 2024. The decrease was primarily due to the absence of debt obligations in 2025, as the related borrowings were incurred in by the Company in 2024.
Previous report
For the Nine Months Ended September 30, 2025, and 2024:
Previous report
Total revenues.
Previous report
Cost of Revenue.
Previous report
Sales and Marketing.
Previous report
Research and Development.
Previous report
Research and development expenses were $770,659 for the nine months ended September 30, 2025, compared to $636,940 for the nine months ended September 30, 2024, representing an increase of $133,719 or 21.0%. The increase was primarily attributable to higher patent maintenance fees, which totaled $41,970 for the nine months ended September 30, 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 $71,800, to $70,349 for the nine months ended September 30, 2025, compared to a reversal of $1,451 in the corresponding period in 2024, due to accruals for incentive-based performance payouts. Quality system and regulatory consulting expenses were $158,842 for the nine months ended September 30, 2025, compared to $136,185 for the same period in 2024, an increase of $22,657, primarily resulting from expanded regulatory compliance and documentation activities. We expect to see research and development expenses to continue to increase in the coming quarters as our enrollment in the CLARITY Trial continues to expand.
Previous report
General and Administrative.
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Other Income (Expense).
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Interest Expense
Previous report
Interest expense was $0 for the nine months ended September 30, 2025, compared to $535,199 for the same period in 2024. The decrease was attributable to the retirement of all unsecured non-convertible notes in 2024.
Previous report
Loss On Exchange of Debt and Gain (Loss) On Extinguishment Of Debt
Previous report
During the nine months ended September 30, 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 adjusted for 2025 Stock Splits) in exchange for $1,519,779 of principal and accrued interest on the notes. This transaction accelerated the recognition of the related note discounts, resulting in a charge of $1,073,317. 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.
Previous report
The Company recognized a gain of $73,272 during the nine months ended September 30, 2025, in connection with the retirement of an obligation associated with commitment shares.
Previous report
The Company’s warrant and derivative liabilities are measured at fair value at each reporting date. For the nine months ended September 30, 2025, the Company recorded a favorable fair value adjustment of $11,766, compared to a favorable adjustment of $330,632 for the nine months ended September 30, 2024. The derivative liability was fully retired in 2024 in connection upon the settlement of all unsecured non-convertible notes.
Previous report
In the nine months ended September 30, 2025, the Company recorded $672,500 in Penalties and Settlements. In March 2025 the Company paid $687,500 to settle a dispute under the "fee tail" provision of an investment banking agreement that the Company had previously entered into. This was netted against a $15,000 favorable accounts payable settlement.
Previous report
Other, Net
Previous report
Other net income was $302,371 for the nine months ended September 30, 2025, primarily reflecting interest income on money market deposits following the Company’s fundraising activities in the first quarter of 2025. In comparison, other net income of $92,985 for the nine months ended September 30, 2024, primarily reflected $117,985 favorable discounts on accounts payable, partially offset by a $25,000 penalty paid to investors related to the untimely registration of certain commitment shares.
Previous report
Certain of our employees and consultants have received grants of common stock options and RSUs in our company. These awards are accounted for in accordance with guidance prescribed for accounting for equity-based compensation. Based on this guidance and the terms of the awards, the awards are equity classified.
Previous report
Until our April 2022 initial public offering, 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 initial public offering, it will no longer be necessary for us to estimate the fair value of our common stock in connection with our accounting for equity awards we may grant, as the fair value of our common stock will be its public market trading price.
Previous report
For financial reporting purposes, we performed common stock valuations as a private company with the assistance of a third-party specialist. Subsequent to the initial public offering, the fair value of the Company’s common stock underlying its equity awards is based on the quoted market price of the Company’s common stock on the grant date.
Previous report
During the nine months ended September 30, 2025, the Company raised an aggregate of $20,058,913 of gross proceeds through a combination of a public offering of units ($14,554,545) consisting of common shares, A warrants, and B warrants, two registered direct offerings ($5,167,927) of common stock, and the exercise of Series C Preferred warrants ($336,441).
Previous report
We believe our current cash will fund our operating expenses and capital expenditure requirements through the first quarter of 2027. Management is actively managing our cash position and continually working to secure additional long-term funding.
Previous report
During the nine months ended September 30, 2025, the Company used $5,536,766 in cash for operating activities, representing an increase in cash use of $1,188,019, compared to $4,348,747 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. For the nine months ended September 30, 2025, the Company recognized a net loss after non-cash adjustments of $4,982,799, representing an increase of $1,766,305, compared to an adjusted net loss of $3,216,494 for the same period in 2024. The year-over-year increase in adjusted net loss was primarily due to the absence of non-cash adjustment related to loss on exchange of debt in 2025, compared to non-cash addback of $1,073,317 recorded in 2024.
Previous report
During the nine months ended September 30, 2025, the Company used $164,100 in cash related to prepaid and other current assets, representing a decrease in cash used of $165,206, compared to $329,306 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.
Previous report
During the nine months ended September 30, 2025, the Company used $214,007 in cash related to accounts payable, representing a decrease in cash used of $229,061 compared to $443,068 used during the same period in 2024. This decrease was primarily due to the timing of vendor payments and lower outstanding payables balances compared to the prior-year period.
Previous report
During the nine months ended September 30, 2025, cash used in investing activities was $162,441, a decrease in cash used of $98,779, compared to cash used of $261,220 during the same period in 2024, mainly due to lower expenditures related to patent and license filings, partially offset by purchases of computer equipment.
Previous report
During the nine months ended September 30, 2025, the Company raised an aggregate of $20,058,913 of gross proceeds through a combination of a public offering of units ($14,554,545) consisting of common shares, A warrants, and B warrants, two registered direct offerings ($5,167,927) of common stock, and the exercise of Series C Preferred warrants ($336,441).
Previous report
January 2025 Registered Direct Public Offerings
Previous 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.
Previous 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.
Previous report
October 2025 Registered Direct Public Offering
Previous 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.
Previous report
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.
Previous report
The aggregate gross proceeds to the Company from this offering were approximately $2.5 million, before deducting the placement agent fees of 7% of the aggregate gross proceeds and other offering expenses payable by the Company. The Company intends to use the net proceeds from the offering to fund market development and clinical evidence, product development and quality, and general and administration support, and other general corporate purposes.
Showing the first 40 of 51 passages. Open the source sections for the rest.
Reworded paragraphs (16)
Previous wording
Total revenues for the nine months ended September 30, 2025, were $57,251, which was an increase of $21,759 or 61.3%, from $35,492 for the nine months ended September 30, 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 wording
Total revenues for the three months ended March 31, 2026 were $21,140, which was an increase of $2,149 or 11.3%, from $18,991 for the three months ended March 31, 2025. 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.
Previous wording
Direct 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 $14,556 for the three months ended September 30, 2025, compared to $21,332 for the same period ended September 30, 2024, a decrease of $6,776 or 31.8%. 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.
Current wording
Direct 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 $17,390 for the three months ended March 31, 2026, compared to $23,479 for the same period ended March 31, 2025, a decrease of $6,089 or 25.9%. The gross margin increased to 17.7% in 2026 as compared to (23.6%) in 2025. This increase 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
Marketing expenses include post-market clinical and reimbursement consulting, salaries, website support, press releases, conferences, travel, and share-based compensation. Sales and marketing expenses totaled $1,278,759 for the nine months ended September 30, 2025, compared to $638,869 for the nine months ended September 30, 2024, representing an increase of $639,890 or 100.2%. The increase was primarily driven by higher post-market clinical expenses, which was $488,279 for the nine months ended September 30, 2025, compared to $149,882 for the same period in 2024, an increase of $338,394, primarily related to costs associated with the initiation of the Clarity trial, for which the first patient enrolled in June 2025. Product marketing consulting expenses increased by $141,718, to $213,253 for the nine months ended September 30, 2025, compared to $71,535 for the same period in 2024, reflecting expanded use of external marketing consultants. Bonus expense increased by $71,995 for the nine months ended September 30, 2025, compared to $0 for the same period in 2024, due to accruals for incentive-based performance payouts. Travel expenses increased to $103,387 for the nine months ended September 30, 2025, from $37,661 in the prior-year period, an increase of $65,726, primarily related to activities supporting local coverage determinations in the United Kingdom. These increases were partially offset by a $57,824 decrease in share-based compensation expense, due to the expiration of previously granted restricted stock awards. Share-based compensation expense was $0 for the nine months ended September 30, 2025, compared to $57,824 for the same period in 2024.
Current wording
Product marketing consulting expenses increased by $239,401 to $250,374 for the three months ended March 31, 2026, compared to $10,973 for the same period in 2025, reflecting expanded use of external marketing consultants.
Previous wording
General and administrative expenses were $3,015,016 for the nine months ended September 30, 2025, compared to $2,402,408 for the nine months ended September 30, 2024, representing an increase of $612,608 or 25.5%. The increase was primarily driven by higher accruals under the Company’s 2025 incentive bonus program, which totaled $293,427 for the nine months ended September 30, 2025, compared to a reversal of $5,309 for the same period in 2024, an increase of $298,736, due to incentive-based performance payout accruals. Insurance expenses, primarily related to directors and officers (“D&O”) coverage, increased to $273,245 for the nine months ended September 30, 2025, from $217,365 in the prior-year period, an increase of $55,880, reflecting expanded policy coverage and higher renewal premiums. The Company also incurred litigation and financial accounting advisory expenses of $100,534 and $269,009, respectively, for the nine months September 30, 2025, compared to $0 and $166,142, respectively, for the same period in 2024, representing increases of $100,534 and $102,867 respectively. These increases were partially offset by a $50,570 decrease in investor relations expenses, which totaled $237,398 for the nine months ended September 30, 2025, compared to $287,968 for the same period in 2024. The decrease was primarily attributable to lower retail marketing activities and reduced use of external communications consultants.
Current wording
In addition, insurance expenses, primarily related to directors and officers (“D&O”) coverage, increased to $99,375 for the three months ended March 31, 2026, from $72,434 for the same period in 2025, an increase of $26,941, reflecting expanded policy coverage and higher renewal premiums.
Previous wording
Changes In Fair Value Of Warrant And Derivative Liabilities
Current wording
Changes in Fair Value of Warrant Liabilities.
Previous wording
Our Management’s Discussion and Analysis of Financial Condition and Results of Operations is based on our financial statements, which have been prepared in accordance with generally accepted accounting principles in the United States. The preparation of our financial statements and related disclosures requires us to make estimates and assumptions that affect the reported amounts of assets and liabilities, costs and expenses and the disclosure of contingent assets and liabilities in our financial statements. We base our estimates on historical experience, known trends and events and various other factors that we believe are reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities that are not readily apparent from other sources. We evaluate our estimates and assumptions on an ongoing basis. Our actual results may differ from these estimates.
Current wording
Our Management’s Discussion and Analysis of Financial Condition and Results of Operations is based on our condensed financial statements, which have been prepared in accordance with generally accepted accounting principles in the United States. The preparation of our condensed financial statements and related disclosures requires us to make estimates and assumptions that affect the reported amounts of assets and liabilities, costs and expenses and the disclosure of contingent assets and liabilities in our condensed financial statements. We base our estimates on historical experience, known trends and events and various other factors that we believe are reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities that are not readily apparent from other sources. We evaluate our estimates and assumptions on an ongoing basis. Our actual results may differ from these estimates.
Previous wording
While our significant accounting policies are described in more detail in the notes to our financial statements, we believe that the following accounting policies are those most critical to the judgments and estimates used in the preparation of our financial statements.
Current wording
While our significant accounting policies are described in more detail in the notes to our condensed financial statements, we believe that the following accounting policies are those most critical to the judgments and estimates used in the preparation of our condensed financial statements.
Previous wording
As of September 30, 2025, we had cash and cash equivalents of $11,366,336, including $25,000 of restricted cash.
Current wording
As of March 31, 2026, we had cash and cash equivalents of $19,029,976, including $25,000 of restricted cash.
Previous wording
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.
Current wording
During the three months ended March 31, 2026, 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.
Previous wording
Units Offering Of Common Stock And Warrants
Current wording
Cash provided by financing activities for the three months ended March 31, 2026, was primarily attributable to $10,359,982 in aggregate proceeds from a registered direct public offering of common stock and prefunded warrants, partially offset by $679,605 in offering-related issuance costs.
Previous wording
Redemption Of Series B Preferred Stock
Current wording
In comparison, cash provided by financing activities for the three months ended March 31, 2025, was primarily driven by $19,722,472 in aggregate proceeds from public and registered direct offerings of common stock and warrants, partially offset by $1,959,642 in issuance costs and $1,213,590 related to the redemption of Series B Preferred Stock. In addition, the prior-year period included $336,441 in proceeds from the exercise of Series C warrants.
Previous wording
Developing medical technology products is a time-consuming, expensive and uncertain process that takes years to complete, and the Company may never generate meaningful revenues. Accordingly, we may need to obtain substantial additional funds to achieve our business objectives.
Current wording
Developing medical technology products is a time-consuming, expensive and uncertain process that takes years to complete, and we may never generate meaningful revenues. Accordingly, we may need to obtain substantial additional funds to achieve our business objectives.
Previous wording
Adequate additional funds may not be available to us on acceptable terms, or at all. To the extent that the Company raises additional capital through the sale of equity securities, the ownership interest of existing stockholders may be diluted. Any debt or preferred equity financing, if available, may involve agreements that include restrictive covenants that may limit our ability to take specific actions, such as incurring additional debt, making capital expenditures or declaring dividends, which could adversely impact our ability to conduct our business, and may require the issuance of warrants, which could potentially dilute existing stockholders’ ownership interests.
Current wording
Adequate additional funds may not be available to us on acceptable terms, or at all. To the extent that we raise additional capital through the sale of equity securities, current stockholders’ ownership interests may be diluted. Any debt or preferred equity financing, if available, may involve agreements that include restrictive covenants that may limit our ability to take specific actions, such as incurring additional debt, making capital expenditures, or declaring dividends, which could adversely impact our ability to conduct our business, and may require the issuance of warrants, which could potentially dilute existing stockholders’ ownership interests.
Previous wording
The Company did not have, during the periods presented, and we do not currently have any off-balance sheet arrangements as defined in the rules and regulations of the SEC.
Current wording
We did not have, during the periods presented, and we do not currently have any off-balance sheet arrangements as defined in the rules and regulations of the Securities and Exchange Commission (“SEC”).
Previous wording
The Company reviewed all recently issued standards and has determined that, other than the two new standards as disclosed in Note 4 to our condensed financial statements appearing in this quarterly report, there have been no other recent accounting pronouncements not yet effective that have significance, or potential significance, to our Condensed Financial Statements.
Current wording
We have reviewed all recently issued standards and have determined that, other than as disclosed in Note 4 to our condensed financial statements appearing at the end of this annual report, such standards will not have a material impact on our condensed financial statements or do not otherwise apply to our operations.
Previous wording
The JOBS Act permits an emerging growth company such as us to take advantage of an extended transition period to comply with new or revised accounting standards applicable to public companies until those standards would otherwise apply to private companies. We have elected not to “opt out” of this extended transition period and, as a result, we will not adopt new or revised accounting standards on the relevant dates on which adoption of such standards is required for public entities. Accordingly, our financial statements may not be comparable to other public companies that do not elect the extended transition period.
Current wording
The JOBS Act permits an emerging growth company such as us to take advantage of an extended transition period to comply with new or revised accounting standards applicable to public companies until those standards would otherwise apply to private companies. We have irrevocably elected not to “opt out” of this extended transition period and, as a result, we will not adopt new or revised accounting standards on the relevant dates on which adoption of such standards is required for public entities. Accordingly, our condensed financial statements may not be comparable to other public companies that do not elect the extended transition period.
Rearranged previous paragraphs (4)
Previous report — wording carried elsewhere
Total revenues for the three months ended September 30, 2025 were $18,942, an increase of $4,535 or 31.5%, compared to $14,407 for the three months ended September 30, 2024. This increase in revenues 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.
Previous report — wording carried elsewhere
The following table summarizes our results of operations for the nine months ended September 30, 2025, and 2024.
Previous report — wording carried elsewhere
Direct 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 $52,214 for the nine months ended September 30, 2025, compared to $64,102 for the nine months ended September 30, 2024, a decrease of $11,888 or 18.5%. 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 report — wording carried elsewhere
The aggregate gross proceeds to the Company from this offering were approximately $2.5 million, before deducting the placement agent fees of 7% of the aggregate gross proceeds and other offering expenses payable by the Company.