# EDGAR Filing Document

**Accession Number:** 0001635077
**File Stem:** 0001683168-25-008169
**Filing Date:** 2025-11
**Character Count:** 176951
**Document Hash:** 0990b9c96e6e9e312187c8cd44f2b58f
**Contains OCR:** False
**Source Format:** 

## Filing Content

## Filing Summary
**0001683168-25-008169.hdr.sgml**: 20251112

**ACCESSION NUMBER**: 0001683168-25-008169

**CONFORMED SUBMISSION TYPE**: 10-Q

**PUBLIC DOCUMENT COUNT**: 71

**CONFORMED PERIOD OF REPORT**: 20250930

**FILED AS OF DATE**: 20251112

**DATE AS OF CHANGE**: 20251112

**FILER**: 

**COMPANY DATA:**
- **COMPANY CONFORMED NAME:** Aclarion, Inc.
- **CENTRAL INDEX KEY:** 0001635077
- **STANDARD INDUSTRIAL CLASSIFICATION:** SERVICES-MEDICAL LABORATORIES [8071]
- **ORGANIZATION NAME:** 08 Industrial Applications and Services
- **EIN:** 473324725
- **STATE OF INCORPORATION:** DE
- **FISCAL YEAR END:** 1231

**FILING VALUES:**
- **FORM TYPE:** 10-Q
- **SEC ACT:** 1934 Act
- **SEC FILE NUMBER:** 001-41358
- **FILM NUMBER:** 251468426

**BUSINESS ADDRESS:**
- **STREET 1:** 8181 ARISTA PLACE
- **STREET 2:** STE 100
- **CITY:** BROOMFIELD
- **STATE:** CO
- **ZIP:** 80021
- **BUSINESS PHONE:** 833 275 2266

**MAIL ADDRESS:**
- **STREET 1:** 8181 ARISTA PLACE
- **STREET 2:** STE 100
- **CITY:** BROOMFIELD
- **STATE:** CO
- **ZIP:** 80021

**FORMER COMPANY:**
- **FORMER CONFORMED NAME:** Nocimed, Inc.
- **DATE OF NAME CHANGE:** 20150226

?xml version='1.0' encoding='ASCII'? ACLARION, INC. 10-Q

[**Table of Contents**](#toc)

**UNITED STATES**

**SECURITIES AND EXCHANGE COMMISSION**

**Washington, D.C. 20549**

**FORM 10-Q**

(Mark One)

☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended **<u>September 30, 2025</u>**

or

☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from __________ to __________

Commission File Number: **<u>001-41358</u>**

---

| |
|:---|
| **ACLARION, INC.** |
| (Exact name of registrant as specified in its charter) |

---

---

| | |
|:---|:---|
| **Delaware** | **47-3324725** |
| (State or other jurisdiction of incorporation) | (IRS Employer Identification No.) |

---

**8181 Arista Place, Suite 100**

**<u>Broomfield, Colorado 80021</u>**

(Address of Principal Executive Offices) (Zip Code)

Registrant's telephone number, including area code: **(833) 275-2266**

**Not Applicable**

(Former name or former address, if changed since last report)

Securities registered pursuant to Section 12(b) of the Act:

---

| | | |
|:---|:---|:---|
| **Title of each class** | **Trading Symbol(s)** | **Name of each exchange on which registered** |
| Common stock, par value $0.00001 per share | ACON | The Nasdaq Stock Market LLC |
| Warrants, each exercisable for one share of Common stock | ACONW | The Nasdaq Stock Market LLC |

---

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☒ No ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☒ No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of "large accelerated filer," "accelerated filer," "smaller reporting company," and "emerging growth company" in Rule 12b-2 of the Exchange Act.

Large accelerated filer ☐ Accelerated filer ☐ <br> Non-accelerated Filer ☒ Smaller reporting company ☒ <br> Emerging growth company ☒

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ☒

As of November 10, 2025, there were 671,371 shares of the registrant's common stock, $0.00001 par value per share, outstanding.

**SPECIAL NOTE REGARDING FORWARD-LOOKING STATEMENTS**

This Quarterly Report on Form 10-Q contains forward-looking statements about us and our industry that involve substantial risks and uncertainties. All statements, other than statements of historical facts, contained in this Quarterly Report on Form 10-Q, including statements regarding our strategy, future financial condition, future operations, projected costs, prospects, plans, objectives of management and expected market growth, are forward-looking statements. In some cases, you can identify forward-looking statements by terminology such as "aim," "anticipate," "assume," "believe," "contemplate," "continue," "could," "design," "due," "estimate," "expect," "goal," "intend," "may," "objective," "plan," "positioned," "potential," "predict," "seek," "should," "target," "will," "would" and other similar expressions that are predictions of or indicate future events and future trends, or the negative of these terms or other comparable terminology.

Although we believe that we have a reasonable basis for each forward-looking statement contained in this Quarterly Report on Form 10-Q, we cannot guarantee that the future results, levels of activity, performance or events and circumstances reflected in the forward-looking statements will be achieved or occur at all. Forward-looking statements are subject to risks and uncertainties that could cause actual results to be materially different from those indicated (both favorably and unfavorably). These risks and uncertainties include, but are not limited to, those described in the Risk Factors section of the Company's Annual Report on Form 10-K for the year ended December 31, 2024 (the Form 10-K) dated April 9, 2025, as filed with the Securities and Exchange Commission on April 9, 2025, under Rule 424(b)(4). Caution should be taken not to place undue reliance on any such forward-looking statements. Except as required by law, we undertake no obligation to publicly update any forward-looking statements, whether as a result of new information, future events or otherwise.

You should read this Quarterly Report on Form 10-Q and the documents that we reference in this Quarterly Report on Form 10-Q and have filed as exhibits completely and with the understanding that our actual future results may be materially different from what we expect. We qualify all of the forward- looking statements in this Quarterly Report on Form 10-Q by these cautionary statements.

**Table of Contents**

---

| | | |
|:---|:---|:---|
|  |  | Page |
| **PART I.** | [**FINANCIAL INFORMATION**](#q3_001) |  |
| Item 1. | [Financial Statements](#q3_002) | 4 |
|  | [Condensed Balance Sheets](#q3_003) | 4 |
|  | [Condensed Statements of Operations](#q3_004) | 5 |
|  | [Condensed Statements of Changes in Stockholders' Equity (Deficit)](#q3_005) | 6 |
|  | [Condensed Statements of Cash Flows](#q3_006) | 8 |
|  | [Notes to Condensed Financial Statements](#q3_007) | 9 |
| Item 2. | [Management's Discussion and Analysis of Financial Condition and Results of Operations](#q3_008) | 26 |
| Item 3. | [Quantitative and Qualitative Disclosures About Market Risk](#q3_009) | 36 |
| Item 4. | [Controls and Procedures](#q3_010) | 36 |
| **PART II.** | [**OTHER INFORMATION**](#q3_011) |  |
| Item 1. | [Legal Proceedings](#q3_012) | 37 |
| Item 1A. | [Risk Factors](#q3_013) | 37 |
| Item 2. | [Unregistered Sales of Equity Securities and Use of Proceeds](#q3_014) | 37 |
| Item 3. | [Defaults Upon Senior Securities](#q3_015) | 37 |
| Item 4. | [Mine Safety Disclosures](#q3_016) | 37 |
| Item 5. | [Other Information](#q3_017) | 37 |
| Item 6. | [Exhibits](#q3_018) | 38 |
|  | [Signatures](#q3_020) | 40 |

---

**PART I—FINANCIAL INFORMATION**

**Item 1. Financial Statements.**

**Aclarion, Inc.**

**Condensed Balance Sheets** 

---

| | | |
|:---|:---|:---|
|  | **September 30, 2025** | **December 31, 2024** |
|  | **(Unaudited)** | |
| **ASSETS** |  |  |
| <u>Current assets:</u> |  |  |
| &nbsp;&nbsp;&nbsp;Cash and cash equivalents | $11341336 | $453661 |
| &nbsp;&nbsp;&nbsp;Restricted cash | 25000 | 10000 |
| &nbsp;&nbsp;&nbsp;Accounts receivable, net | 32018 | 18326 |
| &nbsp;&nbsp;&nbsp;Prepaid expense | 407308 | 183560 |
| &nbsp;&nbsp;&nbsp;Other current assets | 99084 | 158732 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Total current assets | 11904746 | 824279 |
| <u>Non-current assets:</u> |  |  |
| &nbsp;&nbsp;&nbsp;Property and equipment, net | 13164 | 5499 |
| &nbsp;&nbsp;&nbsp;Intangible assets, net | 1282388 | 1293705 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Total non-current assets | 1295552 | 1299204 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**Total assets** | $**13200298** | $**2123483** |
| **LIABILITIES AND STOCKHOLDERS' EQUITY** |  |  |
| <u>Current liabilities:</u> |  |  |
| &nbsp;&nbsp;&nbsp;Accounts payable | $274359 | $531603 |
| &nbsp;&nbsp;&nbsp;Accrued and other liabilities | 425286 | 529182 |
| &nbsp;&nbsp;&nbsp;Warrant liability | 102 | 11869 |
| &nbsp;&nbsp;&nbsp;Liability to issue equity | – | 80772 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Total current liabilities | 699747 | 1153426 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**Total liabilities** | **699747** | **1153426** |
| <u>Commitments and contingencies (see Note 10)</u> | **–** | **–** |
| <u>Stockholders' equity:</u> |  |  |
| &nbsp;&nbsp;&nbsp;Series B preferred stock - $.00001 par value, 3,000 authorized 0 and 930 shares issued and outstanding (see Note 11) |  | \* |
| &nbsp;&nbsp;&nbsp;Series C preferred stock - $.00001 par value, 1,000 authorized 0 and 874 shares issued and outstanding (see Note 11) |  | \* |
| &nbsp;&nbsp;&nbsp;Common stock - $.00001 par value, 200,000,000 authorized 582,371 and 1,370 shares issued and outstanding (See Note 11) | 6 | \* |
| &nbsp;&nbsp;&nbsp;Additional paid-in capital | 69107343 | 52232368 |
| &nbsp;&nbsp;&nbsp;Accumulated deficit | (56606798) | (51262311) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**Total stockholders' equity** | 12500551 | 970057 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**Total liabilities and stockholders' equity** | $**13200298** | $**2123483** |

---

 

*\** *Rounds to less than one share or $1*

See accompanying notes to condensed financial statements.

**Aclarion, Inc.**

**Condensed Statements of Operations** 

**(Unaudited)**

---

| | | | | |
|:---|:---|:---|:---|:---|
|  | **Three Months Ended September 30,** | **Three Months Ended September 30,** | **Nine Months Ended September 30,** | **Nine Months Ended September 30,** |
|  | **2025** | **2024** | **2025** | **2024** |
| **<u>Revenue</u>** |  |  |  |  |
| Revenue | $18942 | $14407 | $57251 | $35492 |
| Cost of revenue | 14556 | 21332 | 52214 | 64102 |
| Gross profit (loss) | 4386 | (6925) | 5037 | (28610) |
| **<u>Operating expenses:</u>** |  |  |  |  |
| Sales and marketing | 632409 | 232775 | 1278759 | 638869 |
| Research and development | 302037 | 195797 | 770659 | 636940 |
| General and administrative | 900904 | 860461 | 3015016 | 2402408 |
| Total operating expenses | 1835350 | 1289033 | 5064434 | 3678217 |
| **Loss from operations** | (1830964) | (1295958) | (5059397) | (3706827) |
| Other income (expense): |  |  |  |  |
| Interest expense |  | (71527) |  | (535199) |
| Loss on exchange of debt |  | (6585) |  | (1073317) |
| Gain (loss) on extinguishment of debt |  |  | 73272 | (111928) |
| Changes in fair value of warrant and derivative liabilities | 1 | 7591 | 11767 | 330632 |
| Penalties and settlements |  |  | (672500) |  |
| Other, net | 124669 | 303 | 302371 | 93284 |
| Total other income (expense) | 124670 | (70218) | (285090) | (1296528) |
| Loss before income taxes | (1706294) | (1366176) | (5344487) | (5003355) |
| Income tax provision | – | – | – | – |
| Net loss | $(1706294) | $(1366176) | $(5344487) | $(5003355) |
| Dividends accrued for preferred stockholders | – | (12142) | (6683) | (12142) |
| Net loss allocable to common stockholders | $(1706294) | $(1378318) | $(5351170) | $(5015497) |
| Net loss per share allocable to common shareholders | $(2.93) | $(1321.49) | $(11.60) | $(5893.65) |
| Weighted average shares of common stock outstanding, basic and diluted | 582371 | 1043 | 461341 | 851 |

---

See accompanying notes to condensed financial statements.

A**clarion, Inc.**

**Condensed Statements of Changes in Stockholders' Equity (Deficit)**

**(Unaudited)**

---

| | | | | | | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|:---|:---|:---|:---|:---|
|  | Series A | Series A | Series B | Series B | Series C | Series C | | | | | |
|  | Preferred Stock | Preferred Stock | Preferred Stock | Preferred Stock | Preferred Stock | Preferred Stock | Common Stock | Common Stock | | | |
|  | Shares | Value | Shares | Value | Shares | Value | Shares | Value |<br>Paid-In<br>Capital |<br>Accumulated<br>Deficit |<br>Total |
| **For the Nine Months Ended September 30, 2024** |  |  |  |  |  |  |  |  |  |  |  |
| **Balance, December 31, 2023** |  | $**–** | **–** | $**–** | **–** | $**–** | **93** | $**\*** | $**43553531** | $**(44281526)** | $**(727995)** |
| Share-based compensation |  |  |  |  |  |  |  |  | 85827 |  | 85827 |
| Issuance of common stock and warrants related to public offering |  |  |  |  |  |  | 572 | \* | 3001495 |  | 3001495 |
| Issuance of common shares - equity line of credit |  |  |  |  |  |  | 50 | \* | 1449532 |  | 1449532 |
| Public offering and equity line issuance costs |  |  |  |  |  |  |  |  | (709211) |  | (709211) |
| Issuance of common shares - debt for equity exchange |  |  |  |  |  |  | 71 | \* | 1771606 |  | 1771606 |
| Issuance of commitment shares - note financing |  |  |  |  |  |  | 1 | \* | 33297 |  | 33297 |
| Issuance of common shares related to restricted stock units |  |  |  |  |  |  | **\*** | \* | \* |  |  |
| Cashless exercise of pre-funded warrants |  |  |  |  |  |  | **\*** | \* |  |  |  |
| Round up convention related to reverse stock split |  |  |  |  |  |  | 4 | \* |  |  |  |
| Net loss |  | – | – | – | – | – | – | – | – | (2399102) | (2399102) |
| **Balance, March 31, 2024** |  | $**–** | **–** | $**–** | **–** | $**–** | **791** | $**\*** | $**49186077** | $**(46680628)** | $**2505449** |
| Share-based compensation |  |  |  |  |  |  |  |  | 70305 |  | 70305 |
| Issuance of common shares related to restricted stock units |  |  |  |  |  |  | 1 | \* | \* |  |  |
| Issuance of common shares - equity line of credit |  |  |  |  |  |  | 116 | \* | 304500 |  | 304500 |
| Net loss |  | – | – | – | – | – | – | – | – | (1238077) | (1238077) |
| **Balance, June 30, 2024** |  | $**–** | **–** | $**–** | **–** | $**–** | **908** | $**\*** | $**49560882** | $**(47918705)** | $**1642177** |
| Share-based compensation |  |  |  |  |  |  |  |  | 74706 |  | 74706 |
| Issuance of common shares related to restricted stock units |  |  |  |  |  |  | 1 | \* |  |  |  |
| Issuance of common shares related to RegA+ |  |  |  |  |  |  | 202 | 18 | 451953 |  | 451971 |
| Issuance of B-Series preferred stock - debt for equity exchange |  |  | 930 |  |  |  |  |  | 930052 |  | 930052 |
| B-Series preferred stock issuance costs |  |  |  |  |  |  |  |  | (35000) |  | (35000) |
| C-Series preferred stock issuance costs |  |  |  |  |  |  |  |  | (55000) |  | (55000) |
| Issuance of C-Series preferred stock |  |  |  |  |  |  |  |  | 602900 |  | 602900 |
| Common stock issuance costs |  |  |  |  | 1000 |  |  |  | (210228) |  | (210228) |
| Issuance of C-Series warrants |  |  |  |  |  |  |  |  | 397100 |  | 397100 |
| Issuance of RegA+ warrants |  |  |  |  |  |  |  |  | 77283 |  | 77283 |
| Capitalization of B-Series preferred stock dividends |  |  |  |  |  |  |  |  | (12142) | 12142 |  |
| Net income (loss) |  | – | – | – | – | – | – | – | – | (1366176) | (1366176) |
| **Balance, September 30, 2024** |  | $**–** | **930** | $**–** | **1000** | $**–** | **1111** | $**18** | $**51782506** | $**(49272739)** | $**2509785** |

---

\* *Rounds to less than one share or $1*

See accompanying notes to condensed financial statements.

**Aclarion, Inc.**

**Condensed Statements of Changes in Stockholders' Equity (Deficit)**

**(Unaudited)**

**(Continued)**

---

| | | | | | | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|:---|:---|:---|:---|:---|
|  | Series A | Series A | Series B | Series B | Series C | Series C | | | | | |
|  | Preferred Stock | Preferred Stock | Preferred Stock | Preferred Stock | Preferred Stock | Preferred Stock | Common Stock | Common Stock | | | |
|  | Shares | Value | Shares | Value | Shares | Value | Shares | Value |<br>Paid-In<br>Capital |<br>Accumulated<br>Deficit |<br>Total |
| **For the Nine Months Ended September 30, 2025** |  |  |  |  |  |  |  |  |  |  |  |
| **Balance, December 31, 2024** |  | $**–** | **930** | $**–** | **874** | $**–** | **1370** | $**\*** | $**52232368** | $**(51262311)** | $**970057** |
| Share-based compensation |  |  |  |  |  |  |  |  | 55897 |  | 55897 |
| Registered Direct offerings of common stock |  |  |  |  |  |  | 19144 | \* | 5167927 |  | 5167927 |
| Public offering of common stock and warrants |  |  |  |  |  |  | 16048 | \* | 14554544 |  | 14554544 |
| Common stock issuance costs |  |  |  |  |  |  |  |  | (2101282) |  | (2101282) |
| Redemption of Series B preferred stock |  |  | (930) |  |  |  |  |  | (1213590) |  | (1213590) |
| Conversion of C-series preferred stock to common stock |  |  |  |  | (874) |  | 687 | \* |  |  |  |
| Exercise of C-series warrants |  |  |  |  |  |  | 629 | \* | 336441 |  | 336441 |
| Warrant amendment |  |  |  |  |  |  | **–** |  | 48087 |  | 48087 |
| Alternative cashless exercise of B warrants |  |  |  |  |  |  | 544299 | 5 | (5) |  |  |
| Round-up conversion related to reverse stock splits |  |  |  |  |  |  | 161 | \* |  |  |  |
| Net loss |  | **–** | **–** | **–** | **–** | **–** | **–** | **–** | **–** | (2037436) | (2037436) |
| **Balance, March 31, 2025** |  | $**–** | **–** | $**–** | **–** | $**–** | **582338** | $**6** | $**69080387** | $**(53299747)** | $**15780645** |
| Share-based compensation |  |  |  |  |  |  |  |  | 28360 |  | 28360 |
| Round up conversion related to reverse stock splits |  |  |  |  |  |  | 33 | \* |  |  |  |
| Common stock issuance costs |  |  |  |  |  |  |  |  | (18150) |  | (18150) |
| Net loss |  | – | – | – | – | – | – | – | – | (1600757) | (1600757) |
| **Balance, June 30, 2025** |  | $**–** | **–** | $**–** | **–** | $**–** | **582371** | $**6** | $**69090597** | $**(54900504)** | $**14190098** |
| Share-based compensation |  |  |  |  |  |  |  |  | 16746 |  | 16746 |
| Net loss |  | – | – | – | – | – | – | – | – | (1706294) | (1706294) |
| **Balance, September 30, 2025** |  | $**–** | **–** | $**–** | **–** | $**–** | **582371** | $**6** | $**69107343** | $**(56606798)** | $**12500551** |

---

\* *Rounds to less than one share or $1*

See accompanying notes to condensed financial statements.

**Aclarion, Inc.**

**Condensed Statements of Cash Flows**

**(Unaudited)**

---

| | | |
|:---|:---|:---|
|  | **Nine Months Ended September 30,** | **Nine Months Ended September 30,** |
|  | **2025** | **2024** |
| **CASH FLOWS FROM OPERATING ACTIVITIES:** |  |  |
| &nbsp;&nbsp;&nbsp;Net loss | $(5344487) | $(5003355) |
| &nbsp;&nbsp;&nbsp;Adjustments to reconcile net loss to net cash used in operating activities: |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Depreciation and amortization | 166093 | 140893 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Share-based compensation | 101003 | 230837 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Amendment of warrants | 48087 |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Non-cash settlements | 58272 |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Loss on exchange of debt |  | 1073317 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Loss on extinguishment of debt |  | 111928 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Amortization of deferred issuance costs |  | 502516 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Change in fair value related to warrants and derivative | (11767) | (330632) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Non-cash interest related to bridge funding |  | 58002 |
| &nbsp;&nbsp;&nbsp;Change in operating assets and liabilities |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Accounts receivable | (13692) | (2351) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Prepaids and other current assets | (164100) | (329306) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Accounts payable | (214007) | (443068) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Accrued and other liabilities | (162168) | (326399) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Note payable, net of discount | – | (31129) |
| **Net cash used in operating activities** | (5536766) | (4348747) |
| **CASH FLOWS FROM INVESTING ACTIVITIES:** |  |  |
| &nbsp;&nbsp;&nbsp;Intangible assets – Patents | (154639) | (261220) |
| &nbsp;&nbsp;&nbsp;Fixed assets | (7802) | – |
| **Net cash used in investing activities** | (162441) | (261220) |
| **CASH FLOWS FROM FINANCING ACTIVITIES:** |  |  |
| &nbsp;&nbsp;&nbsp;Public offering of common stock and warrants | 14554545 |  |
| &nbsp;&nbsp;&nbsp;Registered Direct offerings | 5167927 |  |
| &nbsp;&nbsp;&nbsp;Common stock cash issuance costs | (2243441) | (714332) |
| &nbsp;&nbsp;&nbsp;Exercise of Series C warrants | 336441 |  |
| &nbsp;&nbsp;&nbsp;Redemption of Series B Preferred stock | (1213590) |  |
| &nbsp;&nbsp;&nbsp;Issuance of common stock and warrants related to public offering, net deductions |  | 2691391 |
| &nbsp;&nbsp;&nbsp;Proceeds from common stock and warrant RegA+ offering |  | 529254 |
| &nbsp;&nbsp;&nbsp;Proceeds from sales of C-Series preferred stock and warrants |  | 1000000 |
| &nbsp;&nbsp;&nbsp;Proceeds from equity line |  | 1754032 |
| &nbsp;&nbsp;&nbsp;Repayment of promissory notes |  | (300974) |
| &nbsp;&nbsp;&nbsp;Bridge fund cash issuance costs |  | (23375) |
| &nbsp;&nbsp;&nbsp;Preferred stock cash issuance costs | – | (35000) |
| **Net cash provided by financing activities** | 16601882 | 4900996 |
| Net increase in cash and cash equivalents | 10902675 | 291029 |
| Cash, cash equivalents and restricted cash, beginning of period | 463661 | 1031069 |
| Cash, cash equivalents and restricted cash, end of period | $11366336 | $1322098 |
| **Non-cash activities** |  |  |
| &nbsp;&nbsp;&nbsp;Capitalization of Series B preferred stock dividends | $5425 | $– |
| &nbsp;&nbsp;&nbsp;Capitalization of Series C preferred stock dividends | $1258 | $– |
| &nbsp;&nbsp;&nbsp;Conversion of Series C preferred stock to common stock | $548534 | $– |
| &nbsp;&nbsp;&nbsp;Cashless exercise of B warrants to common stock | $9539081 | $– |
| &nbsp;&nbsp;&nbsp;Dividends accrued on preferred shares | $– | $12142 |
| &nbsp;&nbsp;&nbsp;Exchange of indebtedness for preferred shares | $– | $930052 |
| &nbsp;&nbsp;&nbsp;Issuance of common shares in exchange for debt | $– | $1771606 |
| &nbsp;&nbsp;&nbsp;Issuance of bridge fund commitment shares | $– | $33297 |
| &nbsp;&nbsp;&nbsp;Accrued issuance costs related to preferred stock | $– | $55000 |
| &nbsp;&nbsp;&nbsp;Accrued issuance costs related to common stock | $– | $94733 |
| &nbsp;&nbsp;&nbsp;Designation of prepaid expenses to common stock issuance costs | $– | $919439 |
| &nbsp;&nbsp;&nbsp;Issuance of common shares related to restricted stock units | $– | $216397 |

---

See accompanying notes to condensed financial statements.

**Aclarion, Inc.**

**Notes to Condensed Financial Statements** 

**(Unaudited)**

**NOTE 1. THE COMPANY AND BASIS OF PRESENTATION**

**The Company**

Aclarion, Inc., formerly Nocimed, Inc., (the "Company" or "Aclarion") is a healthcare technology company that leverages magnetic resonance spectroscopy ("MRS") combined with proprietary signal-processing biomarkers to optimize clinical treatments. The Company was formed in February 2015, incorporated in Delaware, and has its principal place of business in Broomfield, Colorado.

**Basis of Presentation**

The accompanying condensed financial statements have been prepared in accordance with generally accepted accounting principles in the United States of America ("GAAP") and pursuant to the rules and regulations of the Securities and Exchange Commission ("SEC") for interim financial information. Accordingly, they do not include all of the information required by U.S. GAAP for complete financial statements. The interim condensed financial statements reflect all adjustments that are of a normal recurring nature and that are considered necessary for a fair representation of the results for the periods presented and should be read in conjunction with the audited financial statements and notes thereto for the year ended December 31, 2024, which include a complete set of footnote disclosures, including our significant accounting policies. The December 31, 2024, condensed balance sheet was derived from the December 31, 2024, audited financial statements. They should be read in conjunction with the financial statements and notes thereto included in our Annual report on Form 10-K, filed with the SEC on April 9, 2025. The results for interim periods are not necessarily indicative of the results that may be expected for a full fiscal year or for any other future period.

**Risks and Uncertainties**

The Company is subject to various risks and uncertainties frequently encountered by companies in the early stages of development. Such risks and uncertainties include, but are not limited to, its limited operating history, competition from other companies, limited access to additional funds, dependence on key personnel, and management of potential rapid growth. To address these risks, the Company must, among other things, develop its customer base; implement and successfully execute its business and marketing strategy; develop follow-on products; provide superior customer service; and attract, retain, and motivate qualified personnel. There can be no guarantee that the Company will be successful in addressing these or other such risks.

**2025 Reverse Stock Splits**

The Company effected (i) a 1:335 reverse stock split of the Company's common stock on January 30, 2025, and (ii) a 1:27 reverse stock split of the Company's common stock on March 28, 2025 (together, the "2025 Stock Splits"). The 2025 Stock Splits resulted in a reduction in the number of outstanding shares of common stock, warrants, stock options and restricted share units and a proportionate increase in the value of each share or strike price of the warrants and stock options.

Unless described otherwise, all references to common stock, share data, per share data and related information contained in these financial statements have been retrospectively adjusted to reflect the effect of the stock splits for all periods presented. In addition, any fractional shares that would otherwise be issued as a result of the stock splits were rounded up to the nearest whole share. Further, the number of shares issuable and exercise prices of stock options and warrants have been retrospectively adjusted in these financial statements for all periods presented to reflect the 2025 Stock Splits.

The following tables present selected share information reflecting on a retroactive basis the reverse stock splits as of and for the year ended December 31, 2024:

---

| | |
|:---|:---|
|  | **December 31, 2024** |
| Common shares issued and outstanding - pre-2025 splits, 12,389,989 shares | $124 |
| Common shares issued and outstanding - post-2025 splits, 1370 shares | $\* |
| Additional paid-in capital - pre-2025 splits | $52232244 |
| Additional paid-in capital - post-2025 splits | $52232368 |

---

*\** *Rounds to less than one share*

---

| | |
|:---|:---|
|  | **Year Ended December 31, 2024** |
| Weighted average shares outstanding, basic and diluted - pre-2025 splits | 8527977 |
| Weighted average shares outstanding, basic and diluted - post-2025 splits | 943 |
| Basic and diluted net loss per shares attributable to common stockholders - pre-2025 splits | $(0.83) |
| Basic and diluted net loss per shares attributable to common stockholders - post-2025 splits | $(7480) |

---

**NOTE 2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES**

**Use of Estimates**

The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosures of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates.

The financial statements include some amounts that are based on management's best estimates and judgments. The most significant estimates relate to depreciation, amortization, and valuation of warrants, warrant and derivative liabilities, and options to purchase shares of the Company's common stock. These estimates may be adjusted as more current information becomes available, and any adjustment could be significant.

**Valuation of Derivative Instruments** 

Financial Accounting Standards Board ("FASB") Accounting Standards Codification ("ASC") 815-40, *Derivatives and Hedging: Contracts on an Entity's Own Equity*, addresses whether an equity-linked contract qualifies as equity in the entity's financial statements. Agreements where an entity has insufficient authorized and unissued shares to settle the contract generally are accounted for as a liability and marked to fair value through earnings each reporting period. The Company evaluates its financial instruments to determine if such instruments are liabilities or contain features that qualify as embedded derivatives. For financial instruments that are accounted for as liabilities, the derivative instrument is initially recorded at its fair value and is then revalued at each reporting date, with changes in the fair value reported as charges or credits to income.

**Fair Value of Financial Instruments**

ASC 820, Fair Value Measurements, provides guidance on the development and disclosure of fair value measurements. Under this accounting guidance, fair value is defined as an exit price, representing the amount that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. As such, fair value is a market-based measurement that should be determined based on assumptions that market participants would use in pricing an asset or a liability.

The accounting guidance classifies fair value measurements in one of the following three categories for disclosure purposes:

*Level 1* - Unadjusted quoted prices in active markets for identical instruments that are accessible by the Company on the measurement date.

*Level 2* - Quoted prices in markets that are not active or inputs which are either directly or indirectly observable.

*Level 3* - Unobservable inputs for the instrument requiring the development of assumptions by the Company.

The Company analyzes all financial instruments with features of both liabilities and equity under the Financial Accounting Standard Board's ("FASB") accounting standard for such instruments. Under this standard, financial assets and liabilities are classified in their entirety based on the lowest level of input that is significant to the fair value measurement.

The carrying values of the Company's financial instruments including cash equivalents, restricted cash, accounts receivable, and accounts payable are approximately equal to their respective fair values due to the relatively short-term nature of these instruments. The Company's warrant liabilities and derivative liabilities are estimated using level 3 inputs (see Note 3).

**Derivative Financial Instruments**

The Company has derivative financial instruments that are not hedges and do not qualify for hedge accounting. Changes in the fair value of these instruments are recorded in other income (expenses), on a net basis in the Condensed Statements of Operations.

**Cash and Cash Equivalents** 

The Company considers all highly liquid instruments purchased with an original maturity of three months or less to be cash equivalents. The Company had $307,106 cash deposits and $11,059,230 of cash equivalents at September 30, 2025. The Company had $463,661 of cash deposits and $0 cash equivalents at December 31, 2024.

The Company maintains cash deposits and cash equivalents at three financial institutions, which are insured by the FDIC up to $250,000. The Company's cash balance may at times exceed these limits. On September 30, 2025 and December 31, 2024, the Company had $10,866,336 and $167,899, respectively, in excess of federally insured limits. The Company continually monitors its positions with, and the credit quality of, the financial institutions with which it invests. The Company maintains no international bank accounts. As of September 30, 2025, $25,000 of the Company's cash was restricted as collateral related to the credit card program offered by our bank.

**Accounts Receivable, Less Allowance for Credit Losses**

The Company estimates an allowance for credit losses based upon an evaluation of the current status of receivables, historical experience, and other factors as necessary. It is reasonably possible that the Company's estimate of the allowance for credit losses will change. The allowance for credit losses was $8,575 on September 30, 2025, and $0 at December 31, 2024.

**Revenue Recognition**

Revenues are recognized when a contract with a customer exists, and at that point in time when we have delivered a Nociscan report to our customer. Revenue is recognized in the amount that reflects the negotiated consideration expected to be received in exchange for those reports. Following the delivery of the report, the company has no ongoing obligations or services to provide to the customer. Customers pay no other upfront, licensing, or other fees. To date, our reports are not reimbursable under any third-party payment arrangements with the exception of three private health insurance providers in the United Kingdom. The Company invoices its customers based on the billing schedules in its sales arrangements. Payment terms range generally from 30 to 90 days from the date of invoice.

**Segment Disclosure**

Operating segments are components of an enterprise about which separate financial information is available and is evaluated quarterly, by management, namely the Chief Operating Decision Maker ("CODM") of an organization, in order to determine operating and resource allocation decisions. By the definition, the Company has identified Brent Ness, Chief Executive Officer, as the CODM.

The Company operates and reports in one segment ("Nociscan segment") related to the delivery of Nociscan reports. The Company generates revenues, earnings, net income, and cash flows through the single segment by collecting fees from our clients for providing Nociscan reports.

The Company believes that this structure reflects its current operational and financial management, and that it provides the best structure for the Company to focus on growth opportunities while maintaining financial responsibility.

The results of the reportable segment is derived directly from the Company's management reporting system. The results are based on the Company's method of internal reporting and are not necessarily in conformity with accounting principles generally accepted in the United States. Management measures the performance of the segment on several metrics, including contribution income (loss). Segment contribution income (loss) includes all product line segment revenue less the related costs of sales, research and development and sales and marketing costs. Contribution income (loss) is used, in part, to evaluate the performance of, and allocate resources to, the segment.

Financial information and annual operating plans and forecasts are prepared and reviewed by the CODM at a segment level. The CODM assesses performance for the Nociscan segment and decides how to better allocate resources based on the segment strategy and net income (losses) that are reported on the Statements of Operations. The Company's objective in making resource allocation decisions is to optimize the financial results. The accounting policies of our Nociscan segment are the same as those described in the summary of significant accounting policies herein.

For single reportable segment-level financial information, total assets, and significant non-cash transactions, see Financial Statements.

**Liquidity and Capital Resources**

As of September 30, 2025, we had cash and cash equivalents of $11,366,336. The Company raised an additional $2.5 million in October, 2025 in a registered direct public offering. We believe our current cash will fund our operating expenses and capital expenditure requirements through the first quarter of 2027. The Company has based these estimates, however, on assumptions that may prove to be wrong, and could spend available financial resources much faster than we currently expect. The Company will need to raise additional funds to continue funding our technology development and commercialization efforts.

**Share-Based Compensation**

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.

The exercise or strike price of each option is not less than 100% of the fair market value of the Common Stock subject to the option on the date the option is granted.

The Company issues restricted stock unit awards to non-employee consultants who are providing various services. The awards are valued at the market price on the date of the grant. The awards vest over the contract life and based on achievement of targeted performance milestones.

On occasion, the Company grants common stock to compensate vendors for services rendered.

**Deferred Financing Costs**

The Company capitalizes certain legal, accounting, and other fees and costs that are directly attributable to in-process equity financings as deferred offering costs until such financings are completed. Upon the completion of an equity financing, these costs are recorded as a reduction of additional paid-in capital of the related offering. Upon the completion of the two registered direct offerings and a public offering during the nine months ended September 30, 2025, approximately $2.1 million of offering costs were reclassified to additional paid-in capital ($1.6 million deducted from proceeds, and $0.5 million paid or accrued). During the three months ended September 30, 2025, $0 offering costs were reclassified to additional paid-in capital.

**Emerging Growth Company Status**

The Company is an emerging growth company, as defined in the Jumpstart Our Business Startups Act of 2012 (the "JOBS Act"). Under the JOBS Act, emerging growth companies can delay the adoption of new or revised accounting standards issued subsequent to the enactment of the JOBS Act until such time as those standards apply to private companies. The Company has elected to use this extended transition period to comply with certain new or revised accounting standards that have different effective dates for public and private companies.

**NOTE 3: FAIR VALUE MEASUREMENTS**

In accordance with ASC 820 (Fair Value Measurements and Disclosures), the Company uses various inputs to measure the outstanding warrants on a recurring basis to determine the fair value of the liability.

---

| | | | | |
|:---|:---|:---|:---|:---|
|  | **Fair value measured as of September 30, 2025** | **Fair value measured as of September 30, 2025** | **Fair value measured as of September 30, 2025** | **Fair value measured as of September 30, 2025** |
|  | Fair value on<br>September 30, 2025 | Quoted prices in active markets<br>(Level 1) | Significant other observable inputs<br>(Level 2) | Significant unobservable inputs<br>(Level 3) |
| **<u>Assets</u>** |  |  |  |  |
| Money market funds | $11059230 | $11059230 | $– | $– |
| **<u>Liabilities</u>** |  |  |  |  |
| Warrant liability | $102 | $– | $– | $102 |

---

There were no transfers between Level 1, 2, and 3 during the nine months ended September 30, 2025.

The following table presents changes in Level 3 liabilities measures at fair value for the three months ended September 30, 2025. Both observable and unobservable inputs were used to determine the fair value positions that the Company has classified within the Level 3 category.

---

| | | | |
|:---|:---|:---|:---|
|  | Warrant Liability | Liability to Issue Commitment Shares | Total |
| Balance - December 31, 2024 | $11869 | $80772 | $92641 |
| Change in fair value | (11767) | (80772) | (92539) |
| Balance - September 30, 2025 | $102 | $– | $102 |

---

**NOTE 4. RECENT ACCOUNTING PRONOUNCEMENTS**

*Accounting Pronouncements Recently Adopted*

In November 2023, the FASB issued Accounting Standards Update ("ASU") 2023-07, "Segment Reporting (Topic 280): Improvements to Reportable Segment Disclosures", which improves reportable segment disclosure requirements, primarily through enhanced disclosures about significant segment expenses. ASU 2023-07 is effective for the Company for the year ended December 31, 2024 and early adoption is permitted. The company adopted the new standard effective December 31, 2024 on a retrospective basis. The adoption did not have any impact on the Company's financial position, results of operations or cash flows. Refer to Note 2, *Segment Disclosure*, for details.

 

 

 

 

*Accounting Pronouncements Not Yet Effective*

In December 2023, the FASB issued ASU 2023-09, "Income Taxes (Topic 740): Improvements to Income Tax Disclosures", which will require the Company to disclose specified additional information in its income tax rate reconciliation and provide additional information for reconciling items that meet a quantitative threshold. ASU 2023-09 will also require the Company to disaggregate its income taxes paid disclosure by federal taxes, with further disaggregation required for significant individual jurisdictions. ASU 2023-09 is effective for the Company for the year ending December 31, 2025 and early adoption is permitted. The guidance allows for adoption using either prospective or retrospective transition method. The company is evaluating the impact that the updated standard will have on its financial statement disclosures.

In November 2024, the FASB issued ASU 2024-03, "Income Statement – Reporting Comprehensive Income – Expense Disaggregation Disclosures (Subtopic 220-40): Disaggregation of Income Statement Expenses", which expands the disclosure requirements for specific costs and expenses. ASU 2024-03 is effective for the Company for the year ending December 31, 2027 and early adoption is permitted. Upon adoption, the guidance should be applied retrospectively to all prior periods presented in the financial statements. The company does not expect that the guidance will have material impacts on its financial position, results of operations or cash flows. The company is evaluating the impact that the updated standard will have on its financial statement disclosures.

With the exception of the new standards discussed above, there have been no other new accounting pronouncements that have significance, or potential significance, to the Company's financial position, results of operations and cash flows.

**NOTE 5. REVENUE**

**Contract Balances**

The timing of revenue recognition, billings, and cash collections may result in trade, unbilled receivables, and deferred revenues on the balance sheets. At times, revenue recognition may occur before the billing, resulting in an unbilled receivable, which would represent a contract asset. The contract asset would be a component of accounts receivable and other assets for the current and non-current portions, respectively. In the event the Company receives advances or deposits from customers before revenue is recognized, this would result in a contract liability.

**NOTE 6. SUPPLEMENTAL FINANCIAL INFORMATION** 

**Balance Sheets**

**Prepaids expenses:**

---

| | | |
|:---|:---|:---|
|  | **September 30, 2025** | **December 31, 2024** |
| Prepaid D&O Insurance | $220833 | $96578 |
| Prepaid Health Insurance | 18063 | 16715 |
| Prepaid Other Insurance | 7272 | 15592 |
| Prepaid Clinical | 26428 | 26428 |
| Prepaid Annual Fees | 18241 | 24079 |
| Prepaid NASDAQ Annual Fees | 17500 |  |
| Prepaid Royalties | 16667 |  |
| Prepaid Consulting | 58367 |  |
| Prepaid - other | 23937 | 4168 |
|  | $407308 | $183560 |

---

**Other current assets:**

---

| | | |
|:---|:---|:---|
|  | **September 30, 2025** | **December 31, 2024** |
| Short term deposits | $39003 | $39002 |
| Deferred offering costs | 60081 | 119730 |
|  | $99084 | $158732 |

---

**Accounts payable:**

---

| | | |
|:---|:---|:---|
|  | **September 30, 2025** | **December 31, 2024** |
| Accounts payable | $265745 | $525582 |
| Credit cards payable | 8614 | 6021 |
|  | $274359 | $531603 |

---

**Accrued and other liabilities:**

---

| | | |
|:---|:---|:---|
|  | **September 30, 2025** | **December 31, 2024** |
| Accrued bonus | $295021 | $404228 |
| Accrued audit and legal expenses | 21302 | 33006 |
| Accrued board compensation | 66250 | 46250 |
| Investment banking and related fees |  | 15000 |
| Other accrued expenses and liabilities | 42713 | 30698 |
|  | $425286 | $529182 |

---

**NOTE 7. LEASES**

The Company had no office lease for the quarter ended September 30, 2025, and the year ended December 31, 2024.

**NOTE 8. INTANGIBLE ASSETS**

The Company's intangible assets are as follows:

---

| | | |
|:---|:---|:---|
|  | **September 30, 2025** | **December 31, 2024** |
| Patents and licenses | $2738711 | $2584072 |
| Other | 5017 | 5017 |
|  | 2743728 | 2589089 |
| Less: accumulated amortization | (1461340) | (1295384) |
| Intangible assets, net | $1282388 | $1293705 |

---

Patents and licenses costs are accounted for as intangible assets and amortized over the life of the patent or license agreement and charged to research and development.

Amortization expense related to purchased intangible assets was $57,744 and $49,732 for the three months ended September 30, 2025, and 2024, respectively. Amortization expense related to purchased intangible assets was $165,955 and $140,003 for the nine months ended September 30, 2025, and 2024, respectively.

Patents and trademarks are reviewed at least annually for impairment. No impairment was recorded through September 30, 2025, and December 31, 2024, respectively.

Future amortization of intangible assets is as follows:

---

| | |
|:---|:---|
| 2025 (remainder of 2025) | $58222 |
| 2026 | 232888 |
| 2027 | 232888 |
| 2028 | 232888 |
| 2029 and beyond | 525502 |
| Total | $1282388 |

---

**NOTE 9. SHORT TERM NOTES AND CONVERTIBLE DEBT**

As of December 31, 2024, there were no short-term notes or convertible notes payable and outstanding. There was no short-term note or convertible note activity in the three or nine months ended September 30, 2025.

**NOTE 10. COMMITMENTS AND CONTINGENCIES**

**Royalty Agreement**

The Company has an exclusive license agreement with the Regents of the University of California to make, use, sell and otherwise distribute products under certain of the Regents of the University of California's patents anywhere in the world. The Company is obligated to pay a minimum annual royalty of $50,000, and an earned royalty of 4% of net sales. The minimum annual royalty will be applied against the earned royalty due for the calendar year in which the minimum payment was made. The license agreements expire upon expiration of the patents and may be terminated earlier if the Company so elects. The U.S. licensed patents that are currently issued expire between 2026 and 2029, without considering any possible patent term adjustment or extensions and assuming payment of all appropriate maintenance, renewal, annuity, or other governmental fees. The Company recorded royalty costs of $12,500 for the three months ended September 30, 2025, and 2024, respectively, and $37,500 for the nine months ended September 30, 2025, and 2024, respectively, as Cost of Revenue.

**Litigation**

From time to time, we are involved in various disputes, claims, suits, investigations, and legal proceedings arising in the ordinary course of business. We believe that the resolution of current pending legal matters will not have a material adverse effect on our business, financial condition, results of operations or cash flows. Nonetheless, we cannot predict the outcome of these proceedings, as legal matters are subject to inherent uncertainties, and there exists the possibility that the ultimate resolution of these matters could have a material adverse effect on our business, financial condition, results of operations or cash flows. If any legal proceeding occurs, the Company would record a provision for a loss when it believes that it is both probable that a loss has been incurred and the amount can be reasonably estimated.

In March 2025 we paid $687,500 to settle a dispute under the "fee tail" provision of an investment banking agreement that the Company had previously entered into. There were no other penalties or settlements paid in the nine months ended September 30, 2025.

**NOTE 11. STOCKHOLDERS' EQUITY**

The Company filed an Amended and Restated Certificate of Incorporation on April 21, 2022, as part of the IPO. The Company is authorized to issue two classes of stock to be designated, respectively, "Common Stock" and "Preferred Stock." The total number of shares which the Company is authorized to issue is two hundred twenty million (220,000,000) shares. Two hundred million (200,000,000) shares are authorized to be Common Stock, having a par value per share of $0.00001. Twenty million (20,000,000) shares are authorized to be Preferred Stock, having a par value per share of $0.00001.

**2024 Public Offering**

On February 27, 2024, the Company completed a public offering of 5,175,000 units ("Units"; equivalent to 572 units following the 2025 Stock Splits) at a price of $0.58 per Unit (adjusted to $5,246.10 following the 2025 Stock Splits), for gross proceeds of approximately $3.0 million, before deducting offering expenses. Each Unit was comprised of (i) one share of common stock or, in lieu of common stock, one pre-funded warrant to purchase one share of common stock, and (ii) two common warrants, each common warrant to purchase a share of common stock. The pre-funded warrants were immediately exercisable at a price of $0.00001 (adjusted to $0.09 following the 2025 Stock Splits) per share of common stock and only expire when such pre-funded warrants are fully exercised. The common warrants were immediately exercisable at a price of $0.58 (adjusted to $5,246.10 following the 2025 Stock Splits) per share of common stock and will expire five years from the date of issuance.

**Subscription Agreements**

On August 12, 2024, we entered into a subscription agreement with an institutional investor, pursuant to which the Company agreed to issue and sell to the investor 400,000 shares (equivalent to 44 shares following the 2025 Stock Splits) of common stock of the Company at a price of $0.29 per share (equivalent to $2,623.05 following the 2025 Stock Splits) for gross proceeds to the Company of $116,000. The shares were not placed through the efforts of a placement agent, and no fees or commissions were paid on the transaction.

On August 15, 2024, we entered into a subscription agreement with an institutional investor, pursuant to which the Company agreed to issue and sell to the investor 425,000 shares (equivalent to 47 shares following the 2025 Stock Splits) of common stock of the Company at a price of $0.29 per share (equivalent to $2,623.05 following the 2025 Stock Splits) for gross proceeds to the Company of $116,000. The shares were not placed through the efforts of a placement agent, and no fees or commissions were paid on the transaction.

On August 27, 2024, we entered into a subscription agreement with certain accredited investors to which the Company agreed to issue and sell to the investors 1,000,000 shares of common stock (equivalent to 111 shares following the 2025 Stock Splits) at a price of $0.29 per share (equivalent to $2,623.05 following the 2025 Stock Splits) for gross proceeds of $290,000. The Shares were offered at-the-market under NASDAQ rules and pursuant to the Company's Form 1-A initially filed on June 11, 2024 and qualified on June 24, 2024.

All of the foregoing shares were offered at-the-market under NASDAQ rules and pursuant to the Company's Form 1-A initially filed with the SEC on June 11, 2024 and qualified on June 24, 2024.

In connection with the August 27, 2024, subscription agreement, the Company also entered into a warrant purchase agreement with the accredited investors pursuant to which the Company issued warrants to purchase up to 400,000 Common Stock (44 shares following the 2025 Stock Splits) exercisable on or after February 27, 2025 with a five-year term and an initial exercise price of $0.29 per share (adjusted to $2,623.05 following the 2025 Stock Splits). The exercise price of the warrants will be adjusted if the Company sells any shares of Common Stock for a consideration per share less than a price equal to the warrant exercise price in effect immediately prior to such sale.

On September 30, 2024, as a result of the securities purchase agreement for the Company's Series C Preferred Stock noted below, the exercise price for the warrants was adjusted to $0.1759 per share (adjusted to $1,591.02 following the 2025 Stock Splits).

**White Lion Equity Line Agreement**

 ****

The Company has had an equity line common stock purchase agreement (the "Equity Line Purchase Agreement") with White Lion Capital, LLC ("White Lion") since 2023. Pursuant to the Equity Line Purchase Agreement, during the year ended December 31, 2024, the Company issued to White Lion 1,502,343 common shares (166 shares post-2025 Stock Splits) for total proceeds of $1,754,032. Since the initiation of the Equity Line Purchase Agreement and through September 30, 2025, the Company has issued 1,800,000 shares (199 shares post-2025 Stock Splits) to White Lion for total proceeds of $3,216,981.

Pursuant to the Equity Line Agreement, the Company has the right, but not the obligation to require White Lion to purchase, from time to time, up to $10,000,000 in aggregate gross purchase price of newly issued shares of the Company's common stock, subject to certain limitations and conditions set forth in the Equity Line Purchase Agreement.

**Ascendiant Capital Markets, LLC Sales Agreement**

On September 24, 2024, the Company entered into an At-The-Market Issuance Sales Agreement (the "Sales Agreement") with Ascendiant Capital Markets, LLC, ("Ascendiant") as sales agent, to sell shares of its common stock, par value $0.00001 per share, having an aggregate offering price of up to $10 million from time to time, through an "at the market offering" as defined in Rule 415 under the Securities Act of 1933, as amended. The aggregate market value of shares of the Company's common stock eligible for sale under the Sales Agreement will be subject to the limitations of General Instruction I.B.6 of Form S-3, to the extent required under such restriction. The Company is not obligated to make any sales of shares of common stock under the Sales Agreement. The Company and Ascendiant each have the right, in its sole discretion, to terminate the Sales Agreement pursuant to the terms and subject to the conditions set forth in the Sales Agreement.

The Company is required to pay Ascendiant a commission of up to 3.0% of the gross proceeds from the sales of its common stock sold through Ascendiant under the Sales Agreement. The Company will also reimburse Ascendiant for certain expenses incurred in connection with the Sales Agreement.

During the year ended December 31, 2024, the Company sold 1,606,211 shares (178 shares post-2025 Stock Splits) of its common stock under the Sales Agreement for net proceeds of $288,294.

On January 3, 2025, the Company terminated the Sales Agreement.

**Issuances of Preferred Stock**

*Series B Preferred Stock*

On August 14, 2024, the Company entered into an exchange agreement (the "Exchange Agreement") with accredited investors to exchange $930,052 of principal and accrued interest on the September 2023 Notes for 930 shares of newly issued Series B convertible preferred stock (the "Series B Preferred Stock") at a purchase price of $1,000 per share. The Series B Preferred Stock is convertible into common stock at an initial conversion price of $0.234 per share ($2,116.53 post-2025 Stock Splits).

Holders of the Series B Preferred Stock are entitled to dividends in the amount of 10% per annum, payable quarterly.

On January 22, 2025, the Company redeemed all Series B Preferred Stock and related accrued dividends with a cash payment of $1,213,590.

*Series C Preferred Stock Financing*

On September 30, 2024, the Company entered into a securities purchase agreement with accredited investors for a convertible preferred stock and warrants financing. The Company received $1,000,000 of gross proceeds in connection with the closing of this financing. The Company issued 1,000 shares of Series C convertible preferred stock (the "Series C Preferred Stock") at a purchase price of $1,000 per share of Series C Preferred Stock. The Series C Preferred Stock is convertible into common stock at an initial conversion price of $0.1759 per share ($1,591.02 post-2025 Stock Splits) of common stock. The Company also issued warrants exercisable for 5,685,049 shares of common stock (equivalent to 629 following the 2025 Stock Splits) with a 5.5-year term and an initial exercise price of $0.1759 (adjusted to$1,591.02 following the 2025 Stock Splits).

During the fourth quarter of 2024, certain holders converted 126 shares of C Preferred Stock and related accrued dividends into 739,050 shares of common stock (equivalent to 82 common shares following the 2025 Stock Splits). There were 874 C Preferred shares remaining at December 31, 2024.

During the three months ended March 31, 2025, certain holders converted the remaining 874 shares of C Preferred Stock and related accrued dividends into 6,211,618 shares of common stock (equivalent to 687 common shares following the 2025 Stock Splits).

During the three months ended March 31, 2025, holders of the Series C warrants exercised 5,685,049 warrants (629 post-2025 Stock Splits). 4,548,039 (503 post-2025 Stock Splits) warrants were exercised at $0.03 per share ($271.35 post-2025 Stock Splits), and 1,137,010 (126 post-2025 Stock Splits) warrants were exercised at $0.1759 per share ($1,591.02 post-2025 Stock Splits). The Company received payments of $336,411 as part of the warrant exercises.

**January 2025 Registered Direct Public Offerings**

*January 3, 2025*

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 $0.45 million.

*January 30, 2025*

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.

**Units Offering of Common Shares and Warrants**

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.

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 Dawson James 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. Dawson James 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.

*Warrants*

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 anniversary of the Initial Exercise Date.

**Approval of A and B Warrant Shares**

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 September 30, 2025.

**Warrants**

The following table summarizes the Company's outstanding warrants as of September 30, 2025. The warrants and related strike prices have been adjusted to reflect the 2025 Stock Splits:

---

| | | | |
|:---|:---|:---|:---|
| **Issue Date** | **Strike Price** | **Number Outstanding** | **Expiration** |
| April 21, 2022 (1) | $629532 | 17 | April 21, 2027 |
| April 21, 2022 | $787277 | 1 | April 26, 2027 |
| April 21, 2022 | $629532 | 3 | April 21, 2027 |
| May 16, 2023 | $2623 | 9 | May 16, 2028 |
| November 21, 2023 | $2623 | 5 | November 21, 2028 |
| November 21, 2023 | $1 | 1 | November 21, 2028 |
| February 27, 2024 | $5246 | 1144 | February 27, 2029 |
| August 27, 2024 | $250 | 22 | August 27, 2029 |
| August 27, 2024 | $181 | 221 | September 5, 2027 |
| January 16, 2025 (2) | $181 | 18242 | March 5, 2030 |
| January 16, 2025 (3) | $181 | 45 | September 5, 2027 |

---

(1) *These warrants were issued as part of the Company's initial public offering completed April 2022, and trade on Nasdaq under the ticker symbol "ACONW."* 

(2) *These Series A warrants were issued as part of the Company's public offering completed January 16, 2025* 

(3) *These Series B warrants were issued as part of the Company's public offering completed January 16, 2025* 

**NOTE 12. NET LOSS PER SHARE OF COMMON STOCK**

Basic and diluted net loss per share is computed by dividing net loss attributable to stockholders by the weighted average number shares of common stock outstanding during the period and shares issuable for vested restricted stock units. Potentially dilutive outstanding shares of common stock equivalents were excluded from the computation of diluted net loss per share for loss periods presented because including them would have been antidilutive.

A reconciliation of the numerator and denominator used in the calculation of basic and diluted net loss per share attributable to stockholders follows:

---

| | | |
|:---|:---|:---|
|  | **Three Months Ended September 30,** | **Three Months Ended September 30,** |
|  | **2025** | **2024** |
| **Numerator:** |  |  |
| Net (loss) allocable to common stockholders used to compute basic and diluted loss per common share | $(1706294) | $(1378318) |
| **Denominator:** |  |  |
| Weighted average shares outstanding used to compute basic and dilutive loss per share | 582371 | 1042 |
| Weighted average shares issuable for vested restricted stock units and pre-funded warrants | – | 1 |
|  | 582371 | 1043 |

---

---

| | | |
|:---|:---|:---|
|  | **Nine Months Ended September 30,** | **Nine Months Ended September 30,** |
|  | **2025** | **2024** |
| **Numerator:** |  |  |
| Net (loss) allocable to common stockholders used to compute basic and diluted loss per common share | $(5351170) | $(5015497) |
| **Denominator:** |  |  |
| Weighted average shares outstanding used to compute basic and dilutive loss per share | 461341 | 850 |
| Weighted average shares issuable for vested restricted stock units and pre-funded warrants | – | 1 |
|  | 461341 | 851 |

---

The following outstanding potentially dilutive securities were excluded from the weighted average calculation of dilutive loss per share attributable to common stockholders because their impact would have been antidilutive for the period presented:

---

| | | |
|:---|:---|:---|
|  | **Nine Months Ended September 30,** | **Nine Months Ended September 30,** |
|  | **2025** | **2024** |
| Preferred stock (as-converted) |  | 167 |
| Warrants | 23709 | 1132 |
| Restricted stock units |  | 2 |
| Stock options | 1908 | 19 |
|  | 25617 | 1320 |

---

**NOTE 13. STOCK BASED COMPENSATION**

**2022 Aclarion Equity Incentive Plan**

On April 21, 2022, in connection with the IPO, the Company's 2022 Aclarion Equity Incentive Plan, or "2022 Plan", went into effect. Our board of directors appointed the compensation committee of our board of directors as the committee under the 2022 Plan with the authority to administer the 2022 Plan. At the initiation of the 2022 Plan, the aggregate number of our shares of common stock were available to be issued or used for reference purposes was 125,000 shares (14 shares post-2025 Stock Splits), with an automatic increase on January 1st of each year, for a period of not more than ten years, commencing on January 1st of the year following the year in which the IPO Date occurs and ending on (and including) January 1, 2032, in an amount equal to 5% of the total number of shares of Capital Stock outstanding on December 31st of the preceding calendar year. Notwithstanding the foregoing, the Board may act prior to January 1st of a given year to provide that there will be no January 1st increase in shares for such year or that the increase in shares for such year will be a lesser number of shares of Common Stock than would otherwise occur pursuant to the preceding sentence.

At the Annual Meeting of Stockholders held December 31, 2024, stockholders approved an amendment to the 2022 Plan to increase the number of shares reserved for issuance by 1,500,000 (166 post-2025 Stock Splits), thereby increasing the number of shares issuable under the 2022 Plan from 195,695 (22 post-2025 Stock Splits) to 1,695,695 (188 post-2025 Stock Splits).

As of the year ended December 31, 2024 the aggregate number of our shares of common stock that may be issued or used for reference purposes under the 2022 Plan was 1,695,695 (188 post-2025 Stock Splits). On January 1, 2025, the 2022 Plan had an automatic increase of 619,499 (68 post-2025 Stock Split) shares which was 5% of the total number of shares of Capital Stock outstanding on December 31, 2024. As of September 30, 2025, the 2022 plan has 256 shares available for grant.

Options granted under the 2022 Plan may be incentive stock options or non-statutory stock options, as determined by the administrator at the time of grant of an option. Restricted stock may also be granted under the 2022 Plan. The options vest in accordance with the grant terms and are exercisable for a period of up to 10 years from grant date.

No stock options were granted under the 2022 Plan during the three or nine months ended September 30, 2025 or during the year ended December 31, 2024.

**Inducement Grant Outside the 2022 Plan**

On September 2, 2025, the Company granted a stock option to its incoming Chief Financial Officer as an inducement award in accordance with Nasdaq Listing Rule 5635(c)(4). This award was not granted pursuant to the 2022 Plan but was structured to mirror the terms and conditions of the 2022 Plan. The inducement grant provides for an option to purchase 17,000 shares of the Company's common stock at an exercise price of $7.15 per share, equal to the fair market value on the date of grant. The option vests over a four-year period and expires on September 2, 2035, ten years from the date of grant.

**Determining Fair Value of Stock Options**

The fair value of each grant of stock options was determined by the Company using the methods and assumptions discussed below. Each of these inputs is subjective and generally requires significant judgment to determine.

*Valuation and Amortization Method* —The Company estimates the fair value of its stock options using the Black-Scholes-Merton option-pricing model. This fair value is then amortized over the requisite service periods of the awards.

*Expected Term*—The Company estimates the expected term of stock option by taking the average of the vesting term and the contractual term of the option, as illustrated by the simplified method.

*Expected Volatility*—The expected volatility is derived from the Company's expectations of future market volatility over the expected term of the options.

*Risk-Free Interest Rate*—The risk-free interest rate is based on the 10-year U.S. Treasury yield curve on the date of grant.

*Dividend Yield*—The dividend yield assumption is based on the Company's history and expectation of no dividend payouts.

**Stock Award Activity** 

A summary of option activity under the Company's 2015 and 2022 incentive plans are as follows:

---

| | | | |
|:---|:---|:---|:---|
|  | **Options Outstanding** | **Weighted Average Exercise Price** | **Weighted Average Remaining Contractual Life&nbsp;&nbsp;&nbsp;&nbsp; (In Years)** |
| **Balance at December 31, 2024** | 19 | $277881.44 | 6.2 |
| Options granted |  |  |  |
| Options exercised |  |  |  |
| Options forfeited/expired | – | – | – |
| **Balance at September 30, 2025** | 19 | $277881.44 | 5.4 |
| **Exercisable at December 31, 2024** | 18 | $277721.70 | 6.2 |
| **Exercisable at September 30, 2025** | 19 | $277721.70 | 5.4 |

---

The aggregate intrinsic value of options outstanding at September 30, 2025 is $0. The aggregate intrinsic value of vested and exercisable options at September 30, 2025 is $0.

As of September 30, 2025, there was approximately $73,550 of total unrecognized compensation cost related to non-vested stock options.

**Restricted Stock Units**

No RSUs were granted during the year ended December 31, 2024, and the three and nine months ended September 30, 2025.

No RSUs were outstanding at December 31, 2024, and September 30, 2025.

As of September 30, 2025, there was no unrecognized compensation cost related to non-vested RSUs.

**Stock-based Compensation Expense**

The following table summarizes the total stock-based compensation expense included in the Company's statements of operations for the periods presented:

---

| | | | | |
|:---|:---|:---|:---|:---|
|  | **Three months ended September 30,** | **Three months ended September 30,** | **Nine Months ended September 30,** | **Nine Months ended September 30,** |
|  | **2025** | **2024** | **2025** | **2024** |
| Sales and marketing | $– | $17091 | $– | $57824 |
| Research and development |  | 1971 |  | 6081 |
| General and administrative | 16746 | 55644 | 101003 | 166932 |
|  | $16746 | $74706 | $101003 | $230837 |

---

**NOTE 14. SUBSEQUENT EVENTS**

***October 2025 Registered Direct Public Offering***

 ****

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.

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.

As of November 10, 2025, 25,000 Pre-funded Warrants have been exercised.

**Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations.**

*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, 2024, which was filed with the SEC on April 9, 2025. 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, 2024, which was as filed with the SEC on April 9, 2025, 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."*

**Overview**

**Corporate Information**

The Company currently operates as a Delaware corporation, under the name Aclarion, Inc.

**Results of operations**

***For the Three Months Ended September 30, 2025, and 2024:***

The following table summarizes our results of operations for the three months ended September 30, 2025, and 2024.

---

| | | | |
|:---|:---|:---|:---|
|  | **Three Months Ended September 30,** | **Three Months Ended September 30,** | |
|  | **2025** | **2024** |<br>**$ Change** |
| **<u>Revenue</u>** |  |  |  |
| &nbsp;&nbsp;&nbsp;Revenue | $18942 | $14407 | $4535 |
| &nbsp;&nbsp;&nbsp;Cost of revenue | 14556 | 21332 | (6776) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Gross profit (loss) | 4386 | (6925) | 11311 |
| **<u>Operating expenses:</u>** |  |  |  |
| &nbsp;&nbsp;&nbsp;Sales and marketing | 632409 | 232775 | 399634 |
| &nbsp;&nbsp;&nbsp;Research and development | 302037 | 195797 | 106240 |
| &nbsp;&nbsp;&nbsp;General and administrative | 900904 | 860461 | 40443 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Total operating expenses | 1835350 | 1289033 | 546317 |
| **Loss from operations** | (1830964) | (1295958) | (535006) |
| Other income (expense): |  |  |  |
| &nbsp;&nbsp;&nbsp;Interest expense |  | (71527) | 71527 |
| &nbsp;&nbsp;&nbsp;Loss on exchange of debt |  | (6585) | 6585 |
| &nbsp;&nbsp;&nbsp;Gain (loss) on extinguishment of debt |  |  |  |
| &nbsp;&nbsp;&nbsp;Changes in fair value of warrant and derivative liabilities | 1 | 7591 | (7590) |
| &nbsp;&nbsp;&nbsp;Penalties and settlements |  |  |  |
| &nbsp;&nbsp;&nbsp;Other, net | 124669 | 303 | 124366 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Total other income (expense) | 124670 | (70218) | 194888 |
| Loss before income taxes | (1706294) | (1366176) | (340118) |
| Income tax provision | – | – | – |
| **Net loss** | $(1706294) | $(1366176) | $(340118) |
| Dividends accrued for preferred stockholders | – | (12142) | 12142 |
| Net loss allocable to common stockholders | $(1706294) | $(1378318) | $(327976) |
| Net loss per share allocable to common shareholders | $(2.93) | $(1321.49) | $(0.56) |
| Weighted average shares of common stock outstanding, basic and diluted | 582371 | 1043 | 581328 |

---

 

*<u>Total Revenues</u>*.

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.

*<u>Cost of Revenue</u>*.

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.

*<u>Sales and Marketing</u>*.

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.

*<u>Research and Development</u>*.

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.

*<u>General and Administrative</u>*.

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.

*<u>Other Income (Expense)</u>*.

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.

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.

 ****

***For the Nine Months Ended September 30, 2025, and 2024:***

The following table summarizes our results of operations for the nine months ended September 30, 2025, and 2024.

---

| | | | |
|:---|:---|:---|:---|
|  | **Nine Months Ended September 30,** | **Nine Months Ended September 30,** | |
|  | **2025** | **2024** |<br>**$ Change** |
| **<u>Revenue</u>** |  |  |  |
| &nbsp;&nbsp;&nbsp;Revenue | $57251 | $35492 | $21759 |
| &nbsp;&nbsp;&nbsp;Cost of revenue | 52214 | 64102 | (11888) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Gross profit (loss) | 5037 | (28610) | 33647 |
| **<u>Operating expenses:</u>** |  |  |  |
| &nbsp;&nbsp;&nbsp;Sales and marketing | 1278759 | 638869 | 639890 |
| &nbsp;&nbsp;&nbsp;Research and development | 770659 | 636940 | 133719 |
| &nbsp;&nbsp;&nbsp;General and administrative | 3015016 | 2402408 | 612608 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Total operating expenses | 5064434 | 3678217 | 1386217 |
| **Loss from operations** | (5059397) | (3706827) | (1352570) |
| Other income (expense): |  |  |  |
| &nbsp;&nbsp;&nbsp;Interest expense |  | (535199) | 535199 |
| &nbsp;&nbsp;&nbsp;Loss on exchange of debt |  | (1073317) | 1073317 |
| &nbsp;&nbsp;&nbsp;Gain (loss) on extinguishment of debt | 73272 | (111928) | 185200 |
| &nbsp;&nbsp;&nbsp;Changes in fair value of warrant and derivative liabilities | 11767 | 330632 | (318865) |
| &nbsp;&nbsp;&nbsp;Penalties and settlements | (672500) |  | (672500) |
| &nbsp;&nbsp;&nbsp;Other, net | 302371 | 93284 | 209087 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Total other income (expense) | (285090) | (1296528) | 1011438 |
| Loss before income taxes | (5344487) | (5003355) | (341132) |
| Income tax provision | – | – | – |
| **Net loss** | $(5344487) | $(5003355) | $(341132) |
| Dividends accrued for preferred stockholders | (6683) | (12142) | 5459 |
| Net loss allocable to common stockholders | $(5351170) | $(5015497) | $(335673) |
| Net loss per share allocable to common shareholders | $(11.60) | $(5893.65) | $(0.73) |
| Weighted average shares of common stock outstanding, basic and diluted | 461341 | 851 | 460490 |

---

*<u>Total revenues</u>*.

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.

*<u>Cost of Revenue</u>*.

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.

*<u>Sales and Marketing</u>*.

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.

*<u>Research and Development</u>*.

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.

*<u>General and Administrative</u>*.

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.

*<u>Other Income (Expense)</u>*.

*Interest Expense*

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.

*Loss On Exchange of Debt and Gain (Loss) On Extinguishment Of Debt*

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.

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.

*Changes In Fair Value Of Warrant And Derivative Liabilities*

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.

*Penalties And Settlements*

 

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.

*Other, Net*

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.

**Critical Accounting Policies and Use of Estimates**

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.

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.

***Revenue Recognition***

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.

***Equity-Based Compensation***

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.

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.

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.

**Liquidity and capital resources**

***Sources of liquidity***

To date, we have financed our operations primarily through private placements and public offerings of our equity and debt securities.

As of September 30, 2025, we had cash and cash equivalents of $11,366,336, including $25,000 of restricted cash.

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).

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.

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.

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.

***Cash flows***

The following table summarizes our sources and uses of cash for each of the periods presented:

---

| | | |
|:---|:---|:---|
|  | **Nine Months Ended September 30,** | **Nine Months Ended September 30,** |
|  | **2025** | **2024** |
| Net cash used in operating activities | $(5536766) | $(4348747) |
| Net cash used in investing activities | (162441) | (261220) |
| Net cash provided by financing activities | 16601882 | 4900996 |
| Net increase in cash and cash equivalents | $10902675 | $291029 |

---

 ****

***Operating activities***

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.

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.

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.

***Investing activities***

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.

***Financing activities***

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).

*January 2025 Registered Direct Public Offerings*

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.

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.

*October 2025 Registered Direct Public Offering*

 ****

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.

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.

As of November 10, 2025, 25,000 Pre-funded Warrants have been exercised.

*Units Offering Of Common Stock And Warrants*

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.

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.

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.

 

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 September 30, 2025.

*Redemption Of Series B Preferred Stock*

On January 22, 2025, the Company redeemed all Series B Preferred Stock and related accrued dividends with a cash payment of $1,213,590.

*Series C Preferred Stock and Warrants*

 

During the fourth quarter of 2024, certain holders converted 126 shares of C Preferred Stock and related accrued dividends into 739,050 shares of common stock (equivalent to 82 common shares following the 2025 Stock Splits). There were 874 C Preferred shares remaining at December 31, 2024.

During the nine months ended September 30, 2025, certain holders converted the remaining 874 shares of C Preferred Stock and related accrued dividends into 6,211,618 shares of common stock (equivalent to 687 common shares following the 2025 Stock Splits).

During the nine months ended September 30, 2025, holders of the Series C warrants exercised 5,685,049 warrants (629 post-2025 Stock Splits). 4,548,039 (503 post-2025 Stock Splits) warrants were exercised at $0.03 per share ($271.35 post-2025 Stock Splits), and 1,137,010 (126 post-2025 Stock Splits) warrants were exercised at $0.1759 per share ($1,591.02 post-2025 Stock Splits). The Company received payments of $336,411 as part of the warrant exercises.

During the nine months ended September 30, 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 $300,974 of outstanding promissory debt.

***Funding requirements***

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.

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.

If we raise additional funds through licensing agreements and strategic collaborations with third parties, we may have to relinquish valuable rights to our technology, future revenue streams, research programs, or product candidates or grant licenses on terms that may not be favorable to us. If we are unable to raise additional funds, we may be required to delay, limit, reduce and/or terminate development of our product candidates or any future commercialization efforts or grant rights to develop and market product candidates that we would otherwise prefer to develop and market ourselves.

**Contractual obligations and commitments**

The Company does not have any contractual obligations, not otherwise on our balance sheet as of September 30, 2025.

**Off-balance sheet arrangements**

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.

**Recently issued accounting pronouncements**

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.

**Emerging growth company and smaller reporting company status**

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.

We are also a "smaller reporting company" meaning that the market value of our stock held by non-affiliates is less than $700 million and our annual revenue was less than $100 million during the most recently completed fiscal year. We may continue to be a smaller reporting company if either (i) the market value of our stock held by non-affiliates is less than $250 million or (ii) our annual revenue was less than $100 million during the most recently completed fiscal year and the market value of our stock held by non-affiliates is less than $700 million. If we are a smaller reporting company at the time we cease to be an emerging growth company, we may continue to rely on exemptions from certain disclosure requirements that are available to smaller reporting companies. Specifically, as a smaller reporting company we may choose to present only the two most recent fiscal years of audited financial statements in our Annual Report on Form 10-K and, similar to emerging growth companies, smaller reporting companies have reduced disclosure obligations regarding executive compensation.

**Item 3. Quantitative and Qualitative Disclosures About Market Risk.**

We are a smaller reporting company as defined by Rule 12b-2 of the Exchange Act and are not required to provide the information required under this item.

**Item 4. Controls and Procedures.**

**Evaluation of Disclosure Controls and Procedures**

We have adopted and maintain disclosure controls and procedures (as such term is defined in Exchange Act Rules 13a-15(e) and 15d-15(e) under the Exchange Act), that are designed to ensure that information required to be disclosed in our reports under the Exchange Act, is recorded, processed, summarized and reported within the time periods required under the SEC's rules and forms and that the information is gathered and communicated to our management, including our Chief Executive Officer (Principal Executive Officer) and Chief Financial Officer (Principal Financial Officer), to allow for timely decisions regarding required disclosure.

As required by Exchange Act Rule 13a-15, our Chief Executive Officer and Chief Financial Officer carried out an evaluation of the effectiveness of the design and operation of our disclosure controls and procedures pursuant to Exchange Act Rule 13a-15 as of the end of the period covered by this report. Based on the foregoing evaluation, our Chief Executive Officer and Chief Financial Officer concluded that due to our limited resources our disclosure controls and procedures are not effective in providing material information required to be included in our periodic SEC filings on a timely basis and to ensure that information required to be disclosed in our periodic SEC filings is accumulated and communicated to our management, including our Chief Executive Officer and Chief Financial Officer, to allow timely decisions regarding required disclosure about our internal control over financial reporting discussed below.

During the nine months ended September 30, 2025, the Company continued to work with an outside firm to establish best practices to improve our required disclosure about our internal control over financial reporting.

**Changes in Internal Control over Financial Reporting**

Our Chief Executive Officer and Chief Financial Officer concluded that our internal control over financial reporting was not effective as of December 31, 2024, due to material weaknesses related to (1) a limited segregation of duties due to our lack of formal control documentation, limited resources, and the small number of employees, and (2) a lack of adequate accounting resources to properly account for complex accounting transactions. Management determined that these control deficiencies constitute material weaknesses, which could result in material misstatements of significant accounts and disclosures that could result in a material misstatement to our interim or annual financial statements that would not be prevented or detected. In addition, due to limited staffing, we are not always able to detect minor errors or omissions in reporting.

The Company did engage an outside firm in the third quarter of 2023 to provide accounting support and increased segregation of duties. During the nine months ended September 30, 2025, the Company continued to work with the outside firm to establish best practices over time that enhance internal control over financial reporting.

Other than the applicable remediation efforts described above, there were no changes to our internal control over financial reporting (as defined in Rules 13a-15(f) and 15d-15(f) under the Exchange Act) that occurred during the quarter ended September 30, 2025 that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

**PART II—OTHER INFORMATION**

**Item 1. Legal Proceedings.**

From time to time, we may be involved in litigation relating to claims arising out of our operations in the normal course of business. We are not currently a party to any material legal proceedings, the adverse outcome of which, in our management's opinion, individually or in the aggregate, could have a material adverse effect on the results of our operations or financial position. There are no material proceedings in which any of our directors, officers or affiliates or any registered or beneficial stockholder of more than 5% of our common stock is an adverse party or has a material interest adverse to our interest.

**Item 1A. Risk Factors.**

In addition to the information set forth in this Form 10-Q, you should carefully consider the risk factors disclosed in the Risk Factors section of our Annual Report on Form 10-K for the year ended December 31, 2024, which was filed with the SEC on April 9, 2025. There have been no material changes to our risk factors from those included in such Annual Report except as noted below. Additional risk factors not presently known to us or that we currently deem immaterial may also impair our business or results of operations. We may disclose changes to such factors or disclose additional factors from time to time in our future filings with the SEC.

**Item 2. Unregistered Sales of Equity Securities and Use of Proceeds.**

There were no unregistered sales of equity securities of the Company during the period covered by this quarterly report which were not previously reported in a (i) Current Report on Form 8-K or (ii) Quarterly Report on Form 10-Q.

We did not repurchase any of our equity securities during the quarter ended September 30, 2025.

**Item 3. Defaults Upon Senior Securities.**

None.

**Item 4. Mine Safety Disclosures.**

Not applicable.

**Item 5. Other Information.**

During the quarter ended September 30, 2025, no director or officer of the Company adopted or terminated or otherwise had in effect a "Rule 10b5-1 trading arrangement" or "non-Rule 10b5-1 trading arrangement," as each term is defined in Item 408(a) of Regulation S-K

**Item 6. Exhibits.**

The exhibits required by Item 601 of Regulation S-K and Item 15(b) of this Quarterly Report are listed in the Exhibit Index below. The exhibits listed in the Exhibit Index are incorporated by reference herein.

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| | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|
| **Exhibit <br> Number** |  | **Description of Document** | **Incorporated by reference from Form** | **Filing<br> Date** | **Exhibit<br> Number** | **Filed<br> Herewith** |
| 1.1 |  | [Underwriting Agreement, dated January 15, 2025, between the Company and Dawson James Securities, Inc.](http://www.sec.gov/Archives/edgar/data/1635077/000168316825000431/acon_ex1001.htm) | 8-K | 1/17/2025 | 10.1 |  |
| 3.1 |  | [Amended and Restated Certificate of Incorporation of the Company](http://www.sec.gov/Archives/edgar/data/1635077/000168316822002974/aclarion_ex0301.htm) | 8-K | 4/27/2022 | 3.1 |  |
| 3.2 |  | [Certificate of Amendment dated January 3, 2024 to the Amended and Restated Certificate of Incorporation](https://www.sec.gov/Archives/edgar/data/1635077/000168316824000066/acon_ex0301.htm) | 8-K | 1/4/2024 | 3.1 |  |
| 3.3 |  | [Certificate of Amendment dated January 29, 2025 to the Amended and Restated Certificate of Incorporation](http://www.sec.gov/Archives/edgar/data/1635077/000168316825000612/acon_ex0301.htm) | 8-K | 1/30/2025 | 3.1 |  |
| 3.4 |  | [Certificate of Amendment dated March 26, 2025 to the Amended and Restated Certificate of Incorporation](http://www.sec.gov/Archives/edgar/data/1635077/000168316825001987/aclarion_ex0301.htm) | 8-K | 3/28/2025 | 3.1 |  |
| 3.5 |  | [Bylaws of the Company](http://www.sec.gov/Archives/edgar/data/1635077/000168316822002974/aclarion_ex0302.htm) | 8-K | 4/27/2022 | 3.2 |  |
| 3.6 |  | [Amendment to Bylaws dated June 12, 2024](http://www.sec.gov/Archives/edgar/data/1635077/000168316824004321/acon_ex0301.htm) | 8-K | 6/18/2024 | 3.1 |  |
| 3.7 |  | [Series B Convertible Preferred Stock Certificate of Designations dated August 14, 2024](http://www.sec.gov/Archives/edgar/data/1635077/000168316824005844/acon_ex0301.htm) | 8-K | 8/16/2024 | 3.1 |  |
| 3.8 |  | [Series C Convertible Preferred Stock Certificate of Designations dated September 30, 2024](http://www.sec.gov/Archives/edgar/data/1635077/000168316824006791/acon_ex0301.htm) | 8-K | 10/1/2024 | 3.1 |  |
| 4.1 |  | [Form of Common Stock Certificate](http://www.sec.gov/Archives/edgar/data/1635077/000165495422007977/aclarion_ex41.htm) | 10-Q | 6/6/2022 | 4.1 |  |
| 4.2 |  | [Form of 2022 IPO Public Warrant](http://www.sec.gov/Archives/edgar/data/1635077/000168316822002974/aclarion_ex0401.htm) | 8-K | 4/27/2022 | 4.1 |  |
| 4.3 |  | [Form of 2022 IPO Representative's Common Stock Purchase Warrant](http://www.sec.gov/Archives/edgar/data/1635077/000168316822002974/aclarion_ex0402.htm) | 8-K | 4/27/2022 | 4.2 |  |
| 4.4 |  | [Form of May 2023 Common Stock Warrant](http://www.sec.gov/Archives/edgar/data/1635077/000168316823003484/aclarion_ex1003.htm) | 8-K | 5/17/2023 | 10.3 |  |
| 4.5 |  | [Form of Common Stock Warrant dated November 21, 2023](http://www.sec.gov/Archives/edgar/data/1635077/000168316823008420/acon_ex1003.htm) | 8-K | 11/22/2023 | 10.3 |  |
| 4.6 |  | [Form of Common Stock Warrant dated September 30, 2024](http://www.sec.gov/Archives/edgar/data/1635077/000168316824006791/acon_ex1002.htm) | 8-K | 10/1/2024 | 10.2 |  |
| 4.7 |  | [February 2024 Form of Common Warrant](https://www.sec.gov/Archives/edgar/data/1635077/000168316824000730/aclarion_ex0405.htm) | S-1/A | 2/6/2024 | 4.5 |  |
| 4.8 |  | [February 2024 Form of Prefunded Warrant](https://www.sec.gov/Archives/edgar/data/1635077/000168316824000730/aclarion_ex0406.htm) | S-1/A | 2/6/2024 | 4.6 |  |
| 4.9 |  | [January 2025 Form of Series A Warrant](http://www.sec.gov/Archives/edgar/data/1635077/000168316825000431/acon_ex0401.htm) | 8-K | 1/17/2025 | 4.1 |  |
| 4.10 |  | [January 2025 Form of Series B Warrant](http://www.sec.gov/Archives/edgar/data/1635077/000168316825000431/acon_ex0402.htm) | 8-K | 1/17/2025 | 4.2 |  |
| 4.11 |  | [January 2025 Form of Pre-Funded Warrant](http://www.sec.gov/Archives/edgar/data/1635077/000168316825000431/acon_ex0403.htm) | 8-K | 1/17/2025 | 4.3 |  |
| 4.12 |  | October 2025 Form of Pre-Funded Warrant | 8-K | 10/14/2025 | 10.2 |  |
| 4.13 |  | [Description of Securities](https://www.sec.gov/Archives/edgar/data/1635077/000168316825002351/aclarion_ex0412.htm) | 10-K | 4/9/2025 | 4.12 |  |
| 10.1 | # | [Employment Agreement of Jeff Thramann](http://www.sec.gov/Archives/edgar/data/1635077/000168316822001851/aclarion_ex1001.htm) | S-1/A | 3/23/2022 | 10.1 |  |
| 10.2 | # | [Employment Agreement of Brent Ness](http://www.sec.gov/Archives/edgar/data/1635077/000168316822001851/aclarion_ex1002.htm) | S-1/A | 3/23/2022 | 10.2 |  |
| 10.3 | # | [Employment Agreement of John Lorbiecki](http://www.sec.gov/Archives/edgar/data/1635077/000168316822001851/aclarion_ex1003.htm) | S-1/A | 3/23/2022 | 10.3 |  |
| 10.4 | # | [Form of Aclarion, Inc. 2022 Equity Incentive Plan](http://www.sec.gov/Archives/edgar/data/1635077/000168316822000097/aclarion_ex1004.htm) | S-1 | 1/6/2022 | 10.4 |  |
| 10.5 |  | [License Agreement with UCSF the Regents of the University of California](http://www.sec.gov/Archives/edgar/data/1635077/000168316822000097/aclarion_ex1006.htm) | S-1 | 1/6/2022 | 10.6 |  |
| 10.6 |  | [Amendment to UC License Agreement](http://www.sec.gov/Archives/edgar/data/1635077/000168316822001434/aclarion_ex1007.htm) | S-1/A | 3/4/2022 | 10.7 |  |
| 10.7 | \*\* | [NuVasive Amended and Restated Commission Agreement dated February 28, 2020](http://www.sec.gov/Archives/edgar/data/1635077/000168316822001851/aclarion_ex1008.htm) | S-1/A | 3/23/2022 | 10.8 |  |
| 10.8 | \*\* | [Right of First Offer Agreement](http://www.sec.gov/Archives/edgar/data/1635077/000168316822001851/aclarion_ex1012.htm) | S-1/A | 3/23/2022 | 10.12 |  |
| 10.9 |  | [First Amendment to Right of First Offer Agreement](http://www.sec.gov/Archives/edgar/data/1635077/000168316822001851/aclarion_ex1013.htm) | S-1/A | 3/23/2022 | 10.13 |  |

---

10.10 [Second Amendment to Right of First Offer Agreement](http://www.sec.gov/Archives/edgar/data/1635077/000168316822001851/aclarion_ex1014.htm) S-1/A 3/23/2022 10.14

10.11 [Warrant Agent Agreement dated April 21, 2022](http://www.sec.gov/Archives/edgar/data/1635077/000168316822002974/aclarion_ex1001.htm) 8-K 4/27/2022 10.1

10.12 [Siemens Strategic Collaboration Agreement](http://www.sec.gov/Archives/edgar/data/1635077/000168316822000097/aclarion_ex1017.htm) S-1 1/6/2022 10.17

10.13 # [Aclarion, Inc. 2022 Equity Incentive Plan – Form of Option Grant Notice and Stock Option Agreement](http://www.sec.gov/Archives/edgar/data/1635077/000168316822000097/aclarion_ex1020.htm) S-1 1/6/2022 10.20

10.14 # [Aclarion, Inc. 2022 Equity Incentive Plan – Form of RSU Grant Notice and RSU Agreement](http://www.sec.gov/Archives/edgar/data/1635077/000168316822000097/aclarion_ex1021.htm) S-1 1/6/2022 10.21

10.15 # [Nocimed, Inc. 2015 Stock Plan](http://www.sec.gov/Archives/edgar/data/1635077/000168316822004014/aclarion_ex9904.htm) S-8 5/26/2022 99.4

10.16 # [Nocimed, Inc. 2015 Stock Plan – Form of Option Grant Notice and Stock Option Agreement](http://www.sec.gov/Archives/edgar/data/1635077/000168316822004014/aclarion_ex9905.htm) S-8 5/26/2022 99.5

10.17 [Form of 2023 Registration Rights Agreement](https://www.sec.gov/Archives/edgar/data/1635077/000168316823003484/aclarion_ex1004.htm) 8-K 5/17/2023 10.4

10.18 [February 2024 Form of Warrant Agency Agreement](https://www.sec.gov/Archives/edgar/data/1635077/000168316824001147/aclarion_ex0407.htm) S-1/A 2/23/2024 4.7

10.19 [White Lion White Lion Equity Line Common Stock Purchase Agreement dated October 9, 2023](https://www.sec.gov/Archives/edgar/data/1635077/000168316823007017/aclarion_ex1001.htm) 8-K 10/10/2023 10.1

10.20 [Amendment dated as of November 27, 2024 to Common Stock Purchase Agreement, dated as of October 9, 2023, by and between White Lion Capital, LLC and Aclarion, Inc.](http://www.sec.gov/Archives/edgar/data/1635077/000168316824008424/acon_ex1001.htm) 8-K 11/27/2024 10.1

10.21 [White Lion Equity Line Registration Rights Agreement](https://www.sec.gov/Archives/edgar/data/1635077/000168316823007017/aclarion_ex1002.htm) 8-K 10/10/2023 10.2

10.22 [At-The-Market Issuance Sales Agreement with Ascendiant Capital Markets, LLC dated September 24, 2024](http://www.sec.gov/Archives/edgar/data/1635077/000168316824006627/acon_ex0101.htm) 8-K 9/24/2024 1.1

10.23 [Form of Registration Rights Agreement dated November 21, 2023](https://www.sec.gov/Archives/edgar/data/1635077/000168316823008420/acon_ex1004.htm) 8-K 11/22/2023 10.4

10.24 [Form of Registration Rights Agreement dated September 30, 2024](http://www.sec.gov/Archives/edgar/data/1635077/000168316824006791/acon_ex1003.htm) 8-K 10/1/2024 10.3

10.25 # [Employment Agreement of Gregory Gould](https://www.sec.gov/Archives/edgar/data/1635077/000168316825006659/aclarion_ex1001.htm) 8-K 9/3/2025 10.1

10.26 # [Form of Inducement Stock Option Grant Notice and Inducement Stock Option Agreement](aclarion_ex1026.htm) X

10.27 [October 2025 Form of Securities Purchase Agreement](https://www.sec.gov/Archives/edgar/data/1635077/000168316825007516/acon_ex1001.htm) 8-K 10/14/2025 10.1

19.1 [Insider Trading Policy](https://www.sec.gov/Archives/edgar/data/1635077/000168316825002351/aclarion_ex1901.htm) 10-K 4/9/2025 19.1

31.1 [Section 302 Certification by the Corporation's Chief Executive Officer](aclarion_ex3101.htm) X

31.2 [Section 302 Certification by the Corporation's Chief Financial Officer](aclarion_ex3102.htm) X

32.1 [Section 906 Certification by the Corporation's Chief Executive Officer](aclarion_ex3201.htm) X

32.2 [Section 906 Certification by the Corporation's Chief Financial Officer](aclarion_ex3202.htm) X

97.1 [Aclarion Clawback Policy](https://www.sec.gov/Archives/edgar/data/1635077/000168316824001821/acon_ex9701.htm) 10-K 3/28/2024 97.1

---

| | |
|:---|:---|
| 101.INS | Inline XBRL Instance Document (the instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document) |
| 101.SCH | Inline XBRL Taxonomy Extension Schema Document |
| 101.CAL | Inline XBRL Taxonomy Extension Calculation Linkbase Document |
| 101.DEF | Inline XBRL Taxonomy Extension Definition Linkbase Document |
| 101.LAB | Inline XBRL Taxonomy Extension Label Linkbase Document |
| 101.PRE | Inline XBRL Taxonomy Extension Presentation Linkbase Document |
| 104 | Cover Page Interactive Data File (formatted in IXBRL, and included in exhibit 101). |

---

___________________________

# Indicates management contract or compensatory plan. <br> \*\* Certain portions of the exhibit have been omitted pursuant to Rule 601(b)(10) of Regulation S-K. The omitted information is (i) not material and (ii) would likely cause competitive harm to the Company if publicly disclosed.

**<u>SIGNATURES</u>**

Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

---

| | | |
|:---|:---|:---|
|  | **ACLARION, INC.** | **ACLARION, INC.** |
|  | By: | /s/ Gregory A Gould |
|  |  | Gregory A Gould |
|  |  | Chief Financial Officer<br> (Principal Financial and Accounting Officer) |
| Date: November 12, 2025 |  |  |

---

## Exhibit 10.26

**EXHIBIT 10.26**

**ACLARION, INC.**

**STOCK OPTION GRANT NOTICE<br> (INDUCEMENT GRANT AWARD)**

Aclarion, Inc. (the "***Company***"), maintains its 2022 Equity Incentive Plan (the "***Plan***") which provides the general terms and restrictions for certain equity incentive awards to the Company's employees, consultants and directors. This Option is not awarded pursuant to the Plan, but rather is intended to constitute a non-plan based "inducement grant," as described in Nasdaq Listing Rule 5635(c)(4). Nonetheless, the terms and provisions of the Plan are hereby incorporated into this Grant Notice and related Stock Option Agreement by this reference, as though fully set forth herein, as if this award was granted pursuant to the Plan.

All capitalized terms used but not defined herein will have the meanings ascribed to them in the Plan. In addition to the terms, conditions and restrictions set forth in the Plan, all terms, conditions and restrictions set forth in this Agreement are applicable to the award of Options as evidenced hereby:

The Company hereby grants to Optionholder an option to purchase the number of shares of the Company's Common Stock set forth below. This option is subject to all of the terms and conditions as set forth in this Stock Option Grant Notice, in the Option Agreement, the Plan and the Notice of Exercise, all of which are attached hereto and incorporated herein in their entirety. Capitalized terms not explicitly defined herein but defined in the Plan or the Option Agreement will have the same definitions as in the Plan or the Option Agreement. If there is any conflict between the terms in this Stock Option Grant Notice and the Plan, the terms of the Plan will control.

---

| | |
|:---|:---|
| Optionholder: |  |
| Date of Grant: |  |
| Vesting Commencement Date: |  |
| Number of Shares Subject to Option: |  |
| Exercise Price (Per Share): | $|
| Total Exercise Price: | $|
| Expiration Date: | September 1, 2035 |

---

**Type of Grant:** ___ Incentive Stock Option <u>XX</u> Nonstatutory Stock Option

**Exercise Schedule**: Same as Vesting Schedule

**Vesting Schedule**: [___________________]

[The options will vest __% on the first anniversary of the grant date, with the remaining __% vesting in equal monthly installments over the following three years, contingent on the Executive's continued employment with the Company through each vesting date.]

[Notwithstanding the foregoing, the Options will become fully vested if the Optionholder is terminated without Cause (as such term is defined in the Optionholder's Employment Agreement) or the Optionholder terminates for Good Reason (as such term is defined in the Optionholder's Employment Agreement) during the 12-month period following a Change in Control, as such term is defined in the Plan (i.e. double trigger).]

---

| | |
|:---|:---|
| **Payment:** | By one or a combination of the following items (described in the Option Agreement): |

---

X By cash, check, bank draft or money order payable to the Company

__ Pursuant to a Regulation T Program if the shares are publicly traded

__ By delivery of already-owned shares if the shares are publicly traded

__ If and only to the extent this option is a Nonstatutory Stock Option, and subject to the Company's consent at the time of exercise, by a "net exercise" arrangement

------

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(1) If this is an Incentive Stock Option, it (plus other outstanding Incentive Stock Options) cannot be first *exercisable* for more
than $100,000 in value (measured by exercise price) in any calendar year. Any excess over $100,000 is a Nonstatutory Stock Option.

**Additional Terms/Acknowledgements:** Optionholder acknowledges receipt of, and understands and agrees to, this Stock Option Grant Notice, the Option Agreement and the Plan. Optionholder acknowledges and agrees that this Stock Option Grant Notice and the Option Agreement may not be modified, amended or revised except as provided in the Plan. Optionholder further acknowledges that as of the Date of Grant, this Stock Option Grant Notice, the Option Agreement, and the Plan set forth the entire understanding between Optionholder and the Company regarding this option award and supersede all prior oral and written agreements, promises and/or representations on that subject with the exception of, if applicable, (i) equity awards previously granted and delivered to Optionholder, (ii) any compensation recovery policy that is adopted by the Company or is otherwise required by applicable law and (iii) any written employment agreement, severance agreement, offer letter or other written agreement entered into between the Company and Participant specifying the terms that should govern this specific option. By accepting this option, Optionholder consents to receive such documents by electronic delivery and to participate in the Plan through an on-line or electronic system established and maintained by the Company or another third party designated by the Company.

---

| | | |
|:---|:---|:---|
| **ACLARION, INC.** | **ACLARION, INC.** | **OPTIONHOLDER:** |
| By: |  |  |
|  | Signature | Signature |
| Title: |  | Date: |
| Date: |  |  |

---

**ATTACHMENTS**: Option Agreement, 2022 Equity Incentive Plan, and Notice of Exercise

**ATTACHMENT I**

**ACLARION, INC.**

**OPTION AGREEMENT**

**(INDUCEMENT GRANT AWARD)**

**(NONSTATUTORY STOCK OPTION)**

Aclarion, Inc. (the "***Company***"), maintains its 2022 Equity Incentive Plan (the "***Plan***") which provides the general terms and restrictions for certain equity incentive awards to the Company's employees, consultants and directors. This Option is not awarded pursuant to the Plan, but rather is intended to constitute a non-plan based "inducement grant," as described in Nasdaq Listing Rule 5635(c)(4). Nonetheless, the terms and provisions of the Plan are hereby incorporated into this Grant Notice and related Stock Option Agreement by this reference, as though fully set forth herein, as if this award was granted pursuant to the Plan.

All capitalized terms used but not defined herein will have the meanings ascribed to them in the Plan. In addition to the terms, conditions and restrictions set forth in the Plan, all terms, conditions and restrictions set forth in this Agreement are applicable to the award of Options as evidenced hereby:

Pursuant to your Stock Option Grant Notice ("***Grant Notice***") and this Option Agreement, Aclarion, Inc. (the "***Company***") has granted you an option to purchase the number of shares of the Company's Common Stock indicated in your Grant Notice at the exercise price indicated in your Grant Notice. The option is granted to you effective as of the date of grant set forth in the Grant Notice (the "***Date of Grant***"). If there is any conflict between the terms in this Option Agreement and the Plan, the terms of the Plan will control. Capitalized terms not explicitly defined in this Option Agreement or in the Grant Notice but defined in the Plan will have the same definitions as in the Plan.

The details of your option, in addition to those set forth in the Grant Notice and the Plan, are as follows:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**1. VESTING.** Subject to the provisions contained herein, your option will vest as provided in your Grant Notice. Vesting will cease upon the termination of your Continuous Service.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**2. NUMBER OF SHARES AND EXERCISE PRICE.** The number of shares of Common Stock subject to your option and your exercise price per share in your Grant Notice will be adjusted for Capitalization Adjustments.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**3. EXERCISE RESTRICTION FOR NON-EXEMPT EMPLOYEES.** If you are an Employee eligible for overtime compensation under the Fair Labor Standards Act of 1938, as amended (that is, a "***Non-Exempt Employee***"), and except as otherwise provided in the Plan, you may not exercise your option until you have completed at least six (6) months of Continuous Service measured from the Date of Grant, even if you have already been an employee for more than six (6) months. Consistent with the provisions of the Worker Economic Opportunity Act, you may exercise your option as to any vested portion prior to such six (6) month anniversary in the case of (i) your death or disability, (ii) a Corporate Transaction in which your option is not assumed, continued or substituted, (iii) a Change in Control or (iv) your termination of Continuous Service on your "retirement" (as defined in the Company's benefit plans).

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**4. METHOD OF PAYMENT.** You must pay the full amount of the exercise price for the shares you wish to exercise. You may pay the exercise price in cash or by check, bank draft or money order payable to the Company or in any other manner ***permitted by your Grant Notice,*** which may include one or more of the following:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**(a)** Provided that at the time of exercise the Common Stock is publicly traded, pursuant to a program developed under Regulation T as promulgated by the Federal Reserve Board that, prior to the issuance of Common Stock, results in either the receipt of cash (or check) by the Company or the receipt of irrevocable instructions to pay the aggregate exercise price to the Company from the sales proceeds. This manner of payment is also known as a "broker-assisted exercise", "same day sale", or "sell to cover".

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**(b)** Provided that at the time of exercise the Common Stock is publicly traded, by delivery to the Company (either by actual delivery or attestation) of already-owned shares of Common Stock that are owned free and clear of any liens, claims, encumbrances or security interests, and that are valued at Fair Market Value on the date of exercise. "Delivery" for these purposes, in the sole discretion of the Company at the time you exercise your option, will include delivery to the Company of your attestation of ownership of such shares of Common Stock in a form approved by the Company. You may not exercise your option by delivery to the Company of Common Stock if doing so would violate the provisions of any law, regulation or agreement restricting the redemption of the Company's stock.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**(c)** If this option is a Nonstatutory Stock Option, subject to the consent of the Company at the time of exercise, by a "net exercise" arrangement pursuant to which the Company will reduce the number of shares of Common Stock issued upon exercise of your option by the largest whole number of shares with a Fair Market Value that does not exceed the aggregate exercise price. You must pay any remaining balance of the aggregate exercise price not satisfied by the "net exercise" in cash or other permitted form of payment. Shares of Common Stock will no longer be outstanding under your option and will not be exercisable thereafter if those shares (i) are used to pay the exercise price pursuant to the "net exercise," (ii) are delivered to you as a result of such exercise, and (iii) are withheld to satisfy your tax withholding obligations.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**5. WHOLE SHARES.** You may exercise your option only for whole shares of Common Stock.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**6. SECURITIES LAW COMPLIANCE.** In no event may you exercise your option unless the shares of Common Stock issuable upon exercise are then registered under the Securities Act or, if not registered, the Company has determined that your exercise and the issuance of the shares would be exempt from the registration requirements of the Securities Act. The exercise of your option also must comply with all other applicable laws and regulations governing your option, and you may not exercise your option if the Company determines that such exercise would not be in material compliance with such laws and regulations (including any restrictions on exercise required for compliance with Treas. Reg. 1.401(k)-1(d)(3), if applicable).

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**7. TERM.** You may not exercise your option before the Date of Grant or after the expiration of the option's term. The term of your option expires, subject to the provisions of Section 5(h) of the Plan, upon the earliest of the following:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**(a)** immediately upon the termination of your Continuous Service for Cause;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**(b)** three (3) months after the termination of your Continuous Service for any reason other than Cause, your Disability or your death (except as otherwise provided in Section 7(d) below); provided, however, that if during any part of such three (3) month period your option is not exercisable solely because of the condition set forth in Section 6 above, your option will not expire until the earlier of the Expiration Date or until it has been exercisable for an aggregate period of three (3) months after the termination of your Continuous Service; provided further, if during any part of such three (3) month period, the sale of any Common Stock received upon exercise of your option would violate the Company's insider trading policy, then your option will not expire until the earlier of the Expiration Date or until it has been exercisable for an aggregate period of three (3) months after the termination of your Continuous Service during which the sale of the Common Stock received upon exercise of your option would not be in violation of the Company's insider trading policy. Notwithstanding the foregoing, if (i) you are a Non-Exempt Employee, (ii) your Continuous Service terminates within six (6) months after the Date of Grant, and (iii) you have vested in a portion of your option at the time of your termination of Continuous Service, your option will not expire until the earlier of (x) the later of (A) the date that is seven (7) months after the Date of Grant, and (B) the date that is three (3) months after the termination of your Continuous Service, and (y) the Expiration Date;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**(c)** twelve (12) months after the termination of your Continuous Service due to your Disability (except as otherwise provided in Section 7(d)) below;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**(d)** eighteen (18) months after your death if you die either during your Continuous Service or within three (3) months after your Continuous Service terminates for any reason other than Cause;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**(e)** the Expiration Date indicated in your Grant Notice; or

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**(f)** the day before the tenth (10th) anniversary of the Date of Grant.

If your option is an Incentive Stock Option, note that to obtain the federal income tax advantages associated with an Incentive Stock Option, the Code requires that at all times beginning on the Date of Grant and ending on the day three (3) months before the date of your option's exercise, you must be an employee of the Company or an Affiliate, except in the event of your death or Disability. The Company has provided for extended exercisability of your option under certain circumstances for your benefit but cannot guarantee that your option will necessarily be treated as an Incentive Stock Option if you continue to provide services to the Company or an Affiliate as a Consultant or Director after your employment terminates or if you otherwise exercise your option more than three (3) months after the date your employment with the Company or an Affiliate terminates.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**8. EXERCISE.**

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**(a)** You may exercise the vested portion of your option (and the unvested portion of your option if your Grant Notice so permits) during its term by (i) delivering a Notice of Exercise (in a form designated by the Company) or completing such other documents and/or procedures designated by the Company for exercise and (ii) paying the exercise price and any applicable withholding taxes to the Company's Secretary, stock plan administrator, or such other person as the Company may designate, together with such additional documents as the Company may then require.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**(b)** By exercising your option you agree that, as a condition to any exercise of your option, the Company may require you to enter into an arrangement providing for the payment by you to the Company of any tax withholding obligation of the Company arising by reason of (i) the exercise of your option, (ii) the lapse of any substantial risk of forfeiture to which the shares of Common Stock are subject at the time of exercise, or (iii) the disposition of shares of Common Stock acquired upon such exercise.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**(c)** If your option is an Incentive Stock Option, by exercising your option you agree that you will notify the Company in writing within fifteen (15) days after the date of any disposition of any of the shares of the Common Stock issued upon exercise of your option that occurs within two (2) years after the Date of Grant or within one (1) year after such shares of Common Stock are transferred upon exercise of your option.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**(d)** By accepting your option you agree that you will not sell, dispose of, transfer, make any short sale of, grant any option for the purchase of, or enter into any hedging or similar transaction with the same economic effect as a sale, any shares of Common Stock or other securities of the Company held by you, for a period of one hundred eighty (180) days following the effective date of a registration statement of the Company filed under the Securities Act or such longer period as the underwriters or the Company will request to facilitate compliance with FINRA Rule 2711 or NYSE Member Rule 472 or any successor or similar rules or regulation (the "***Lock-Up Period***"); provided, however, that nothing contained in this Section 8(d) will prevent the exercise of a repurchase option, if any, in favor of the Company during the Lock-Up Period. You further agree to execute and deliver such other agreements as may be reasonably requested by the Company or the underwriters that are consistent with the foregoing or that are necessary to give further effect thereto. In order to enforce the foregoing covenant, the Company may impose stop-transfer instructions with respect to your shares of Common Stock until the end of such period. You also agree that any transferee of any shares of Common Stock (or other securities) of the Company held by you will be bound by this Section 8(d). The underwriters of the Company's stock are intended third party beneficiaries of this Section 8(d) and will have the right, power and authority to enforce the provisions hereof as though they were a party hereto.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**9. TRANSFERABILITY.** Except as otherwise provided in this Section 9, your option is not transferable, except by will or by the laws of descent and distribution, and is exercisable during your life only by you.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**(a) Certain Trusts.** Upon receiving written permission from the Board or its duly authorized designee, you may transfer your option to a trust if you are considered to be the sole beneficial owner (determined under Section 671 of the Code and applicable state law) while the option is held in the trust. You and the trustee must enter into transfer and other agreements required by the Company.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**(b) Domestic Relations Orders.** Upon receiving written permission from the Board or its duly authorized designee, and provided that you and the designated transferee enter into transfer and other agreements required by the Company, you may transfer your option pursuant to the terms of a domestic relations order, official marital settlement agreement or other divorce or separation instrument as permitted by Treasury Regulation 1.421-1(b)(2) that contains the information required by the Company to effectuate the transfer. You are encouraged to discuss the proposed terms of any division of this option with the Company prior to finalizing the domestic relations order or marital settlement agreement to help ensure the required information is contained within the domestic relations order or marital settlement agreement. If this option is an Incentive Stock Option, this option may be deemed to be a Nonstatutory Stock Option as a result of such transfer.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**(c) Beneficiary Designation.** Upon receiving written permission from the Board or its duly authorized designee, you may, by delivering written notice to the Company, in a form approved by the Company and any broker designated by the Company to handle option exercises, designate a third party who, on your death, will thereafter be entitled to exercise this option and receive the Common Stock or other consideration resulting from such exercise. In the absence of such a designation, your executor or administrator of your estate will be entitled to exercise this option and receive, on behalf of your estate, the Common Stock or other consideration resulting from such exercise.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**10. OPTION NOT A SERVICE CONTRACT.** Your option is not an employment or service contract, and nothing in your option will be deemed to create in any way whatsoever any obligation on your part to continue in the employ of the Company or an Affiliate, or of the Company or an Affiliate to continue your employment. In addition, nothing in your option will obligate the Company or an Affiliate, their respective stockholders, boards of directors, officers or employees to continue any relationship that you might have as a Director or Consultant for the Company or an Affiliate.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**11. WITHHOLDING OBLIGATIONS.**

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**(a)** At the time you exercise your option, in whole or in part, and at any time thereafter as requested by the Company, you hereby authorize withholding from payroll and any other amounts payable to you, and otherwise agree to make adequate provision for (including by means of a "same day sale" pursuant to a program developed under Regulation T as promulgated by the Federal Reserve Board to the extent permitted by the Company), any sums required to satisfy the federal, state, local and foreign tax withholding obligations of the Company or an Affiliate, if any, which arise in connection with the exercise of your option.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**(b)** If this option is a Nonstatutory Stock Option, then upon your request and subject to approval by the Company, and compliance with any applicable legal conditions or restrictions, the Company may withhold from fully vested shares of Common Stock otherwise issuable to you upon the exercise of your option a number of whole shares of Common Stock having a Fair Market Value, determined by the Company as of the date of exercise, not in excess of the maximum amount of tax required to be withheld by law (or such lower amount as may be necessary to avoid classification of your option as a liability for financial accounting purposes). Notwithstanding the filing of such election, shares of Common Stock shall be withheld solely from fully vested shares of Common Stock determined as of the date of exercise of your option that are otherwise issuable to you upon such exercise. Any adverse consequences to you arising in connection with such share withholding procedure shall be your sole responsibility.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**(c)** You may not exercise your option unless the tax withholding obligations of the Company and/or any Affiliate are satisfied. Accordingly, you may not be able to exercise your option when desired even though your option is vested, and the Company will have no obligation to issue a certificate for such shares of Common Stock or release such shares of Common Stock from any escrow provided for herein, if applicable, unless such obligations are satisfied.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**12. TAX CONSEQUENCES**. You hereby agree that the Company does not have a duty to design or administer the Plan or its other compensation programs in a manner that minimizes your tax liabilities. You will not make any claim against the Company, or any of its Officers, Directors, Employees or Affiliates related to tax liabilities arising from your option or your other compensation. In particular, you acknowledge that this option is exempt from Section 409A of the Code only if the exercise price per share specified in the Grant Notice is at least equal to the "fair market value" per share of the Common Stock on the Date of Grant and there is no other impermissible deferral of compensation associated with the option.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**13. NOTICES.** Any notices provided for in your option or the Plan will be given in writing (including electronically) and will be deemed effectively given upon receipt or, in the case of notices delivered by mail by the Company to you, five (5) days after deposit in the United States mail, postage prepaid, addressed to you at the last address you provided to the Company. The Company may, in its sole discretion, decide to deliver any documents related to participation in the Plan and this option by electronic means or to request your consent to participate in the Plan by electronic means. By accepting this option, you consent to receive such documents by electronic delivery and to participate in the Plan through an on-line or electronic system established and maintained by the Company or another third party designated by the Company.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**14. GOVERNING PLAN DOCUMENT.** Your option is subject to all the provisions of the Plan, the provisions of which are hereby made a part of your option, and is further subject to all interpretations, amendments, rules and regulations, which may from time to time be promulgated and adopted pursuant to the Plan. If there is any conflict between the provisions of your option and those of the Plan, the provisions of the Plan will control. In addition, your option (and any compensation paid or shares issued under your option) is subject to recoupment in accordance with The Dodd—Frank Wall Street Reform and Consumer Protection Act and any implementing regulations thereunder, any clawback policy adopted by the Company and any compensation recovery policy otherwise required by applicable law.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**15. OTHER DOCUMENTS.** You hereby acknowledge receipt of and the right to receive a document providing the information required by Rule 428(b)(1) promulgated under the Securities Act, which includes the Plan prospectus. In addition, you acknowledge receipt of the Company's policy permitting certain individuals to sell shares only during certain "window" periods and the Company's insider trading policy, in effect from time to time.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**16. EFFECT ON OTHER EMPLOYEE BENEFIT PLANS.** The value of this option will not be included as compensation, earnings, salaries, or other similar terms used when calculating your benefits under any employee benefit plan sponsored by the Company or any Affiliate, except as such plan otherwise expressly provides. The Company expressly reserves its rights to amend, modify, or terminate any of the Company's or any Affiliate's employee benefit plans.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**17. VOTING RIGHTS.** You will not have voting or any other rights as a stockholder of the Company with respect to the shares to be issued pursuant to this option until such shares are issued to you. Upon such issuance, you will obtain full voting and other rights as a stockholder of the Company. Nothing contained in this option, and no action taken pursuant to its provisions, will create or be construed to create a trust of any kind or a fiduciary relationship between you and the Company or any other person.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**18. SEVERABILITY.** If all or any part of this Option Agreement or the Plan is declared by any court or governmental authority to be unlawful or invalid, such unlawfulness or invalidity will not invalidate any portion of this Option Agreement or the Plan not declared to be unlawful or invalid. Any Section of this Option Agreement (or part of such a Section) so declared to be unlawful or invalid shall, if possible, be construed in a manner which will give effect to the terms of such Section or part of a Section to the fullest extent possible while remaining lawful and valid.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**19. MISCELLANEOUS**.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**(a)** The rights and obligations of the Company under your option will be transferable to any one or more persons or entities, and all covenants and agreements hereunder will inure to the benefit of, and be enforceable by the Company's successors and assigns.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**(b)** You agree upon request to execute any further documents or instruments necessary or desirable in the sole determination of the Company to carry out the purposes or intent of your option.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**(c)** You acknowledge and agree that you have reviewed your option in its entirety, have had an opportunity to obtain the advice of counsel prior to executing and accepting your option, and fully understand all provisions of your option.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**(d)** This Option Agreement will be subject to all applicable laws, rules, and regulations, and to such approvals by any governmental agencies or national securities exchanges as may be required.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**(e)** All obligations of the Company under the Plan and this Option Agreement will be binding on any successor to the Company, whether the existence of such successor is the result of a direct or indirect purchase, merger, consolidation, or otherwise, of all or substantially all of the business and/or assets of the Company.

This Option Agreement will be deemed to be signed by you upon the signing by you of the Stock Option Grant Notice to which it is attached.

**ATTACHMENT II**

**2022 EQUITY INCENTIVE PLAN**

**ATTACHMENT III**

**NOTICE OF EXERCISE**

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| | |
|:---|:---|
| **Aclarion, Inc.** | Date of Exercise: |

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2100 Central Avenue

Boulder, CO 80301

This constitutes notice to Aclarion, Inc. (the "***Company***") under my stock option that I elect to purchase the below number of shares of Common Stock of the Company (the "***Shares***") for the price set forth below.

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| | | |
|:---|:---|:---|
| Type of option (check one): | Incentive ☐ | Nonstatutory ☐ |
| Stock option dated: |  |  |
| Number of Shares as to which option is exercised: |  |  |
| Certificates to be issued in name of: |  |  |
| Total exercise price: | $ | $— |
| Cash payment delivered herewith: | $ | $— |
| [Value of Shares delivered herewith(1): | $ | $] |
| [Value of Shares pursuant to net exercise(2): | $ | $] |
| [Regulation T Program (cashless exercise(3)): | $ | $] |

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(1) Shares must meet the public trading requirements set forth in the option. Shares must be valued in accordance with the terms of the option being exercised, and must be owned free and clear of any liens, claims, encumbrances or security interests. Certificates must be endorsed or accompanied by an executed assignment separate from certificate.

(2) The option must be a Nonstatutory Stock Option, and the Company must have established net exercise procedures at the time of exercise, in order to utilize this payment method.

(3) Shares must meet the public trading requirements set forth in the option.

By this exercise, I agree (i) to provide such additional documents as you may require pursuant to the terms of the Aclarion, Inc. 2022 Equity Incentive Plan, (ii) to provide for the payment by me to you (in the manner designated by you) of your withholding obligation, if any, relating to the exercise of this option, and (iii) if this exercise relates to an incentive stock option, to notify you in writing within fifteen (15) days after the date of any disposition of any of the Shares issued upon exercise of this option that occurs within two (2) years after the date of grant of this option or within one (1) year after such Shares are issued upon exercise of this option.

Very truly yours,

## Exhibit 31.1

**EXHIBIT 31.1**

**CERTIFICATION OF PRINCIPAL EXECUTIVE OFFICER**

**PURSUANT TO RULES 13a-14(a) OR 15D-14(a)**

**UNDER THE SECURITIES EXCHANGE ACT OF 1934,** 

**AS ADOPTED PURSUANT TO SECTION 302 OF** 

**THE SARBANES-OXLEY ACT OF 2002**

I, Brent Ness, certify that:

1. I have reviewed this Quarterly Report on Form 10-Q for the period ended September 30, 2025, of Aclarion, Inc.

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4. The registrant's other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

c) Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

d) Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting.

5. The registrant's other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions):

a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and

b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.

---

| |
|:---|
| November 12, 2025 |
| */s/ Brent Ness* |
| Brent Ness |
| Chief Executive Officer<br> (Principal Executive Officer) |

---

## Exhibit 31.2

**EXHIBIT 31.2**

**CERTIFICATION OF PRINCIPAL FINANCIAL OFFICER**

**PURSUANT TO RULES 13a-14(a) OR 15D-14(a)**

**UNDER THE SECURITIES EXCHANGE ACT OF 1934,** 

**AS ADOPTED PURSUANT TO SECTION 302 OF** 

**THE SARBANES-OXLEY ACT OF 2002**

I, Gregory A Gould, certify that:

1. I have reviewed this Quarterly Report on Form 10-Q for the period ended September 30, 2025, of Aclarion, Inc.

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4. The registrant's other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

c) Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

d) Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting.

5. The registrant's other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions):

a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and

b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.

---

| |
|:---|
| November 12, 2025 |
| */s/ Gregory A Gould* |
| Gregory A Gould |
| Chief Financial Officer<br> (Principal Financial and Accounting Officer) |

---

## Exhibit 32.1

**EXHIBIT 32.1**

**CERTIFICATION PURSUANT TO 18 U.S.C. SECTION 1350,** 

**AS ADOPTED PURSUANT TO SECTION 906**

**OF THE SARBANES-OXLEY ACT OF 2002**

In connection with the Quarterly Report of Aclarion, Inc. (the "Company") on Form 10-Q, for the period ended September 30, 2025, as filed with the Securities and Exchange Commission, I, Brent Ness, Chief Executive Officer of the Company, certify, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that:

(1) The Quarterly Report fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

(2) The information contained in the Report fairly presents, in all material respects, the financial condition and result of operations of the Company.

---

| |
|:---|
| November 12, 2025 |
| */s/ Brent Ness* |
| Brent Ness |
| Chief Executive Officer<br> (Principal Executive Officer) |

---

## Exhibit 32.2

**EXHIBIT 32.2**

**CERTIFICATION PURSUANT TO 18 U.S.C. SECTION 1350,** 

**AS ADOPTED PURSUANT TO SECTION 906**

**OF THE SARBANES-OXLEY ACT OF 2002**

In connection with the Quarterly Report of Aclarion, Inc. (the "Company") on Form 10-Q, for the period ended September 30, 2025, as filed with the Securities and Exchange Commission, I, Gregory A Gould, Chief Financial Officer of the Company, certify, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that:

(1) The Quarterly Report fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

(2) The information contained in the Report fairly presents, in all material respects, the financial condition and result of operations of the Company.

---

| |
|:---|
| November 12, 2025 |
| */s/ Gregory A Gould* |
| Gregory A Gould |
| Chief Financial Officer<br> (Principal Financial and Accounting Officer) |

---