# EDGAR Filing Document

**Accession Number:** 0001635077
**File Stem:** 0001683168-25-006126
**Filing Date:** 2025-8
**Character Count:** 128582
**Document Hash:** 10a0b414051cd3e456ce02accfa6ad65
**Contains OCR:** False
**Source Format:** 

## Filing Content

## Filing Summary
**0001683168-25-006126.hdr.sgml**: 20250814

**ACCESSION NUMBER**: 0001683168-25-006126

**CONFORMED SUBMISSION TYPE**: 10-Q

**PUBLIC DOCUMENT COUNT**: 70

**CONFORMED PERIOD OF REPORT**: 20250630

**FILED AS OF DATE**: 20250814

**DATE AS OF CHANGE**: 20250814

**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:** 251217183

**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. Form 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>June 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 August 14, 2025, there were 582,371 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**](#q_001) |  |
| Item 1. | [Financial Statements](#q_002) | 4 |
|  | [Condensed Balance Sheets](#q_003) | 4 |
|  | [Condensed Statements of Operations](#q_004) | 5 |
|  | [Condensed Statements of Changes in Stockholders' Equity](#q_005) | 6 |
|  | [Condensed Statements of Cash Flows](#q_007) | 8 |
|  | [Notes to Condensed Financial Statements](#q_008) | 9 |
| Item 2. | [Management's Discussion and Analysis of Financial Condition and Results of Operations](#q_009) | 27 |
| Item 3. | [Quantitative and Qualitative Disclosures About Market Risk](#q_010) | 35 |
| Item 4. | [Controls and Procedures](#q_011) | 35 |
| **PART II.** | [**OTHER INFORMATION**](#q_012) |  |
| Item 1. | [Legal Proceedings](#q_013) | 36 |
| Item 1A. | [Risk Factors](#q_014) | 36 |
| Item 2. | [Unregistered Sales of Equity Securities and Use of Proceeds](#q_015) | 36 |
| Item 3. | [Defaults Upon Senior Securities](#q_016) | 36 |
| Item 4. | [Mine Safety Disclosures](#q_017) | 36 |
| Item 5. | [Other Information](#q_018) | 36 |
| Item 6. | [Exhibits](#q_019) | 37 |
|  | [Signatures](#q_020) | 39 |

---

**PART I—FINANCIAL INFORMATION**

**Item 1. Financial Statements.**

**Aclarion, Inc.**

**Condensed Balance Sheets** 

---

| | | |
|:---|:---|:---|
|  | **June 30,**<br> **2025** | **December 31,**<br> **2024** |
|  | (Unaudited) | |
| **<u>ASSETS</u>** |  |  |
| <u>Current assets:</u> |  |  |
| &nbsp;&nbsp;&nbsp;Cash and cash equivalents | $12825657 | $453661 |
| &nbsp;&nbsp;&nbsp;Restricted cash | 25000 | 10000 |
| &nbsp;&nbsp;&nbsp;Accounts receivable, net | 20920 | 18326 |
| &nbsp;&nbsp;&nbsp;Prepaid Expense | 470095 | 183560 |
| &nbsp;&nbsp;&nbsp;Other current assets | 99083 | 158732 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Total current assets | 13440755 | 824279 |
| <u>Non-current assets:</u> |  |  |
| &nbsp;&nbsp;&nbsp;Property and equipment, net | 6461 | 5499 |
| &nbsp;&nbsp;&nbsp;Intangible assets, net | 1307304 | 1293705 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Total non-current assets | 1313765 | 1299204 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**Total assets** | $14754520 | $2123483 |
| **<u>LIABILITIES AND STOCKHOLDERS' EQUITY</u>** |  |  |
| <u>Current liabilities:</u> |  |  |
| &nbsp;&nbsp;&nbsp;Accounts payable | $281516 | $531603 |
| &nbsp;&nbsp;&nbsp;Accrued and other liabilities | 282803 | 529182 |
| &nbsp;&nbsp;&nbsp;Warrant liability | 103 | 11869 |
| &nbsp;&nbsp;&nbsp;Liability to issue equity | – | 80772 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**Total current liabilities** | 564422 | 1153426 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**Total liabilities** | 564422 | 1153426 |
| <u>Commitments and contingencies (see Note 10)</u> | **–** | **–** |
| <u>Stockholders' equity</u> |  |  |
| &nbsp;&nbsp;&nbsp;Series B preferred stock - $0.00001 par value, 3,000 authorized and 0 and 930 shares issued and outstanding (see Note 11) |  | \* |
| &nbsp;&nbsp;&nbsp;Series C preferred stock - $0.00001 par value, 1,000 authorized and 0 and 874 shares issued and outstanding (see Note 11) |  | \* |
| &nbsp;&nbsp;&nbsp;Common stock - $0.00001 par value, 200,000,000 authorized and 582,371 and 1,370 shares issued and outstanding (see Note 11) | 6 | \* |
| &nbsp;&nbsp;&nbsp;Additional paid-in capital | 69090597 | 52232368 |
| &nbsp;&nbsp;&nbsp;Accumulated deficit | (54900505) | (51262311) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**Total stockholders' equity** | 14190098 | 970057 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**Total liabilities and stockholders' equity** | $14754520 | $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 June 30,** | **Three Months Ended June 30,** | **Six Months Ended June 30,** | **Six Months Ended June 30,** |
|  | **2025** | **2024** | **2025** | **2024** |
| **<u>Revenue</u>** |  |  |  |  |
| &nbsp;&nbsp;&nbsp;Revenue | $19319 | $10971 | $38309 | $21085 |
| &nbsp;&nbsp;&nbsp;Cost of revenue | 14179 | 23294 | 37658 | 42770 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Gross profit (loss) | 5140 | (12323) | 651 | (21685) |
| **<u>Operating expenses:</u>** |  |  |  |  |
| &nbsp;&nbsp;&nbsp;Sales and marketing | 343765 | 225037 | 646350 | 406094 |
| &nbsp;&nbsp;&nbsp;Research and development | 270434 | 202102 | 468622 | 441143 |
| &nbsp;&nbsp;&nbsp;General and administrative | 1127449 | 696099 | 2114112 | 1541947 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Total operating expenses | 1741648 | 1123238 | 3229084 | 2389184 |
| **<u>Income (loss) from operations</u>** | (1736508) | (1135561) | (3228433) | (2410869) |
| Other income (expense): |  |  |  |  |
| &nbsp;&nbsp;&nbsp;Interest expense |  | (127848) |  | (463672) |
| &nbsp;&nbsp;&nbsp;Loss on exchange of debt |  |  |  | (1066732) |
| &nbsp;&nbsp;&nbsp;Gain (loss) on extinguishment of debt |  |  | 73272 | (111928) |
| &nbsp;&nbsp;&nbsp;Changes in fair value of warrant and derivative liabilities | 45 | 25357 | 11766 | 323041 |
| &nbsp;&nbsp;&nbsp;Penalties and settlements |  |  | (672500) |  |
| &nbsp;&nbsp;&nbsp;Other, net | 135706 | (25) | 177702 | 92980 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Total other income (expense) | 135751 | (102516) | (409760) | (1226311) |
| Loss before income taxes | (1600757) | (1238077) | (3638193) | (3637180) |
| Income tax provision | – | – | – | – |
| **Net Loss** | $(1600757) | $(1238077) | $(3638193) | $(3637180) |
| Dividends accrued for preferred stockholders | – | – | (6683) | – |
| Net loss allocable to common stockholders | $(1600757) | $(1238077) | $(3644876) | $(3637180) |
| Net loss per share allocable to common shareholders | $(2.75) | $(1362.83) | $(9.09) | $(4816.86) |
| Weighted average shares of common stock outstanding, basic and diluted | 582371 | 908 | 400868 | 755 |

---

See accompanying notes to condensed financial statements.

**Aclarion, 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 |
|  | Shares | Value | Shares | Value | Shares | Value |
| **For the Six Months Ended June 30, 2024** |  |  |  |  |  |  |
| **Balance, December 31, 2023** |  | $– | – | $– | – | $– |
| Share-based compensation |  |  |  |  |  |  |
| Issuance of common stock and warrants related to public offering, net issuance costs |  |  |  |  |  |  |
| Issuance of common shares - equity line |  |  |  |  |  |  |
| Public offering and equity line issuance costs |  |  |  |  |  |  |
| Issuance of common shares - debt for equity exchange |  |  |  |  |  |  |
| Issuance of commitment shares - note financing |  |  |  |  |  |  |
| Issuance of common shares related to restricted stock units |  |  |  |  |  |  |
| Cashless exercise of pre-funded warrants |  |  |  |  |  |  |
| Round up convention related to reverse stock split |  |  |  |  |  |  |
| Net loss |  | – | – | – | – | – |
| **Balance, March 31, 2024** |  | $– | – | $– | – | $– |
| Share-based compensation |  |  |  |  |  |  |
| Issuance of common shares related to restricted stock units |  |  |  |  |  |  |
| Issuance of common shares - equity line of credit |  |  |  |  |  |  |
| Net income (loss) |  | – | – | – | – | – |
| **Balance, June 30, 2024** |  | $– | – | $– | – | $– |
| **For the Six Months Ended June 30, 2025** |  |  |  |  |  |  |
| **Balance, December 31, 2024** |  | $– | 930 | $\* | 874 | $\* |
| Share-based compensation |  |  |  |  |  |  |
| Registered Direct offering of commons stock |  |  |  |  |  |  |
| Public offering of common stock and warrants |  |  |  |  |  |  |
| Common stock issuance cost |  |  |  |  |  |  |
| Redemption of B series preferred stock |  |  | (930) | \* |  |  |
| Conversion of C-series preferred stock to common stock |  |  |  |  | (874) | \* |
| Exercise of C-series warrants |  |  |  |  |  |  |
| Warrant amendment |  |  |  |  |  |  |
| Alternative cashless exercise of B warrants |  |  |  |  |  |  |
| Round-up conversion related to reverse stock splits |  |  |  |  |  |  |
| Net loss |  | – | – | – | – | – |
| **Balance, March 31, 2025** |  | $– | – | $– | – | $– |
| Share-based compensation |  |  |  |  |  |  |
| Round up conversion related to reverse stock splits |  |  |  |  |  |  |
| Common stock issuance costs |  |  |  |  |  |  |
| Net income (loss) |  | – | – | – | – | – |
| **Balance, June 30, 2025** |  | $– | – | $– | – | $– |

---

(continued)

**Aclarion, Inc.**

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

**(Unaudited)**

**(continued)**

---

| | | | | | |
|:---|:---|:---|:---|:---|:---|
|  | Common Stock | Common Stock | | | |
|  | Shares | Value | Paid-In<br>Capital | Accumulated<br>Deficit |<br>Total |
| **For the Six Months Ended June 30, 2024** |  |  |  |  |  |
| **Balance, December 31, 2023** | 91 | $\* | $43553532 | $(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 | 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 | $\* | $49186078 | $(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 income (loss) | – | – | – | (1238077) | (1238077) |
| **Balance, June 30, 2024** | 908 | $\* | $49560883 | $(47918705) | $1642177 |
| **For the Six Months Ended June 30, 2025** |  |  |  |  |  |
| **Balance, December 31, 2024** | 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 |  |  | (1213590) |  | (1213590) |
| Conversion of C-series preferred stock to common stock | 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 | $69080386 | $(53299747) | $15780645 |
| Share-based compensation |  |  | 28360 |  | 28360 |
| Round up conversion related to reverse stock splits | 33 |  |  |  |  |
| Common stock issuance costs |  |  | (18149) |  | (18149) |
| Net income (loss) | – | – | – | (1600757) | (1600757) |
| **Balance, June 30, 2025** | 582371 | $6 | $69090597 | $(54900505) | $14190098 |

---

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

 

See accompanying notes to condensed financial statements.

**Aclarion, Inc.**

**Condensed Statements of Cash Flows** 

**(unaudited)**

---

| | | |
|:---|:---|:---|
|  | **Six Months Ended June 30,** | **Six Months Ended June 30,** |
|  | **2025** | **2024** |
| **Cash flows from operating activities** |  |  |
| &nbsp;&nbsp;&nbsp;Net income (loss) | $(3638193) | $(3637180) |
| &nbsp;&nbsp;&nbsp;Adjustments to reconcile net loss to net cash used in operating activities: |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Depreciation and amortization | 107729 | 90864 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Share-based compensation | 84257 | 156131 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Amendment of warrants | 48087 |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Non-cash settlements | 58272 |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Loss on exchange of debt |  | 1066732 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Loss on extinguishment of debt |  | 111928 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Amortization of deferred issuance costs |  | 491405 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Change in fair value related to warrants and derivative | (11766) | (323041) |
| &nbsp;&nbsp;&nbsp;Change in assets and liabilities |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Accounts receivable | (2595) | (5115) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Prepaids and other current assets | (232111) | (405657) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Accounts payable | (268237) | (540710) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Accrued and other liabilities | (521837) | (267325) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Note payable, net of discount | – | (31129) |
| **Net cash (used in) operations** | (4376394) | (3293096) |
| **Investing activities** |  |  |
| &nbsp;&nbsp;&nbsp;Intangible assets – Patents | (121810) | (157523) |
| &nbsp;&nbsp;&nbsp;Fixed assets | (481) | – |
| **Net cash (used in) investing activities** | (122290) | (157523) |
| **Financing activities** |  |  |
| &nbsp;&nbsp;&nbsp;Public offering of common stock and warrants | 14554545 | 3001495 |
| &nbsp;&nbsp;&nbsp;Registered Direct offerings | 5167927 |  |
| &nbsp;&nbsp;&nbsp;Proceeds from equity line |  | 1754032 |
| &nbsp;&nbsp;&nbsp;Common stock cash issuance costs | (1959643) | (828941) |
| &nbsp;&nbsp;&nbsp;Repayment of promissory notes |  | (300973) |
| &nbsp;&nbsp;&nbsp;Bridge fund cash issuance costs |  | (23375) |
| &nbsp;&nbsp;&nbsp;Exercise of Series C warrants | 336441 |  |
| &nbsp;&nbsp;&nbsp;Redemption of Series B Preferred stock | (1213590) | – |
| **Net cash provided by financing activities** | 16885680 | 3602237 |
| **Net increase (decrease) in cash and cash equivalents** | 12386996 | 151618 |
| Cash, cash equivalents and restricted cash, beginning of period | 463661 | 1031069 |
| Cash, cash equivalents and restricted cash, end of period | $12850657 | $1182687 |
| **Non-cash activities** |  |  |
| &nbsp;&nbsp;&nbsp;Issuance of common shares in exchange for debt | $– | $1519779 |
| &nbsp;&nbsp;&nbsp;Issuance of bridge fund commitment shares | $– | $33297 |
| &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 | $– |

---

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"), and a proprietary biomarker to optimize clinical treatments. The Company was formed in February 2015, is 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,**<br>**2024** |
| Common shares issued and outstanding - pre-2025 splits, 12,389,989 shares | $124 |
| Common shares issued and outstanding - post-2025 splits, 1,370 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**<br> **December 31,**<br>**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 $900,749 cash deposits and $11,949,908 of cash equivalents at June 30, 2025. The Company had $463,661 of cash deposits at December 31, 2024.

The Company maintains cash deposits and cash equivalents at two financial institutions, which are insured by the FDIC up to $250,000. The Company's cash balance may at times exceed these limits. On June 30, 2025, and December 31, 2024, the Company had $12,350,657 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 June 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 $7,350 on June 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 June 30, 2025, we had cash of $12,850,657. We believe our current cash will fund our operating expenses and capital expenditure requirements into the third quarter of 2026. 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 three months ended March 31, 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 June 30, 2025, $18,149 of 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 June 30, 2025** | **Fair value measured as of June 30, 2025** | **Fair value measured as of June 30, 2025** | **Fair value measured as of June 30, 2025** |
|  | **Fair value on<br> June 30,**<br> **2025** | **Quoted prices**<br> **in active**<br> **markets**<br> **(Level 1)** | **Significant**<br> **other**<br> **observable**<br> **inputs**<br> **(Level 2)** | **Significant unobservable**<br> **inputs**<br> **(Level 3)** |
| **<u>Assets</u>** |  |  |  |  |
| Money market funds | $11949908 | $11949908 | $– | $– |
| **<u>Liabilities</u>** |  |  |  |  |
| Warrant liability | $103 | $– | $– | $103 |

---

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

The following table presents changes in Level 3 liabilities measures at fair value for the three months ended June 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**<br> **Liability** | **Liability to Issue Commitment Shares** | **Total** |
| Balance – December 31, 2024 | $11869 | $80772 | $92641 |
| &nbsp;&nbsp;&nbsp;Change in fair value | (11766) | (80772) | (92538) |
| Balance – June 30, 2025 | $103 | $– | $103 |

---

**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:** 

---

| | | |
|:---|:---|:---|
|  | **June 30,**<br> **2025** | **December 31,**<br> **2024** |
| Prepaid insurance D&O | $320208 | $96578 |
| Prepaid health insurance | 16715 | 16715 |
| Prepaid clinical | 26428 | 26428 |
| Prepaid NASDAQ annual fees | 35000 |  |
| Prepaid royalties | 29167 |  |
| Prepaid other annual fees | 29604 | 24079 |
| Prepaid insurance, other | 12937 | 15592 |
| Prepaid other | – | 4167 |
|  | $470095 | $183560 |

---

**Other current assets:** 

---

| | | |
|:---|:---|:---|
|  | **June 30,**<br> **2025** | **December 31,**<br> **2024** |
| Short term deposits | $39002 | $39002 |
| Deferred offering costs | 60081 | 119730 |
|  | $99083 | $158732 |

---

**Accounts payable:** 

---

| | | |
|:---|:---|:---|
|  | **June 30,**<br> **2025** | **December 31,**<br> **2024** |
| Accounts payable | $279642 | $525582 |
| Credit cards payable | 1874 | 6021 |
|  | $281516 | $531603 |

---

**Accrued and other liabilities:** 

---

| | | |
|:---|:---|:---|
|  | **June 30,**<br> **2025** | **December 31,**<br> **2024** |
| Accrued bonus | $199444 | $404228 |
| Accrued audit and legal expenses | 15737 | 33006 |
| Accrued board compensation | 46250 | 46250 |
| Investment banking and related fees |  | 15000 |
| Other accrued expenses and liabilities | 21372 | 30698 |
|  | $282803 | $529182 |

---

**NOTE 7. LEASES**

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

**NOTE 8. INTANGIBLE ASSETS**

The Company's intangible assets are as follows:

---

| | | |
|:---|:---|:---|
|  | **June 30,**<br> **2025** | **December 31,**<br> **2024** |
| Patents and licenses | $2705882 | $2584072 |
| Other | 5017 | 5017 |
|  | 2710899 | 2589089 |
| Less: accumulated amortization | (1403595) | (1295385) |
| Intangible assets, net | $1307304 | $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 $54,762 and $45,458 for the three months ended June 30, 2025, and 2024, respectively. Amortization expense related to purchased intangible assets was $108,211 and $90,270 for the six months ended June 30, 2025, and 2024, respectively.

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

Future amortization of intangible assets is as follows:

---

| | |
|:---|:---|
| 2025 | $114310 |
| 2026 | 228619 |
| 2027 | 228619 |
| 2028 | 228619 |
| 2029 and beyond | 507137 |
| Total | $1307304 |

---

**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 months ended June 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 June 30, 2025, and 2024, respectively, and $25,000 for the six months ended June 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 six months ended June 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 June 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.

**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 June 30, 2025.

**Warrants**

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

---

| | | | |
|:---|:---|:---|:---|
| **Issue Date** | **Strike**<br> **Price** | **Number**<br> **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 | $1.45 | 1 | November 21, 2028 |
| February 27, 2024 | $5246 | 1144 | February 27, 2029 |
| August 27, 2024 | $249.75 | 22 | August 27, 2029 |
| August 27, 2024 | $180.90 | 221 | September 5, 2027 |
| January 16, 2025 (2) | $180.90 | 18242 | March 5, 2030 |
| January 16, 2025 (3) | $180.90 | 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 June 30,** | **Three Months Ended June 30,** |
|  | **2025** | **2024** |
| **Numerator:** |  |  |
| Net (loss) allocable to common stockholders used to compute basic and diluted loss per common share | $(1600757) | $(1238077) |
| **Denominator:** |  |  |
| Weighted average shares outstanding used to compute basic and dilutive loss per share | 582371 | 907 |
| Weighted average shares issuable for vested restricted stock units and pre-funded warrants | – | 1 |
|  | $582371 | $908 |

---

---

| | | |
|:---|:---|:---|
|  | **Six Months Ended June 30,** | **Six Months Ended June 30,** |
|  | **2025** | **2024** |
| **Numerator:** |  |  |
| Net (loss) allocable to common stockholders used to compute basic and diluted loss per common share | $(3644876) | $(3637180) |
| **Denominator:** |  |  |
| Weighted average shares outstanding used to compute basic and dilutive loss per share | 400826 | 754 |
| Weighted average shares issuable for vested restricted stock units and pre-funded warrants | 42 | 1 |
|  | $400868 | $755 |

---

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:

---

| | | | | |
|:---|:---|:---|:---|:---|
|  | **June 30,** <br> **2025** | **June 30,** <br> **2025** | **June 30,** <br> **2024** | **June 30,** <br> **2024** |
| Warrants |  | 19709 |  | 1179 |
| Restricted stock units |  |  |  | 1 |
| Stock options | | 19 | | 19 |
|  | | 19,728 | | 1,199 |

---

**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.

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.

The Company did not grant any stock options for the six months ended June 30, 2025 and twelve months ended December 31, 2024.

**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 incentive plans is as follows:

---

| | | | |
|:---|:---|:---|:---|
|  | **Options**<br> **Outstanding** | **Weighted Average Exercise Price** | **Weighted Average Remaining Contractual Life (In Years)** |
| **Balance at December 31, 2024** | 19 | $277881.44 | 6.2 |
| Options granted |  |  |  |
| Options exercised |  |  |  |
| Options forfeited/expired | – |  |  |
| **Balance at June 30, 2025** | 19 | $277881.44 | 5.7 |
| Exercisable at December 31, 2024 | 18 | $277721.70 | 6.2 |
| Exercisable at June 30, 2025 | 18 | $277721.70 | 5.7 |

---

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

As of June 30, 2025, there was approximately $15,424 of total unrecognized compensation cost related to non-vested stock options, which is expected to be recognized over the next 4 months.

**Restricted Stock Units**

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

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

As of June 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 June 30,** | **Three months ended June 30,** | **Six months ended June 30,** | **Six months ended June 30,** |
|  | **2025** | **2024** | **2025** | **2024** |
| Sales and marketing | $– | $12605 | $– | $40733 |
| Research and development |  | 2055 |  | 4110 |
| General and administrative | 28360 | 55644 | 84257 | 111288 |
| Total share based compensation | $28360 | $70305 | $84257 | $156131 |

---

**NOTE 14. SUBSEQUENT EVENTS**

**Submission of Matters to a Vote of Security Holders**

On July 21, 2025, the Company reconvened and held its 2025 Annual Meeting of Stockholders. The Annual Meeting had been adjourned from the original scheduled meeting date of July 7, 2025.

The matters voted upon at the Annual Meeting and the results of such voting are set forth below:

&nbsp;&nbsp;&nbsp;&nbsp;· Proposal 1 - Election of seven directors to serve
a term ending at the 2026 annual meeting, in each case until their respective successors are duly elected and qualified: Approved

&nbsp;&nbsp;&nbsp;&nbsp;· Proposal 2 - Ratification of appointment of independent
registered accounting firm – Haynie & Company: Approved

&nbsp;&nbsp;&nbsp;&nbsp;· Proposal 3 – Approval of a proposed reverse
stock split: Approved

&nbsp;&nbsp;&nbsp;&nbsp;· Proposal 4 – Approval of an amendment to
our 2022 equity incentive plan: Not approved

**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 June 30, 2025, and 2024:***

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

 ****

---

| | | | |
|:---|:---|:---|:---|
|  | **Three Months Ended June 30,** | **Three Months Ended June 30,** | |
|  | **2025** | **2024** |<br>**$ Change** |
| **<u>Revenue</u>** |  |  |  |
| Revenue | $19319 | $10971 | $8348 |
| Cost of revenue | 14179 | 23294 | (9115) |
| &nbsp;&nbsp;&nbsp;Gross profit (loss) | 5140 | (12323) | 17463 |
| **<u>Operating expenses:</u>** |  |  |  |
| Sales and marketing | 343765 | 225037 | 118728 |
| Research and development | 270434 | 202102 | 68332 |
| General and administrative | 1127449 | 696099 | 431350 |
| &nbsp;&nbsp;&nbsp;Total operating expenses | 1741648 | 1123238 | 618410 |
| **<u>(Loss) from operations</u>** | (1736508) | (1135561) | (600947) |
| Other income(expense): |  |  |  |
| &nbsp;&nbsp;&nbsp;Interest expense |  | (127848) | 127848 |
| &nbsp;&nbsp;&nbsp;Changes in fair value of warrant and derivative liabilities | 45 | 25357 | (25312) |
| &nbsp;&nbsp;&nbsp;Other, net | 135706 | (25) | 135731 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Total other income(expense) | 135751 | (102516) | 238267 |
| (Loss) before income taxes | (1600757) | (1238077) | (362680) |
| Income tax provision | – | – |  |
| &nbsp;&nbsp;&nbsp;**Net income (loss)** | $(1600757) | $(1238077) | $(362680) |
| Net (loss) allocable to common stockholders | $(1600757) | $(1238077) | $(362680) |
| Net (loss) per share allocable to common stockholders | $(2.75) | $(1362.83) | $1360.08 |
| Weighted average shares of common stock outstanding, basic and diluted | 582371 | 908 | 581463 |

---

 ****

*<u>Total Revenues</u>*. Total revenues for the quarter ended June 30, 2025 were $19,319, which was an increase of $8,348, or 76%, from $10,971 for the quarter ended June 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.

*<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 $14,179 for the quarter ended June 30, 2025, compared to $23,294 for the quarter ended June 30, 2024, a decrease of 39%. 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 shared-based compensation for Key Opinion Leaders. Sales and marketing expenses were $343,765 for the quarter ended June 30, 2025, compared to $225,037 for the quarter ended June 30, 2024, an increase of $118,728, or 53%. Post-market clinical expenses increased as the Company initiated the Clarity trial, with the first patient enrolled in June 2025. Travel expenses were also higher to support the local coverage decisions in the UK market. These increased costs were partially offset by decreased product marketing consulting and the expiration of restricted stock vesting.

*<u>Research and Development</u>*. Research and development expenses were $270,434 for the quarter ended June 30, 2025, compared to $202,102 for the quarter ended June 30, 2024, an increase of $68,332, or 34%. This increase was due primarily to a bonus accrual in Q2 2025, compared to the quarter ended June 30, 2024 without a bonus accrual. Additionally, the Company utilized more quality and regulatory consulting services for the quarter ended June 30, 2025.

*<u>General and Administrative</u>*. General and administrative expenses were $1,127,449 for the quarter ended June 30, 2025, an increase of $431,350 or 62%, from $696,099 for the quarter ended June 30, 2024. For the quarter ended June 30, 2025, the Company accrued about $199,000 for the 2025 bonus program, compared to no bonus accrual in the quarter ended June 30, 2024. Also in 2025, the Company incurred higher insurance costs related to enhanced D&O coverage. Consulting services were also higher given increased attention on marketing the Company's stock, financial control enhancements, and human resources.

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

The Company earned about $135,000 of interest income during the quarter ended June 30, 2025, on money market deposits following the fundraising activity in the first quarter ended March 31, 2025. Interest expense was $127,848 for the quarter ended June 30, 2024, due to the increase in debt taken on by the company in 2024.

***For the Six Months Ended June 30, 2025, and 2024:***

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

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| | | | |
|:---|:---|:---|:---|
|  | **Six Months Ended June 30,** | **Six Months Ended June 30,** | |
|  | **2025** | **2024** |<br>**$ Change** |
| **<u>Revenue</u>** |  |  |  |
| Revenue | $38309 | $21085 | $17224 |
| Cost of revenue | 37658 | 42770 | (5112) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Gross profit (loss) | 651 | (21685) | 22336 |
| **<u>Operating expenses:</u>** |  |  |  |
| Sales and marketing | 646350 | 406094 | 240256 |
| Research and development | 468622 | 441143 | 27479 |
| General and administrative | 2114112 | 1541947 | 572165 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Total operating expenses | 3229084 | 2389184 | 839900 |
| **<u>(Loss) from operations</u>** | (3228433) | (2410869) | (817564) |
| Other income(expense): |  |  |  |
| &nbsp;&nbsp;&nbsp;Interest expense |  | (463672) | 463672 |
| &nbsp;&nbsp;&nbsp;Loss on exchange of debt |  | (1066732) | 1066732 |
| &nbsp;&nbsp;&nbsp;Gain(loss) on extinguishment of debt | 73272 | (111928) | 185200 |
| &nbsp;&nbsp;&nbsp;Changes in fair value of warrant and derivative liabilities | 11766 | 323041 | (311275) |
| &nbsp;&nbsp;&nbsp;Penalties and settlements | (672500) |  | (672500) |
| &nbsp;&nbsp;&nbsp;Other, net | 177702 | 92980 | 84722 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Total other (expense) | (409760) | (1226311) | 816551 |
| (Loss) before income taxes | (3638193) | (3637180) | (1013) |
| Income tax provision | – | – | – |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**Net income (loss)** | $(3638193) | $(3637180) | $(1013) |
| Dividends accrued for preferred stockholders | $(6683) | $– | $(6683) |
| Net (loss) allocable to common stockholders | $(3644876) | $(3637180) | $(7696) |
| Net (loss) per share allocable to common stockholders | $(9.09) | $(4816.86) | $4807.77 |
| Weighted average shares of common stock outstanding, basic and diluted | 400868 | 755 | 400113 |

---

*<u>Total revenues</u>*. Total revenues for the six months ended June 30, 2025, were $38,309, which was an increase of $17,224, or 82%, from $21,085 for the six months ended June 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, with a slight increase also in patient-pay volume.

*<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 $37,658 for the six months ended June 30, 2025, compared to $42,770 for the six months ended June 30, 2024, a decrease of 12%. This decrease was primarily due to a reduced allocation of hosting fees to cost of revenue in the second quarter of 2025.

*<u>Sales and Marketing</u>*. Marketing expenses include post-market clinical and reimbursement consulting, salaries, website support, press releases, conferences, travel, and shared-based compensation for Key Opinion Leaders. Sales and marketing expenses were $646,350 for the six months ended June 30, 2025, compared to $406,094 for the six months ended June 30, 2024, an increase of $240,256, or 59%. Increased post-market clinical expense related to the Clarity trial (approximately $180,000 increase), co-marketing expense, and a 2025 bonus accrual, was offset in part by a reduction in restricted stock vesting expense related to the Company's engagement of Key Opinion Leaders and reduced product market consulting.

*<u>Research and Development</u>*. Research and development expenses were $468,622 for the six months ended June 30, 2025, compared to $441,143 for the six months ended June 30, 2024, an increase of $27,479, or 6%. The increase expense was due to the bonus accrual that was recorded in the six months ended June 30, 2025, compared to the six months ended June 30, 2024 without a bonus accrual, and an increase in required regulatory and quality system work in the first half of 2025.

*<u>General and Administrative</u>*. General and administrative expenses were $2,114,112 for the six months ended June 30, 2025, an increase of $572,165 or 37%, from $1,541,947 for the six months ended June 30, 2024. The increase was related to a bonus accrual of about $154,000 for the 2025 bonus program, compared to no bonus accrual in the quarter ended June 30, 2024. For the six months ended June 30, 2025, the Company incurred higher insurance costs related to enhanced D&O coverage. Consulting services were also higher given increased attention to marketing the Company's stock, financial control enhancements, and human resources. Finally, the Company recorded higher NASDAQ and SEC fees versus the prior year.

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

Interest expense was $0 for the six months ended June 30, 2025, while interest expense for the six months ended June 30, 2024 was $463,672. This decrease in interest expense was related to the retirement of all unsecured non-convertible notes in 2024.

The Company incurred losses during the six months ended June 30, 2024, on two transactions to reduce debt. The first transaction took place between January 22 and January 29, 2024, whereby the Company entered into a series of exchange agreements with investors to issue an aggregate of 644,142 (71 adjusted for 2025 Stock Splits) shares of common stock in exchange for $1,519,779 principal and accrued interest on the notes. This transaction accelerated the recognition of the related note discounts and resulted in a $1,066,732 charge. The second transaction was on March 6, 2024, whereby the Company paid $300,974 of principal and accrued interest on the notes. This transaction accelerated the recognition of the related note discounts and resulted in a $111,928 charge.

The Company recognized a gain of $73,272 in the six months ended June 30, 2025 related to retiring an obligation for commitment shares.

The Company's warrant and derivative liabilities are recorded at fair value as of each reporting date. For the six months ended June 30, 2025, the Company recorded a favorable adjustment in fair value of $11,766. For the six months ended June 30, 2024, the Company recorded a favorable adjustment in fair value of $323,041. The derivative liability was retired in 2024 along with the retirement of all unsecured non-convertible notes.

In the six months ended June 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 income of $177,702 for the six months ended June 30, 2025, was primarily interest on money market deposits following the fundraising activity in the first quarter of 2025. Other net income of $92,980 for the six months ended June 30, 2024, included a favorable discount to accounts payable of $117,985, offset in part by a $25,000 penalty paid to investors related to a failure to timely register 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 States and United Kingdom.

***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 June 30, 2025, we had cash and cash equivalents of $12,850,657, including $25,000 of restricted cash.

During the six months ended June 30, 2025, the Company raised an aggregate of $20.1 million of gross proceeds through a combination of a public offering of units ($14.6 million) consisting of common shares, A warrants, and B warrants, two registered direct offerings ($5.2 million) of common stock, and the exercise of Series C Preferred warrants ($0.3 million).

We believe our current cash will fund our operating expenses and capital expenditure requirements into the third quarter of 2026. Management is actively managing our cash position and continually working to secure long-term funding.

***Cash flows***

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

---

| | | |
|:---|:---|:---|
|  | **Six Months Ended June 30,** | **Six Months Ended June 30,** |
|  | **2025** | **2024** |
| Cash used in operating activities | $(4376394) | $(3293096) |
| Cash used in investing activities | (122290) | (157523) |
| Cash provided by financing activities | 16885680 | 3602237 |
| Net increase (decrease) in cash | $12386996 | $151618 |

---

***Operating activities***

During the six months ended June 30, 2025, operating activities used $4,376,394 of cash. This use of cash consisted primarily of employee compensation and benefit expense, general liability insurance, CLARITY study expenses, and audit and legal fees. During the six months ended June 30, 2024, operating activities used $3,293,096 of cash. During the six months ended June 30, 2025, the Company reduced accounts payable, primarily legal expenses that had accumulated over time, and reduced accrued expenses including payroll, bonuses, board compensation, and audit fees. In addition, prepaid expenses increased primarily due to D&O insurance.

***Investing activities***

During the six months ended June 30, 2025, and 2024, investing activities used $122,290 and $157,523 of cash, respectively. These investing activities consisted almost entirely of patent and license filings.

***Financing activities***

<u>Six months ended June 30, 2025</u>

During the six months ended June 30, 2025, the Company raised an aggregate of $20.1 million of gross proceeds through a combination of a public offering of units ($14.6 million) consisting of common shares, A warrants, and B warrants, two registered direct offerings ($5.2 million) of common stock, and the exercise of Series C Preferred warrants ($0.3 million).

*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 $0.45 million.

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 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.

*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 June 30, 2025.

*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 six months ended June 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 six months ended June 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.

<u>Six months ended June 30, 2024</u>

During the six months ended June 30, 2024, net cash provided by financing activities was $3,602,237, which included gross proceeds of $1,754,032 from our equity line and $3,001,495 from a February 27, 2024, public offering. Cash issuance costs related to all financing activities totaled $1,153,289. The Company used cash in the year 2024 to retire $300,973 of outstanding 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 June 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, as disclosed in Note 4 to our condensed financial statements appearing in this quarterly report, there have been no recent accounting pronouncements not yet effective that have significance, or potential significance, to our Consolidated 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 six months ended June 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 six months ended June 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 June 30, 2024 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.

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.

**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.**

Not applicable.

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

None.

**Item 4. Mine Safety Disclosures.**

Not applicable.

**Item 5. Other Information.**

During the quarter ended June 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.

---

| | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|
| **Exhibit <br> Number** |  | **Description of Document** | **Incorporated by reference from Form** | **Filing<br> Date** | **Exhibit<br> Number** | **Filed<br> Herewith** |
| 1.1 |  | <u>[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)</u> | 8-K | 1/17/2025 | 10.1 |  |
| 3.1 |  | <u>[Amended and Restated Certificate of Incorporation of the Company](http://www.sec.gov/Archives/edgar/data/1635077/000168316822002974/aclarion_ex0301.htm)</u> | 8-K | 4/27/2022 | 3.1 |  |
| 3.2 |  | <u>[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)</u> | 8-K | 1/4/2024 | 3.1 |  |
| 3.3 |  | <u>[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)</u> | 8-K | 1/30/2025 | 3.1 |  |
| 3.4 |  | <u>[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)</u> | 8-K | 3/28/2025 | 3.1 |  |
| 3.5 |  | <u>[Bylaws of the Company](http://www.sec.gov/Archives/edgar/data/1635077/000168316822002974/aclarion_ex0302.htm)</u> | 8-K | 4/27/2022 | 3.2 |  |
| 3.6 |  | <u>[Amendment to Bylaws dated June 12, 2024](http://www.sec.gov/Archives/edgar/data/1635077/000168316824004321/acon_ex0301.htm)</u> | 8-K | 6/18/2024 | 3.1 |  |
| 3.7 |  | <u>[Series B Convertible Preferred Stock Certificate of Designations dated August 14, 2024](http://www.sec.gov/Archives/edgar/data/1635077/000168316824005844/acon_ex0301.htm)</u> | 8-K | 8/16/2024 | 3.1 |  |
| 3.8 |  | <u>[Series C Convertible Preferred Stock Certificate of Designations dated September 30, 2024](http://www.sec.gov/Archives/edgar/data/1635077/000168316824006791/acon_ex0301.htm)</u> | 8-K | 10/1/2024 | 3.1 |  |
| 4.1 |  | <u>[Form of Common Stock Certificate](http://www.sec.gov/Archives/edgar/data/1635077/000165495422007977/aclarion_ex41.htm)</u> | 10-Q | 6/6/2022 | 4.1 |  |
| 4.2 |  | <u>[Form of 2022 IPO Public Warrant](http://www.sec.gov/Archives/edgar/data/1635077/000168316822002974/aclarion_ex0401.htm)</u> | 8-K | 4/27/2022 | 4.1 |  |
| 4.3 |  | <u>[Form of 2022 IPO Representative's Common Stock Purchase Warrant](http://www.sec.gov/Archives/edgar/data/1635077/000168316822002974/aclarion_ex0402.htm)</u> | 8-K | 4/27/2022 | 4.2 |  |
| 4.4 |  | <u>[Form of May 2023 Common Stock Warrant](http://www.sec.gov/Archives/edgar/data/1635077/000168316823003484/aclarion_ex1003.htm)</u> | 8-K | 5/17/2023 | 10.3 |  |
| 4.5 |  | <u>[Form of Common Stock Warrant dated November 21, 2023](http://www.sec.gov/Archives/edgar/data/1635077/000168316823008420/acon_ex1003.htm)</u> | 8-K | 11/22/2023 | 10.3 |  |
| 4.6 |  | <u>[Form of Common Stock Warrant dated September 30, 2024](http://www.sec.gov/Archives/edgar/data/1635077/000168316824006791/acon_ex1002.htm)</u> | 8-K | 10/1/2024 | 10.2 |  |
| 4.7 |  | <u>[February 2024 Form of Common Warrant](https://www.sec.gov/Archives/edgar/data/1635077/000168316824000730/aclarion_ex0405.htm)</u> | S-1/A | 2/6/2024 | 4.5 |  |
| 4.8 |  | <u>[February 2024 Form of Prefunded Warrant](https://www.sec.gov/Archives/edgar/data/1635077/000168316824000730/aclarion_ex0406.htm)</u> | S-1/A | 2/6/2024 | 4.6 |  |
| 4.9 |  | <u>[January 2025 Form of Series A Warrant](http://www.sec.gov/Archives/edgar/data/1635077/000168316825000431/acon_ex0401.htm)</u> | 8-K | 1/17/2025 | 4.1 |  |
| 4.10 |  | <u>[January 2025 Form of Series B Warrant](http://www.sec.gov/Archives/edgar/data/1635077/000168316825000431/acon_ex0402.htm)</u> | 8-K | 1/17/2025 | 4.2 |  |
| 4.11 |  | <u>[January 2025 Form of Pre-Funded Warrant](http://www.sec.gov/Archives/edgar/data/1635077/000168316825000431/acon_ex0403.htm)</u> | 8-K | 1/17/2025 | 4.3 |  |
| 4.12 |  | <u>[Description of Securities](https://www.sec.gov/Archives/edgar/data/1635077/000168316825002351/aclarion_ex0412.htm)</u> | 10-K | 4/9/2025 | 4.12 |  |
| 10.1 | # | <u>[Employment Agreement of Jeff Thramann](http://www.sec.gov/Archives/edgar/data/1635077/000168316822001851/aclarion_ex1001.htm)</u> | S-1/A | 3/23/2022 | 10.1 |  |
| 10.2 | # | <u>[Employment Agreement of Brent Ness](http://www.sec.gov/Archives/edgar/data/1635077/000168316822001851/aclarion_ex1002.htm)</u> | S-1/A | 3/23/2022 | 10.2 |  |
| 10.3 | # | <u>[Employment Agreement of John Lorbiecki](http://www.sec.gov/Archives/edgar/data/1635077/000168316822001851/aclarion_ex1003.htm)</u> | S-1/A | 3/23/2022 | 10.3 |  |
| 10.4 | # | <u>[Form of Aclarion, Inc. 2022 Equity Incentive Plan](http://www.sec.gov/Archives/edgar/data/1635077/000168316822000097/aclarion_ex1004.htm)</u> | S-1 | 1/6/2022 | 10.4 |  |
| 10.5 |  | <u>[License Agreement with UCSF the Regents of the University of California](http://www.sec.gov/Archives/edgar/data/1635077/000168316822000097/aclarion_ex1006.htm)</u> | S-1 | 1/6/2022 | 10.6 |  |
| 10.6 |  | <u>[Amendment to UC License Agreement](http://www.sec.gov/Archives/edgar/data/1635077/000168316822001434/aclarion_ex1007.htm)</u> | S-1/A | 3/4/2022 | 10.7 |  |
| 10.7 | \*\* | <u>[NuVasive Amended and Restated Commission Agreement dated February 28, 2020](http://www.sec.gov/Archives/edgar/data/1635077/000168316822001851/aclarion_ex1008.htm)</u> | S-1/A | 3/23/2022 | 10.8 |  |
| 10.8 | \*\* | <u>[Right of First Offer Agreement](http://www.sec.gov/Archives/edgar/data/1635077/000168316822001851/aclarion_ex1012.htm)</u> | S-1/A | 3/23/2022 | 10.12 |  |
| 10.9 |  | <u>[First Amendment to Right of First Offer Agreement](http://www.sec.gov/Archives/edgar/data/1635077/000168316822001851/aclarion_ex1013.htm)</u> | S-1/A | 3/23/2022 | 10.13 |  |
| 10.10 |  | <u>[Second Amendment to Right of First Offer Agreement](http://www.sec.gov/Archives/edgar/data/1635077/000168316822001851/aclarion_ex1014.htm)</u> | S-1/A | 3/23/2022 | 10.14 |  |
| 10.11 |  | <u>[Warrant Agent Agreement dated April 21, 2022](http://www.sec.gov/Archives/edgar/data/1635077/000168316822002974/aclarion_ex1001.htm)</u> | 8-K | 4/27/2022 | 10.1 |  |
| 10.12 |  | <u>[Siemens Strategic Collaboration Agreement](http://www.sec.gov/Archives/edgar/data/1635077/000168316822000097/aclarion_ex1017.htm)</u> | S-1 | 1/6/2022 | 10.17 |  |
| 10.13 | # | <u>[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)</u> | S-1 | 1/6/2022 | 10.20 |  |

---

10.14 # <u>[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)</u> S-1 1/6/2022 10.21

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

10.16 # <u>[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)</u> S-8 5/26/2022 99.5

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

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

10.19 <u>[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)</u> 8-K 10/10/2023 10.1

10.20 <u>[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)</u> 8-K 11/27/2024 10.1

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

10.22 <u>[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)</u> 8-K 9/24/2024 1.1

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

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

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

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

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

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

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

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

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| 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). |

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___________________________

# 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.

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| | | |
|:---|:---|:---|
|  | **ACLARION, INC.** | **ACLARION, INC.** |
|  | By: | /s/ John Lorbiecki |
|  |  | John Lorbiecki |
|  |  | Chief Financial Officer<br> (Principal Financial and Accounting Officer) |
| Date: August 14, 2025 |  |  |

---

## 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 June 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.

---

| |
|:---|
| August 14, 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, John Lorbiecki, certify that:

1. I have reviewed this Quarterly Report on Form 10-Q for the period ended June 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.

---

| |
|:---|
| August 14, 2025 |
| */s/ John Lorbiecki* |
| John Lorbiecki |
| 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 June 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.

---

| |
|:---|
| August 14, 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 June 30, 2025, as filed with the Securities and Exchange Commission, I, John Lorbiecki, 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.

---

| |
|:---|
| August 14, 2025 |
| */s/ John Lorbiecki* |
| John Lorbiecki |
| Chief Financial Officer<br> (Principal Financial and Accounting Officer) |

---