Aclarion, Inc.

Previous wording

The following discussion and analysis should be read in conjunction with the unaudited condensed financial statements and related notes included elsewhere in this Quarterly Report and our audited financial statements and related notes included in our Annual Report on Form 10-K for the year ended December 31, 2025, which was filed with the SEC on March 18, 2026. This discussion and analysis and other parts of this Quarterly Report contain forward-looking statements based upon current beliefs, plans and expectations that involve risks, uncertainties and assumptions, such as statements regarding our plans, objectives, expectations, intentions and projections. Our actual results and the timing of selected events could differ materially from those anticipated in these forward-looking statements as a result of several factors, including those set forth under Part II, Item 1A, “Risk Factors” and elsewhere in this Quarterly Report. You should carefully read the “Risk Factors” section of this Quarterly Report and of our Annual Report on Form 10-K for the year ended December 31, 2025, which was as filed with the SEC on March 18, 2026, to gain an understanding of the important factors that could cause actual results to differ materially from our forward-looking statements. Please also see the section entitled “Special Note Regarding Forward-Looking Statements.”

Current wording

The following discussion and analysis should be read in conjunction with the unaudited condensed financial statements and related notes included elsewhere in this Quarterly Report and our audited financial statements and related notes included in our Annual Report on Form 10-K for the year ended December 31, 2025, which was filed with the SEC on March 18, 2026. This discussion and analysis and other parts of this Quarterly Report contain forward-looking statements based upon current beliefs, plans and expectations that involve risks, uncertainties and assumptions, such as statements regarding our plans, objectives, expectations, intentions and projections. Our actual results and the timing of selected events could differ materially from those anticipated in these forward-looking statements as a result of several factors, including those set forth under Part II, Item 1A, “Risk Factors” and elsewhere in this Quarterly Report. You should carefully read the “Risk Factors” section of this Quarterly Report and of our Annual Report on Form 10-K for the year ended December 31, 2025, which was filed with the SEC on March 18, 2026, to gain an understanding of the important factors that could cause actual results to differ materially from our forward-looking statements. Please also see the section entitled “Special Note Regarding Forward-Looking Statements.”

Previous wording

Total revenues for the three months ended June 30, 2026 were $25,208, which was an increase of $5,889 or 30.5%, from $19,319 for the three months ended June 30, 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.

Current wording

Net revenues for the three months ended September 30, 2026 were $33,733 which was an increase of $14,791 or 78.1%, from $18,942 for the three months ended September 30, 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 $16,911 for the three months ended June 30, 2026, compared to $14,179 for the same period ended June 30, 2025, an increase of $2,732 or 19.3%. The increase was primarily attributable to the growth in our sales as well as higher hosting software costs, partially offset by a reduction in 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 $18,937 for the three months ended September 30, 2026, compared to $14,556 for the same period ended September 30, 2025, an increase of $4,381 or 30.1%. The increase was primarily attributable to the growth in our sales as well as higher hosting software costs and partner fees (RadNet). As a result, gross profit was $14,796 and a gross margin of 43.9% for the three months ended September 30, 2026, compared to $4,386 and a gross margin of 23.2% for the same period in 2025.

Previous wording

The increase in sales and marketing expenses was primarily driven by increased salaries and benefits due to adding three new salespeople in the United States and the United Kingdom. The increase was $286,804 to $382,014 for the three months ended June 30, 2026, compared to $95,210 for the same period in 2025, primarily due to increased salary expense and accruals for incentive-based performance payouts. We expect salaries and benefits to continue at this higher rate through 2026.

Current wording

The increase in sales and marketing expenses was primarily driven by higher salaries and benefits resulting from the addition of three salespeople in the United States and the United Kingdom. Salaries and benefits were $407,234 for the three months ended September 30, 2026, compared to $168,035 for the same period in 2025, an increase of $239,199, or 142.4%, primarily due to increased salary expense and accruals for incentive-based performance payouts. We expect salaries and benefits to continue at this higher level in the fourth quarter of 2026.

Previous wording

Reimbursement consulting expenses were $66,712 for the three months ended June 30, 2026, compared to $12,000 for the three months ended June 30, 2025, an increase of $54,712. The increase was primarily attributable to the startup and implementation of the Company’s hybrid reimbursement and patient access program and ongoing strategic reimbursement support.

Current wording

Reimbursement consulting expenses were $20,458 for the three months ended September 30, 2026, compared to $5,138 for the same period in 2025, an increase of $15,320, or 298.2%. The increase was primarily attributable to the startup and implementation of the Company’s hybrid reimbursement and patient access program, as well as expanded strategic reimbursement support.

Previous wording

Product marketing consulting expenses increased by $89,336 to $101,374 for the three months ended June 30, 2026, compared to $12,038 for the same period in 2025, reflecting expanded use of external marketing consultants.

Current wording

Product marketing consulting expenses were $103,277 for the three months ended September 30, 2026, compared to $190,242 for the same period in 2025, a decrease of $86,965, or 45.7%, reflecting reduced use of external marketing consultants as certain marketing activities were transitioned in-house.

Previous wording

The increase was primarily driven by higher quality system and consulting expenses increased by $26,516 to $130,640 for the three months ended June 30, 2026, compared to $104,124 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 wording

The increase was primarily driven by higher quality system and consulting expenses, which were $110,081 for the three months ended September 30, 2026, compared to $90,933 for the same period in 2025, an increase of $19,148, or 21.1%, primarily as a result of expanded regulatory compliance and documentation activities.

Previous wording

In addition, patent maintenance fees, which totaled $19,053 for the three months ended June 30, 2026, compared to $11,705 for the same period in 2025, an increase of $7,348. This rise reflects the Company’s ongoing efforts to strengthen and expand protection of its intellectual property portfolio.

Current wording

In addition, patent maintenance fees were $37,476 for the three months ended September 30, 2026, compared to $29,951 for the same period in 2025, an increase of $7,525, or 25.1%, reflecting the Company’s ongoing efforts to maintain and protect its intellectual property portfolio.

Previous wording

General and administrative expenses were $1,733,789 for the three months ended June 30, 2026, compared to $1,127,449 for the three months ended June 30, 2025, representing an increase of $606,340 or 53.8%.

Current wording

General and administrative expenses were $1,639,456 for the three months ended September 30, 2026, compared to $900,904 for the same period in 2025, an increase of $738,552, or 82.0%.

Previous wording

For the three months ended June 30, 2026, salaries and benefits increased by $131,784 to $562,605 for the three months ended June 30, 2026, compared to $430,821 for the same period in 2025, primarily due to accruals for incentive-based performance and stock-based compensation. The Company recorded accruals under its 2026 incentive bonus program totaling $213,125 for the three months ended June 30, 2026, compared to $154,688 for the same period in 2025, an increase of $58,437, primarily due to the addition of new participants to the program. Stock-based compensation expense was $73,542 for the three months ended June 30, 2026, compared to $28,360 for the same period in 2025, an increase of $45,182, primarily attributable to restricted stock unit expense recognized following the equity awards granted under the Company’s 2022 Equity Incentive Plan in June 2026.

Current wording

The increase was primarily driven by higher salaries and benefits, which were $1,039,447 for the three months ended September 30, 2026, compared to $421,577 for the same period in 2025, an increase of $617,870, or 146.6%. Stock-based compensation expense was $299,544 for the three months ended September 30, 2026, compared to $16,746 for the same period in 2025, an increase of $282,798, primarily attributable to restricted stock unit expense recognized following equity awards granted under the Company’s 2022 Equity Incentive Plan in June 2026. Bonus expense was $435,325 for the three months ended September 30, 2026, compared to $138,739 for the same period in 2025, an increase of $296,586, primarily due to the accruals under the Company’s annual incentive bonus program.

Previous wording

For the six months ended June 30, 2026, legal expenses were $466,363 compared to $188,288 in the same period in 2025, an increase of $278,075 primarily due to increased legal and advisory fees associated with corporate governance and shareholder-related matters.

Current wording

Legal expenses were $101,662 for the three months ended September 30, 2026, compared to $29,057 for the same period in 2025, an increase of $72,605, or 249.9%, primarily due to increased legal fees associated with corporate governance and shareholder-related matters.

Previous wording

Investor relations expenses also increased to $205,648 for the three months ended June 30, 2026, compared to $155,297 in the corresponding prior-year period, representing an increase of $50,351 primarily reflecting expanded investor outreach activities and increased use of third-party investor relations service providers.

Current wording

Investor relations expenses were $87,786 for the three months ended September 30, 2026, compared to $33,021 for the same period in 2025, an increase of $54,765, or 165.8%, primarily reflecting expanded investor outreach activities and increased use of third-party investor relations service providers.

Previous wording

Delaware franchise tax expense increased to $80,190 for the three months ended June 30, 2026, from $10,190 in the prior-year period, an increase of $70,000, primarily due to changes in the Company’s capital structure and the methodology used to calculate the Company’s Delaware franchise tax obligation.

Current wording

Delaware franchise tax expense was $20,190 for the three months ended September 30, 2026, compared to a credit of $2,370 for the same period in 2025, an increase of $22,560, primarily due to changes in the Company’s capital structure and an adjustment to previously accrued franchise tax in the prior-year period.

Previous wording

The Company’s warrant liabilities are measured at fair value at each reporting date. For the three months ended June 30, 2026, remeasurement of the outstanding warrants resulted in no material fair value adjustment, compared to a favorable adjustment of $45 recognized in the same period of the prior year.

Current wording

The Company’s warrant liabilities are remeasured at fair value at each reporting date. For the three months ended September 30, 2026, remeasurement of the outstanding warrants resulted in a gain of $12, compared to a gain of $1 for the same period in 2025.

Previous wording

Interest income was $157,346 for the three months ended June 30, 2026, compared to $135,865 for the same period in 2025, an increase of $21,481, primarily reflecting higher average cash balances following the Company’s fundraising activities and related interest earned on money market deposits.

Current wording

Interest income was $134,069 for the three months ended September 30, 2026, compared to $124,800 for the same period in 2025, an increase of $9,269, primarily reflecting higher average cash balances following the Company’s fundraising activities and related interest earned on money market deposits.

Previous wording

The following table summarizes our results of operations for the six months ended June 30, 2026, and 2025.

Current wording

The following table summarizes our results of operations for the nine months ended September 30, 2026, and 2025.

Previous wording

Total revenues for the six months ended June 30, 2026 were $46,348 which was an increase of $8,039 or 21.0%, from $38,309 for the six months ended June 30, 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.

Current wording

Net revenues for the nine months ended September 30, 2026 were $80,081, an increase of $22,830, or 39.9%, from $57,251 for the same period in 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, with reimbursed revenue increasing to $50,491 from $23,973 for the same period in 2025. Research revenue increased to $14,300 from $3,628, partially offset by lower patient-pay revenue, which decreased to $15,290 from $30,150. We expect revenue to continue to increase as we add insurance payors and our scan volumes increase.

Previous wording

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 $877,160 for the three months ended June 30, 2026, compared to $343,765 for the three months ended June 30, 2025, representing an increase of $533,395 or 155.2%.

Current wording

Sales and marketing expenses primarily consist of salaries and benefits, post-market clinical expense related to the CLARITY Trial, product marketing consulting, travel and entertainment, and reimbursement consulting. Sales and marketing expenses were $2,543,985 for the nine months ended September 30, 2026, compared to $1,278,759 for the same period in 2025, an increase of $1,265,226, or 98.9%.

Previous wording

The increase in sales and marketing expenses was primarily driven by increased salaries and benefits due to adding three new salespeople in the United States and the United Kingdom. The increase was $514,975 to $685,858 for the six months ended June 30, 2026, compared to $170,883 for the same period in 2025, primarily due to increased salary expense and accruals for incentive-based performance payouts. We expect salaries and benefits to continue at this higher rate through 2026.

Current wording

The increase in sales and marketing expenses was primarily driven by higher salaries and benefits resulting from the addition of three salespeople in the United States and the United Kingdom. Salaries and benefits were $1,093,092 for the nine months ended September 30, 2026, compared to $338,918 for the same period in 2025, an increase of $754,174, or 222.5%, primarily due to increased salary related expense of $540,399, stock-based compensation expense of $108,407 related to equity awards granted in June 2026, and accruals for incentive-based performance payouts of $105,368. We expect salaries and benefits to continue at this higher level in the fourth quarter of 2026.

Previous wording

Reimbursement consulting expenses were $116,050 for the six months ended June 30, 2026, compared to $12,000 for the six months ended June 30, 2025, an increase of $104,050. The increase was primarily attributable to the startup and implementation of the Company’s hybrid reimbursement and patient access program and ongoing strategic reimbursement support.

Current wording

Reimbursement consulting expenses were $136,508 for the nine months ended September 30, 2026, compared to $17,138 for the same period in 2025, an increase of $119,370, or 696.5%. The increase was primarily attributable to the startup and implementation of the Company’s hybrid reimbursement and patient access program, as well as expanded strategic reimbursement support.

Previous wording

The increase was primarily driven by higher quality system and consulting expenses which increased by $63,216 to $238,107 for the six months ended June 30, 2026, compared to $174,891 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 wording

The increase was primarily driven by higher quality system and consulting expenses, which were $348,188 for the nine months ended September 30, 2026, compared to $265,824 for the same period in 2025, an increase of $82,364, or 31.0%, primarily as a result of increased use of research and development contractors and expanded regulatory compliance and documentation activities.

Previous wording

General and administrative expenses were $3,500,266 for the six months ended June 30, 2026, compared to $2,114,112 for the six months ended June 30, 2025, representing an increase of $1,386,154 or 65.6%.

Current wording

General and administrative expenses were $5,139,722 for the nine months ended September 30, 2026, compared to $3,015,016 for the same period in 2025, an increase of $2,124,706, or 70.5%.

Previous wording

Salaries and benefits increased by $237,652 to $980,119 for the six months ended June 30, 2026, compared to $742,467 for the same period in 2025, primarily due to accruals for incentive-based performance and stock-based compensation. The Company recorded accruals under its 2026 incentive bonus program totaling $325,000 for the six months ended June 30, 2026, compared to $154,688 for the same period in 2025, an increase of $170,312 primarily due to the addition of new participants to the program. Stock-based compensation expense was $78,236 for the six months ended June 30, 2026, compared to $84,257 for the same period in 2025, a decrease of $6,021, primarily due to a lower level of stock option expense recognized in the current period, partially offset by restricted stock unit expense recognized following the equity awards granted under the Company’s 2022 Equity Incentive Plan in June 2026.

Current wording

The increase was primarily driven by higher salaries and benefits, which were $2,019,566 for the nine months ended September 30, 2026, compared to $1,164,044 for the same period in 2025, an increase of $855,522, or 73.5%. Stock-based compensation expense was $377,780, compared to $101,003 for the same period in 2025, an increase of $276,777, primarily attributable to restricted stock unit expense recognized following equity awards granted under the Company’s 2022 Equity Incentive Plan in June 2026. Bonus expense was $760,325, compared to $293,427 for the same period in 2025, an increase of $466,898, or 159.1%, primarily due to the addition of new participants to the Company’s incentive bonus program.

Previous wording

The increase was primarily driven by investor relations expenses of $566,198 for the six months ended June 30, 2026, compared to $211,931 in the corresponding prior-year period, representing an increase of $354,267 primarily reflecting expanded investor outreach activities and increased use of third-party investor relations service providers.

Current wording

Investor relations expenses were $653,984 for the nine months ended September 30, 2026, compared to $244,952 for the same period in 2025, an increase of $409,032, or 167.0%, primarily reflecting expanded investor outreach activities and increased use of third-party investor relations service providers.

Previous wording

The increase was primarily driven by legal expenses which were $250,871 compared to $99,483 in the same period in 2025, an increase of $151,388 primarily due to increased legal and advisory fees associated with corporate governance and shareholder-related matters.

Current wording

Legal expenses were $568,025 for the nine months ended September 30, 2026, compared to $217,345 for the same period in 2025, an increase of $350,680, or 161.3%, primarily due to increased legal fees associated with corporate governance and shareholder-related matters.

Previous wording

Delaware franchise tax expense increased to $317,190 for the six months ended June 30, 2026, compared to $19,137 for the same period in 2025, an increase of $298,053, primarily due to changes in the Company’s capital structure and the methodology used to calculate the Company’s Delaware franchise tax obligation.

Current wording

Delaware franchise tax expense was $337,380 for the nine months ended September 30, 2026, compared to $16,767 for the same period in 2025, an increase of $320,613, primarily due to changes in the Company’s capital structure and the methodology used to calculate the Company’s Delaware franchise tax obligation.

Previous wording

Gain on extinguishment of debt was $0 for the six months ended June 30, 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 wording

Gain on extinguishment of debt was $0 for the nine months ended September 30, 2026, compared to $73,272 for the same period in 2025, 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.

Previous wording

The Company’s warrant liabilities are measured at fair value at each reporting date. For the six months ended June 30, 2026, remeasurement of the outstanding warrants resulted in a favorable adjustment of $18, compared to a favorable adjustment of $11,766 for the same period in 2025, a decrease of $11,748. The decrease was primarily attributable to a reduction in the number of outstanding warrants subject to remeasurement.

Current wording

The Company’s warrant liabilities are remeasured at fair value at each reporting date. For the nine months ended September 30, 2026, remeasurement of the outstanding warrants resulted in a gain of $30, compared to a gain of $11,767 for the same period in 2025, a decrease of $11,737, primarily attributable to a reduction in the number of outstanding warrants subject to remeasurement.

Previous wording

Penalties and settlements expense were $0 for the six months ended June 30, 2026, compared to $672,500 for the same period in 2025, 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 wording

Penalties and settlements expense was $0 for the nine months ended September 30, 2026, compared to $672,500 for the same period in 2025, 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.

Previous wording

Interest income was $290,381 for the six months ended June 30, 2026, compared to $178,028 for the same period in 2025, an increase of $112,353, primarily reflecting higher average cash balances following the Company’s fundraising activities and related interest earned on money market deposits.

Current wording

Interest income was $424,450 for the nine months ended September 30, 2026, compared to $302,786 for the same period in 2025, an increase of $121,664, or 40.2%, primarily reflecting higher average cash balances following the Company’s fundraising activities and related interest earned on money market deposits.

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 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.

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 as well as revenues from certain EU countries related to clinical trials.

Previous wording

As of June 30, 2026, we had cash and cash equivalents of $16,310,462, including $25,000 of restricted cash.

Current wording

As of September 30, 2026, we had cash and cash equivalents of $14,212,566 including $25,000 of restricted cash.

Previous wording

During the six months ended June 30, 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.

Current wording

During the nine months ended September 30, 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

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 wording

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. Management continues to actively monitor and manage the Company’s cash position.

Previous wording

During the six months ended June 30, 2026, the Company used $5,298,896 in cash for operating activities, compared to $4,376,394 for the same period in 2025, representing an increase in cash used of $922,502. 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 wording

During the nine months ended September 30, 2026, the Company used $7,317,637 in cash for operating activities, compared to $5,536,766 for the same period in 2025, representing an increase in cash used of $1,780,871. The increase was primarily driven by a higher net loss after adjusting for non-cash items, partially offset by favorable changes in working capital.

Previous wording

Net loss after non-cash adjustments was $5,371,555 for the six months ended June 30, 2026, compared to $3,351,614 for the same period in 2025, an increase of $2,019,941. This increase was primarily attributable to a higher net loss of $1,962,933, together with lower non-cash adjustments in the current period. The prior-year period included non-cash charges that did not recur in 2026, consisting of warrant amendment costs of $48,087 and non-cash settlements of $58,272. The change in fair value related to warrants and derivative liabilities produced a smaller non-cash gain in 2026 of $18, compared to $11,766 in 2025. These factors were partially offset by increases in share-based compensation, which rose $22,554 to $106,811, and depreciation and amortization, which rose $15,049 to $122,778.

Current wording

Net loss after non-cash adjustments was $7,505,206 for the nine months ended September 30, 2026, compared to $4,982,799 for the same period in 2025, an increase of $2,522,407. This increase was primarily attributable to a higher net loss of $2,878,674, partially offset by higher non-cash adjustments in the current period. Share-based compensation rose $430,629 to $531,632, and depreciation and amortization rose $20,260 to $186,353. These increases were partially offset by non-cash charges in the prior-year period that did not recur in 2026, consisting of warrant amendment costs of $48,087 and non-cash settlements of $58,272. The change in fair value related to warrants and derivative liabilities produced a smaller non-cash gain in 2026 of $30, compared to $11,767 in 2025.

Previous wording

Changes in working capital affected cash used in operating activities. Prepaid expenses and other current assets used $129,339 of cash for the six months ended June 30, 2026, compared to a use of $232,111 for the same period in 2025. Accounts payable provided $372,842 of cash, compared to a use of $268,237 in the prior-year period. Accrued and other liabilities used $172,352 of cash, compared to a use of $521,837 for the same period in 2025.

Current wording

Changes in working capital provided $187,569 of cash for the nine months ended September 30, 2026, compared to $553,967 used for the same period in 2025. Prepaid expenses and other current assets used $7,727 of cash, compared to a use of $164,100 for the same period in 2025. Accounts payable used $89,204 of cash, compared to a use of $214,007 in the prior-year period, primarily due to the timing of vendor payments. Accrued and other liabilities provided $288,063 of cash, compared to a use of $162,168 for the same period in 2025, primarily reflecting the accrual of 2026 incentive bonuses. Accounts receivable used $3,563 of cash, compared to a use of $13,692 in the prior-year period.

Previous wording

Net cash used in investing activities decreased to $92,524 for the six months ended June 30, 2026, compared to $122,290 for the same period in 2025, a decrease in cash used of $29,766. Investing activities in both periods consisted primarily of capitalized patent costs. The decrease was primarily attributable to lower expenditures on patent and license filings, which fell $31,094 to $90,716, partially offset by a $1,328 increase in fixed asset purchases.

Current wording

Net cash used in investing activities increased to $165,354 for the nine months ended September 30, 2026, compared to $162,441 for the same period in 2025, an increase in cash used of $2,913. Investing activities in both periods consisted primarily of capitalized patent costs. The increase was primarily attributable to higher expenditures on patent and license filings, which rose $8,907 to $163,546, partially offset by a $5,994 decrease in fixed asset purchases to $1,808.

Previous wording

Net cash provided by financing activities decreased to $9,661,093 for the six months ended June 30, 2026, compared to $16,885,680 for the six months ended June 30, 2025, a decrease of $7,224,587.

Current wording

Net cash provided by financing activities decreased to $9,654,768 for the nine months ended September 30, 2026, compared to $16,601,882 for the nine months ended September 30, 2025, a decrease of $6,947,114.

Previous wording

Cash provided by financing activities for the six months ended June 30, 2026, was primarily attributable to $10,359,982 in aggregate proceeds from a registered direct offering, consisting of $1,036,000 from common stock and $9,323,982 from prefunded warrants, partially offset by $698,889 in issuance costs.

Current wording

Cash provided by financing activities for the nine months ended September 30, 2026 was primarily attributable to $10,359,982 in aggregate proceeds from a registered direct offering, consisting of $1,036,000 from common stock and $9,323,982 from pre-funded warrants, partially offset by $705,214 in issuance costs.